Turnover and profits tumble at listed housebuilder

York-headquartered housebuilder Permisson has seen its turnover and profits fall in a six month period when the number of new homes it sold dropped by around 500.

Reporting on the six month period to June 30 2019, the listed group said its total revenues were £1.7bn – down from £1.8bn in 2018, with new housing revenues dropping 5.6% from £1.7bn in 2018 to £1.6bn in the current period.

Pre-tax profits dropped to £509m, down from £516m in the previous year.

In the period, the group sold 7,584 new homes – around 500 fewer than the 8,072 it sold in the same period last year – at an average selling price of £216,942 (2018: £215,813).

Persimmon said it secured 3,582 plots of new land in the period, including 1,962 plots converted from the Group’s strategic land bank; 75,444 plots owned at 30 June (December 2018: 75,793 plots).

It is the first set of results for incoming CEO Dave Jenkinson, who was announced in February as the successor to former CEO Jeff Fairburn, who was last year criticised for taking home a £75m bonus.

Today’s results are in contrast to its full year results announced in February, when the housebuilder revealed  that it was the first in the sector to hit £1bn in profits.

This morning, Jenkinson said: “Improving the quality and service delivered to our customers remains our top priority and I am encouraged with the progress made in the first half, which clearly shows that Persimmon is changing.  Our customer satisfaction ratings for the current HBF survey year are showing improvement and I am particularly pleased that, in July, Persimmon became the first housebuilder to introduce a retention scheme for customers placing us at the forefront of strengthened consumer rights for homebuyers.

“The improvements to our customer service approach had two main impacts in the period.  First, customer service spend increased by c. 40% year on year and these additional initiatives are anticipated to increase our annual customer care costs by an estimated £15m. Second, and as noted earlier in the year, our decision to invest an additional c. £140m in work in progress as we held back some sites for later sales release to give customers more accurate moving-in dates reduced the Group’s overall sales volumes. Allowing for these impacts, Persimmon’s trading in the first half of 2019 was strong.”

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