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Persimmon shares higher as it enjoys increased demand

Last updated: 19:00 25 Feb 2014 AEDT, First published: 20:00 25 Feb 2014 AEDT

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UK house builder Persimmon (LON:PSN) expects further encouraging sales growth in 2014 as it showed pre-tax profit surged almost 50% in 2013.

The firm, along with the rest of the sector, is enjoying surging demand for new homes, driven by improved mortgage lending and such schemes as 'Help to Buy'.

The firm said the strong result enabled it to accelerate its plan to return cash to shareholders, which will see a final planned payment of 115 pence a share in 2021.

For the 12 months to December 31 last year, underlying pre-tax profit was £330mln (2012: £222mln) on revenue of £2.1bn (2012: £1.7bn).

Legal completions increased by 16% to 11,528 (2012: 9,903) and the average selling price was lifted 4% to £181,861 (2012: £175,640), the company said.

The company bought a further 17,735 plots in the year bringing the consented land bank to 74,407, representing 6.5 years supply.

Nicholas Wrigley, group chairman, said: "The group entered 2014 with a very strong forward order book and the early weeks of the spring selling season have been encouraging, with our weekly private sales rate per site being 22% ahead of last year for the first eight weeks.

"We anticipate a further year of encouraging sales growth in 2014."

Shares nudged up 0.75% to stand at 1,482p.

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