Home Commercial Property Completions down at Persimmon as pandemic continues

Completions down at Persimmon as pandemic continues

by LLP Finance Reporter
15th Jan 21 1:43 pm

Despite a robust performance in 2020, volume housebuilder, Persimmon, has revealed via a recent trading update that its completions fell 14% to 13,575 against 2019 due to the effects of the pandemic.

The firm announced that its strong trading performance in the second half of 2020, in which it delivered 8,675 new home legal completions, mitigated some of the impacts of delays caused by the market shutdown in the first half.

For its financial year ending December 31 2020, Persimmon’s total group revenues were £3.33bn against 2019’s £3.65bn with new housing revenues slipping to £3.13bn from the previous year’s £3.42bn. Its average selling price rose 7% to £230,500, due to the 6% higher proportion of new homes delivered to owner-occupiers in Persimmon’s total sales for the year, it said.

During the second half of the year, the company’s average weekly sales rate per site was 39% above H2 2019, partly resulting from the government’s stamp duty holiday, announced in July.

In the final quarter of the year, sales returned to “more normalised levels” after the release of pent up demand, and Persimmon working through stock.

In recent weeks, the business saw delays to reservations with the opening of the new Help to Buy scheme in mid-December, with sales in recent weeks also lower due to lower active outlet numbers “and some constraints on stock availability”.

As of December 31 2020, Persimmon’s forward sales were 25% ahead of 2019 at £1.689bn.

The business sounded caution over the ongoing pandemic and Brexit, saying: “On entering the third phase of tighter Covid-19 restrictions, whilst recognising the commencement of the nationwide vaccine rollout, the uncertainties surrounding the potential impact of the pandemic remain, particularly with regard to unemployment levels and consumer confidence. We are also mindful of the potential impact of an end to the stamp duty holiday.

“In addition, whilst the completion of the free trade agreement between the UK and the EU has relieved some immediate concerns, including regarding increased customs duties on supplies imported from the EU, the broader impact of these new trade arrangements has yet to be seen.”

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