TIDMPSN
RNS Number : 8007Z
Persimmon PLC
15 January 2020
TRADING UPDATE - 15 JANUARY 2020
Persimmon plc announces the following update ahead of its Final
Results for the year ended 31 December 2019, which will be released
on 27 February 2020.
Highlights
"Persimmon continues to make good progress with the
implementation of its customer care improvement plan. Central to
this plan is putting customers before volume, with new home legal
completions for 2019 being 4% lower than last year.
"Delivering the maximum benefit to our customers from our
quality and service improvement initiatives will continue to be my
top priority for 2020. I am pleased with the progress we have made
in 2019 and there is more to do. Action taken to maintain our
increased levels of work in progress investment, the increase in
quality assurance and customer service resources, and our plans for
the implementation of the recommendations of the recent Independent
Review, will all add to our momentum.
"While our plans for delivering a sustained improvement in
quality go far beyond a focus on the criteria of the HBF customer
satisfaction survey, our current rating, which is trending strongly
ahead of the Four Star threshold, is tangible evidence of the
improvement we are making. I am determined that we will make
further headway this year, supported by the introduction of
Persimmon's customer retention scheme from July 2019, which was a
first for the industry.
"I am encouraged by the enthusiasm and commitment with which the
whole Persimmon team is making the step change necessary to deliver
higher levels of quality and service to our customers. When
combined with Persimmon's strong forward build and sales position,
robust liquidity and industry-leading land holdings, I am confident
of the Group's future success."
Dave Jenkinson, Group Chief Executive
Trading
Our regional housing markets across the UK continued to benefit
from resilient consumer confidence throughout 2019, supported by
low interest rates, a competitive mortgage market, and robust
employment levels.
With total Group revenues for the year of GBP3.65bn Persimmon
has traded well. The 2.4% reduction on the prior year (2018:
GBP3.74bn) reflects the action being taken to ensure the Group
delivers improved levels of quality and service to its customers.
New housing revenues reduced by 3.5% to GBP3.42bn (2018:
GBP3.55bn). New home legal completion volumes were 15,855 (2018:
16,449), including private sales of 12,463 new homes (2018:
13,341). Our average selling price of c. GBP215,700 was in line
with last year (2018: GBP215,563). This performance reflects the
continued strength of the Group's Westbury Partnerships business,
with sales to the Group's housing association partners increasing
to 21.4% of the sales mix (2018: 18.9%) with an average selling
price of c. GBP119,150 (2018: GBP117,653). The average selling
price of the Group's private sales was c. GBP241,975 (2018:
GBP238,373).
We anticipate the Group's pre-tax profits will be in line with
our market consensus.
On 2 January 2019, the Group opened a new business at Harworth,
near Doncaster, which has supported the Group's growth across the
Yorkshire region, delivering 350 new homes in its first year of
trading. We will continue to invest in the Group's infrastructure
and people to support improved quality, service and growth.
Total forward sales value of c. GBP1,356m at 31 December 2019
(2018: GBP1,397m) provides Persimmon with a solid platform as we
enter 2020. The Group will continue to offer a range of new homes
for all, maintaining its traditional focus on first time buyers and
home movers. We currently have c. 365 developments in construction,
a similar position to last year and plan to open c. 80 new sites in
the first half of the year, adding to the Group's high quality
development portfolio. In higher demand locations we continue to
focus on releasing new developments for sale only when more
advanced construction stage is achieved, to support improved
availability, quality and accuracy of moving in dates for our
customers.
The Group's disciplined approach to land replacement, having
secured over 9,900 plots of new land in 60 locations through 2019,
reflects the strength and quality of the Group's existing land
holdings. This approach is in line with our strategic priorities,
which give full consideration to current economic uncertainties,
including those associated with the UK leaving the EU, together
with risks associated with the market cycle.
The Group's cash generation remains strong. Cash balances of c.
GBP844m were held at 31 December 2019 (2018: GBP1,048m) after
returning GBP748m of capital to shareholders in 2019 (2018:
GBP732m).
Looking ahead to the 2020 spring season, Persimmon is in a
strong market position. The Group has a nationwide outlet network
and a range of attractive house types available at affordable
prices across the UK regions, supported by high quality land
holdings and a conservative balance sheet.
We will give an update on our assessment of the housing market
over the early weeks of 2020, together with the progress we are
making with the implementation of our customer care improvement
plan and the recommendations of the recent Independent Review, when
we announce our results for the year ended 31 December 2019 on
Thursday 27 February 2020.
Please Note
There will be a call for analysts at 09.00 GMT today. Please use
the dial-in details below:
+44 (0)33 3300
Telephone number 0804
Access pin 98513810#
Passcode Persimmon
An audiocast of the call will be available on
www.persimmonhomes.com/corporate
For further information please contact:
Dave Jenkinson, Group Chief Executive Simon Rigby
Mike Killoran, Group Finance Director Kevin Smith
Jos Bieneman
Persimmon plc Citigate Dewe Rogerson
Tel: +44 (0) 1904 642199 Tel: +44 (0) 20 7638
9571
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END
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