Persimmon has been addressing its quality failings over the past two years and the new boss wants to ramp this up.
“We will adopt more exacting building tolerances than existing industry standards,” Dean Finch said. “We will employ the industry's largest group of independent quality controllers who will check every stage of construction, by doubling our team of inspectors to over 60 by the end of this year.”
He added: “This team, which will directly report to the Group Construction Director, will assess every single plot we build at a number of key stages and only allow work to continue if our higher standards have been met.”
Persimmon commissioned an independent review of its customers care culture and operations in 2019 in the wake of a torrent of bad publicity for the company. The report was damning, highlighting a nationwide problem of missing and/or incorrectly installed cavity barriers in its timber frame properties. This was attributed to a poor corporate culture coupled with the lack of a group build process. But the Persimmon board faced up to their failings and set about changing.
Dean Finch took over from Dave Jenkinson as chief executive in September 2020. He had previously been chief executive of National Express for 10 years. Before that he was chief executive of Tube Lines and finance director at First Group.
As previously reported, Persimmon is also on a training drive and has developed its own NVQ programme. Initially created for site managers and sales staff, the intention is that the NVQ programme will eventually extend to every area of the business and all 6,000 employees.
Dean Finch said: “Our new 'Persimmon Pathway' will ultimately ensure that every direct employee will receive a tailored training programme. We are starting with our site-based colleagues, so they can receive the recognised industry qualification in their area of expertise. Alongside our pioneering new NVQ Assessment Centre and a reinvigorated toolbox talk programme for tradespeople, we will ensure our site managers, independent quality controllers and sales advisors are amongst the best trained in the industry.
“ These enhanced standards, the increased investment and enhanced training are targeted at ensuring we build right, first time, every time. With a significantly expanded team under our group construction director and a new group technical director, we are strengthening our central oversight to ensure the consistent application of these standards. This is clearly crucial, but to strengthen our customers' trust we need to go further.”
For customers that remain unconvinced by Persimmon’s quality control, there is the option of taking advantage of Persimmon’s homebuyer retention scheme, introduced by Dave Jenkinson as an industry first. This enables buyers to withhold 1.5% of the total home value until any faults identified at the point of key release are resolved. Roughly half of Persimmon owner occupiers have used this scheme since July 2020.
In the year to 31st December 2020 Persimmon completed 13,575 new homes, 14% down on 2019’s 15,855.
With an average selling price of £230,534 (2019: £215,709), total group revenues were £3.33bn (2019: £3.65bn). Pre-tax profit was down 25% to £783.8m (2019: £1,040.8m), taking into account the £75m that has been set aside for resolving fire-safety cladding issues on high-rise developments. [See Persimmon to spend £75m on cladding replacement, 10/2/21.]