Persimmon says it is on course to deliver at least 9,000 homes in 2023 as the firm reported its half year results for the six months to the end of June. This is at the top end of the range indicated by the firm earlier this year, but significantly below last year’s 14,868.

The firm completed 4,249 homes in the half year (2022: 6,652) generating revenue of £1.19 billion (2022: £1.69 billion) and profit before tax of £151 million (£439.7 million).

The sales rate for the six months was 0.59 per outlet per week (2022: 0.91). Persimmon said this sustained “the higher than expected rates seen in the first quarter and secured with the controlled use of incentives and investor deals”. The average incentive level in the period was 3.2% on private sales, while investor deals accounted for 0.03 of the sales rate. Persimmon “continues to assess approaches from interested parties on a case-by-case basis”. Sales outlets remained flat in the period, 273 in June 2023 against 272 in December 2022.

The group’s average sales price was £256,445, up 4% on last year’s £245,597 partially reflecting the firm delivering larger homes. However housing gross margin has slipped to 21.5% in the first half (H1 2022: 31%) due to inflation, lower sales volumes, the use of incentives and an increase in sales to housing associations.

The firm’s current forward sales – including five weeks post period end – is £1.6 billion, 30% lower year on year (£2.2 billion).

Persimmon ceo Dean Finch said: "Against a backdrop of higher mortgage rates, the removal of Help to Buy and significant market uncertainty, Persimmon has delivered a robust sales rate excluding bulk sales whilst growing the private average selling price in our forward order book and also securing cost savings. We are on track to deliver profit expectations for the year and are building a platform for future growth.

"Our private sales rate has remained broadly consistent throughout the period resulting in a private forward order book that is now 83% higher than it was at the beginning of the year, despite controlled use of sales incentives and limited recourse to investor deals. Our pricing overall has remained resilient with continued positive momentum in the forward order book. However, the reduced volumes in the first half of the year has negatively affected our operating margins as we predicted earlier in the year. As we look forward, we expect increasing completions to result in improving operating margins.

"We have maintained targeted investment in exceptional new land opportunities and enhanced key capabilities to deliver high quality homes for customers consistently. Subject to the challenges in the planning system we are determined to grow our outlet numbers in a disciplined way. Our new Space4 factory and investment in TopHat modular manufacturer will help us drive even greater efficiencies in the coming years. We are carefully strengthening our operations and national outlet network to position ourselves for future growth while protecting margins.”

Looking ahead Persimmon expects market volatility to continue and affordability to remain so the firm is looking at “innovative ways to help customers realise their ambition of owning a home”.

Build cost inflation at 5% is expected to moderate but “disciplined cost control will continue as we actively protect our margin. Regular interrogation of build processes, product specifications and subcontractors will drive opportunities for savings, as will ongoing overhead reviews.”

Persimmon said it is looking to share cost pressures with its subcontractors and that a recruitment freeze across the group has seen headcount reduce by nearly 300 this year.