York-based homebuilder Persimmon reported a jump of 55 per cent in 2011 profits from a year earlier and plans to return nearly £2bn to shareholders over the coming decade, the company announced today.
Persimmon's profits last year rose to £148.1m from £95.5m in 2010, despite a year-on-year drop in revenue, from £1.57bn to £1.54bn.
The company increased its final 2011 dividend to 6.0p per share - up from 4.5p per share in 2010 - and said it will send shareholders dividends -- totalling £1.9bn -- between 2013 and 2021.
Alastair Stewart of Collins Stewart thinks the £1.9bn pledge to shareholders may be overly optimistic about the long-term future of the housing market.
He said, in a report on Persimmon: "We see this as a very big bet on a big, long cyclical upturn - which we don't concur with, certainly over the next two or three years."
Colm Lauder, research analyst with Investment Property Databank, is reasonably optimistic about the housing market for 2012. Lauder told New Statesman:
I would like to think things will improve once we get over the [Greek bailout] hurdle. Hopefully banks will cool down a bit once the situation in Europe is more clarified.
Persimmon group chairman Nicholas Wrigley acknowledged the tough state of the current housing market but pointed to some positive trends. He said, in a statement:
"Visitor levels and reservations continue on an improving trend and, although we expect the UK housing market to remain difficult, Persimmon is in a strong position to meet this challenge."
The company acquired 14,300 plots in 2011, bringing its total to 63,300.
Persimmon's stock surged 19 per cent in the first hour of trading Tuesday, and was up 12 per cent in early afternoon trading. The company's stock is up 50 per cent in 2012.