Housebuilder Persimmon sounded an upbeat note on its prospects today as it put investors on standby for another year of record annual results.

Despite a more subdued market, the York-based group said it expected to meet City forecasts for profits in the region of £467.1 million in the current year, compared with £352.5 million in 2003.

It added that forward sales were at the same level as last year's "very strong" order book of £550 million, while the signs for the market were good.

In a trading update, the company said it believed demand would benefit from the under supply of new housing, in addition to the bounce back expected from the decision of buyers to stay out of the market earlier in the year.

Persimmon added: "The fundamentals for the housing market remain good, with historically low interest rates, good employment prospects and a robust economy."

The company indicated in August that the market was more subdued, although it still said today that volumes for the year had increased to around 12,400 legal completions, compared with 12,163 a year earlier. The average selling price was £172,000, against £154,810.

Since its last update in the summer, Persimmon said prices for new homes had remained stable and that it had been further helped by its limited exposure to the buy-to-let and inner city apartment markets.

It is operating off 12% more sites than at the same time last year and visitor levels remain good, the company added.

Persimmon also said it had seen a considerable easing in labour costs, although the business continued to experience cost pressures on materials.

It told investors: "We expect to keep total build cost increases at a low level. In addition, the depth and quality of our landbank together with our scale benefits puts us in a strong position to continue to focus on profitability and returns."