Business

Profits and completions take a hit at Persimmon

Property Reporter
|
5th March 2021
construction 665

Volume housebuilder, Persimmon, has revealed that the challenges of the pandemic saw its pre-tax profit fall 25% in 2020 with completions down 14%.

Volume housebuilder, Persimmon, has revealed that the challenges of the pandemic saw its pre-tax profit fall 25% in 2020 with completions down 14%.

According to the firm, during the year ending December 31 2020, its new home legal completions totalled 13,575 against 2019’s 15,855. The homes’ average selling price rose 6.9% to £230,534; this was mainly due to a 6.5% increase in the proportion of new homes sold to private owner-occupiers.

Pre-tax profit dropped from £1,040.8 million in 2019 to £783.8m million. Persimmon generated total revenues of £3,328.3 million against the previous year’s £3,649.4 million, with new housing revenue down to £3,129.5 million (2019: £3,420.1 million) on reduced completions.

With pandemic-induced build delays, the company’s first-half completions fell 35% to 4,900 against H1 2019. But Persimmon said this disruption was balanced by resilient customer demand, government support “and the group's ability to maintain a good degree of operational continuity”.

These factors, alongside strong forward build levels at the end of June and build rates returning to pre-Covid times, gave Persimmon a robust second half, it said, with the business delivering 8,675 new homes in H2 2020.

This was reflected in Persimmon’s average private weekly sales rate per site for 2020 being 12% higher year-on-year, it said. For the first eight weeks of 2021, this was 7% ahead of last year.

Its forward sales position at the end of 2020 was £2.27 billion against 2019’s £1.98 billion. For the first half of 2021, it expects to deliver completions close in volume to H1 2019, “with similar delivery in the second half”.

As announced last month, the business has set aside £75 million in its 2020 results towards removing now-banned cladding on 26 multi-storey schemes.

Dean Finch, Persimmon’s group CEO, said: "Persimmon delivered a robust performance in 2020 despite the challenges presented by the pandemic.

"Persimmon is a company of many strengths with great opportunities ahead. Combining the business' entrepreneurial spirit and astute land buying with enhanced quality, efficiency and service standards will drive superior, sustainable value creation for our shareholders and broader stakeholders alike."

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