PERSIMMON refused to rule out a takeover bid for a sector rival yesterday, as City speculation intensifies that weak market conditions will trigger a fresh round of consolidation in the housebuilding sector.
John White, chief executive, said that he was “watching the sector with interest” as City analysts suggested that Persimmon may be preparing to pounce on a rival.
Persimmon’s gearing has dropped to just 13 per cent, leaving it with plenty of headroom for acquisitions.
Nevertheless Mr White insisted that the company had not changed its position from earlier in the year, when it said it was focusing on organic growth.
“We have stacks of opportunities for organic growth in the business so we don’t need to do a corporate deal to achieve that,” he said. But he added that nothing had been ruled out.
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The comments came as Persimmon forecast a slight upturn in the housing market this autumn. Mr White said: “There is cause for optimism in the autumn. Confidence is returning now people can see there is not going to be a price crash.”
He said that he expected house prices to rise by between 4 and 5 per cent this year — the top end of the range he forecast earlier this year.
In a trading update Persimmon said that despite slower market conditions, pre-tax profits would be ahead of last year, boosted by a 7.6 per cent rise in average selling prices to £184,000. The company said that the rise was a mix of house price inflation and higher sales at Charles Church, its premium brand.
The group attributed its strong performance to a 15 per cent increase in its sales outlets. Overall Persimmon said that total sales revenue to date this year was about £1.8 billion from about 10,000 homes.
Shares in Persimmon rose 2½p to 749½p.