In key news on UK stocks, Persimmon PLC (GB:PSN) reported a 52% decline in its pre-tax profits for 2023. Despite lower profits, the company announced a final dividend of 40p per share, leading to a full-year payout of 60p, similar to last year. PSN shares were trading down by more than 4% at the time of writing.
Persimmon is one of the top property developers in the UK, offering services like design, construction, and maintenance of residential buildings.
Thrived in a Challenging Market
Persimmon recorded 9,922 new home completions in its 2023 annual results, surpassing its initial projections. However, this figure was below the 14,868 homes completed in 2022. The average selling price increased by 3% to £255,752 in 2023. The underlying operating profit fell sharply to £354.5 million in 2023, down from £1,006.5 million last year. The bottom line was mainly affected by lower volumes and cost inflation.
Moving ahead, Persimmon expects uncertain market conditions to continue in 2024, particularly for first-time buyers. The potential for an upcoming election further adds to this uncertainty. In total, the company anticipates delivering between 10,000 and 10,500 completions in 2024, with full planning secured for 98% of these projects. Also, the company expects its operating margin to be in line with the 14% recorded in 2023.
Are Persimmon Shares a Good Buy?
According to TipRanks, PSN stock has a Moderate Buy consensus rating based on two Buy and five Hold recommendations. The Persimmon share price forecast is 1,500.71p, which is 13.3% above the current trading level. The target price has a high forecast of 1,706p and a low forecast of 1,120p.
