UK's Persimmon says 'mindful' of economic woes, home completions on track

Persimmon Remains Cautious Amid Economic Uncertainty, Home Targets Met

(Reuters) -UK homebuilder Persimmon said on Thursday it was currently on track to deliver its annual target for home completions, but was cautious of how widespread economic uncertainty could affect affordability and demand.

The company said ongoing geopolitical uncertainty had not yet impacted business or consumer confidence, or its supply chain and sales rate, but was "mindful" of possible impact of economic uncertainties on mortgage rates and consumer spending.

That caution undercut what analysts called a "good start to the year" after Persimmon's sales rate for the three-month period ended April 27 was 1% higher than last year.

The company's shares fell as much as 2.36% earlier in the session, but reversed losses to trade 0.6% higher, as of 0811 GMT.

Housing demand in the UK has been through the wringer in recent years.

While the market overall has recovered since the pandemic and the Labour government has sought to revive the sector, rising inflation, slower-than-expected interest rate cuts and an end to a discount on property transactions are weighing on demand.

Still, Peel Hunt analysts view Persimmon as "well placed in the context of a recovering market."

They said the company's broad presence should help it with selling prices, while having a central production process and specialty in timber frames will aid in managing any cost increases or supply issues.

Persimmon's forward sales position, which measures sold properties pending construction, grew to 2.34 billion pounds ($3.11 billion) for the reported period, from 2.09 billion pounds a year earlier.

The company also said that any impact from U.S. tariffs was expected to be limited and indirect as it does not trade directly with the U.S. market.

($1 = 0.7522 pounds)

(Reporting by Simone Lobo and Pushkala Aripaka in Bengaluru; Editing by Rashmi Aich)