Persimmon share price edges lower despite stellar annual results

Persimmon’s (LON:PSN) share price edged lower this morning, despite the company revealing a robust annual performance. The UK’s biggest listed housebuilder reported a 44 percent rise in full-year profit, and said 2015 had got off to a solid start.

Persimmon’s underlying pretax profit for the year ended 31 December 2014 rose to £475 million, on revenue up 23 percent at £2.6 billion. Legal completions rose 17 percent to 13,509 while the average selling price increased 5.3 percent to £190,533.
Persimmon, which focuses predominantly on homes for first-time buyers and young families, said last month that about 40 percent of 2014 sales involved customers that used the government’s Help to Buy scheme. Shrugging off fears of a UK housing sector slowdown, group chairman Nicholas Wrigley said: “Despite some uncertainty arising from the General Election in May, the ongoing gradual improvement in the UK economy and increasing mortgage lender support provides a supportive backdrop for the new homes market.” Wrigley further noted that Persimmon had experienced an encouraging start to 2015 and a solid opening period to the spring season with current total forward sales of £1,490 million, five percent ahead of the previous year.

Despite the robust annual results and upbeat outlook, Persimmon’s share price opened lower this morning. By 08:18 GMT, the stock had declined 0.82 percent to 1,696.00p. According to the Financial Times, of the 15 analysts projecting 12 month price targets for the FTSE 100-listed housebuilder, the median target is 1,617.00p, with a high estimate of 2,000.00p and a low of 1,222.00p. As of 23 February 2014, the consensus forecast amongst 26 polled investment analysts covering Persimmon has it that investors should hold their position in the company.
As of 09:02 GMT, Tuesday, 24 February, Persimmon plc share price is 1,667.50p.