Persimmon has increased its homebuilding full-year guidance in its half-year results, after recording a 15% increase in both group revenue and profit before tax.

In the six months to 30 June, the housebuilder saw its statutory group revenue jump to £1.73bn, while its statutory profit before tax totalled £168m.

In this period, new home completions rose by 13% to 5,189, with new housing revenue increasing by the same proportion to £1.48bn.

Meanwhile, the housebuilder’s underlying operating profit jumped by 10% to £189.1m, driven by increased volume and “ongoing operational discipline”.

Persimmon stated that assuming no “material change” to market conditions, it expects to deliver around 12,500 home completions in the full-year, which is at the upper end of its previous guidance.

It also expects its underlying profit to be in line with market expectations.

While its lower build costs, vertically integrated operating platform, procurement scale and ongoing efficiency actions are already providing important mitigation, it does expect additional inflationary pressure in 2027 as a result of the Middle East conflict, adding that its mitigations may not fully offset the impact in 2027.

Following the update, shares in Persimmon increased by over 4%.

Group chief executive at Persimmon, Dean Finch, said the firm’s performance demonstrates the “strength” of its "established strategy, product mix and geographic footprint".

He added: "Market conditions remain challenging, with affordability constraints and build cost pressures affecting the sector. We have responded quickly, taking clear management action focusing on driving operational efficiencies throughout the business. Our disciplined land buying, industry-leading cost efficiency and vertically integrated operating platform give us important structural advantages as we seek to mitigate cost pressures and support growth.

"Persimmon's strategy is delivering growth. Having significantly invested in our strategy over recent years, our focus is increasingly on converting those investments into improving returns. Our disciplined land investment at better margins, outlet growth, stronger brands and increasingly differentiated operating platform position us to progressively deliver higher volumes, stronger cash-generation and improving returns over time."

Investment director at AJ Bell, Russ Mould, described Persimmon’s results as "no mean feat".

He concluded: "This is underpinned by strong volume growth in the first half of the year. Persimmon also reported resilient margins which only edged slightly lower year-on-year. The company’s vertically integrated model, with materials and components manufactured in-house, helps provide a measure of protection against rising costs.

"It does not however render Persimmon immune from the inflationary pressures facing the industry and this was reflected in the company quantifying a substantial headwind on this front in the coming 18 months.

"The need to have a cash buffer to withstand these pressures explains the decision to keep the dividend on hold. It is striking that Persimmon hasn’t yet pivoted towards buybacks like several of its peer group."

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