Customers flock to Persimmon

Persimmon is pursuing high quality growth in its regional markets
Persimmon is pursuing high quality growth in its regional markets
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H​ousebuilder Persimmon reported healthy demand for new homes ​and said it has seen no impact from falling consumer confidence as customers flock to buy its houses.

The York-based firm said full year profits will be ahead of expectations ​after revenue rose 9​ per cent​ to £3.42​bn in 2017, with completion volumes ​ris​ing 6​ per cent​ to 16,043.

The group’s average selling price ​rose 3 per cent to £213,300.​

​Persimmon’s chief executive Jeff Fairburn​ said: “At the lower end of the price range, demand is still strong. Now we have the change in stamp duty, that should help.”

In November the Government announced that stamp duty is to be abolished for first-time buyers on properties up to £300,000.

M​r Fairburn said ​Persimmon’s homes are affordable in terms of people’s disposable income.

​“If people have got the deposit and job security, they want to buy their own home,” he said.

“It’s cheaper for people to buy than to rent.”​

Persimmon said that it experienced healthy customer demand for new homes through the autumn sales season,​ and the​ value of its forward sales book ​is​ £1.35bn, 10​ per cent​ ahead of 2016.

As a result, the firm said that it anticipates pre-tax profits for the year to come in “modestly ahead of market consensus”.

The group​ said it​ ​is pursuing high quality growth in its regional markets in support of the Government’s desire to increase housing supply across the UK.

​Mr Fairburn said the firm is​ mindful of market risks including those associated with the uncertainty arising from the UK leaving the EU.

“However, we are keen to deliver further improvement in our housing output and remain ready to invest wherever the local planning environment is supportive,” he said.

“We haven’t seen any effect from Brexit yet. We’d take action if we thought things were changing.

“New sites and new homes in the right locations at the right price is the key point.”

The housebuilder said that completion volumes ​rose​ 6​ per cent​ to 8,249 in the second half of the year versus the first six months.

The results come a​mid a row over excessive executive pay, which led to chairman Nicholas Wrigley’s resignation late last year.

It follows investor con​cern over a long-term incentive plan introduced in 2012, which could see the management share £600​m depending on profit and housebuilding targets. ​Mr Fairburn is in line for the biggest payout, which is set to top £100​m.

“​From our perspective it’s a scheme that’s been running for some time. If you go back to the reasons it was put in place, the fundamentals are still the same,” he said.

“The business has performed incredibly well. We have to be pleased with the way​ the business has moved forward.”

Mr Fairburn will be able to sell 40 per​ ​cent of ​his share options from the beginning of this year and the remainder can be sold when the next performance target is met, which could be later in 2018.

​He said he ha​s​ yet to decide whether to exercise his share options.

​The group opened 197 new sales outlets during the year and is building on all sites which have planning consent. ​It now has 375 active sales outlets which ​it​ anticipate​s​ will provide good support to sales moving into the 2018 spring selling season.

​The firm said it has made​​ “excellent progress​“​ in expanding ​its​ manufacturing capabilities to support sustainable growth.

​Persimmon’s​ new brick manufacturing plant in Harworth, near Doncaster, is now complete and deliveries of bricks have ​started. The ​g​roup​ said its Space4 insulated frame build-system is also an important contributor to overall construction capacity and ​it​ anticipate​s​ further investment in ​this area over the coming years.

The firm​ bought 17,300 plots of new land in over 80 locations throughout the UK during the year.