Persimmon’s ‘customers before volume’ strategy strengthens foundations
Housebuilder Persimmon is building on the foundations of its strategic shift of “putting customers before volume” with a confident performance in 2019.
The York-headquartered group, which is the region’s largest public company, said it “continued to benefit from resilient consumer confidence throughout 2019, supported by low interest rates, a competitive mortgage market, and robust employment levels”.
Persimmon has faced complaints in recent years for its build quality, which culminated in it commissioning a critical independent review that it published last month.
Those criticisms have been exacerbated by the huge profits the group has made – it generated record £1bn profits in 2018, while its former chief executive Jeff Fairburn pocketed a £75m bonus.
The housebuilder has sought to reposition itself away from the toxicity.
Dave Jenkinson, who replaced Fairburn as group chief executive, said: “Delivering the maximum benefit to our customers from our quality and service improvement initiatives will continue to be my top priority for 2020.”
He argued that the business “is making the step change necessary” to deliver higher levels of quality and service to its customers.
Dave Jenkinson, chief executive of Persimmon Homes
Investors have been reassured by the change in approach. Persimmon’s share price has enjoyed a remarkable revival in recent months, rebounding from a year-low of 1802p last August to above 2800p today.
The near-60% increase has added £3.3bn to the company’s market value, increasing it to above £9bn.
Persimmon’s revenues were down 2.4% in 2019, to £3.65bn, although its average selling price of £215,700 was only £140 higher than a year earlier.
It expects its profits will be in line with market expectations – which is forecasting a drop of around 5% – when it publishes its financial figures in late February.
