“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.”
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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.
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.”
East Devon Watch 