Persimmon trims debt to build profit

Persimmon, the housebuilder, enjoyed a pre-tax profit of £260m in the first six months of 2006.

It completed 8,200 properties during the interim financial period (six months to 30 June), a rise of 38% over the same period last year, thanks largely to the acquisition of Westbury. The average selling price was 3% higher at £188,000.

John White, chief executive, said: "The integration of Westbury has been completed ahead of expectations. The group is well placed to take advantage of a strong and stable housing market.

"Visitor levels remain good. Revenues are ahead of last year on a like-for-like basis."

Persimmon completed the acquisition of Westbury, its housebuilding rival, in January. It paid £660m. Persimmon also took on Westbury's debts, which ran to a further £420m.

Persimmon's level of debt has been brought down during the six-month financial period, even though a further £320m has been spent on land for building. The improvement is the result of £420m of cash flowing in from building operations.

Persimmon has a total landbank of 92,000 plots, which represents a five-year supply.

[Contract Journal, 30 August 2006, p 6]