Persimmon Shares (LON: PSN) Jump as Firm Increases Profit Guidance

Developer Persimmon (LON: PSN) has raised its 2024 pre-tax profit guidance, surprising investors and market analysts with better-than-expected home completions and increased average selling prices. This update was well received, as evidenced by a notable rise in Persimmon's share price, which climbed 66.5p or 6.3% to reach 1122.50p following the announcement.

Persimmon reported a substantial improvement in its home completions, delivering 10,664 homes by December 2024. This figure represents a 7% increase from the previous year, exceeding market consensus expectations. The growth in completions was bolstered by an 18% rise in private home completions.

The company also saw a favorable shift in its selling prices. The blended average price for homes was 5% higher than the previous year. Additionally, net private sales per week increased to 0.7 from 0.58, marking a 21% rise.

The improvement in completions and prices has led Persimmon to project its underlying pre-tax profit for 2024 towards the upper end of market expectations. The profit is anticipated to land between £350 million and £390 million.

In terms of forward sales, Persimmon has strengthened its position, reporting an 8% increase to £1.15 billion, with private forward sales soaring by 31%.

After 2024 saw Persimmon's shares fall more than 14%, the latest trading statement provides a glimmer of hope for investors as the company improves its financial outlook, driven by stronger home completions and increased selling prices. The road to recovery might still take some time, but the news is certainly welcome for bulls.