Shares in Persimmon were down on the FTSE 250 in morning trading after the housebuilder reported a strong rise in revenue and profits in the full year ended 31 December 2010.
Revenues increased 10.5 per cent in the period to £1.57 billion, while pre-tax profit doubled from £77.8 million to £153.9 million. On an underlying basis pre-tax profit soared from £7.0 million to £95.5 million.
Persimmon said that the number of legal completions increased 4.5 per cent in the year to 9,384 new homes. The average selling price also climbed 5.7 per cent to £167,249.
In addition Persimmon said it had forward sales of £848 million, down slightly from £898 million in the previous year. The group also acquired 10,200 plots of land during the year.
The group said its net borrowings fell from £267.5 million to £51 million.
Persimmon said that its final dividend for the year would be 7.5 pence per share.
John White, Chairman of Persimmon, said, "Despite a continuing low level of mortgage approvals, the Group is achieving improving returns and remains well positioned for the upturn in the housing market when it occurs."
Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers, commented, "With buyers and sellers continuing their stand off and banks reluctant to fill the void with mortgage availability, housebuilders continue to use the lull to reposition themselves, supported by ultra low interest rates.
"Like rivals, Persimmon has sculpted a rebound in profitability, reducing costs, adjusting the sales mix away from buy-to-let flats and towards family homes, whilst increasing its dependency on the South of the country, as the UK North South divide continues to intensify. Strong cash flow has remained the focus, a drive underpinning a reduction in debt and enabling the resumption of a dividend payment.
"In addition, investors will take comfort in the group's current trading comments, buoyed further by today's unexpectedly positive Nationwide house price survey.
"In all, management experience and the group's more conservative positioning coming into the credit crisis have allowed for a more rapid turnaround compared to rivals. Persimmon is continuing to wean itself off government support schemes, replacing these with its own initiatives, whilst the use of more newly acquired lower priced land should support profit margins going forward. On balance, market consensus opinion currently denotes a buy."
By 09:40 shares in Persimmon were down 0.40 per cent on the FTSE 250 to 468.50 pence per share.