Persimmon maintains dividend after ‘exceptional’ response to COVID disruption

Persimmon has announced an interim dividend on the back of an “excellent” start to the second half.

Persimmon maintains dividend after ‘exceptional’ response to COVID disruption

The housebuilder’s average weekly sales rate for private homes since the start of July was almost 50% higher than the same period last year.

A “modest” interim dividend of 40p has been proposed for shareholders.

Results for the first half of 2020 saw group revenues fall 32% to £1,190 million from £1,754m due to the impact of the COVID-19 lockdown, and pre-tax profit fall 42% to £292.4m from £509.3m.

Persimmon put the cost of closing down sites in April at £11.3m.

Chief executive Dave Jenkinson said: “The group, governed by its clear purpose and values, reacted responsibly, swiftly and effectively to the challenges of the COVID-19 pandemic, with the safety and wellbeing of our workforce, customers and local communities our first priority. Taking an early decision not to take advantage of the furlough scheme for any colleagues, we maintained good momentum in the business, continuing to serve our customers, making detailed preparations for a safe return to work and, when it was appropriate, restarting our build programmes efficiently.  Build rates were back at pre-COVID levels by the end of the period.

“Despite the significant disruption, the group’s preparedness, agility and strength ensured a robust first half performance with 4,900 new home completions and further good progress made on our customer care improvement plan. 

“The group has had an excellent start to the second half with a c. 49% year on year increase in average weekly private sales rates per site since the start of July and a current forward order book of c. £2.5bn, a 21% increase on last year. Our strong opening work in progress position and excellent build rate through the summer give us confidence in a positive second half outturn. We expect that by the end of September, we will have delivered c. 45% of our anticipated second half new home legal completions.”

He added: “As a result of the continuing strong performance of the business through this challenging period, together with our cautious optimism on the group’s prospects for the second half, we are pleased to announce that the board is proposing a modest interim dividend of 40p per share. Further dividend payments this year will remain under close review.

“Our reaction to the COVID disruption showed very clearly the exceptional quality of our colleagues throughout the business and I’m very proud of their response to the recent challenges. Our team, together with our strong balance sheet, high quality land holdings, significant investment in work in progress, a transformed customer care programme and a 5-star HBF rating now within reach, gives Persimmon a strong platform from which to deliver the homes the country needs, support the UK’s economic recovery and drive long-term sustainable value for all our stakeholders.”

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