Persimmon trading update provides mixed picture to investors

Revenues are up as employment levels continue to fuel high demand.

Article updated: 15 January 2019 10:00am Author: Helal Miah

  • Rising revenues supported by continued customer demand with high employment levels and competitive mortgages
  • Group strategy and outlook provides an encouraging outlook as they expand the number of sites
  • We continue to recommend the shares as higher risk ‘hold’

Persimmon has this morning published a trading update showing a group performing well but at the same time provided a relatively mixed picture against the consensus expectations. Total revenues were 4% higher as completions rose by 4% but average selling prices were only 1% higher. As with most other housebuilders, rising revenues were supported by continued customer demand as employment levels remain high and mortgages competitive.

Going forward the group’s strategy and outlook paints an encouraging outlook as they continue to expand on the number of sites to boost production and remains one of the few taking a proactive approach developing their own manufacturing facilities for bricks, roof tiles and frames. This is good news in a market where competition for resources and labour costs continue to rise.

Our major concern for Persimmon and all the housebuilders is the outcome and the uncertainty over the Brexit situation. At this moment in time we are talking a relative positive outlook as a “No Deal” scenario looks unlikely, should this change though we fear a downturn for the housebuilders to come. We continue to recommend the shares as a higher risk ‘hold’ for investors.

All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Helal Miah portrait photo
Helal Miah

Investment Research Analyst

After graduating with an economics degree from University College London, Helal started his career within private banking at Smith & Williamson Investment Management and later held analyst and fund manager roles with the Industrial Bank of Japan, Schroders and Mitsubishi Corporation. He is a chartered fellow of the Chartered Institute for Securities & Investment.