BRITISH house builder Persimmon reported a 64-percent fall in first-half pretax profit yesterday and said it was cutting its dividend.

It blamed very difficult market conditions and uncertainty for the rest of 2008 for the cut in the payout to 5 pence a share from 18.5 pence (34 US cents).

Home sales were down 31 percent year on year as buyers found it much harder to get mortgages, but the company said sales volumes since April had not deteriorated any further.

Shares in the company, which peaked at 1,544 pence in January 2007, were up 1.84 percent to 304.25 pence yesterday morning.

"We are surprised to see the group claiming that trading has not deteriorated since the slowdown in April, which flies in the face of comments from others house builders," Landsbanki analyst Simon Brown said.

"This and the anticipated free cash flow of 200 million pounds in the second half should reassure doubters that Persimmon can successfully weather this storm."

Persimmon, which in the past few months has restructured and cut 1,100 jobs, was cautious in its outlook as prices and margins remained under pressure in an industry trying to dispose of stocks of houses. It said that activity levels in the autumn selling season would give a clearer picture for 2009.

"The recent speculation regarding a change to stamp duty on housing transactions has undoubtedly caused further delay and uncertainty in respect of house purchases," it said. "However, we are pleased that the government has confirmed it is considering various alternatives for assisting the housing market, particularly with respect to improving mortgage availability."

Persimmon, Britain's biggest house builder by market value and number three by homes built, posted 100.9 million pounds in pretax profit for the six months to end-June.