ii view: Persimmon profit to hit top end of forecasts
A share price that's almost halved over the last five years, but which is up by almost a quarter over the last six months. Buy, sell, or hold?
3rd February 2026 15:38
by Keith Bowman from interactive investor
Full-year trading update to 31 December
- Home completions up 12% to 11,905
- Average selling price up 4% to £278,000
- Net private sales per outlet per week unchanged at 0.70
Guidance:
- Forward sales up 2% to £1.172 billion
- Expects year-end net cash of £116 million
- Expects 2025 adjusted pre-tax profit at upper end of a £415-440 million range versus £395 million in 2024
Chief executive Dean Finch said:
“This performance demonstrates the benefit of our sustained investment in recent years, alongside our self-help strategy, broad geographic coverage and increased outlets, to create a differentiated growth platform.”
- Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts
ii round-up:
Persimmon (LSE:PSN) operates from 29 UK regional offices and three offsite manufacturing facilities where it makes items ranging from timber frames and roof systems to bricks and tiles.
Employing around 4,700 people, the housebuilder operates under the brand names of Persimmon Homes, Charles Church and Westbury Partnerships.
For a round-up of this latest trading update announced on 13 January, please click here.
ii view:
Began in 1972, Persimmon is today headquartered in York and a constituent of the FTSE 100 index. As well as regional offices across the UK, the housebuilder also operates three manufacturing plants where it makes items ranging from timber frames and roof systems to bricks and tiles. Group competitors include Barratt Redrow (LSE:BTRW), Taylor Wimpey (LSE:TW.) and Bellway (LSE:BWY).
For investors, management spells out expectation for no material improvement in market conditions in 2026, with the latest sales rate coming in flat year-over-year. Cost pressures persist including a doubling of landfill charges from April 2026. A forecast one-year price/earnings (PE) ratio above the three- and 10-year averages may suggest the shares are not obviously cheap, while expected net cash of £116 million is down from £420 million in late 2023.
- 10 shares to give you a £10,000 annual income in 2026
- As goes January, so goes the year: trading signal or noise?
- 10 hottest ISA shares, funds and trusts
On the upside, above-forecast build completions for 2025 support expected profit at the upper end of City forecasts. Land purchases made over recent years continue to support management’s medium-term ambition to increase profit margins to 20% from 14%, with 2026 profits potentially on track to grow to between £461 million and £487 million. Expanding operations to manufacture materials such as bricks and tiles were previously estimated by management to save it around £5,500 per plot in build costs, while hopes for reduced UK interest persist.
For now, a consensus analyst fair value estimate just above £16 per share and forecast dividend yield in the region of 4.3% look to provide grounds for longer-term optimism.
Positives
- Government push to ease planning regulations
- Previous sector consolidation
Negatives
- Uncertain economic outlook
- Reducing net cash held
The average rating of stock market analysts:
Buy
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.