Persimmon Half-Year Results 2026: Volumes Rise but Margins and Debt Need Watching

Persimmon has delivered a solid first half of 2026, with higher completions, increased market share and growth in both underlying and statutory profit.

The headline numbers are encouraging. However, investors also need to look beneath the volume growth. Margins declined, finance costs rose sharply and the balance sheet moved from net cash to net debt as Persimmon invested in land, construction and future growth.

That makes these results positive overall, but not without important pressure points.

The full figures are available in the original company announcement.

Persimmon's key half-year figures

Metric	H1 2026	H1 2025	Change
New home completions	5,189	4,605	13%
Average sales price	£285,752	£284,047	1%
New housing revenue	£1.48 billion	£1.31 billion	13%
Underlying operating profit	£189.1 million	£172.0 million	10%
Underlying operating margin	12.8%	13.1%	Down 30 basis points
Underlying profit before tax	£170.1 million	£164.9 million	3%
Statutory profit before tax	£168.0 million	£146.7 million	15%
Net debt or cash	£165.0 million net debt	£123.0 million net cash	£288.0 million movement
Interim dividend	20p	20p	Unchanged

A basis point is one-hundredth of a percentage point, so the 30 basis point decline means the underlying operating margin fell by 0.3 percentage points.

Volume growth did the heavy lifting

The strongest part of the update is Persimmon's delivery growth. Completions increased by 13% to 5,189 homes, while new housing revenue rose by the same percentage to £1.48 billion.

The average sales price increased by only 1%, meaning the revenue improvement came mainly from selling more homes rather than relying on substantial price rises.

Private completions increased 7% to 4,261 homes, with the private average sales price up from £302,476 to £310,464. Charles Church helped improve this mix, with completions from the premium brand rising 25% to 555.

Housing association completions increased 50% to 928 homes. This provided useful volume growth but also contributed to margin pressure because these homes are sold at lower margins. Their average sales price was £172,286.

Persimmon's first-half private sales rate improved 7% to 0.75 homes per outlet per week. Excluding bulk transactions, it rose 3% to 0.64. These figures suggest the company gained ground despite continuing affordability constraints.

Investors following Persimmon PLC will recognise the strategic emphasis on broader customer coverage through Persimmon Homes, Charles Church and Westbury Partnerships. All three brands grew during the period.

Profit increased, but margins remain under pressure

Underlying operating profit rose 10% to £189.1 million, supported by higher volumes and operational leverage. Statutory operating profit increased 22% to £187.0 million, although the comparison benefited from a £16.2 million exceptional charge in H1 2025. There were no exceptional items this time.

The concern is that profitability did not rise as quickly as housing revenue.

Underlying housing gross margin fell from 20.1% to 18.0%. Management attributed this to a greater proportion of lower-margin housing association homes, increased incentives, residual build-cost inflation and additional cost pressures.

Underlying operating margin also declined from 13.1% to 12.8%. Higher volumes therefore offset much of the margin squeeze, but did not remove it.

Underlying profit before tax increased by a more modest 3% to £170.1 million. One reason was the increase in net finance costs from £7.1 million to £19.0 million, reflecting higher average borrowings and increased imputed interest on land creditors and the legacy buildings provision.

The balance sheet absorbed significant investment

Persimmon moved from £123.0 million of net cash at 30 June 2025 to £165.0 million of net debt at 30 June 2026.

This was not simply the result of weaker trading. The company invested heavily in work in progress, land and operational capabilities. Work in progress increased by £212.7 million from the end of 2025 to £1.85 billion, with around 5,000 equivalent units under construction.

Gross land spending was £271.1 million, while the business ended June with 80,836 plots owned or under control. That represents 6.5 years of supply based on expected 2026 volumes.

Persimmon also had £497.3 million of land creditors, up from £401.1 million a year earlier. These are deferred amounts owed for land purchases, with around £185 million expected to be paid by the end of 2026.

Liquidity appears substantial, with total committed bank facilities increased to £1 billion. Nevertheless, the movement into net debt means cash conversion deserves close attention. Management continues to expect the year-end position to fall between £100 million of net debt and £100 million of net cash.

Cost inflation is the main warning for 2027

Persimmon expects build-cost inflation of around 3% to 4% in 2026. Before mitigating action, the estimated effect of increased inflation expectations could be approximately £40 million to £50 million over the next 18 months.

Management believes it has already identified savings capable of offsetting at least half of that impact. Measures include procurement savings, specification changes, house-type design improvements, overhead reductions and operating efficiencies.

Even so, the company warned that these actions might not fully offset the pressure in 2027. It also said the review could lead to restructuring costs during the second half of 2026, although the amount was not disclosed.

Vertical integration should provide some protection. Persimmon supplied 31.0 million bricks from its own factory during the half, while Space4 timber-frame deliveries increased 30% to 2,219 units. Producing more components internally can support cost control, supply resilience and consistency.

Sales visibility supports the full-year target

The current private forward order book increased 5% to £1.31 billion, with the private average sales price up 3% to approximately £302,000.

Persimmon is around 80% secured on expected private completions and fully secured on housing association completions for 2026. It expects to deliver around 12,500 homes for the full year, at the upper end of previous guidance, assuming no material change in market conditions.

There is some short-term softness to monitor. In the five weeks following the half year, the overall private sales rate rose 6% to 0.72, but the rate excluding bulk sales slipped to 0.59 from 0.61. Website traffic remained well ahead of the prior year, although enquiries weakened in July.

Persimmon plans to open around 100 gross new outlets during 2026 and remains confident of reaching at least 300 outlets over the medium term.

Dividend maintained while returns remain a longer-term goal

The Board declared an unchanged interim dividend of 20p per share, payable on 6 November 2026. Persimmon also paid the 40p final dividend for 2025 in July.

Management intends to maintain a minimum annual capital return of 60p per share, with the potential to increase returns over time as cash generation improves. Future surplus cash could be used for higher dividends or share buybacks, but no additional return has been announced.

The medium-term ambition remains a 20% housing operating margin and 20% return on capital employed, or ROCE. ROCE measures how effectively a business generates operating profit from the capital invested in it.

Current underlying figures of 12.8% for operating margin and 11.3% for ROCE show that Persimmon still has considerable ground to cover.

What Persimmon needs to prove next

Persimmon's operational progress is clear. More homes were completed, all three brands grew and the forward order book provides reasonable visibility for the rest of 2026.

The next test is whether higher volumes can translate into stronger margins and cash generation. Investors should watch the open-market sales rate, build-cost inflation, delivery of planned savings, year-end debt and progress towards the 20% margin and ROCE ambitions.

For now, Persimmon is growing through a difficult housing market, but the cost of supporting that growth is visible in both margins and the balance sheet.