Wednesday 3 March 2021 8:51 am

Persimmon profit falls as spring site closures dent builder

Housebuilder Persimmon said that its profit fell about a quarter in 2020 as a result of the coronavirus pandemic.

The FTSE 100 firm reported profit of £783.8m over the last 12 months, down from £1.04bn in 2019.

Despite the fall, shares in the firm rose 2.9 per cent after the open, as traders welcomed optimistic forward-looking statements from the group.

The number of houses that Persimmon fell from 15,855 the prior year to 13,575 in 2020, although selling price increased about seven per cent.

It also said that it was putting aside £75m to remove now-banned cladding from 26 multi-storey developments that it had built.

Where Persimmon still owns the building, the firm said it would lead the work, and where it does not it said it would support the new owners and tenants in getting the job done.

Looking to 2021, the company said that forward sales had hit £2.3bn, up 15 per cent year on year due to the combination of low interest rates and government support.

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For the first eight weeks of the year, it said that its private sales rate was up seven per cent compared to 2020.

And it said that build rates had been at pre-Covid levels since July 2020, having fallen sharply last spring amid site closures.

Persimmon also committed to returning a dividend of 235p per share this year, the same as it did in 2019. For 2020, the dividend slipped to 110p.

Chief executive Dean Finch said: “Persimmon delivered a robust performance in 2020 despite the challenges presented by the pandemic.

“I would like to commend our workforce for the effective way Covid-secure operating protocols have been adopted, protecting our customers, local communities and colleagues alike whilst maintaining effective on-site operations.”

Richard Hunter, head of markets at Interactive Investor, commented “Much as the pandemic left its indelible mark on the results, Persimmon has recovered strongly and is now building on strong foundations.

“However, there will still be challenges to come, not least of which is the fallout from the eventual removal of government support schemes to individuals which could lead to a spike in unemployment and a collapse of consumer confidence, hardly an ideal environment for the housing market.”