Persimmon in mood to acquire

BRITAIN'S second-biggest housebuilder, Persimmon, today signalled that it is ready to acquire another housebuilder as it turned in a forecast-busting set of results.

Unveiling a 32% leap in full-year pre-tax profits to £352.5m, nearly £10m above market expectations, group chairman Duncan Davidson said: 'Looking ahead, the group is in a very strong position to achieve further growth, both organically and, where appropriate, by acquisition.'

Improved cashflow and better margins helped reduce gearing to 28% with £314m of borrowings at 31 December 2003.

'This is our lowest level of debt since before the acquisition of the Beazer Group three years ago. This low level of gearing gives Persimmon great flexibility to invest in new opportunities as these occur,' Davidson said.

Market talk over the past year has been that Persimmon, worth £1.6bn, is ready to step up a gear with a big enough corporate corporate acquisition to propel it into the FTSE-100 index. A buy at least as big as Beazer, bought in 2001 for £610m, would do that.