Persimmon Warns of Rising Costs, Shares Drop 8% Amid Inflation Fears
ECONOMY & POLICY

Persimmon Warns of Rising Costs, Shares Drop 8% Amid Inflation Fears

British homebuilder Persimmon's stock plummeted by 8%, reaching a four-month low of 1,352 pence, after the company raised concerns about increasing costs for 2025. The broader construction sector also saw a decline of 3%, highlighting the widespread impact of inflation fears across the industry.

The cost increases come as rising inflation, spurred by the UK government's October budget, is expected to delay potential interest rate cuts by the Bank of England. Persimmon’s Chief Financial Officer, Andrew Duxbury, revealed that the company anticipates additional expenses, including a £5 million increase from higher national insurance rates and another £10 million impact through the supply chain over the next year.

In her first budget, British finance minister Rachel Reeves raised employer social security contributions by 1.2 percentage points to 15%, adding pressure to business costs. This move is aimed at raising revenue but has drawn criticism from companies worried about economic growth due to higher payroll expenses.

Despite cost concerns, Persimmon reported positive sales figures, with private forward sales since July 1 increasing by 40% to £1.45 billion. The company's net private sales per outlet also saw a 37% year-on-year rise during the second half of 2024.

Barclays analysts noted that the return of cost inflation presents margin risks, with another UK homebuilder, Vistry, also reporting similar concerns last month, cutting its annual profit forecast due to understated costs in one of its divisions.

British homebuilder Persimmon's stock plummeted by 8%, reaching a four-month low of 1,352 pence, after the company raised concerns about increasing costs for 2025. The broader construction sector also saw a decline of 3%, highlighting the widespread impact of inflation fears across the industry. The cost increases come as rising inflation, spurred by the UK government's October budget, is expected to delay potential interest rate cuts by the Bank of England. Persimmon’s Chief Financial Officer, Andrew Duxbury, revealed that the company anticipates additional expenses, including a £5 million increase from higher national insurance rates and another £10 million impact through the supply chain over the next year. In her first budget, British finance minister Rachel Reeves raised employer social security contributions by 1.2 percentage points to 15%, adding pressure to business costs. This move is aimed at raising revenue but has drawn criticism from companies worried about economic growth due to higher payroll expenses. Despite cost concerns, Persimmon reported positive sales figures, with private forward sales since July 1 increasing by 40% to £1.45 billion. The company's net private sales per outlet also saw a 37% year-on-year rise during the second half of 2024. Barclays analysts noted that the return of cost inflation presents margin risks, with another UK homebuilder, Vistry, also reporting similar concerns last month, cutting its annual profit forecast due to understated costs in one of its divisions.

Related Stories

Gold Stories

Next Story
Real Estate

Anshul Singhal launches Vantrock with Rs 42 billion development plan

Real estate professional Anshul Singhal has launched Vantrock Real Assets Private Limited (VRAPL), a Mumbai-headquartered platform focused initially on warehousing, industrial and logistics parks. The company plans to develop approximately 11.5 million sq ft of assets, with an estimated gross development value (GDV) of Rs 42 billion (approximately USD 434 million) on completion.The first phase will cover around 3 million sq ft across the National Capital Region (NCR), Bengaluru and Pune, with an estimated development value of Rs 11 billion (approximately USD 113 million). Construction is sched..

Next Story
Infrastructure Transport

Afcons wins CII award for biodiversity management

Afcons Infrastructure has received the Confederation of Indian Industry (CII) National Award for Environmental Best Practices 2026 in the Biodiversity Management category for its work on the Mumbai-Ahmedabad High Speed Rail Project’s C-2 package.The award was presented at a ceremony in Chennai on 9 October 2026. It was received by Mihir Mishra, Vice-President, CPE, and Sumon Paul, Assistant General Manager, HSE, along with the Afcons team.The project adopted several resource recovery and waste management practices. These included recycling concrete washout waste to recover sand, aggregates a..

Next Story
Technology

Indian businesses lead globally in planned AI investment, says Autodesk

Indian organisations are moving towards deeper integration of artificial intelligence (AI), digital technologies and sustainability into business operations, according to Autodesk’s 2026 State of Design & Make report. The fourth edition of the annual study highlights growing AI adoption, measurable outcomes from digital transformation and the role of sustainability in long-term business growth.The report found that 64 per cent of Indian organisations are approaching or have achieved their current AI goals. While 88 per cent believe AI will enhance their industry, up from 78 per cent in 2..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code