Persimmon sees big drop in completions and forward sales in Q3

(Sharecast News) - UK housebuilder Persimmon has raised its guidance for new home completions despite a 37% slump in finished builds in the third quarter and a significant fall in its order book. The company also said it was continued a "disciplined management of costs" and announced that it would reduce headcount by around 700 in 2023 as a whole.

Persimmon said it is now on track to deliver around 9,500 new home completions in 2023, up from guidance at the half-year stage of "at least 9,000".

However, completions in the third quarter totalled just 1,439, down from 2,270 the year before, while the average private selling price on these rose 2% year-on-year £296,822.

Average private sales per sales outlet were down 24% at 0.48 per week, though Persimmon said it did see a pick-up from September after launching its latest marketing campaign.

Meanwhile, the forward sales position as of 5 November stood at just £1.62bn, down 23% on the same time last year.

"On the whole pricing remains broadly stable although we have seen a slight reduction in group private average selling price in the forward order book and an increase in the use of incentives, particularly in the South where affordability constraints are greater," the company said.

Looking ahead to 2024, Persimmon said market conditions are likely to remain "highly uncertain" but longer-term fundamentals for the business remain positive.

"We have a proven track record of delivering strong returns through the cycle and our good progress in improving our key quality and service capabilities will allow us to respond quickly when conditions improve."