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Date: Thursday 21 Aug 2008

LONDON (ShareCast) - Housebuilder Persimmon saw pre-tax profit plunge 87% in the first six months of 2008 from £281.1m to £36.9m as buyers struggled to get a mortgage.

Underlying pre-tax profit sank 64% to £100.9m, although that figure is before exceptional restructuring costs of £15m and exceptional land write-downs and associated costs of £49m.

Weaker selling prices forced the firm to write-down owned land by about £40m, or 1.5% of the value of the landbank on its balance sheet. Turnover dropped 34% to £998.4m.

It sold 5,501 homes during the period due to a “significant reduction in mortgage availability”, down 31% from 8,002 in 2007, at an average £181,485 versus £189,255 a year ago.

Persimmon said sales for the second half are currently at around £835m versus £1.35bn this time last year. Prices and margins remain under pressure as the industry seeks to offload houses.

“The business has performed well in very difficult conditions,” said chairman John White. “We are confident that our business, having been restructured, is in a strong position to move forward whenever the market improves.”

The dividend is slashed to 5p from 18.5p.

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