Builder's profits rise reflects growth in sector confidence
The recent upturn in confidence in the building industry will be on show this week, with upbeat results due from Persimmon.
Persimmon, one of the developers on site at Exeter's new town, Cranbrook, will reap the benefits of Britain's recovering housing market when its half-year results tomorrow show surging demand and profits.
Government stimulus schemes have fuelled the housing market in recent months, sending buyers flocking to the builder's developments.
Persimmon is expected to report more demand for its homes after reservations leapt 30% since the Government launched its Help to Buy scheme loan scheme in April.
NEW FROM SYMPLY - a wet dog food in a tray freshly steamed with real meat and veg you can see minimum of 68% meat content up to 72% in the adult trays.
Terms: Come and try tray at introductory price of £1
Contact: 01271 440626
Valid until: Friday, January 31 2014
By July forward sales were 19% ahead year-on-year at £920 million. Analysts on average expect Persimmon to post underlying profits of £285.3 million for 2013, up from £221.8 million a year earlier.
Chancellor George Osborne unveiled Help to Buy in March, which lends buyers 20% of the value of a new home worth up to £600,000, interest-free for five years.
Together with another state stimulus programme, the Funding for Lending Scheme (FLS), it has been credited with spurring a recovery in the housing market. The FLS incentivises banks and building societies to lend more, by offering them discounted loans.
The average selling price of homes has jumped by 15% to £188,500, compared with £164,400 a year earlier.
Closer to home, Torquay-based housebuilder Cavanna Homes has continued to go from strength to strength. The business, which is celebrating its 90th anniversary, made 184 sales in 2012, resulting in a turnover of £30.2 million – a 6.6% increase on 2011.
Chairman Jeremy Cavanna told WMN earlier this month that the business had withstood the recession because of a good portfolio of sites and a strong balance sheet going in.
Mr Cavanna has predicted a slow but steady recovery and said that government schemes have helped to boost the market, adding: "I think it will be consistent growth."
Within the wider construction sector, latest figures from Exeter based Midas Group have revealed a profits increase for its most recent financial year, to April.
Despite a 15% turnover decrease, the parent company of Midas Construction, Midas Property Services and Mi-Space saw its pre-tax profits rise by £709,000 to £1.2 million, due to a focus upon targeting contracts and reducing costs.