British housebuilder Persimmon (LON:PSN) saw shares plunge over 3.5 percent on Wednesday morning, after analysts failed to be impressed by a 10 percent rise in sales.
The company released strong results on Wednesday morning, saying that it had opened 61 new sales outlets during the second half of the year and that it expects to open another 45.
The group said also that it had £909 million of forward sales reserved beyond 2017, an increase of 10 per cent on the £829 million the year before. The housing market remains resilient in the wake of Brexit, with rising house prices providing a solid market for housebuilders.
Persimmon said in a statement that consumer confidence remained “resilient”, and that “mortgage lenders remain keen to compete for new business, with mortgage approvals for the third quarter being c. 8 percent ahead of last year. Mortgage interest rates remain very attractive, particularly for first time buyers taking advantage of the Government’s Help to Buy scheme.”
Looking forward, the group said:
“Management remain focused on the cash efficiency of Group operations with strong cash generation being central to the execution of our long-term strategy. The Group is likely to hold increased cash balances at 31 December 2017 subject to the timing of further land investment (30 June 2017: GBP1,120.4 million).”
Despite the strong results Persimmon shares fell on Wednesday morning, currently trading down 3.60 percent at 2,770.48 (1232GMT).