Persimmon Profit Surges Amid Housing Market Challenges and Geopolitical Tensions

Persimmon Profit Rises 13% to GBP445.6 Million Despite Challenging Housing Market

• Persimmon’s pretax profit increased 13% to GBP445.6 million in 2025 Persimmon
• New home completions rose 12% to 11,905 units Persimmon
• Shell agrees to sell US Jiffy Lube business for $1.3 billion Shell
• FTSE 100 Index tumbled, with energy stocks leading gains FTSE 100 Index

Geopolitical tensions and rising oil prices impact market sentiment

PERSIMMON—UK housebuilder Persimmon reported a significant increase in its annual profit and completions for 2025, navigating a difficult housing market. The company’s performance comes as energy giants, including Shell, experience stock surges due to rising oil prices exacerbated by geopolitical conflict. The FTSE 100 Index saw energy stocks in the green, with Shell and BP among the top performers, while most other constituents slumped amid escalating geopolitical risks.

The London market is set for a higher open, with the FTSE 100 index called 1.0% higher at 10,355.62, reflecting some resilience despite broader market pressures. The pound also saw gains, trading higher at USD1.3465 compared to the previous London equities close of USD1.3396.

Persimmon’s Financial Performance

Revenue and profit growth driven by higher sales volumes

York-based housebuilder Persimmon announced that its new housing revenue climbed a notable 16% to GBP3.31 billion, an increase from GBP2.86 billion in the prior year. This revenue growth was underpinned by a substantial 12% rise in new home completions, which reached 11,905 units, up from 10,664 a year earlier. The average selling price for these new homes also contributed positively, increasing by 4% to GBP278,203 from GBP268,499.

Profitability sees double-digit increase

Persimmon’s underlying operating profit saw a significant expansion of 17%, reaching GBP472.1 million, an increase from GBP405.2 million. This strong operational performance flowed through to the bottom line, with underlying pretax profit increasing by 13% to GBP445.6 million, up from GBP395.1 million. The total group revenue across all its operations expanded by 17% to GBP3.75 billion. Statutory pretax profit, which includes exceptional items, rose 11% to GBP397.3 million from GBP359.1 million. Reflecting confidence in its financial position, the company maintained its final dividend at 40 pence per share, keeping the total dividend for the year at 60p. Persimmon has stated that its results were achieved despite a “challenging housing market,” highlighting the company’s operational efficiency and market position.

Outlook and Housing Market Conditions

Strong start to 2026 despite market challenges

Persimmon reported that early trading in 2026 has been robust, indicating positive momentum heading into the current year. Specifically, the private sales rate per outlet increased by 9% in the first nine weeks of the year. This indicates a strengthening demand for the company’s properties. Forward private sales stood at GBP1.25 billion as of March 1, representing a 9% increase over the previous period. Total forward sales across all segments grew 6% to GBP1.80 billion, signalling a healthy order book for the coming months. Persimmon anticipates delivering between 12,000 and 12,500 completions in 2026. The company projects its underlying operating profit for 2026 to be towards the upper end of current market consensus, with the crucial assumption that the impact of the conflict with Iran proves short-lived on the broader economy and market sentiment.

Home ownership aspiration remains a growth driver

Despite the “challenging housing market” conditions that Persimmon acknowledged, the company expressed optimism regarding future prospects. Persimmon stated: “The enduring aspiration for home ownership remains strong and provides the opportunity for growth into the medium term.” This view suggests that underlying demand drivers for housing remain intact, even amidst economic uncertainties. The company’s confidence is further buoyed by the strong early trading figures for 2026, reinforcing its strategy and market position. Persimmon’s expectation for profit growth assumes a stabilization or resolution of the geopolitical conflict, which could otherwise introduce volatility into the market and impact consumer confidence and material costs.

Energy Market Volatility and Corporate Impact

Shell agrees to divest US Jiffy Lube business for USD1.3 billion

In a significant corporate maneuver, Shell has agreed to sell its US Jiffy Lube business for USD1.3 billion. This strategic divestment allows Shell to streamline its operations and focus on core energy assets while capitalizing on a favorable market valuation. The sale comes at a time when energy companies are benefiting from a surge in oil and gas prices, driven by ongoing geopolitical tensions, particularly the conflict in Iran.

Energy stocks surge as oil prices hit multi-year highs

The ongoing war in Iran has significantly impacted global energy markets, propelling crude oil and natural gas prices to their highest levels in years. Brent crude prices surged dramatically to $120 per barrel before experiencing a pullback to $105. Similarly, West Texas Intermediate (WTI) jumped to $117, with current trading levels near $102. This represents an extraordinary surge, with oil benchmarks jumping by over 70% this year alone. European gas prices have also seen a dramatic increase, soaring by 117% this year. Energy companies like Shell and BP have been primary beneficiaries of this market environment. Shell’s stock saw a notable surge of 2%, reaching 3,200p, and is hovering near its all-time high. BP’s stock price also experienced a significant jump of 1%, hitting a record high of 513p. These energy companies are positioned to capitalize on the sustained high energy prices, which are expected to translate into substantially higher revenues and profits. Notably, many analysts had not anticipated such a rapid and significant escalation in energy prices this year.

FTSE 100 Index Faces Downward Pressure Amid Geopolitical Risks

Broad market decline with energy sector exceptions

The FTSE 100 Index experienced a significant downturn, tumbling for the third consecutive day and reaching its lowest level since January 20. The index retreated by over 7% from its highest point of the year and is rapidly approaching its correction zone, having fallen by 10% from its year-to-date high. This broad market decline mirrored a negative trend across other major global indices. The German DAX fell by over 2.15%, and other European indices, including the CAC 40, Stoxx 50, and IBEX, experienced drops exceeding 2%. This widespread slump in equity markets indicates a significant shift in investor sentiment, driven by increasing global uncertainties.

Geopolitical risks fuel energy sector gains

The primary catalyst for the market’s sharp slide has been the escalating war in Iran, which has had a profound impact on global energy markets. The conflict has sent crude oil and natural gas prices to multi-year highs, creating a volatile economic environment. While most companies within the FTSE 100 Index were trading in the red, energy sector giants such as Shell and BP demonstrated notable resilience and significant gains. Shell, identified as Europe’s largest energy group, was the top performer on the index, with its stock soaring by 2% to 3,200p, bringing it close to its all-time high. BP’s stock price also saw a substantial 1% jump, reaching a record high of 513p. These energy companies are strategically positioned to capitalize on the sustained surge in energy prices, which are expected to translate directly into higher revenues and profits. This performance contrasts sharply with the broader market, highlighting the divergent impacts of the geopolitical crisis on different sectors.

Other notable market movements

Beyond the major energy players, other companies within the FTSE 100 also experienced varied performance. Admiral Group, Babcock International, and Compass Group were among the other top gainers, indicating specific sector strengths or company-specific news driving their stock prices upward. Conversely, companies like Anglo American, Antofagasta, and Barclays were among those leading the decliners, suggesting broader commodity price pressures or sector-specific challenges affecting their performance. The overall trend, however, remains one of significant downward pressure on the index, with a clear divergence between energy stocks benefiting from the crisis and the majority of other companies facing headwinds.