Persimmon makes more than £480m profit during first half
Persimmon said today its positive outlook has been reaffirmed by a strong trading performance which saw profits and productivity return to pre-Covid levels.
Announcing its half year results for the six months to 30 June 2021, the housebuilder reported profit before tax of £480.1m (2020: £292.4m / 2019: £509.3m) and completed 7,406 new homes (2020: 4,900 / 2019: 7,584).
Average private sales rate for the period was over 30% ahead of 2020, the increase reflecting the unprecedented site shutdowns in 2020 due to the pandemic, but was also c. 20% ahead of 2019.
Total group revenues reached £1,840m (2020: £1,190m / 2019: £1,754m).
Dean Finch, group chief executive, said: “Persimmon’s first half performance has been robust. In particular, I am pleased we have delivered strong growth in legal completions whilst also achieving higher levels of build quality and customer satisfaction.
“We made good progress in the land market in the period, bringing over 10,000 plots of high quality land into the business, achieving good visibility of new outlet openings and providing momentum for our future growth. With c. 85 new outlets opening in the second half of the current year, we are improving availability and choice for our customers.
“We’re managing the balance of inflationary pressures well and currently anticipate that our industry leading returns will remain resilient. Our forward sales position is c. 9% ahead of the same point in 2019, with our cumulative private sales rate over 20% above that of 2019 for the year to date.
“I would like to thank all my colleagues across the business who have achieved these results.
“Persimmon’s high quality land holdings, disciplined land replacement strategy, healthy liquidity, experienced management team and continued resolve to drive improvements in build quality and customer service provide an excellent platform for its future success.
“Our ambition is to be seen by our customers as delivering both outstanding service and outstanding value. I am determined to build on the progress we have made and enhance our capability to consistently provide high quality homes which will help secure sustainable benefits for all of our stakeholders.
“We anticipate successfully delivering c. 10% growth in sales completions this year. The Group has a great platform and good momentum to deliver further disciplined growth into the medium term, creating value for all.”
John Moore, senior investment manager at Brewin Dolphin, added: “Persimmon has delivered another strong set of results as the company – and housebuilders more generally – return to pre-pandemic levels of performance. Strong sales, good margins, and excess cash on its balance sheet are backed up by a solid pipeline of future sales, all of which underpin the business’s ability to deliver for shareholders.
“Housebuilding is among the top sectors contributing to the return of dividends, but with around half of its homes sold to first-time buyers and nervousness about the price of land and raw materials, there are potential challenges on the horizon. Nevertheless, Persimmon’s £1.32 billion cash pile – around 15% of its market value – and industry-leading operating metrics offer the company the ability to navigate any such challenges better than most.”
Meanwhile, Persimmon’s greenhouse gas reduction targets have been validated by a global authority.
The housebuilder has received validation from the Science Based Targets initiative (SBTi) for its ambitious targets to reduce greenhouse gas (GHG) emissions by 2030 in line with the levels required to meet the 1.5C warming goals of the Paris Agreement.
The SBTi is a partnership between the Carbon Disclosure Project (CDP), the United Nations Global Compact, the Word Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It independently assesses and validates corporate emissions reduction targets against the latest climate science.
The SBTi has validated Persimmon’s commitment to reduce absolute scope 1 and 2 GHG emissions 46.2% by 2030 from a 2019 base year and to reduce scope 3 GHG emissions 22% per square meter of completed floor area within the same timeframe.
Group sustainability manager Philippa Bolton-Hadfield said: “Tackling climate change requires ambitious action from the corporate sector. At Persimmon we recognise that as a responsible housebuilder we fulfil an important role in society.
“The world is facing an unprecedented environmental challenge so we must – and will – play a full and active role in the imperative of achieving a net zero carbon economy.
“Our science-based targets are a clear demonstration of our commitment to reducing our environmental impact in a meaningful way. We’ve also set ambitious targets for our homes to be net zero in use by 2030 and net zero in our operations by 2040. We will work closely with our supply chain and wider industry in order to achieve this.”
Sanda Ojiambo, CEO and executive director of the UN Global Compact, one of the SBTi partners, said: “The climate emergency has led CEOs to act urgently and decisively to set science-based emissions reduction targets for their companies in line with a 1.5°C pathway. The movement to transition to a net-zero economy by 2050 is also growing rapidly, and we call on all business leaders to adopt concrete plans to realize this goal.”