Scandal-hit Persimmon’s profit tops £1bn

Embattled York-based housebuilder Persimmon confirmed interim chief executive David Jenkinson as its CEO on Tuesday as it reported its revenue increased 4% to £3.74 billion and profit before tax rose 13% to £1.091 billion in the year ended December 31, 2018.

Persimmon is still recovering from criticism of its excessive executive compensation that led to the departure of its former CEO Jeff Fairburn and is now under the spotlight over its alleged practices with the UK government’s “Help to Buy” scheme.

Persimmon said legal completion volumes increased by 406 new homes to 16,449 with an average selling price of £215,563, up 1% year on year.

The firm reported net cash of £1.048 billion and a “strong” forward sales position of £2.02 billion.

Jenkinson said: “Our results for 2018 reflect our successful focus on offering attractively priced new homes primarily to the first time buyer and first time mover markets, where housing need is greatest. 

“This strategy has enabled Persimmon to grow its construction volumes by more than 75% since 2012, making a significant contribution to UK housing supply. 

“My focus is to build on this strong platform, maintaining our operational momentum, but also implementing a number of necessary new initiatives in customer care. 

“A wide range of projects to improve customer satisfaction commenced in late 2018 and the initial results have been encouraging, giving us confidence in our ability to make progress in this important area.

“We continue to invest in our teams, systems, and our off-site manufacturing capabilities to support the group’s further growth …

“Whilst the sales outlook remains subject to a degree of uncertainty at the start of any financial year, at this point the group’s sales are in line with management’s expectations.

“Given our strong prior year comparatives, the current increased uncertainties with respect to the future performance of the UK economy and the planned later sales releases in the early part of the year, we are encouraged by the levels of customer interest across the UK.

“Including legal completions taken so far in 2019, the group has a strong forward sales position at £2.02bn and we currently anticipate delivering a similar level of legal completions during 2019 as in the prior year.”

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