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Persimmon posts strong results and is bullish about future performance

by: Edward Murray
  • 27/02/2017
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Persimmon posts strong results and is bullish about future performance
Construction group Persimmon has reported a strong set of results for 2016, with profit before tax increasing by 23% to £782.8m and the company highlighting the importance of the government’s Help to Buy scheme in its ongoing performance.

The firm also reported an increase in full year revenue, up 8% to £3.14bn, while its operating margin for 2016 was 25%, up from 22% in 2015. The group’s completions rose by 599 new homes to hit a total of 15,171 for the year, up from the 14,572 recorded in 2015.

Persimmon is now five years into a 10-year strategic plan and group chairman Nicholas Wrigley said the business was well ahead of schedule. He said: “The group has continued to execute its long-term strategic plan, concentrating on delivering disciplined high quality growth. Key to supporting this growth is opening new development sites swiftly following receipt of an implementable detailed planning consent and then progressing a build programme to secure rates of new home construction to meet market demand.”

He added: “Having completed the first five years of the plan, group operational performance is well ahead of our original expectations.”

The group also underlined the importance of effective and proactive intervention from the government in the housing market.

Jeff Fairburn, group chief executive, said: “The availability of the government’s Help to Buy scheme remains an important facility supporting greater access and increased participation of first-time buyers in regional new-build housing markets. Mortgage lenders continue to support this 20% shared equity loan scheme with very competitive interest rates, with Help to Buy mortgage products remaining the most attractive opportunity for customers to buy a new home.”

Looking forward to the year ahead, Wrigley said that despite the strong results the group had posted for 2016, it would still be able to deliver further growth on the back of a confident UK housing market.

He said: “Despite particularly demanding comparatives given our excellent trading performance through 2016, we are in a good position to deliver further growth in 2017. Current total forward sales, including legal completions taken so far in 2017, are £1.89bn, 9% ahead of the previous year (2016: £1.74bn).”

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