TIDMPSN
RNS Number : 7803W
Persimmon PLC
28 April 2021
TRADING UPDATE
WEDNESDAY 28 APRIL 2021
Persimmon plc ("Persimmon" or "the Group") is today providing an
update on trading for the period from 1 January 2021 to date, ahead
of its Annual General Meeting ("AGM") which is being held at 12.00
noon today.
Dean Finch, Group Chief Executive, said:
"Persimmon has made a strong start to the year with current
forward sales 23% ahead of last year and 11% ahead of the same
point in 2019. Our build rates continue at pre-Covid levels and we
remain on track to deliver first half volumes approaching those of
the first half of 2019. We are progressing our land holdings and
taking advantage of good quality investment opportunities, bringing
6,000 plots across 29 locations into the business in the period and
securing a strong pipeline for the future. Our current outlet
network is expected to remain stable at approximately 300 outlets
on average throughout the year.
"In March, I outlined our five key priorities to ensure
Persimmon achieves our new ambition and secures a reputation for
providing both outstanding service and outstanding value. We are
making good progress and pleasingly our HBF customer satisfaction
score(1) remains ahead of the five-star threshold.
"Demand for newly built homes remains healthy and the Group's
sales rates are encouraging. Persimmon's high quality land
holdings, balance sheet strength and liquidity provide a strong
platform to continue to deliver the homes the country needs,
underpinning long-term sustainable returns for the benefit of all
of its stakeholders."
Trading
The Group's current forward sales position, including year to
date legal completions, of c. GBP3.0bn (2020: c. GBP2.4bn) is 23%
ahead of last year and 11% ahead of the same point in 2019 (2019:
GBP2.7bn). The Group's average selling price for homes sold to
private owner occupiers in the forward order book is c. GBP252,000
(2020: c. GBP244,500). Customer enquiry levels remained encouraging
throughout the period and our average private sales rate for the
current year to date is well ahead of 2020, as expected given the
impact of the pandemic from week 12 last year, but is also c. 17%
ahead of 2019.
The Group continues to focus on advancing its construction
programmes to meet customer demand, without compromising on safety
or quality. Build rates across our developments remain at
pre-pandemic levels, whilst maintaining all Covid secure protocols.
The Group's active outlet numbers have been running c. 15% lower
than for 2019 and the first half of 2020 in line with our strategy
of mitigating the risks associated with the cycle. This provides us
with the opportunity to strengthen our active outlet network
through the current year in support of delivering further growth
into 2022. We have continued to take advantage of good quality
selective land investment opportunities during the period resulting
in net land spend of GBP140m. 6,000 plots have been brought into
the business in 29 locations across the UK during the period.
Persimmon's balance sheet and liquidity remain robust. The Group
held GBP940m of cash at 23 April 2021 with deferred land
commitments of approximately GBP90m to the end of the current year.
In addition, the Group has an undrawn GBP300m Revolving Credit
Facility which has recently been extended, having a five year term
out to 31 March 2026.
Building excellence: build right, first time, every time
The Persimmon Way is operating well and the Group remains
focused on implementing quality improvements that are consistently
applied on each home we build through initiatives including
improved training and quality assurance processes. Specifically,
the Persimmon Pathway, a tailored training programme for our direct
employees, has registered over 100 site managers on relevant
National Vocational Qualification training plans, improving the
skills base of our on-site teams. In addition, we continued to
appoint new Independent Quality Controllers across the Group, in
line with our target of doubling the size of this team by the end
of the year.
Through the provision of the Group's ultrafast full fibre
broadband service, FibreNest, we are particularly pleased to be
currently supporting c. 14,000 of our customers across more than
200 of our developments, helping to ease the burdens of life in
lockdown (2020: c. 6,500 customers).
