Persimmon Plc (PSN), one of the UK’s largest homebuilders, posted a solid first half of 2025 performance despite affordability challenges and a subdued housing market. The company’s vertically integrated model, from its own brick, tile, and timber-frame factories to in-house planning and sales, helped offset rising costs and maintain margins even as broader sector activity slowed.
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CEO Dean Finch credited Persimmon’s operational discipline, pricing strength, and planning success for driving growth in both volume and profitability. The builder completed 4,605 homes, up 4% year-on-year, and grew average sales prices by 8% to £284,047, buoyed by a higher mix of premium Charles Church developments.
Looking ahead, Persimmon expects to deliver 11,000–11,500 completions in 2025, with margins of 14.2%-14.5%, before expanding to 12,000 homes in 2026. A focus on build quality, brand diversification, and efficient land use continues to anchor its growth strategy through market volatility.
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Financial Story
Persimmon reported total revenue of £1.50 billion, up 14% year-on-year, driven by an 8% increase in private home prices and a 7% rise in private completions. Underlying operating profit grew 13% to £172 million, with a stable 13.1% operating margin and 11.2% return on capital employed. The company declared a 20p interim dividend, unchanged from last year, reflecting confidence in long-term cash generation.
| Metric | H1 2025 | H1 2024 | YoY Change |
|---|---|---|---|
| Homes Completed | 4,605 | 4,445 | ↑ 4% |
| Avg. Sales Price | £284,047 | £263,288 | ↑ 8% |
| Revenue | £1.50 bn | £1.32 bn | ↑ 14% |
| Underlying Op. Profit | £172 m | £152 m | ↑ 13% |
| Op. Margin | 13.1% | 13.0% | ↑ 10 bps |
| ROCE | 11.2% | 10.0% | ↑ 120 bps |
| Cash | £123 m | £350 m | ↓ £227 m |
Cash at period end fell to £123 million (from £350 million in 2024) as Persimmon reinvested heavily in land and work-in-progress, spending £210 million to replenish its land bank and open 55 new outlets. Despite these investments, the group maintained its robust balance sheet and remains fully funded to achieve growth targets into 2026.
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Broader Market Context
UK homebuilders have been contending with affordability pressures, elevated mortgage rates, and planning delays, but Persimmon’s performance underscores how scale and vertical integration can preserve profitability through the cycle. Its focus on efficiency, cost control, and customer satisfaction has kept it ahead of peers still battling margin compression.
With the UK government signalling stronger pro-housing policies and gradual stabilization in mortgage markets, Persimmon’s mix of cost control and market reach positions it well for a sector recovery. The group’s long-term goal of 20% operating margins and ROCE now appears increasingly achievable if housing demand steadies through 2026–27.
1. Vertical Integration Strengthens Margins
Persimmon’s self-manufactured materials, bricks, tiles, and timber frames, continue to provide a significant cost advantage. Its brickworks and tileworks each delivered record production, cutting per-home build costs by up to £5,500. The firm also installed a new automated timber-frame line at its Birmingham factory, with a second facility planned in Loughborough to support medium-term capacity.
These investments not only hedge against supply-chain disruptions but also ensure consistent build quality. As inflation moderates, Persimmon’s ability to control more of its inputs should protect margins and sustain returns even if market pricing remains tight.
2. Disciplined Land Strategy and Expanding Outlets
The company’s selective land buying remains a competitive edge. Persimmon added 5,729 new plots in the half, maintaining an 11.9% land cost-to-revenue ratio and expanding its total holdings to 82,504 plots. With 277 active outlets (up 4%) and a strong planning pipeline, the group expects to exceed 300 outlets by year-end, securing visibility into 2026 volumes.
Persimmon also finalized the £100 million sale of FibreNest, a non-core broadband business, redirecting proceeds into higher-return land investments. These actions reflect management’s discipline in optimizing capital allocation while reinforcing the platform for steady growth.
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3. Resilient Demand Across Brands
Persimmon’s three-brand portfolio, Persimmon Homes, Charles Church, and Westbury Partnerships, continues to diversify demand. Charles Church completions rose 20%, driven by strong uptake in premium housing, while Persimmon Homes maintained its edge in affordability through flexible financing and new shared-equity programs.
Westbury Partnerships added 618 homes for housing associations and remains fully secured for 2025 delivery, supported by a growing build-to-rent presence. This multi-channel mix allows Persimmon to sustain sales even as first-time buyer affordability remains constrained.
The TIKR Takeaway
Persimmon’s first half demonstrates a builder executing through headwinds. Solid pricing, stronger completions, and manufacturing efficiencies highlight its durable model. While affordability remains a risk, Persimmon’s strong land position, vertical integration, and multi-brand diversification offer structural advantages that should compound returns once volumes recover.
Should You Buy, Sell, or Hold Persimmon Stock in 2025?
At roughly £12 per share, Persimmon trades at under 9× forward earnings and yields 5%, supported by a strong balance sheet and consistent dividends. For long-term investors seeking income and exposure to the UK housing recovery, Persimmon combines steady execution with margin resilience and optional upside from falling mortgage rates.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
