Positive news from Persimmon sends shares soaring

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by Kay Mitchell

Housebuilder Persimmon has issued an encouraging statement today which led to its shares soaring 7% to 390¼p.

Furthermore, fellow housebuilders Taylor Wimpey, Barratt, Bellway and Bovis were also up by between 3% and 4%.

Persimmon, along with other housebuilders, experienced a dismal 2008 as a result of falling house prices and the tightening of lending criteria.

However, Persimmon said in a statement today: “We are encouraged by the improvement in sales rates when compared to last year, but will remain cautious until mortgage availability improves further and employment prospects stabilise.”

The housebuilder said that since April, it has been selling more homes than the same period last year and it expects the improvement to continue.

Forward sales for the latter half of this year stood at £700 million, against the £650 million reported at the same time in 2008.

However, the housebuilder said it sold just over 4,000 homes in the first half of the year – a fall of almost 30% compared with the same period last year, when 5,500 homes were sold.

The group generated revenues of £625 million – 37% down on the £998 million compared with the corresponding period last year.

In related news, Taylor Wimpey said last month it had noted stability in the housing market and that a “severe” downturn should now be avoided. As a result, the group is hoping to increase the number of new sites in the latter half of 2009.

In related news, Hanson Cement in Padeswood, Flintshire (formerly Castle Cement) announced today it is planning to axe 93 jobs due to a slump in orders and the “continuing downturn in the construction industry“.

A spokesperson for the company said: “We have had to make cut backs. Essentially we’re a demand-led business. Our proposals are regrettable but vital to ensure we remain competitive in very difficult market conditions.”