Space4 boosts Persimmon performance
BIRMINGHAM-based sustainable building supplier Space4 has helped to boost the performance of parent Persimmon, results out today reveal.
The Castle Bromwich firm, which supplies a patented building system developed to address three main challenges in housing delivery; affordability, construction industry skills shortages and sustainability, has seen production rise almost 70%.
Space 4 uses CAD/CAM production techniques from the automotive industry and a unique patented injection technology to produce closed panel MMC structures for homes and apartments.
In its results statement today, Persimmon said the improvement to the housing market and the availability of further Government funding had benefited the Space4 business.
Although production in the first half was low with just 801 housing units completed, this substantially improved in the second half to such an extent that extended working hours were required to keep pace with demand.
Total production for the year was 2,089 units, up almost 70% on the previous year’s total of 1,238 units.
Mike Farley, Persimmon chief executive said: “The need for increased energy efficiency for private housing and the changes we have made to the Space4 Eco housing range has led to an improvement in orders for the business.
“The Space4 system enables our business to build houses in a shorter period and tightly controls our cost base. We are able to react quickly to sales demand which in turn maintains our work in progress at an acceptable level.”
He said there was now increased demand for the Space4 product, not only for affordable homes but also for private residential housing and as a result nearly 85% of its production is now being used within the group.
Additional capacity is available and the group will seek new external business in periods where its own demand is lower. It has already secured a sale for a 120 unit care home scheme which meets this requirement.
“Space4 is now supplying 18 of the group’s operating businesses and has a forward order book of 2,400 units. We anticipate that Space4 will provide significant support to the expansion of Group volumes as the market recovers,” said Mr Farley.
In its statement today, the company reported a pre-tax profit of £77.8m in 2009 which has been boosted substantially by the re-evaluation of its land values.
The York-based company, the UK’s largest housebuilder by market value, saw its revenue fall 19% to £1.42bn while its house sales dropper to 8,976 from 10,202 a year earlier.
The £77.8m pre-tax profit – which includes the exceptional release of £74.8m of ‘net realisable value provisions’ – compares favourably with the £780m loss it made in 2008.
The company states in its final results for the year to the end of December 2009 that it is now focusing on achieving margin growth despite remaining ‘cautious’ about its investment decisions.
Persimmon’s Central Division has recorded the highest level of completions in the group for the year. At 2,714, the figure is a reduction of just 1% on the previous year’s 2,748.
Mr Farley said the group’s continued strategy of long term relationships with its Housing Association partners had also secured a 5% increase in volumes for the Eastern region’s operating businesses within this division.
He said the group had also seen a good take-up of its HomeBuy Direct and Shared Equity schemes with 675 units, equating to 25% of its sales being assisted in this manner.
“Although demand in our Birmingham region remains constrained, our ability to offer homes at an average selling price of £136,504 has supported sales in this region to increase volumes by 7% to 1,062 homes,” he said.
The average selling price of private homes in the division was £167,894, compared with £189,449 in 2008. This said the group, offered buyers good affordability.
Prices declined in real terms by 4% in the first half of the year. However, the group said it had seen a 3% underlying increase in the second half and there was greater emphasis on price growth for its operating businesses closer to the stronger London market.
Westbury Partnerships, another of the group’s housing brands, has recently started work on its first scheme for 34 homes in Redditch, partly funded by the Homes & Communities Agency (HCA) Kickstart 1 programme. This funding is in addition to grant funding received under the National Affordable Housing Programme.
