"Customer interest remains good, with sales rates and cancellation rates stable in recent weeks"
According to the firm's Q1 trading update, its net private sales rate per outlet had been 0.62, compared to the 0.30 seen in the challenging Q4 of last year. This is against 0.98 in Q1 2022.
Persimmon commented that customer interest remains good, with sales rates and cancellation rates stable in recent weeks. However, according to the firm, it was too early to tell if these would follow regular seasonal patterns for the rest of the year.
Its completions in Q1 were 42% down on Q1 2022 to 1,136 homes, resulting from a 36% drop in forward sales at the start of 2023 year-on-year to £1 billion. The company’s forward sales position has since increased to £1.7bn in response to Q1’s improved sales rate.
Persimmon stated that if sales continued at the levels seen, it would expect 2023 completions to be towards the high end of its previously stated range of 8,000 to 9,000 completions - a notable decline on the 14,868 completions achieved in 2022.
Persimmon cautioned that it remained “unclear” how its trading would unfold throughout 2023 and reiterated that profit margins were being significantly impacted by lower completions “and build cost inflation outstripping the more modest increase in ASP.”
In Q1 2023, the firm’s private average selling price on completions rose 10% year-on-year, improving 4% on Q4 2022.