Shares of York-based house building giant Persimmon plc rose about 6% on Wednesday after it reported strong forward sales of £2.3 billion, 15% higher year on year.

Announcing results for the year to December 31, 2020, Persimmon said 2020 revenue fell 8.7% to £3.33 billion and profit before tax slumped 24% to £783.8 million.

2020 dividends of 40p (£127.5 million) and 70p (£223.2 million) per share were paid on September 14 and December 14 respectively.

Persimmon CEO Dean Finch said: “Persimmon delivered a robust performance in 2020 despite the challenges presented by the pandemic.”

On future dividends, Persimmon said it has a commitment to a total return of £2.35 per share in 2021 “subject to continual board review.”

It said the payment of its regular annual instalment of £1.25 per share will be accelerated to  March 26, 2021, from July 2021.

It said the intended payment of £1.10 per share surplus capital will be split into 55p per share to be paid in August 2021 and 55p per share to be paid in December 2021.

In its outlook, Persimmon said: “Reflecting the consistent outlet levels anticipated through the year, in the first half of 2021 we expect to deliver new home completion volumes approaching the levels seen during the first half of 2019, with similar delivery in the second half.

“We anticipate the Group’s margin will reflect the return to delivering an increased proportion of homes to our Housing Association Partners from 2021 …

“We are targeting a full return to 2019 levels of new home completions in 2022.

“From 2023, with a stable market, we expect our enhanced quality, service and efficiency capabilities to provide the opportunity to grow further.

“We are focused on bringing more outlets into production to support these targets …

“Despite near term uncertainties as the economic and social disruption of the pandemic continue and the full impact of the UK’s exit from the EU unfolds, the longer term fundamentals of the UK housing market remain strong.”

Steve Clayton, manager of the HL Select UK Income Shares fund, which owns shares in Persimmon, said: “Persimmon stands out from the pack.

“It takes a more cautious stance than some, but achieves higher margins and cash generation across the cycle as a result.

“They operate outside of London and have much less exposure to tall buildings and the cladding remediation costs that other players are facing.

“With land investment rising and build rates picking up, Persimmon is moving into a period of measured growth.

“The results today are likely to be somewhat eclipsed by what Chancellor Sunak has to say in his budget later on, with expectations of stamp duty holiday extensions and support for first time buyers running high.

“With £1.2bn of cash in the bank, Persimmon’s ability to reward shareholders is strong and the 235p per share payout announced for 2021 leaves the stock offering a prospective yield of over 8%; ample reward for investors that stuck by the group through the dark days of 2020, when Persimmon and the rest of the industry had to down tools and walk away from their sites.”

AJ Bell Investment Director Russ Mould said: “There were some eye-catching details in Persimmon’s full year numbers, not least the fact it is sitting on more than £1 billion of cash in the bank and that it saw a material increase in average selling prices last year despite the impact of the pandemic.

“Clearly results were affected by restrictions and build rates only returned to pre-Covid levels by July 2020 but Persimmon is mindful that in its scramble to catch up it not neglect build quality after a somewhat chequered past on these issues.

“Persimmon’s decision to boost its team of quality controllers to more than 60 by the end of 2021 should be seen in this context as it looks to ensure that it lives up to a pledge to ‘build right, first time, every time’.

“Recently appointed CEO Dean Finch is obviously keen to bolster Persimmon’s ESG credentials across the board – introducing the living wage and looking to apply its principles in its wider supply chain and across its development partnerships while also adopting tougher environmental targets.

“Finch clearly hopes Persimmon can move from bad boy to head boy status in the sector, after its historic governance, construction and customer care issues.”