Persimmon says off to 'excellent' start in second half, reinstates dividend

The homebuilder thus set an interim 2020 dividend payment of 40.0p per share, albeit one which the company itself described as "modest".

Management also reiterated that the return of surplus capacity remained a key part of is strategy and said that the final dividend of 110.0p for 2019 might be paid out before the end of the current financial year.

Commenting on the company's decision to reinstate its dividend, David Madden at CMC Markets UK said that it remained a far cry from the 125.0p paid out at the half-year stage in 2019 but added that it was "a step in the right direction".

"The house builder will closely review further dividend payments for this year, so that will be the focus of traders’ attention in the months ahead," he added.

The Covid-19 pandemic hammered both Persimmon's top and bottom lines during the half.

Net revenues plummeted from £1.75bn for the comparable year ago period to £1.19bn, while profits before tax were reduced from £509.3m to £292.4m.

Nonetheless, by period end, build rates had already returned to their pre-Covid 19 levels, Persimmon chief executive officer, Dave Jenkinson, said.

He also said that the second half had begun in "excellent" fashion.

In a statement however, while the company described the short-term outlook as "robust", also referencing the "healthy" level of forwards orders as well as its "strong" work in progress position, it also conceded that there were risks.

Included among the latter were the pandemic, the resulting increase in unemployment and Brexit.

Nevertheless, "long-term housing market fundamentals continue to be strong," the company added.

Persimmon also highlighted the "quality" of its land holdings, which management said underpinned future production, and the fact that its average selling price per customer, of £246,208, was 17% below the UK average.

The firm's forward sales position had certainly improved, rising from £2,048m to £2,483m, while cash on hand was little changed at £828.9m, thanks in part to the decision to withhold 2019's final dividend.

Yet as Persimmon explained, that decision was only meant to be temporary.

"Recognising the importance of dividend receipts to pension schemes in supporting retired workers and their families, the Board will continue to assess whether a further dividend may be paid prior to the end of the current financial year in satisfaction of the Board's previously indicated final dividend for 2019."

-- More to follow --