Persimmon increases dividend amid management pay row

York-headquartered Persimmon, which has come under fire recently for the huge bonuses paid to its top bosses, is paying out more than £300m to shareholders.

The group has been at the centre of a storm over management pay after awarding its chief executive Jeff Fairburn a £75m bonus.

He was to collect a total of £110m worth of bonus shares, but agreed to give up half of the second half of the award, also announcing he was to give a substantial amount to charity.

In its half year trading update this morning, Persimmon said for 2018 an additional payment of 125p per share or £389m was paid to shareholders at the end of March with a further 110p per share or £344m paid on July 2.

It said the increased commitment raised the total value of the plan to around £4.07bn, or 13pence per share, to be returned to shareholders by the end of 2021.

This morning, Persimmon reported a 5% rise in first half revenue to £1.84bn, fuelled by improved house sales and a 1.2% rise in average prices.

Housing revenues for the first six months of £1.74bn were 5% higher than the prior year’s £1.66bn, with new housing legal completion volumes increasing by 278 homes, or 3.6%, to 8,072 homes from 7,794 in the prior year period.

The group’s new housing average selling price increased by 1.2% to around £215,800, up from £213,262.

Persimmon said its focus on increasing its output of family housing at affordable prices has continued to support healthy trading with total enquiry levels running around 6% ahead of the prior year.

“Consumer confidence remains resilient in our markets and attractive mortgage products provide compelling support to purchasers of new homes,” the company said.

The value of the group’s total forward sales of new housing at the end of June of £1.68bn was 5% higher than last year in addition to the increase of 5% in housing revenues legally completed in the first half.

“The group has a strong platform to achieve further growth in the second half,” said Persimmon.

The average selling price of the around 4,900 new homes sold forward into the private sales market was £236,700, 2% ahead of the prior year.

During the first half of the year, the group brought 45 new land parcels for the delivery of around 11,000 homes in a land market which it said continued to provide good quality opportunities.
The company’s total land spend in the period was around £343m.

“The successful execution of Persimmon’s strategy launched in 2012 has delivered the group’s strong financial position together with a high quality asset platform designed to place the business in a robust position as we continue to make progress into the future,” the company said.

“The group will continue to focus on building the new homes needed by communities right across the UK. We remain confident in the group’s future prospects.”