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Persimmon PLC on Thursday reported a drop in half year revenue and legal completions but reported improving housing gross margin due to house price growth.
Shares were down 5.8% at 1,756.00 pence each on Thursday morning in London.
The FTSE-100 home construction company said its revenue dropped 8.2% to £1.69 billion in the first half of 2022 from £1.84 billion a year earlier. New home completions have fallen to 6,652 from 7,406.
Persimmon said completions were below expectations due to ‘further delays in the planning system and material and labour shortages’.
However, the average selling price was 4.0% higher at £245,600.
Forward sales were 2.7% higher at £1.87 billion from £1.82 billion.
The company said: ‘Rising energy prices, supply constraints on certain materials and increased labour costs are driving upward pressure on total build costs. Currently, house price inflation is continuing to offset these increases. As a result, we expect to deliver a housing gross margin that is slightly ahead year on year, although, the lower number of completions will result in a slight fall in operating margin reflecting the reduced efficiency of the group's overhead recovery rates.
‘Despite this, we anticipate the group's profit at the half year to be modestly above our expectations.’
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