Persimmon reports “very strong” start to 2018 as shareholder plan is set to double
York-headquartered housebuilder Persimmon has announced a “very strong” forward sales position with legal completions so far this at £2.76bn – up 8% on the same period last year.
The firm said it had 9,048 (2017: 8,928) new homes sold forward into the private ownership market with an average selling price of £236,500 (2017: c. £229,500).
The group has also maintained a forward order book of new homes for delivery to its Housing Association partners, with 5,330 (2017: 4,616) new homes included in its forward sales position.
In its update to the market ahead of its AGM today, Persimmon said: “The Group continues to focus on building family housing at affordable prices across the UK. Customer activity since the start of the year has been encouraging with the Group’s total enquiry levels running c. 13% ahead of the prior year.
“This has resulted in robust trading since the start of the year with visitor levels to site, sales conversion rates and cancellation rates all running in line with our expectations.”
Persimmon operates a Capital Return Plan to return surplus capital to shareholders. Persimmon this morning said the group’s successful trading performance over the six years to the end of 2017 – increasing annual output by over 70% and opening 1,189 new sales outlets whilst investing in £3.2bn in land – had enabled the board to increase the total value of the plan.
The first of these additional payments of £389m was paid to shareholders as an interim dividend on 29 March 2018. At the same time, the Board recommended that the scheduled return of 110p per share, or £345m, will be paid to shareholders on 2 July 2018 as a final dividend.
With the scheduled payment on 2 July 2018, the total value of the capital returned by that date of £2.22bn will be £1.36bn greater than that originally planned at launch in 2012.
The additional payments over the next three years will bring the total value of the Plan to £13.00 per share, more than double the £6.20 per share original commitment made by the Board in 2012. The total value of the plan is now £4.07bn.
Persimmon said that in total, the group had generated £2.77bn of “free cash” before the return of surplus capital over the six years since the launch of the Group’s strategy.
Persimmon opened 65 of the 100 new sites planned for the first half of the year and is building new homes on all sites that have detailed planning consent. It is currently developing 375 active sales outlets across the UK.
It said that the development of its off-site manufacturing capability will play an increasingly important role in supporting the expansion of home construction volumes.
The firm has a manufacturing hub at Harworth, Doncaster, where the Group is investing in new manufacturing capacity to help improve the supply of construction materials. Permission said that this approach was a “major differentiator” for Persimmon.
In 2017, the firm opened a new brick manufacturing factory and is due to open a new roof tile manufacturing facility during 2018. Persimmon is also looking at options to expand its Space4 business to extend its reach for the supply of timber frames, wall panels and roof cassettes.
