Persimmon’s sales rate surges 30% in 2021
Persimmon’s sales rate has soared along with its pre-tax profits, as demand for new homes remains buoyant.
Highlights
- Good first half performance against the backdrop of the continuing pandemic and the pandemic’s impact in the first half of the prior year – profit before tax of £480.1m (2020: £292.4m).
- 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.
- New housing operating margin of 27.6%² for the six months to 30 June 2021 (2020: 26.6%).
- The business is managing the balance of inflationary pressures being experienced by the industry well.
- £479.8m of net cash generation before capital returns of £398.7m and land spend of £200.4m
- Underlying return on average capital employed4 of 37.9% (December 2020: 29.4%).
- Over the last 3 years, the Group’s average underlying return on capital employed has been 36.5% reflecting the sustainable performance of the business.
- After tax return on equity of 22.6%5 (2020: 21.5%).
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.”
Outlook
- Good forward sales of £2.23bn, including legal completions in the second half so far, up c. 9% on the more normal trading year of 2019.
- Cumulative average private weekly sales rate for the 33 weeks to date is over 20% ahead of 2019.
- As previously announced, we anticipate delivering c. 10% growth in sales completions this year (FY 2020: 13,575 legal completions), with further growth to come.
Source: Show House News
