The shares of Persimmon (LSE: PSN) dropped 1% to 1,200p this morning after the FTSE 100 home construction firm revealed third-quarter results in line with market expectations.
Despite seeing sales, profits and margins improve in the quarter, Persimmon cooled speculation surrounding a government-fuelled UK housing bubble, saying that the newly-accelerated Help-to-Buy scheme had a “muted” impact since October.
According to Persimmon, the scheme — which the government bolstered last month — has had a limited effect due to the small number of lenders involved, and the higher interest rates charged. However, Persimmon believes this will improve in the months to come, as greater competition pushes down rates charged to customers.
The company said its projects are fully sold for the year, with £650m in forward sales booked beyond 2013.
Discussing Persimmon’s strong sales activity, the company remarked:
“In response to the improvement in sales we have increased our build rates across the country. Our robust build programmes and processes are enabling the Group to react swiftly to the increase in sales activity… We have also been encouraged by the support provided by our suppliers and sub-contractors to our increased build requirements and look forward to the further development of these long term relationships as they grow in partnership with Persimmon.”
With a market cap of £3.8bn, Persimmon’s shares trade at 14 times expected earnings, and offer a prospective dividend yield of 1.6%.
