Persimmon to return cash to shareholders

YORK-based housebuilder Persimmon today revealed that it planned to return £1.9bn of cash to its shareholders over nine and a half years.

The company also said it had made a strong start to 2012. In the year ended December 31 2011, underlying pre-tax profit increased by 55 per cent to £148.1m.

The full year revenue was £1.54bn, compared with £1.57bn the year before.

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The company said the strength of the Persimmon business model will support the development of a stronger, larger business over the next decade, while maximising return on capital employed and providing greater certainty of returns to shareholders.

Persimmon said it had a healthy land bank, with around 14,300 plots acquired in the year, bringing the total of owned and controlled plots to around 63,300, representing more than six and a half year’s supply.

Nicholas Wrigley, the group chairman, said: “Underlying profit before tax grew by 55 per cent during the year, as Persimmon’s successful strategy of improving operating margins, investing in high quality land and generating surplus cash to pay down debt proved highly effective, despite difficult prevailing housing market conditions. Looking ahead, we have made a strong start to the year, with forward sales up by 9.4 per cent to £927m. Visitor levels and reservations continue on an improving trend and, although we expect the UK housing market to remain difficult, Persimmon is in a strong position to meet this challenge.

“In addition to the strong financial results we are reporting today I am pleased to announce the conclusion of a strategic review, which will see Persimmon return £1.9bn of cash to shareholders over the next nine and a half years, whilst maintaining a largely ungeared balance sheet.”

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