Persimmon continues to build momentum with £1bn of forward sales

HOUSEBUILDER Persimmon today announced a strong set of results and said it has already achieved forward sales of £1bn for this year.

The York-based group said underlying pre-tax profits in the year to December 31 was up 52% to £225.1m from £148.1m with revenues up 12% to £1.72bn.

Persimmon said it had made an “excellent” start to the delivery of its new long term strategy and is due to make the first payment to shareholders from its long term capital return plan of 75p per share in June, part of a programme to return £1.9bn, or £6.20 per share, by 2021.

The group said legal completions increased by 6% to 9,903 with the average selling price up 6% to £175,640.

Chairman Nicholas Wrigley, said: “These strong results mark the completion of the first year of our new strategy and I’m pleased that at this early stage we are ahead of plan.

“Persimmon has made excellent progress throughout the year increasing underlying pre-tax profitability by 52%, growing operating margins strongly to 13% and generating £179m of free cash flow before dividends.  We continue to see good value in the land market and acquired 14,800 plots during the year, 38% of which were converted from our own strategic land bank. 
 
“We have made a strong start to the new year, with forward sales reaching the £1bn milestone, an increase of 9% on last year.  Mortgage availability remains the key constraint to the housing market.  However, there are some signs that lenders are embracing the Government’s Funding for Lending scheme and we have seen some recent reductions in mortgage rates.  We anticipate increasing our active outlet number to around 390 sites by the end of June, helping to increase the volume of new homes that the country needs.”

Persimmon announced last month that group managing director Jeff Fairburn will replace chief executive Mike Farley, who is retiring in April.

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