August 21, 2012 / 6:32 AM / 5 years ago

UPDATE 1-Persimmon sees lack of finance curbing demand for homes

* H1 pretax profit 98.7 mln stg vs 59.7 mln stg yoy

* Average home selling price up 7 pct to 171,206 stg

* Mortgage availability to curb demand for homes

* On track to pay dividend of 75 pence/shr in 2013

LONDON, Aug 21 (Reuters) - UK housebuilder Persimmon posted a 65 percent rise in first-half profit on the back of higher house prices and home completions and said that the low level of mortgage availability would constrain demand for homes.

Persimmion, the UK’s largest housebuilder by market value, said underlying profit before tax for the six months to end June was 98.7 million pounds ($155 million) versus 59.7 million pounds in the same period in 2011. Revenue rose 13 percent to 806.7 million pounds.

The company said legal completions of homes rose 6 percent to 4,712 and that the average selling price rose to 171,206 pounds from 160,583 pounds in the same period last year.

“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,” Chairman Nicholas Wrigley said.

A lack of available new homes in Britain and government schemes aimed at boosting the market has shored up demand for homes built by Persimmon and its rivals despite the UK’s tough economic outlook.

These housebuilders have also used the financial crisis as an opportunity to snap up cheaper development land. That, combined with a focus on building in regions where house prices have stayed strong, has helped improve profitability.

The company said it had strengthened its landbank, having acquired 5,779 new plots on 50 sites in the first half of the year. It owned and controlled a total of 63,786 plots, representing over 6.5 years’ supply at current sales levels.

Persimmon, which said in February that it planned to return 1.9 billion pounds to shareholders over the next 9 years, said it was on track to make its first dividend payment of 75 pence per share in June 22013.

Shares in the company, which have risen by about 50 percent since the start of 2012, closed at 705 pence on Monday valuing the company at 2.1 billion pounds.

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