Persimmon profits rise despite challenging housing market

Homebuilder Persimmon reported an 11% increase in underlying profit before tax to £164.9 million for the first half of 2025, beating analyst expectations despite continued headwinds in the UK housing market

The York-based company delivered 4,605 new homes in the six months to June 30, representing a 4% increase from the prior year, while achieving an average selling price of £284,047, up 8% year-on-year. This performance enabled revenue growth of 12% to £1.31 billion, demonstrating the company’s ability to navigate challenging market conditions.

Chief Executive Dean Finch highlighted the company’s resilient performance against industry trends, stating: “Our average sales price, sales, completions, planning approvals, active sites and forward order book are all up, many against industry trends, showing that our strategy including a focus on self-help has continued to deliver”.

The underlying operating margin improved by 10 basis points to 13.1%, ahead of Jefferies’ estimate of 12.3%, while return on capital employed reached a sector-leading 11.2%. However, statutory profit before tax remained largely flat at £146.7 million due to exceptional charges related to a Competition and Markets Authority investigation.

Persimmon maintained its full-year guidance for completions of between 11,000 and 11,500 homes at a housing operating margin of 14.2% to 14.5%. Looking ahead to 2026, the company expects to deliver approximately 12,000 completions with margins progressing at a similar pace to 2025.

The company’s private forward order book strengthened by 11% to £1.25 billion, though this represented a slowdown from previous growth rates. The total forward order book, including housing association partnerships, increased 9% to £1.86 billion, providing visibility for the second half of the year.

Despite the positive operational metrics, Persimmon acknowledged ongoing affordability constraints facing potential customers. “While interest and mortgage rates have reduced, they are at levels that still present a barrier to many potential customers,” the company noted.

The results come as the UK housing market continues to face challenges from elevated borrowing costs and economic uncertainty. However, Persimmon’s focus on first-time buyers and strategic positioning in key regional markets has enabled the company to outperform broader industry trends.

Cash balances stood at £123.0 million at the end of June, down from £350.2 million a year earlier, reflecting the company’s continued investment in land acquisition and development. The board maintained its interim dividend at 20 pence per share.