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Persimmon profits drop as housebuilder focuses on quality

By Duncan Ferris

Date: Tuesday 20 Aug 2019

Persimmon profits drop as housebuilder focuses on quality

(Sharecast News) - Persimmon on Tuesday reported drops in interim revenues and profit, though this was in line with expectations as the company focused more on improving the quality of its properties and the service delivered to its customers.
The housebuilder reported that revenue for the six month period ended 30 June came in at £1.75bn, falling by 4.0% when compared to the same period last year, as a drop in sales volumes from 6,577 homes to 5,963 offset a 1.7% increase in the average property sale price to the private market.

Consequently, profit before tax edged 1.4% lower to £509.3m.

Persimmon, which has faced recent media scrutiny regarding the quality of its new-build properties, said the lower sales volumes were due to its decision to invest additional funds of around £140.0m in work in progress as the company held back some sites for later sales release to give customers more accurate moving-in dates.

The company also noted that it had been impacted by an approximate 40% increase in customer care costs, which was expected to result in a £15.0m increase in its annual costs.

Dave Jenkinson, chief executive of Persimmon, said: \"Improving the quality and service delivered to our customers remains our top priority and I am encouraged with the progress made in the first half, which clearly shows that Persimmon is changing. Our customer satisfaction ratings for the current HBF survey year are showing improvement and I am particularly pleased that, in July, Persimmon became the first housebuilder to introduce a retention scheme for customers placing us at the forefront of strengthened consumer rights for homebuyers.\"

Meanwhile, the FTSE 100-traded company reported that it stands in a strong position to take advantage of high levels of employment, low interest rates, and a competitive mortgage market, even as Brexit uncertainty lingers.

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