Persimmon profits soar as margins improve

Aaron Morby 13 years ago

Persimmon has dismissed talk of a softening housing market and staged a return to the big profits of a few years ago.

A tight grip on costs, kept lower than last year, and a higher number of completions at better prices helped Britain’s third biggest house builder return to past form.

Pre-tax profit for the year increased to £154m from £78m in the prior year.

Even before exceptional items, underlying profits came in a shade under £100m, strongly ahead of £7m last time.

Chief executive Mike Farley said: “Site activity for the first eight weeks of 2011 is encouraging.

“Visitor levels are around 10% ahead of the same period last year, cancellation rates of 16% remain at historically low levels and net private sale reservations are 2% ahead.”

“We continue to seek further cost improvements and efficiencies which, together with the introduction of new sites into production, will assist further progress in improving our operating profit margin,” he added.

Over last year, sales revenue rose 10% to £1.6bn as housing completions rose 4.5% to 9,384 homes and average selling price rose nearly 6% to £167,249.

The improvement came from a 3% rise in underlying selling price and  a change of mix of homes.

Persimmon managed to double operating margins to 8% in 2010, although they are still a long way from the margins achieved in the previous housing boom.

Home completions rose to 9,384 from 8,976 and the average selling price of Persimmon’s homes rose 5.7% to 167,249 pounds.

Persimmon currently has 380 sites in development and expects to open 70 sites in the first half of this year.

The house builder’s timber frame business Space 4 saw sales of housing kits rise 31% during the year to 2,738. Space4 has an order book of 3,000 units and expects to achieve double digit growth this year.

Its up-market southern housing arm Charles Church saw volumes recover strongly in the second half of the year with the business now accounting for a fifth of total completions.

The main Persimmon operating company won planning consents on strategic land parcels including 650 plots at Trowbridge and 200 plots at Cullompton in the South West.

Latest news

RG Group signs £121m Newcastle rental homes job

Developer Olympian Homes advances 519 flats plan at Pottery Lane site
3 days ago

Geoffrey Osborne files administration notice

Contractor in talks to save parts of the business
3 days ago

Winners named for £260m Manchester Uni framework

B&K, Henry Bros, Graham, Robertson and Vinci among new line-up
3 days ago

Shed specialist Benniman rides out market lull

Worcestershire warehouse builder says industrial and logistics work is picking up again
3 days ago

Another contractor cleared after high profile immigration raid

Adana Construction employees were working legally on site swooped on by Home Office
3 days ago

McAleer & Rushe wants to meet new London suppliers

Contractor holding Meet the Buyer event in London: Register now
3 days ago

McAlpine signs £500m Broadgate dual towers deal

Work to start on iconic 36-storey and 21-storey towers
3 days ago

Worker rescued from collapsed four metre deep trench

Fire crews take six hours to save trapped builder near Blackwall Tunnel
4 days ago

Gove puts another major building scheme on hold

Secretary of State starts another planning fight after M&S defeat
4 days ago

Greenwich University tenders £300m framework

Up to five firms will carry out upgrade and newbuild work at three campuses
4 days ago

Work starts on Manchester 26-storey Obsidian tower

Contractor Domis starts Salboy's 10th Manchester scheme in seven years
4 days ago

Race for £1.3bn West Midlands social homes framework

The Community Housing Group reboots tender race for new build housing
4 days ago

Delancey submits £400m King’s Cross lab plans

200,000 sq ft lab/office project will be built above railway and tube tunnels just 4.5m below
4 days ago

Winners revealed for £150m fire safety framework

New deal will help organisations comply with the Building Safety Act
4 days ago

Sellar plans £500m City tower next to Walkie-Talkie

Consultation starts on London 60 Gracechurch Street tower
5 days ago

Severfield ends year on high with record order book

Orders top £500m with strong future pipeline of opportunities ahead
5 days ago

Second senior director exits National Highways

Commercial director Malcolm Dare set to move on to new role
5 days ago

New scheme fuels London lab building boom

Plans in for 160,000 sq ft Whitechapel scheme near Royal London hospital
5 days ago

Contract race starts for next £155m section of A9 dualling

Prior Information Notice published for Tay Crossing to Ballinluig stretch
5 days ago

£55m Sheffield build-to-rent scheme approved

Demolition to start later this year for 158-flat Sheffield Garden project
5 days ago

London back as most expensive place to build in world

Capital leapfrogs Geneva to top costliest construction rankings
6 days ago

Gas supplier Regent to buy TClarke for £90m

£491m turnover listed building services specialist to be sold
6 days ago

Steel contractor Billington launches into bridge market

Steelwork firm hires staff from failed architectural and bridge specialist SH Structures
6 days ago

McGee employees benefit from rise in profits

Pre-tax profit doubles boosting payouts for Employee Ownership Trust
6 days ago

Lendlease veteran is latest new McAlpine director

Paul Sims joins as Operations Director after 40 years at rival contractor
6 days ago

Costain signs site labour supply deal with four firms

Contractor to use only a quartet of providers for temporary labour supply
6 days ago

BAM go-ahead for Leeds 200,000 sq ft office

Latitude Yellow will complete final plot at Doncaster Monk Bridge site
6 days ago

VolkerFitzpatrick wins £30m logistics job

Latest deal to build five distribution units for Prologis UK
6 days ago

Trio win new Scape utilities consultancy framework

Perfect Circle, AtkinsRéalis and Arcadis win places on
6 days ago

Precast firm FP McCann cleared after immigration raid

Home Office takes no action after public raid on construction site
7 days ago

Contractor services