Friday 24 April 2020 7:33 am

Persimmon will start reopening construction sites next week

Persimmon has announced a phased restart to work on its construction sites from next week, as the housebuilding sector starts to return to work.

The housebuilder said it will start to open up sites from 27 April “in response to the UK government’s objective of getting the construction sector back to work.”

Following the announcement of lockdown last month, Persimmon closed construction sites to “ensure the safety of its customers, staff, contractors, and suppliers throughout this period”. Some construction work has continued in limited instances to complete the construction of new homes. New protocols will allow sites to open up from next week.

It comes after rival Taylor Wimpey yesterday laid out plans to start work on sites in England and Wales from early May.

Listen to our daily City View podcast as we chart the economic fallout and business impact of the coronavirus pandemic.

Persimmon’s chief executive David Jenkinson said: “Having spent the last month developing and testing new site protocols that incorporate the necessary social distancing and protective measures, we believe that we are now able to return to site safely”.

“These new measures are fully compliant with government public health guidance and will be strictly enforced by a specialist team”.

Cancellations remain low

The outbreak of coronavirus has done little to dent Persimmon’s business with cancellation rates at “historically low levels”. Sales teams have pivoted to online, using virtual viewings and digitalised reservation processes.

It has resulted in approximately 820 gross private sales reservations being secured in the five weeks to 1 April.

Jenkinson said the firm had strong financial liquidity to maintain operational capabaility. He said the firm had paid colleagues in full “which will allow us to reopen sites swiftly”.

The housebuilder said around 30 per cent of employees had been unable to work during the lockdown period. Persimmon has not made use of the government’s furloughing scheme.

William Ryder, equity analyst at Hargreaves Lansdown, said: “Either volumes bounce back over the coming months and pricing remains steady, or prices fall to maintain volumes as the marginal home buyer drops out of the market.

“In a worst case scenario both volumes and prices fall, and such a combination could quickly drive Persimmon and its competitors into the red. Ultimately, what matters now is the speed and strength of the economic recovery – and that’s out of Persimmon’s hands.”

Shares are down 1.6 per cent.

Get the news as it happens by following City A.M. on Twitter