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| Version 1 | Version 2 |
|---|---|
| Persimmon posts sharp profit fall | Persimmon posts sharp profit fall |
| (about 4 hours later) | |
| UK housebuilder Persimmon has posted a sharp fall in profits for the first six months of the year as it struggles to deal with the housing market slump. | UK housebuilder Persimmon has posted a sharp fall in profits for the first six months of the year as it struggles to deal with the housing market slump. |
| The York-based firm said pre-tax profits for the half-year were £36.9m, down from £281.1m a year ago. | The York-based firm said pre-tax profits for the half-year were £36.9m, down from £281.1m a year ago. |
| Sales were down more than 30% on last year, and profits were also hit by costs related to shrinking the business and write-downs of its land values. | Sales were down more than 30% on last year, and profits were also hit by costs related to shrinking the business and write-downs of its land values. |
| The company has cut 2,000 jobs since the start of the year. | The company has cut 2,000 jobs since the start of the year. |
| But with some indication that the market had stabilised since what the firm called a "significant downturn" in April, shares in the housebuilder rallied. | |
| They were up 33 pence, or 11%, at 331.5p in afternoon trade in London. | |
| The business has performed well in very difficult conditions Persimmon chairman John White See Persimmon shares | |
| Gloomy news on mortgage lending and house prices since the start of the year have taken their toll on shares in the sector, with Persimmon down more than 60% since its 2008 peak. | |
| Mortgage problems | Mortgage problems |
| Persimmon said it sold 5,501 new homes in the first half of the year, down from 8,002 sales in the same period last year. | Persimmon said it sold 5,501 new homes in the first half of the year, down from 8,002 sales in the same period last year. |
| It blamed the drop in sales on a lack of affordable mortgages - a fact that also depressed the average selling price of a new home to £181,485 from £189,255 last year. | It blamed the drop in sales on a lack of affordable mortgages - a fact that also depressed the average selling price of a new home to £181,485 from £189,255 last year. |
| Persimmon remained cautious on the outlook for the property market, and reduced the value of its land bank. | |
| It took a £40m write-down on the value of its owned land, and wrote-off a further £9m in fees relating to potential transactions that it has withdrawn from. | |
| Persimmon took an additional £15m hit on restructuring costs, which included the closure of three offices, 2,000 job cuts and the postponement of starting work at some new sites. | Persimmon took an additional £15m hit on restructuring costs, which included the closure of three offices, 2,000 job cuts and the postponement of starting work at some new sites. |
| Better prepared | |
| "The business has performed well in very difficult conditions," said Persimmon chairman John White. | "The business has performed well in very difficult conditions," said Persimmon chairman John White. |
| "We are confident that our business, having been restructured, is in a strong position to move forward whenever the market improves." | "We are confident that our business, having been restructured, is in a strong position to move forward whenever the market improves." |
| But the firm added that its prospects depended on the pick-up in the availability of affordable mortgages. | |
| Richard Hunter, an analyst at Hargreaves Lansdown, was not optimistic for a swift recovery. | |
| "The fact remains that the outlook is bleak," he said. |