Persimmon has cut around 300 jobs, reported a drop in revenue and profits, and signalled plans to make a further £25 million in savings.  

The company revealed a fall in revenue to £1.2 billion as it sold considerably fewer houses during the first six months of the year, set against £1.7bn over the same period the year before.

The housebuilder, which has sites across Scotland, said it completed 4,249 new homes over the period, a reduction from 6,652 in the same time frame a year ago, “reflecting the lower forward order book coming into the year following the market challenges after last autumn's 'mini-Budget'”.

Pre-tax profit fell by around two-thirds to £151m. However, the firm stuck to its target and forecast.

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Dean Finch, Persimmon chief executive, said: “Against a backdrop of higher mortgage rates, the removal of Help to Buy and significant market uncertainty, Persimmon has delivered a robust sales rate excluding bulk sales while growing the private average selling price in our forward order book and also securing cost savings.

"We are on track to deliver profit expectations for the year and are building a platform for future growth."

He also said: "With the historic under-supply of homes the longer term outlook for housing remains positive. Persimmon has a proven track record of delivering strong returns through the cycle.”

The firm is also reviewing its sub-contractor pricing "on a more frequent basis to identify opportunities to secure increased savings".

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It said: "We are actively retendering sites to identify savings. Just as we absorbed many price increases from sub-contractors in recent years, so we need to share the cost pressures in this new challenging environment."

Persimmon also said that "further reviews are ongoing and we are targeting £25m annualised saving".

Andy Murphy, director at Edison Group, said the report “underscores the challenging landscape of Britain's housing sector”.

He said: “The persistent inflation has led the Bank of England to sustain a run of interest rate hikes since December 2021, consequently dampening mortgage affordability and causing subdued demand.”

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He also said: “Despite the significant drop in underlying operating profit to £152.2m from £440.7m, the FTSE 100 firm's annual profit is expected to be in line with the median analysts' consensus of £348m.

“While Persimmon anticipates ongoing market volatility and affordability challenges, they have reassuringly reiterated their home build target of 9,000 for this fiscal year. It's an indication of resilience, but also a sign that the housing sector may continue to grapple with these issues in the near term."

Persimmon said it has a current forward sales position of £1.6bn, which is 30% lower year on year and set against £2.2bn.

Oli Creasey, equity research analyst at Quilter Cheviot, said the results were “as expected”.

He described the order book as “steady” at £1.6bn. “Given the fall in volumes vs 2022, the company’s operating margin has been hit, almost halving to 14%.”

Julie Palmer, partner at Begbies Traynor, also pointed to the source of the slowdown.

She said: “Last year’s mini-Budget sent shockwaves through the entire housing industry and its impact is clear to see in Persimmon’s results …”

Ms Palmer also said: “Britain is suffering from a structural housing shortage, with simply not enough new properties being built. That means that the long-term future of the Persimmon is strong, despite the current difficulties caused by soaring mortgage costs.”

Persimmon also said it has identified a further seven buildings that need to have cladding removed or other fire safety work after the Grenfell fire highlighted the need for change.

Persimmon set aside £275m last year in order to support leaseholders in buildings it had constructed to remove combustible cladding.

Similar cladding, which is put on the outside of a building, was widely blamed for the rapid spread of the fire at Grenfell Tower in London in 2017, which killed 72 people.

Developers, including Persimmon, have signed deals with the Government that oblige them to make buildings safer.

Shares in Persimmon closed up 25p, or 2.23%, at 1,148.5p.