Persimmon profits soar to £148m as completions fall

Aaron Morby 13 years ago
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House builder Persimmon saw annual completions fall to 9,360 and average selling prices drop 2% last year.

But the fall off in building completions failed to dent its performance with underlying profits soaring 55% to £148m.

The house builder also revealed plans to return £1.9bn to shareholders over the next 10 years in enhanced dividend payments.

Nicholas Wrigley, Group Chairman, said: “Underlying profit before tax grew by 55% 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% to £927 million.

“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.”

Legal completions for the year were 9,360 (2010: 9,384) at an average selling price down 2% at £166,142.

Persimmon said the fall reflected a greater proportion of first time buyer homes in the sales mix

Operating margin peaked in the second half of the year at 10.8%, up from 8.2% last year. Wrigley predicted that the house builder would see further improvement this year and believed margins would again return to 15-17%.

He added: “Persimmon will return £1.9bn of cash to shareholders over the next 9.5 years, whilst maintaining a largely ungeared balance sheet.

“This new strategy sets Persimmon on course to build a stronger, larger business and deliver enhanced shareholder returns over the next decade.”

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