Persimmon bemoans Covid challenges as revenues and sales decline
A “robust” performance by Persimmon in the second half of the year has mitigated some of the impact of delays caused by the initial Covid-19 lockdown period in the first half, the housebuilder said today.In a trading update today ahead of the publication of its annual results, Persimmon revealed that total group revenues for 2020 were £3.33 billion, which is 8.7% down on 2019’s £3.65bn, with new housing revenues of £3.13bn (2019: £3.42bn).
New home legal completions of 13,575, (2019: 15,855), include 11,363 new homes sold to private owner occupiers (2019: 12,463). The group’s average selling price increased by c. 7% to c. £230,500, resulting from the 6% higher proportion of new homes delivered to owner occupiers in our total sales for the year. The average selling price of new homes sold to owner occupiers improved by 3.7% to c. £250,900 (2019: £241,985), largely reflecting year on year changes in the mix of active sales outlets and homes sold.
Demand for new homes has remained resilient throughout the second half with the group’s average weekly sales rate per site being 39% higher than the second half of last year in part supported by the temporary adjustment to the government’s stamp duty regime. The group’s sales in the second half were delivered from c. 305 active outlets on average through the period (2019: c. 345 outlets).
The group’s average weekly sales rate during the final quarter of the year trended towards more normalised levels from the elevated rate seen over the summer months, the latter having been supported by the group’s prior investment in stock and a degree of pent up demand. As a result, the Group’s sales levels over more recent weeks reflect lower active outlet numbers and some constraints on stock availability, together with delays to reservations while first time buyers awaited the opening of the new Help to Buy scheme on 16 December 2020.
Forward sales at 31 December 2020 were £1.689bn, 25% ahead of last year (2019: £1.356bn).
Persimmon said trading has been robust despite the challenges arising from the pandemic, including the ongoing increase in the time taken to progress and complete sales contracts.
Dean Finch, group chief executive, said: “Against the backdrop of the unprecedented challenges of 2020, Persimmon produced a robust performance for the year, as we continued to deliver the new homes the country needs. The group’s strong second half completions were supported by its advanced build coming into the year, an agile and effective response to the Covid-19 pandemic and resilient customer demand. I would like to take this opportunity to thank my colleagues and our suppliers and subcontractors for their continued hard work and commitment throughout this challenging period.
“The health, safety and wellbeing of our customers, our workforce and our communities has been paramount throughout and all of the Group’s businesses continue to operate in line with our Covid-secure policies and procedures.
“We continue to improve our customer service and build quality and I am pleased at the level of commitment I have seen from within the business to achieving these aims, as recognised in our current customer satisfaction scores which have been trending ahead of the 5 star HBF rating since January 2020. Looking ahead, we are focused on delivering further improvement and consistency in the way we serve our customers and build our homes, whilst reducing our impact on the environment.
“Recent events have served to further demonstrate the continuing near term uncertainties arising from the Covid-19 pandemic. However, we believe that the longer term fundamentals of the UK housing market remain resilient and I am confident Persimmon will continue to deliver superior long term value for all of its stakeholders.”