Shutdown begins at Persimmon construction sites

House builder Persimmon says it has begun an “orderly shutdown” of its construction sites in response to the coronavirus crisis.

The York-headquartered listed company will also close all of its sales offices from Thursday 26 March until further notice.

In a trading update, the business explains: “While we will continue to support existing and new customers on the telephone and/or online, all customer care site visits will cease except for emergencies.

“All Persimmon regional offices will also close, with only a skeleton staff to facilitate the wider workforce working from home.

“Construction sites are commencing an orderly shutdown with only essential work taking place which will be focused on making partly built homes safe and secure and where failure to complete the build could put customers in a vulnerable position.”

Persimmon says it is preparing for a significant delay in the timing of legal completions, a rise in cancellation rates and a material slowdown in new sales.

Its Board has decided to cancel the proposed 125p per share interim dividend payment of surplus capital to shareholders on 2 April 2020.

And it will postpone the proposed annual, final dividend payment of 110p per share on 6 July 2020 and reassess it later in the calendar year when the effects of the virus will be clearer.

The update adds: “Whilst the company’s regular annual payment of at least 110p per share has been stress tested for payment through the housebuilding industry cycle, the Covid-19 virus presents an exceptional set of circumstances.

“Persimmon entered the current year with a strong balance sheet including cash holdings of £844m, land creditors of £435m (£268m payable over 2020) and industry leading land holdings of 93,246 plots owned and under control.

“The Board remains confident of the Group’s future prospects.

“The Group’s current cash position of c. £610m (as at 20 March 2020), deferred land commitments of c. £195m to the end of the current year, availability of the Group’s £300m Revolving Credit Facility, together with the measures the Board is taking to manage the cash flows of the business, will preserve the strength of the Group during this unprecedented period of uncertainty.”