Our build quality and assurance initiatives are generating
positive outcomes for our customers and we are seeing further
improvements in our customer satisfaction scores(1) as we achieve
greater consistency in delivering high quality homes and good
levels of customer service. The Group's HBF customer satisfaction
score(1) has continued to improve and is currently 91.8%, which
exceeds the five-star threshold of 90% (89.7% for the survey year
to 30 September 2020).
Our customer portal, which will assist customers from the point
of reserving their new home, has been successfully piloted across
seven of our businesses and will be fully rolled out during this
summer.
As announced on 10 February 2021, the Group set aside GBP75m
towards helping occupants of multi-storey properties built by
Persimmon and all relevant management companies, managing agents,
or building owners have been contacted and this work is
progressing.
Sustainable communities
The Group remains focused on creating and supporting sustainable
communities. We recognise our role as a responsible builder and are
committed to playing our part in achieving a net zero carbon
economy. We recently announced net zero carbon targets for our
homes in use and our operations and are currently actively
assessing initiatives to assist in achieving these objectives(2) .
Also, having already adopted the principles of the Living Wage
Foundation within our direct pay policies, we are now seeking full
Foundation accreditation. In addition, the Group recently donated
GBP250,000 to the Mail Force campaign to provide laptops to
children in need, to support their education from home and
subsequent life opportunities.
Capital Return Programme
As announced on 3 March 2021, given the successful trading
result of the Group in 2020 and its strong financial position, the
payment of the regular annual distribution for the year ended 31
December 2020 of GBP1.25 per share, was accelerated and paid as an
interim dividend on 26 March 2021, rather than in early July 2021
as previously planned.
The Board is pleased to re-iterate its intention, subject to
continual assessment, to return 110p of surplus capital by way of
two additional interim dividend payments in relation to the 2020
financial year, each amounting to 55p per share, the first in
August 2021 and the second in December 2021.
Outlook and growth
Persimmon continues to experience good demand for its newly
built homes across the UK and the Group's forward sales are strong.
Recognising the reduction in construction activity in 2020 due to
the impact of the pandemic, the Group continues to focus on
advancing its build programmes to improve the availability of homes
for sale and its stock position. Persimmon remains on track to
increase the number of new homes handed over to its customers
compared with last year by delivering new home completion volumes
in the first half of 2021 approaching those of the first half of
2019, with similar volumes expected in the second half. As
indicated previously, and allowing for the robust sales rates being
experienced, we anticipate the Group's sales outlet network will
remain stable at c. 300 outlets on average for the year.
With well-designed homes offered for sale at compelling
prices(3) in attractive environments, Persimmon is well positioned
in its markets. Whilst recognising the cautious optimism being
generated by the vaccine rollout programme, employment levels and
consumer confidence will be influenced by unfolding events and the
UK's future economic progress. As demonstrated by Persimmon's
performance through the disruption of last year, the Group remains
particularly well placed to manage market conditions as they
develop. The long-term fundamentals surrounding the new home market
remain positive and the Board is confident of the Group's future
success.
Next Update
The Group will provide a further update in its next Trading
Update on 8 July 2021.
1. The Group participates in a National New Homes Survey, run by the
Home Builders Federation. The Survey year covers the period from 1 October
to 30 September. The rating system is based on the number of customers
who would recommend their builder to a friend.
2. Details of the Group's net zero carbon targets for our homes in use
and our operations can be found in our Annual Report 2020 which can be
accessed here: www.persimmonhomes.com/corporate
3. The Group's private average selling price of GBP250,897 for the year
to 31 December 2020 was c. 17% below the UK national average. The n ational
average selling price for newly built homes was sourced from the UK House
Price Index as calculated by the Office for National Statistics from
data provided by HM Land registry.
For further information, please contact:
Dean Finch, Group Chief Executive Kevin Smith
Mike Killoran, Group Finance Director Jos Bieneman
Persimmon Plc Ellen Wilton
Tel: +44 (0) 1904 642199 Citigate Dewe Rogerson
Tel: +44 (0) 20 7638 9571
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END
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