Persimmon completions edge up 4% as profit soars

Aaron Morby 7 years ago
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House builder Persimmon raised completions last year by just 4% as it delivered pre-tax profits up nearly a quarter to £775m.

The strong housing market saw Persimmon operating margins rise from around 22% in 2015 to 26% in the second half of the year.

Announcing 2016 annual results today the house builder also revealled plans to shovel more cash back to shareholders othrough its capital return plan to 2021, increasing payments by 49% to £9.25 a share.

Jeff Fairburn, chief executive, said Persimmon aimed for further margin growth from cutting construction overheads with increased production from its off-site timber frame business Space 4 and a new concrete brick plant due to come on stream by April.

The concrete brick factory at Harworth, near Doncaster will have the capacity to produce 80 million bricks a year. This is equivalent to around two thirds of the house builder’s brick requirements paying back the £10m upfront investment in around three years.

He said that Space 4 would now be upping production from around 5,500 units after production had been concentrated on meeting Persimmon’s core housing designs.

Fairburn said: “The Space4 factory has the capacity to increase production to support the construction of around 8,000 new homes each year.

“We are continuing to investigate the further development of the Space4 build processes driven by the design of the group house types, to secure further improvements for the business.”

Last year Persimmon saw legal completions rise by legal completions increased by 599 new homes to 15,171 and average selling price increased by 3.8% to £206,765.

This lifted full-year revenue up 8% to £3.14bn.

Across our regional markets the highest volumes were secured in our Shires and Scottish markets with 1,539 and 1,492 legal completions respectively.

The North East, Midlands and Western markets also produced very strong sales with each delivering over 1,250 legal completions.

 

 

 

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