Persimmon sees profits swell 25% to nearly £1bn

Persimmon has posted 2017 revenues increasing by 9% to £3,422.3m (2016: £3,136.8m) and profit before tax increasing by 25% to £966.1m (2016: £774.8m).

Legal completions increased by 872 new homes to 16,043 (2016: 15,171) and average selling price increased by 3.2% to £213,321 (2016: £206,765).

The operating margin increased to 28.2% (2016: 24.8%).

In the first eight weeks of 2018 visitor numbers to show homes has been 7% up on last year, indicating growing demand, and current total forward sales, including legal completions taken so far in 2018, are £2.03bn, which is 7.5% ahead of the previous year (2017: £1.89bn).  Cancellation rates remain at historically low levels.  The average selling price of private sales is up 2.0% at £234,106.

Persimmon is looking to expand output further, opened a new branch near Ipswich last month. This is the company’s sixth new operating business in three years and takes the total number of group house-building businesses to 30.

Persimmon has been generating headlines recently for the size of its executives’ bonuses. Shareholders are doing alright too and the board today announced an increase in its capital return plan. Additional payments of 125 pence per share will be made each year for the next three years, increasing the total value of the plan by 375 pence per share to £13 per share.

Acting chairman Nigel Mills 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.

"The group's outstanding performance is demonstrated by both the strength of the financial position of the business and the quality of the asset platform, which provides the opportunity to continue to deliver excellent returns moving forwards. Since the launch of the group's new strategy in 2012 the group has increased new home completion volumes by more than 70% and invested c. £3.18bn of cash in land while simultaneously returning c. £1.49bn of surplus capital to shareholders." 

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