UK homebuilder Persimmon restores dividend on hopes of solid second-half

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Housebuilder Persimmon (PSN.L) posted a plunge in first-half profit on Tuesday, as it sold fewer homes due to coronavirus-driven disruptions to construction activity and transactions, but “an excellent start to the second half” helped it reinstate dividend.

The UK’s second-largest homebuilder is expecting to deliver about 45% of its second half new home completions by September end.

Britain’s housing market has picked up pace in recent months after coming to a virtual standstill in late March and April as tax breaks for home purchases and a shift towards suburban living caused by the pandemic spur home sales.

“Potential medium-term risks to demand associated with Covid-19, rising unemployment and Brexit remain, but long-term housing market fundamentals continue to be strong”, Persimmon said.

The FTSE-100 company declared a “modest” interim dividend of 40 pence per share in place of 125 pence a share that it had cancelled earlier.

In the first half, it sold 4,900 homes compared with 7,584 homes sold last year, with the average selling price of its homes rising to 225,066 pounds ($295,736.72) from 216,942 pounds a year earlier.

Pretax profit fell to 292.4 million pounds in the six months ended June 30 from 509.3 million pounds last year.

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