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Persimmon shares dive over concerns about slowing sales | Persimmon shares dive over concerns about slowing sales |
(about 1 hour later) | |
Fears over slowing sales at Persimmon, one of Britain’s biggest housebuilders, have caused a sharp drop in its share price. | Fears over slowing sales at Persimmon, one of Britain’s biggest housebuilders, have caused a sharp drop in its share price. |
In a trading update on Thursday morning ahead of its annual meeting at York Racecourse, which could involve protests over executive pay and other issues, Persimmon said sales revenues had risen 8% to £2.15bn since the start of the year. Weekly private sales per site were 6% ahead of last year as the company sold 7,598 new homes, with an average selling price of £220,000, up 5.8%. | |
Analysts said the numbers suggested sales had slowed in recent weeks. Charlie Campbell, of Liberum, said: “Persimmon has seen a good start to 2016, with sales rates up 6%, but this implies that growth has moderated in the last seven weeks, to around 2.5%, as comparatives have strengthened.” | |
He added that margins were peaking “as selling price inflation moderates and build cost inflation persists”. Persimmon shares fell nearly 6% to £19.07 in early trading. | He added that margins were peaking “as selling price inflation moderates and build cost inflation persists”. Persimmon shares fell nearly 6% to £19.07 in early trading. |
At the same time, the Royal Institution of Chartered Surveyors warned that the EU referendum in June and recent changes to stamp duty had created a climate of uncertainty that could lead to falling sales and prices in the housing market. | At the same time, the Royal Institution of Chartered Surveyors warned that the EU referendum in June and recent changes to stamp duty had created a climate of uncertainty that could lead to falling sales and prices in the housing market. |
Shares in other housebuilders were also down, with Berkeley Group falling nearly 4% and Barratt down 2%. | Shares in other housebuilders were also down, with Berkeley Group falling nearly 4% and Barratt down 2%. |
Persimmon reiterated that housebuilding was being held back by planning delays. So far it has opened 75 of 100 new sites planned for the first half of the year. | |
The company’s AGM is one of the first of the AGM season. | |
Shareholder groups have issued warnings over a share scheme set up in 2012 that could hand an estimated £600m to 150 directors by 2022 – one of the most generous bonus schemes in the City. A retiring senior executive, Nigel Greenaway, who has led Persimmon’s southern division, could pocket up to £9.4m. | |
Some are also unhappy over Persimmon’s appointment of Nigel Mills as a non-executive director, questioning his independence due to his links with the housebuilder’s financial advisers, Citi. | |
The company sought to defend the share plan by saying that since the launch of its new strategy in early 2012, it had delivered a 56% increase in new homes built, invested more than £2.2bn in new land, and returned £1.071bn to shareholders – £550m more than was originally planned. |
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