Persimmon shares jump on outlook, despite rising costs pressures

(Sharecast News) - Shares in Persimmon jumped on Thursday after the housebuilder said it still expected to trade in line with expectations despite pressures on buyers and rising costs due to the war on Iran.

The company said total forward sales in the four months to November 1 were up 1% to £2.82bn. Persimmon said market conditions would remain challenging, reflecting continued affordability constraints, higher borrowing costs and uncertainty over build costs arising from the conflict in the Middle East.

"Inflationary pressures are expected to increase costs by c.£30m-£40m in 2027, as set out in August, which together with higher financing costs are expected to limit near-term profit progression," the company said in a trading statement on Thursday. Persimmon shares were up 6% in London trade.

Private forward sales increased 3% to £2.15bn, underpinning the group's target of around 12,500 completions in 2026, with 77% of expected open-market private deliveries already exchanged or completed.

Sales rates improved to 0.79 net private sales per outlet per week, or 0.65 excluding bulk deals, while the Build-to-Rent market remained supportive, with 77% of planned 2026 delivery exchanged.

The group said it had maintained momentum despite affordability pressures and higher build costs, with operational efficiency measures expected to substantially offset additional cost headwinds by 2028.

Meanwhile, the average private selling price in the forward order book rose 2% year-on-year to around £301,900, while incentive levels remained stable at about 5%.

Reporting by Frank Prenesti for Sharecast.com