PERSIMMON has warned of an “economic impact” amid disruption caused by the Russian invasion of Ukraine.
However, the housebuilder was upbeat about the year ahead overall, after a strong 2021 that saw house sales up and revenues rising.
Dean Finch, Persimmon chief executive, hailed private sales rates ahead by two per cent in the opening weeks of the year and a “robust” forward sales position of £2.21 billion.
“We expect to grow our outlet position in 2022 and are targeting volume growth of 4-7% on 2021 levels, whilst maintaining our industry-leading margins, although we are mindful of the growing risk of an economic impact as a result of the tragic conflict in Ukraine,” said Mr Finch.
New UK home average selling prices also rose to £237,078 from £230,534 in 2020, helping pre-tax profits jump to £966.8m from £783.8m the year before.
In Scotland it reported 1,535 new homes at an average price of £212,607 north of the Border, up 1%, with a total 10,047 plots owned. It bought 20,750 plots across the UK last year and expects to open 75 new selling outlets in the first half of 2022.
Mr Finch said the company maintained build rates at pre-Covid levels and improved customer service during the year.
He said: “An agile approach across the business ensured we navigated the supply chain challenges posed by the pandemic, with our Brickworks, Tileworks and Space4 manufacturing facilities providing security of supply for essential materials and helping us maintain our operating efficiency.
“We will significantly expand production capacity at our Brickworks and Tileworks facilities this year and invest in a new Space4 timber frame facility.”
The firm said that “effective supply chain management, cost control and the group’s vertical integration, together with strong selling prices, mitigated build cost inflation of 5%”.
The company will expand production at its facilities this year as it plans for further growth, it said.
Persimmon had previously put aside £75 million to fund any cladding issues following the Grenfell tragedy. It has identified 33 sites in need of work.
It said it did not need to increase the pot at this time but said it has extended its search for affected properties by 30 years following requests from the Government.
Oli Creasey, analyst at Quilter Cheviot, said the results “paint a picture of a company that has successfully transformed itself, without requiring considerable financial resource at the expense of sales or profits”.
He said: “What is perhaps more impressive is that the company has been able to achieve this improvement without suffering a noticeable financial hit. The company’s pursuit of vertical integration, building their own brick, tile and timber factories has helped to shield the company from supply chain shortages and some of the cost inflation experienced in 2021.”
Andy Murphy, Edison Group director, said: “Importantly, the results of focus on customer satisfaction has yielded results with the score hitting 92% which should give the company a five-star rating at the next review, the first time it will have achieved this level in its history… it expects to pay a regular dividend of 125p/share on April 1 and a ‘surplus’ payment of 110p in July.”
Shares in Persimmon closed up 2%, or 48p, at 2,370p.