Housebuilder Persimmon failed to convince a worried City on Tuesday despite raising its guidance on annual profits.
Shares in the firm, whose performance last year was overshadowed by the row about departed chief executive Jeff Fairburn’s £100 million bonus, dipped 11.5p to 2217.5p even though 2018 profits will be “modestly ahead” of the £1.07 billion market consensus.
Persimmon is more exposed to stronger performing northern markets, helping the UK’s biggest builder grow sales 3% to 16,449 in a climate of low unemployment and cheap mortgage deals.
But interim boss, Dave Jenkinson, said the firm was “trading well” despite the housing market’s seasonal slowdown starting a couple of weeks earlier than usual. Sales of bigger homes have been a “little bit sticky” amid more caution from buyers as Brexit looms.
“It’s hard to predict what is going to happen in 2019 but I’m quite aware the potential for it to be a lot different to last year is there… We don’t believe we can walk on water, there’s a potential to trade otherwise.”
Jenkinson, in the running to replace Fairburn, said the company could opt to slow land purchases in the event of a No Deal. “My personal view is that if there was some confusion for two or three months we could plan for that quite comfortably,” he said.
Shore Capital’s Robin Hardy added: “The market has changed materially in the last six months despite the house builders’ desire to present that all is well. Though the exit from 2018 and carrying forward sales from more bullish times enables trading to look healthy now, we remain concerned that there is a much more negative undertow that will emerge in later updates.”
