Persimmon provide early housing market update

In Persimmon's last interim management statement, the group reported that visits from first-time buyers between July 1 and November 7 were 35% up on a year ago.

However, with the mortgage market still restricted and concerns persisting over the ability of first time buyers to find a mortgage, sales over this period were running just 4% ahead of the preceding period.

So analysts will be looking for any indications that initiatives such as the Government sponsored FirstBuy shared equity scheme are turning visits into sales over the more recent period.

With turnover of GBP1,570 million in 2010 (2009: GBP1,421 million), Persimmon was the third biggest housebuilder gauged by revenue - behind Barratt in first place and Taylor Wimpey in second.

However, in terms of pre-exceptional profit Persimmon's last annual figures show a total of GBP124.1 million (2009: GBP53.2 million), making the company easily the most profitable British housebuilder.

Persimmon expects to push the underlying operating margin of 9% achieved at the half-way stage up higher, possibly into double digits.

The only listed housebuilder to achieve this feat was the London and South East-centric Berkeley Group, but Glenigan's information suggests that Persimmon's focus for growth is on less populated areas of Britain.

In terms of homes planned, Glenigan's figures rank Persimmon third after submitting 82 detailed planning applications of 10 or more units during the 12 months to September 2011 (2010: 75).

Although the number of units in these applications has edged up to 10,011 (2010: 9,404) Persimmon has lost second place to Taylor Wimpey, which has plans for 10,474.

The housebuilder proposing the most units in this period was Barratt with applications to build 10,771.

The large proportion of homes proposed by Persimmon going forward are houses at 83% (2010: 89%) but the proportion of flats in the planning pipeline has edged up to 17% (2010: 11%).

Persimmon is active in most parts of Britain and Glenigan's research shows that the group has more new homes planned than any other housebuilder in four of the 11 British regions in the year to September 2011.

These are though, mostly less populated parts of the country.

Persimmon is top in East Anglia with proposals for 1,349 units (2010: 2,543), the North with plans for 1,038 homes (2010: 816) and Wales 648 homes (2010: 364).

Even the South West where Persimmon's plans for 3,108 units (2010: 1,638) make the group the most active housebuilder, is not a major population centre.

The South East is typically Britain's largest provider of new homes but Persimmon's total has shrunk over the last year to 1,381 (2010: 2,147).

The group is again ranked third behind Barratt and Taylor Wimpey, whose planning programmes have expanded significantly over the past year to 3,825 units (2010: 2,462) and 3,324 homes (2010: 1,247) respectively.

Persimmon has retreated from London, which is the only region that the group does not feature among the top 10 housebuilders in planning activity.

A year ago, Persimmon was ranked eighth in London in terms of planning activity but the latest programme of homes planned totalling just 35 units leaves the group ranked just 27th.

Elsewhere, Persimmon is ranked second in the West Midlands with submissions for 811 homes (2010: 468).

The group is also sixth in both the East Midlands and the North West with proposals for 418 homes (2010: 359) and 328 units (2010: 588) respectively.

Persimmon's planning pipeline in Scotland is flat at 323 homes (2010: 318), leaving the company ranked fourth.

Persimmon is also ranked fourth in Yorkshire but has significantly stepped up its planning programme to 572 homes over the past year (2010: 17).

Shares in Persimmon have endured a turbulent 12-months, dropping as low as GBP361.3p during the summer then recovering to hit 525.5p in the Autumn only to drop back to start 2012 around 460p.

According to a recent Thomson/First Call survey, of 19 analysts covering Persimmon, 14 rate the group's shares a strong buy or buy and three a hold with just two brokers advocating a sell.