Persimmon (LON:PSN) Announces Earnings Results

Persimmon (LON:PSN) announced its earnings results on Thursday. The company reported GBX 38 EPS for the quarter, Digital Look Earnings reports. Persimmon had a net margin of 7.62% and a return on equity of 8.05%.

Here are the key takeaways from Persimmon’s conference call:

• Persimmon delivered strong first-half growth, with completions up 13% to 5,189, underlying operating profit up 10% to £189 million, and underlying PBT up 3% to £170 million. Growth was supported by higher volumes, overhead discipline, and increased first-time-buyer sales.
• The company raised full-year completion guidance to around 12,500 homes, the top end of its previous range, supported by a £1.9 billion forward order book, a 5% increase in the private order book, and an affordable housing order book fully secured for the year.
• Gross margin declined to 18% due to a less favorable affordable-housing mix, higher incentives, and build-cost inflation, with management expecting continued margin pressure through the second half and into 2027. Persimmon estimates an additional £40 million–£50 million cost impact over the next 18 months, partly linked to the Middle East conflict.
• Management highlighted substantial medium-term growth capacity, including nearly 81,000 owned and controlled plots, around 93,000 strategic-land plots including recent promoter acquisitions, and plans to open at least 100 outlets this year. The company remains focused on reaching at least 300 outlets and achieving a 20% operating margin and ROCE over the medium term.
• Recent trading softened modestly, with the private sales rate excluding bulk falling to 0.59 over the last five weeks, although the total private forward order book rose 5%. Building-remediation work remains a cash and execution consideration, with £206 million provisioned and ongoing cost-recovery efforts from the supply chain.

Persimmon Trading Up 1.0%

Shares of LON:PSN opened at GBX 1,166.50 on Friday. The business has a 50 day moving average of GBX 1,075.49 and a two-hundred day moving average of GBX 1,186.37. Persimmon has a 12-month low of GBX 947.40 and a 12-month high of GBX 1,552. The company has a market capitalization of £3.75 billion, a PE ratio of 13.23, a PEG ratio of 0.83 and a beta of 1.39. The company has a current ratio of 3.99, a quick ratio of 1.04 and a debt-to-equity ratio of 0.46.

Insider Buying and Selling at Persimmon

In other Persimmon news, insider Dean K. Finch sold 60,000 shares of the company’s stock in a transaction on Tuesday, May 26th. The shares were sold at an average price of GBX 1,119, for a total transaction of £671,400. 2.63% of the stock is currently owned by insiders.

Analyst Upgrades and Downgrades

PSN has been the topic of a number of research reports. JPMorgan Chase & Co. reduced their price target on shares of Persimmon from GBX 1,800 to GBX 1,430 and set an “overweight” rating on the stock in a report on Tuesday, June 16th. Citigroup dropped their price objective on shares of Persimmon from £161.50 to £128 and set a “buy” rating for the company in a research note on Tuesday, June 23rd. Panmure Gordon reaffirmed a “buy” rating and set a GBX 1,694 target price on shares of Persimmon in a research note on Friday, May 1st. Jefferies Financial Group reaffirmed a “buy” rating and issued a GBX 1,591 price target on shares of Persimmon in a research note on Thursday, April 30th. Finally, Royal Bank Of Canada restated an “outperform” rating and set a GBX 1,350 price objective on shares of Persimmon in a report on Friday. Eight equities research analysts have rated the stock with a Buy rating and two have given a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus target price of GBX 2,566.

About Persimmon

Persimmon Plc, together with its subsidiaries, operates as a house builder in the United Kingdom. The company offers family housing under the Persimmon Homes brand name; housing under the Charles Church brand name; and social housing under the Westbury Partnerships brand name. It also provides broadband services under the FibreNest brand; and timber frame, insulated wall panels, and roof cassettes under the brand Space4. Further, it offers concrete bricks and roof tile. Persimmon Plc was founded in 1972 and is headquartered in York, the United Kingdom.