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UK's Persimmon flags risk to building plans from new virus variant

·1-min read

(Reuters) - British homebuilder Persimmon posted a 9% fall in 2020 revenue on Wednesday and flagged risks to its construction sites from the fast-spreading new variant of COVID-19 which has spurred calls for an even tighter UK lockdown.

The warning from Britain's second-largest homebuilder pushed its shares 1.5% lower in early trade and came despite a 25% jump in its forward sales to 1.69 billion pounds ($2.31 billion) from 1.36 billion pounds a year ago.

"Demand for new homes has remained resilient throughout the second half with the group's average weekly sales rate per site being 39% higher than the second half of last year," the company said in a trading update.

While revenue dipped to 3.33 billion pounds from 3.65 billion a year ago, Persimmon said average selling prices had risen to just over 230,000 pounds from 215,000 in 2019.

House prices marked their biggest annual increase in six years last month on the back of government tax incentives and COVID-driven appetite for larger homes.

England is now back under lockdown, however, potentially hampering prospective buyers, although the new restrictions do not affect construction sites, offering relief to builders who had to shut for months last year due to the pandemic.

Persimmon said it was confident of the ability to continue to operate safety and effectively, but also recognised "elevated risks to the Group's planned build programmes" and "increasing operational challenges" linked to unplanned staff absences and its supply chain.

($1 = 0.7309 pounds)

(Reporting by Aby Jose Koilparambil and Samantha Machado in Bengaluru; Editing by Saumyadeb Chakrabarty and Patrick Graham)