Persimmon profits up by 25 per cent following “outstanding” year

Jeff Fairburn

Persimmon has revealed annual profits soared by a quarter last year and the housebuilding giant mains “encouraged” by the start to 2018 despite Brexit uncertainties.

Revenue in 2017 year was up by nine per cent to £3.42 billion with legal completions ahead by 872 new homes to 16,043 and average selling price up by 3.2 per cent to £213,321.

Persimmon’s pre-tax profit increased from £774.8 million in 2916 to £966.1 million.

Shares in the group – which also owns the Charles Church and Westbury Partnerships brands – raced more than 10 per cent ahead after it revealed the bumper bottom-line profits haul for last year, boosted by booming demand for new builds.

Newly appointed acting chairman Nigel Mills, who took on the role on an interim basis on Monday after Nicholas Wrigley stepped down, praised an “outstanding” performance for 2017.

He said: “Persimmon’s performance in 2017 has been excellent. The group’s focus on high quality growth, coupled with capital discipline, has accelerated the delivery of our strategic objectives and generated record returns for our shareholders.”

He added that the start of the 2018 spring season had also been “encouraging”, with the group’s private sales rate per site up 7 per cent and average selling prices 2 per cent ahead at £234,106, with overall pricing conditions remaining firm.

The results for last year follow the high-profile controversy over executive pay at the group, with bosses last week agreeing to hand back around £50 million in bonuses.

The furore over the affair led to Mr Wrigley’s and remuneration committee chairman Jonathan Davie’s resignations.

In December, Mr Wrigley, a former banker, said he regretted not capping the company’s bonus scheme and was leaving “in recognition of this omission”.

Current chief executive Jeff Fairburn’s near-£100 million award was cut by £25 million in recent weeks following mounting pressure from politicians and some shareholders over the long-term incentive plan introduced by the company six years ago, with the firm having been boosted by the Government’s Help to Buy scheme.

Reacting to today’s annual results, Mr Fairburn said ongoing strong demand would help the market in 2018, although he flagged concerns over Brexit.

He said: “Whilst conditions in the new-build housing market remain supportive, the negotiations associated with the UK’s exit from the EU, including both the transitional arrangements and the terms of the longer term relationship, together with the nature of UK’s trading relationships with its other global partners, present key uncertainties that will have a substantial influence on market outcomes.

“However, with a long-term unfulfilled demand for housing, we believe that UK fundamentals remain strong.”

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