Directors of Persimmon Homes West Midlands said its market has seen recovery after its parent company reported a seven per cent sales rise.

John White, chairman of the Wolverhampton-based firm, said it had seen progress on several sites in the region.

He was speaking after Persimmon reported a seven per cent rise in sales since the beginning of the year and said the sales rate per site was up by a fifth due to the company operating from 370 locations, 12 per cent fewer than a year earlier.

Persimmon comments emerged as it reported pre-tax profits of £77.8 million for last year, compared with a £780 million loss in 2008 when results were affected by write-downs due to lower property valuations.

The company wrote back £74.8 million, meaning that profits without exceptional items were £3 million.

Mr White said: “Our cash generation and cost control have placed the business in a strong position both operationally and financially for a recovering market.

“Prices have held firm since the beginning of the year and we remain focused on improving our operating margins and to profitably grow the business.”

Dominic Harman, managing director for Persimmon Homes West Midlands, said: “During the second half of 2009 we were able to achieve more legal completions than the first half, as we continued to see confidence return to the housing market. As an example our Charles Church development, Deers Leap in Birmingham had an increase of around 25 per cent more customers moving into their new home at the end of 2009 than the start of the year.

“We remain cautious, but by focusing on our production and strong cash management, we have been able to invest in both our existing developments and open new schemes at Adam’s Court in Newport, and The Pippins in Rugeley, as we see the underlying demand for new homes gaining momentum. We have also achieved planning consent at our site in West Heath, Birmingham and we are currently tendering the infrastructure works to start construction within the next two months.

“We see this as the right time to purchase land and we have been successful in negotiating the purchase of land in Wolverhampton and Birmingham which again strengthens our position in our operating area. We are delighted that we have obtained planning for 170 new homes at Hadley quarry in Telford, which is the first phase of development of a much larger scheme.

“The Government’s HomeBuy Direct initiative is still proving very successful for us and we are seeing a growing demand for this exclusive new home scheme as our customers become more familiar with the assistance that is on offer for first time buyers and key workers. Our scheme at Mitchells Brook in Smethwick has seen an exceptional take up in demand.

“Whilst we still have funds available, we have also successfully applied for funding using Kickstart, to help start more developments and widen the availability of HomeBuy Direct to even more customers. Forthcoming developments at West Heath, Birmingham and a new phase at Crystal Mead in Stourbridge will open very shortly, providing even more assistance to first time buyers.”

Persimmon halted work in April 2008 before opening 40 new sites in the first half of last year and a further 50 in the second half. Some of the sites were assisted by Government grant funding for affordable homes.

With prices remaining firm since the beginning of the year, Persimmon said it would look for an improvement in operating margin from its current level of six per cent.