Housebuilder Persimmon - behind the controversial redevelopment of the Cape Hill Brewery site in Smethwick - sounded a positive note about future prospects as it unveiled a seven per cent rise in first half profits to a record £235 million.
Persimmon - parent company of Wolverhamptonbased Persimmon Homes West Midlands - yesterday said it was well-placed for the full year with sales of £980 million already booked for its second half, similar to last year's level.
Although the slower housing market has led some of its rivals to warn of lower volumes and margin erosion, Persimmon said its wide geographic spread and range of house types helped protect it against the downturn.
Maureen Haywood, deputy managing director for Persimmon's West Midlands division, said the regional property market had reached a period of stability.
She said: "While we haven't seen high levels of price growth, there are no significant price reductions."
Sales across the West Midlands had remained constant over the last six months and the division was on track to achieve its year end target.
She was upbeat about performance over the coming months with six new developments set to be launched during the rest of the year.
The York-based group's core operation has 26 regional offices ranging from from Exeter to Edinburgh, while its premium Charles Church division operates from a further nine regional sites.
Persimmon said this month's interest rate cut contributed to its confidence and added: "We remain optimistic for the business in 2005 and are well-placed for 2006 and beyond."
The results were in line with analysts' expectations after Persimmon reported a large uplift in the price of its homes in a recent trading statement.
During the six months to June 30, it sold 5,954 homes at an average price of £183,581, compared with 6,058 homes last year at an average £171,082.
Chairman Duncan Davidson said the recent reduction in interest rates, continuing low unemployment levels, together with the strong position of Persimmon's business, gave the firm great confidence for the future.
He said: "Whilst the current market requires us to be flexible in our approach to both sales and marketing, it is nevertheless one in which we can continue to operate successfully."
Persimmon said special incentives and extra marketing costs due to the slowdown in demand had been largely balanced by its ability to minimise other cost increases.
Charles Church homes, which attract affluent buyers who are more immune to changes in interest rates, continued to make strong progress, completing 568 homes in the first half against 503 last time.
Group turnover increased to £1.09 billion during the period, against £1.04 billion last time.
The land bank rose to 62,157 plots from 60,287 while net new reservations since July 1 are eight per cent ahead of 2004.
The interim dividend was increased by 32 per cent to 12p, and the group said that the payout for the full year would not be less than 30.4p, which is up from 27.5p last time.
