Top UK housebuilder sees revenues soar in ‘healthy’ housing market
The UK’s second largest housebuilder, Persimmon Homes, recorded a 9% boost to its revenues in 2017 with full-year profits expected to be 20% higher than the previous year.
The company, which was founded in 1972 and has headquarters in York, sold 16,043 properties last year, a 6% rise on 2016, while the average selling price went up by 3% to £213,300. The total amount generated by the sales was £3.42bn, which is 9% more than 2016’s results.
A statement from Persimmon said: “We continued to experience healthy customer demand for new homes through the autumn sales season and the value of our forward sales on 31 December 2017 was 10% ahead of the prior year.”
The FTSE 100-listed group is hoping to catch up with the likes of housing giants Taylor Wimpey and Barratt Developments, and is expecting pre-tax profits for the year to be “modestly ahead of market consensus” when they are published next month.
It also intends to support “regional markets” – those outside of London – as it plans on investing in whichever areas offer the most opportunities.
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Persimmon stated: “We remain 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.”
Persimmon’s positive results will see the CEO Jeff Fairburn pocket bonuses and benefits of more than £100m, while the top 150 employees will share a £500m pot, which is linked to shareholder dividends.
The bonus scheme has been labelled “obscene” by some commentators, and the chairman Nicholas Wrigley stood down last month in protest to the uncapped pay scheme.
Meanwhile, December saw the housebuilding sector enter its 16th consecutive month of growth, according to a survey of purchasing managers. This was partly put down to factors such as the government’s Help To Buy scheme, which has kept demand high for new-build properties.
Noble Francis, economics director at the Construction Products Association, said: “Activity remains high on site and that is clear from the number of cranes around…not just in London but even more so in Manchester.”
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