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Persimmon invests in land as turnover rises 26pc

Persimmon said it will continue to invest in new development sites in anticipation of a stronger housing market this autumn, as it posted a 26 per cent rise in half year turnover.

In a trading update ahead of its half year results to 30 June 2010, the housebuilder said it remained cautious about the housing market as it saw its turnover for the period increase to £785 million.

The firm said: “We are continuing to invest in new site openings in readiness for the normally stronger housing market in the autumn, however, we remain cautious in our investment decisions until mortgage availability improves further.”

During the last six months the company has acquired around 4,000 plots and has also agreed terms on a further 3,500 plots, which are proceeding to contract.  Its total land holdings are at a similar level as at 31 December 2009.

Persimmon has now replanned the bulk of its existing landbank with 85 per cent of its plots nohaving planning for traditional two and three storey housing, for which it said demand would be strongest.

The firm said completions in the first six months of 2010 had increased 16 per cent to 4,567 compared to 4,006 in the same period last year.

It also expects operating margins for the first half of 2010 - before exceptional items - to have increased to 7.5 per cent.

The firm said: “We have made good progress with our planned strategy of debt reduction and margin improvement.  We have a strong platform for profit growth as and when the housing market improves further.”