Persimmon Plc - Final Results

Chairman's Overview

"Since the launch of the Group's strategy in 2012 we have focused on increasing the strength, resilience, and performance of Persimmon for the long term. Building a strong vibrant business where our employees are proud to work, constructing well designed traditional homes and creating sustainable communities throughout the UK remains our central focus."      

 

Highlights

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Legal completion volumes increased by 406 new homes to 16,449 (2017: 16,043) with an average selling price of £215,563, up 1% year on year (2017: £213,321)

 

·

Total Group revenue for the year increased by 4% to £3.74bn (2017: £3.60bn)            

 

·

2018 new housing operating margin* of 30.8% increased from 28.2% last year, with a second half new housing operating margin* of 31.8%

 

·

13% increase in total Group operating profits to £1.083bn (2017: £0.955bn)

 

·

13% increase in Group profit before tax to £1.091bn (2017: £0.966bn)

 

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11% increase in basic earnings per share to 283.3p (2017: 255.0p)

 

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52.8% return on average capital employed** (2017: 51.5%)

 

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17,092 plots of land acquired in the year, with 3,772 plots successfully converted from the Group's strategic land portfolio

 

·

Net cash of £1.048bn at 31 December 2018 (2017: £1.303bn)

 

·

Strong forward sales position at £2.02bn (2018: £2.03bn)

 

·

Interim and Final dividends of 125p and 110p per share respectively declared for 2018

 

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Appointment of Dave Jenkinson as Group Chief Executive announced separately today

 

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Range of new customer service initiatives implemented in late 2018 showing encouraging initial results.  The Group is confident these measures will improve its customer satisfaction score once they have had time to take effect

 

·

Significant investment in training to address the skills shortage in the house building industry

 

·

Adoption of the Living Wage Foundation payment criteria for our employees from January 2019

 

·

Persimmon is proud to be a sponsor of Team GB who will compete at the 2020 Tokyo Olympics

Roger Devlin, Group Chairman, said:

"Persimmon is changing. In his short time as interim CEO Dave Jenkinson has introduced new approaches to customer satisfaction and colleague engagement, whilst also ensuring that the Group delivered another year of growth. These changes are illustrative of wider efforts across the Group to evolve our processes and practices to pursue excellence across all aspects of our business. Achieving further progress with these initiatives will be a key priority for Dave in his new post as CEO."

"The Board remains confident in the Group's long term prospects."

Outlook

Recognising the current robust level of demand for our new homes, as part of our drive to improve our service to customers we have taken action in the new year to deliver greater accuracy of anticipated moving in dates. We have adopted a more targeted approach to the phasing of sales releases in 5 of our 31 businesses, where demand on certain sites is strong. In addition, as indicated in our January trading update, we still have a dozen new sales outlets where we are progressing build to a more advanced stage before releasing to the market over the next few weeks which will provide further sales opportunities. Whilst we do not expect this will impact on the Group's completions for the year overall, these measures have contributed to a slower pace of sales reservations in the early weeks of the current spring trading period. Overall sales remain in line with our expectations and we are confident that these sites will make a good contribution to sales once build has progressed.

The UK economy displayed resilience through 2018 delivering increased levels of employment, some real wage growth, and continued support from a disciplined mortgage lending market, which supported consumer confidence. Looking to the future, the Group is in a strong financial position and is well positioned in its markets with a high quality land bank and a very experienced management team. The Board remains confident in the Group's future progress.

Roger Devlin

Group Chairman

25 February 2019