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Housebuilder Persimmon Sees Profits Soar 65%

(c) Sky News 2012

Housebuilder Persimmon has reported a pre-tax profit rise of 65% to £98.7m for half a year to the end of June.

It compares to £59.7m for the same period in 2011.

The company also said revenue was up by 13% to £806.7m.

Commenting on the results, chairman Nicholas Wrigley said the strong performance means the company is on track to deliver £6.20 per share to stakeholders over the next 9 years.

Mr Wrigley said: "These results reflect the early success of Persimmon (LSE: PSN.L - news) 's new strategy to grow into a stronger, larger business whilst returning £1.9bn of surplus cash to shareholders.

"The future growth of Persimmon will continue to be based on the solid foundations of the good results achieved in the first half of 2012."

The housing business completed 2,838 new homes in the first half of 2012, a 4% rise on the previous year.

The strongest growth was in the company's north division which saw the number of new homes climb by 21% to 1,080.

On average Persimmon's houses sold for £171,703- a 3% increase on 2011 and the firm said pricing has remained stable despite tough economic conditions.

It said: "Although the UK housing market remains constrained by the reduced availability of mortgage credit we have continued to see strong demand from first time buyers for the Government backed FirstBuy shared equity scheme."

"We expect conditions in the UK housing market to remain challenging reflecting the wider issues within the economy.

"However, we anticipate continued firm underlying demand for new homes but this will remain constrained by the low level of mortgage availability."

The company said it was working with mortgage lenders to develop opportunities that help buyers get onto the housing market.

It added: "Government initiatives such as NewBuy are an important feature in helping the industry deliver the new homes and associated infrastructure which will support UK economic growth over the next few years.

"We are pleased to see recent rate reductions by the lenders which should help affordability."

The news follows Bovis homes' announcement that it's profits doubled in the first half of the year.

The strong set of results come as Halifax reported that the average house price has fallen by 0.6% over the last year.