Homebuilder Persimmon sees energy price-led cost inflation, holds 2026 delivery target
Persimmon's Performance and Market Outlook
By Raechel Thankam Job
April 30 (Reuters) - Persimmon warned on Thursday that surging energy prices could push up costs into the next year, but kept its home delivery forecast unchanged after posting robust sales growth through the first four months of 2026.
Resilience Amid Rising Material Costs
Capabilities such as in-house production of bricks, tiles and timber frames have made the company more resilient than peers to rising material costs due to soaring oil prices brought by the Iran war that have squeezed the outlook for the sector.
"There are early signs of increased inflation in the supply chain, driven by higher energy costs, which are likely to impact the second half of 2026 and into 2027", it said.
Its shares rose nearly 3% in early trading.
Industry Comparison and Land Investment Strategy
Competitor Strategies
Berkeley has warned of slower profit growth through 2030 and paused new land purchases, while Barratt Redrow and Taylor Wimpey have scaled back land approvals.
Persimmon's Approach
Persimmon, which has bucked the trend by pressing ahead with investment in new land, said it will be "even more disciplined" with land buying, given the current backdrop.
The builder said it is reviewing costs and working with suppliers to mitigate impacts and maintained its 2026 home completions target, subject to stable market conditions.
Sales Performance and Market Conditions
Enquiries and Sales Metrics
ENQUIRIES SOFTEN AS RATES CLIMB
Persimmon's weekly net private sales per outlet, excluding bulk deals, rose 3% to 0.67 in the year to date, though it acknowledged enquiries had softened slightly in recent weeks, as mortgage rates climbed.
CEO Commentary
"We are mindful of its (the conflict's) potential impact, including on consumer confidence, and there are early signs of increased inflationary pressure," CEO Dean Finch said, adding it had no material impact yet on trading.
Financial Outlook and Analyst Views
Profit Expectations
Persimmon expects to report 2026 pre-tax profit in line with market expectations of 462 million pounds ($622.08 million), according to company consensus.
Analyst Commentary
JPMorgan's Perspective
"We think this is a robust update from Persimmon," said JPMorgan analyst Zaim Beekawa, adding that its performance stands out from that of peers.
($1=0.7427 pounds)
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Subhranshu Sahu and Clarence Fernandez)
