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LONDON -- Persimmon (LSE: PSN.L ) -- the housebuilding group behind Persimmon Homes, Charles Church, and Westbury Partnerships -- posted a 65% increase in pre-tax profits this morning, up to 98.7 million pounds from 2011's 59.7 million pounds. Revenue was up 13% at 806.7 million pounds, with legal completions up 6% to 4,712, and a strong increase in operating margin, up to 12.2% from 9% a year ago. But the good news was obviously already more than priced-in, as its share price had slipped almost 3% at the time of writing.
Chairman Nicholas Wrigley commented:
The Group has made an excellent start to the current financial year, underlying pre-tax profit up 65% and an operating margin of 12.2% -- an improvement of 320bps compared to the first half of 2011. These results reflect the early success of Persimmon's new strategy to grow into a stronger, larger business whilst returning [1.9 billion pounds] of surplus cash to shareholders The future growth of Persimmon will continue to be based on the solid foundations of the good results achieved in the first half of 2012.
Even with this morning's drop, Persimmon's share price is up almost 80% on a year ago and, with its nine-year plan to return 6.20 pounds per share of surplus capital to shareholders over the next nine years, it looks an attractive proposition, despite the challenging conditions that continue to beset the U.K. housing market.
Persimmon's recent performance shows how well-run companies can provide great opportunities for ordinary investors.
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