Persimmon makes £66,000 profit per house

Grant Prior 4 months ago
Share

Persimmon has unveiled pre-tax profits of £966.8m for last year while making margins of 31.4%.

The house building giant completed 14,551 homes in 2021 with an average selling price of £237,078 and an average profit of £66,442 per home.

Shareholders received dividends of £748m during 2021 with similar returns earmarked for this year.

Group Chief Executive Dean Finch said: “The new year’s trading has started well, with private sales rates ahead by c. 2% in the opening weeks and a robust forward sales position of £2.21bn. We expect to grow our outlet position in 2022 and are targeting volume growth of 4-7% on 2021 levels.”

Build quality is now a major factor for bonus payments across the business.

Persimmon said: “Our senior management bonus scheme was restructured last year to incorporate build quality and customer service targets.

“In the current year, this approach is being extended across the organisation, including to our site management teams.

“Our sub-contract tendering process has been revised to emphasise quality and customer service performance alongside cost efficiency considerations.”

Persimmon has also more than doubled its team of Independent Quality Controllers, who check construction standards, from 29 to 60.

It said: “We believe this is the largest independent team of inspectors in the industry. Each key stage of development must be independently verified as complete and at the required standard before further work can continue.”

Build cost inflation of 5% has been partly offset by Persimmon’s in-house production which will be increased.

Smith said: “Our Space4, Brickworks and Tileworks factories have also proven crucial tools in both maintaining security and consistency of supply and securing build efficiencies, especially in a period of material and labour cost inflation.

“Through the bulk buying of raw materials and stable labour costs within our factories, we have been able to maintain a price advantage compared to the open market.

“Further, our use of Space4 timber frames in 33% of our homes built in the year, reduces our reliance on bricklayers, where labour shortages have been most pronounced.

“These factories will play an increasingly crucial role in our security of supply, quality control and drive to secure cost-efficiencies. We are already looking to expand production – through increased shifts and product lines – across our Brickwork and Tilework factories.

“We anticipate increasing output at Brickworks by 25% and at Tileworks by over 50% this year.

“We also plan to start building a new Space4 factory in 2022, updating the technology and techniques to drive enhanced quality and further efficiency gains. We anticipate – for example – that the new factory’s product will improve our speed of build by up to five days per house.”

Latest news

Keltbray gets start date for £50m motorway upgrade

Contractor hails "significant step forward" for highways business
11 hours ago

Site workers settle for 5% pay increase

Contractors and unions agree one-year deal following months of talks
1 day ago

Rising wages and skills gap to overshadow materials issues

Materials and product Inflation tops 20% so far this year, but labour set to be next big headache
15 hours ago

Erith pays £2.8m bonus to staff after ownership switch

Around 450 staff have on average received over £6,000 since move to employee ownership five years ago
16 hours ago

Algeco lands £19.2m Leeds modular school scheme

Offsite specialist will supply and install 192 steel frame modules
16 hours ago

Eight firms placed on £750m Midlands and Eastern framework

Next generation framework for jobs up to £7.5m employs a parallel plotting structure
16 hours ago

Aston Villa unveil plans for £100m stadium expansion

Construction set to start next year on first phase of Villa Park upgrade
15 hours ago

Skanska bans ‘swing-up’ lorry loaders after site death

Banned vehicles are used mainly to deliver bulky items like cabins and welfare units
1 day ago

HS2 agrees £78m variation on Euston tunnels cost

Skanska Costain Strabag seals extra payment for agreed changes to the scope of work
2 days ago

B&K breaks ground at £150m Newcastle HMRC job

Work gets underway on city's largest ever office project
2 days ago

New building safety laws come into force today

Leaseholders protected and new regulator for construction product manufacturers in wake of Grenfell
2 days ago

Peel submits plan for £150m cannabis production plant

Isle of Man seeks to become a leader in the emerging medicinal cannabis sector.
2 days ago

Tarmac buys first electric concrete mixer truck

Country's first battery powered mixer truck will start site deliveries this Autumn
2 days ago

Tilbury Douglas wins Dorset hospital upgrade

Construction could start in 2024 after Dorset County Hospital secures £77.3m of funding
2 days ago

McGee in £2.4m provision for bid-rigging probe

Demolition contractor says provision will cover the expected fine over cover pricing ring
3 days ago

First designs for £275m HS2 Midlands nerve centre

Contractor due to be named in Autumn next year for Washwood Heath hub
3 days ago

London Bankside Yards next project switches from resi to offices

Revised plan submitted for 18-storey office next to Blackfriars Bridge
3 days ago

Plans in for Cambridge North major mixed-use scheme

Over 400 homes and nearly 600,000 sq ft of office and shops planned for railway sidings site
3 days ago

Barratt falls foul of planners on £25m estate

Council acts after residents complain about construction deliveries
3 days ago

VolkerHighways and WJ Group shot blast roads with steel

Latest retexturing technique provides benefits all round
3 days ago

Ten demolition firms named in cartel probe

Biggest names in demolition face massive fines over "unacceptable" behaviour on 19 contracts worth over £150m
6 days ago

Imtech vows to avoid big resi jobs after return to profit

Engineering services arm puts trio of loss-making residential jobs behind it
6 days ago

Sisk replaces Morgan Sindall on £1bn Midlands Highways Alliance

Four firms secure places in Midlands framework renewal race
7 days ago

Winvic wins Bristol Redcliff Quarter 468 flats job

Grainger buys planned build to rent project and brings in Winvic to start this Autumn
6 days ago

Peel takes on Wirral Waters after Urban Splash modular collapse

Developer is reviewing whether to return to traditional build methods after modular specialist collapse
6 days ago

Kier launches £80m JV to build 2,000 homes by 2027

Property arm JV with Lloyds fund to develop housing on urban brownfield sites
1 week ago

Mace chief Reynolds replaces Mitchell at CLC

Mark Reynold takes over as co-chair of the Construction Leadership Council
6 days ago

Cost inflation forces bid rethink for £200m M5 junction 10

ECI simplified and amendments made to reflect rising construction costs
7 days ago

Wages among key trades keep pace with cost of living rise

Self employed plasterers, plumbers, roofers and scaffolders enjoy wage rises ahead of annual inflation rate
7 days ago

Midgard drives recovery at JRL Group

Revenue tops £600m again at diversified contractor
1 week ago

Contractor services