Persimmon (PSMMF) led U.K. house builders higher Wednesday after reporting double-digit revenue growth for the first-half, driven by an ever present supply and demand disparity in the British housing market.
The U.K.'s second-largest builder said revenue grew 12% to £1.66 billion ($2.14 billion) for the six month ending June 30, with the top line expansion driven by an 8% increase in completions and 3.5% price growth.
Persimmon shares rose 3.5% during early trading in London to change hands at an intraday high of 2,404.0 pence, which came in contrast to the 0.05% loss of the Stoxx Europe 600 Construction & Materials index.
"We expect the Group's strong trading through the first half of the year, including the contribution from 95 new sales outlets opened in the period, will lead to further good progress in our operating margin," the company said in a statement.
Persimmon has forecast that its operating margin for the period will "comfortably exceed" the 25.7% margin it reported for the second half of last year. It also said it will open more than 100 new sales outlets in the second half of the current year.
For the first-half period, the average selling price of a Persimmon home reached £213,000.
The 3.5% rate of growth was slower than that seen in recent years although the residential real estate market remains a bright spot in the domestic construction industry, which is beset with uncertainty related to U.K's pending exit from the EU.
"The construction sector experienced a growth slowdown in June, largely reflecting weaker rises in commercial building and civil engineering activity. Residential construction work continued to increase at one of the fastest rates since the end of 2015," said Tim Moore, a senior economist at IHS Market, when commenting on the latest U.K. construction industry PMI survey Tuesday.
Shares of residential real estate firms, such as Persimmon, have recovered all of the losses wrought on them by the June 2016 Brexit referendum and have since, gone on to post further gains.
The performance has been helped by a growing population and an industry that has consistently failed to build a sufficient number of new homes to keep pace with population growth over many years, a job which is made difficult by an archaic planning system.