REG - Persimmon Plc - 2024 Trading Statement

PersimmonAnnouncement

14/01/2025 07:00

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RNS Number : 1614T  Persimmon PLC  14 January 2025

 

14 January 2025

 

2024 Trading Statement

 

Completions up 7%; full year underlying profit before tax to be around the
upper end of expectations

 

Persimmon Plc today announces the following update ahead of its Final Results
for the year ended 31 December 2024, which will be released on 11 March 2025.

 

Dean Finch, Group Chief Executive, commented:

 

"We performed well through 2024 delivering 7% growth in completions, ahead of
market expectations.  We expect to report an underlying operating margin in
line with the prior year, as previously guided, with 2024 underlying profit
before tax expected to be around the upper end of market expectations.
Customer enquiries and sales rates have been consistently ahead of the prior
year since the spring selling season.

 

Persimmon has worked hard and is well positioned for the future, supported by
the land and planning investment we have made in recent years, our vertical
integration capabilities and our excellent teams. This investment, coupled
with the government's ambitious planning reforms which demand more of the
high-quality, affordable homes which are Persimmon's core strength, supports
our growth ambitions in the medium-term.

 

I want to extend my gratitude to our colleagues, subcontractors and suppliers
for their dedication and support. Their efforts have been instrumental in
keeping Persimmon well-placed to provide high-quality, sustainable homes at
affordable prices to customers across the UK."

 

2024 Highlights

                                                2024         2023       change
 New home completions                           10,664       9,922      +7%
 Average selling price                          c.£268,500   £255,752   +5%
 Sales outlets at 31 December                   270          258        +5%
 Cash at 31 December                            c.£260m      £420m      -£160m
 Forward sales position                         £1,146m      £1,060m    +8%
 Of which private forward sales                 £653m        £499m      +31%
 Land holdings (plots owned and under control)  c.82,100     82,235     0%

 

Trading

The Group delivered a total of 10,664 homes, up 7% year-on-year (2023: 9,922),
ahead of market expectations. We did this whilst retaining our HBF five-star
rating for the third consecutive year, with the investment that we have made
in quality and customer service driving value. This growth was driven by an
18% increase in private home completions to 9,075 (2023: 7,681) with 1,589
partnership homes delivered in the period (2023: 2,241).

 

The Group's private average selling price was slightly ahead of the prior year
at c.£287,150 (2023: £285,774). Pricing improved as the year progressed,
largely due to mix, but also reflecting improving market conditions.
Incentives have continued to run at c.4-5%. Our partnerships average selling
price increased by 6% to c.£161,900, (2023: £152,852) resulting in a 5%
increase in the blended average selling price to c.£268,500 (2023:
£255,752).

 

Net private sales per outlet per week increased by 21% during the period to
0.70 (2023: 0.58), 0.57 excluding bulk sales (2023: 0.50), with demand
consistently higher than the prior year since the spring. Our strategic
investment in land and planning in recent years enabled us to open c.100 new
outlets during the year, ending the year with 270 open outlets, a 5% increase
from the beginning of the year (2023: 258 outlets). We operated from an
average of 261 outlets during the period (2023: 266).

 

We expect full-year underlying profit before tax for 2024 to be around the
upper end of market expectations (£349m to £390m) with underlying operating
margins similar to last year, in line with previous guidance.

Our forward sales position has increased by 8% to £1.15bn compared to the
prior year (31 December 2023: £1.06bn), showing the value of our three strong
brands (Persimmon Homes, Charles Church and Westbury Partnerships). Of this
£653m relates to private forward sales (31 December 2023: £499m), up 31%
including bulk sales (+16% excluding bulk sales), with a private average
selling price of c.£276,850 (31 December 2023: c.£266,100).

 

Balance sheet and land investment

During the year we achieved detailed or reserved matters planning on c.13,050
plots in 2024, up 21% on the prior year (2023: 10,809), equivalent to 123% of
2024 completions and further supporting our high quality land bank.

 

Net land spend was c.£440m during the year (2023: £398m) of which c.£210m
was the settlement of land creditors (2023: £253m). Our owned and under
control land holdings stood at c.82,100 plots at 31 December 2024 (31 December
2023: 82,235 plots).

 

We ended the year with net cash of c.£260m, ahead of previous guidance,
having returned £192m to shareholders and spent c.£60m on building safety
remediation during the period (bringing our total remediation spend to date to
c.£120m). We continue to make good progress with remediation works underway
or completed on over 70% of known developments.

 

Outlook

We are pleased with the progress we have made in developing our capabilities
and we entered 2025 with an improved forward order book and strong land bank.
Our Boxing Day campaign has started well driving strong levels of enquiries
and visitors to our website. However, we are mindful of evolving macroeconomic
and geopolitical uncertainties, including the timing of future interest rate
changes, and the effect that they may have on our market and consumer
confidence in the short-term.

The strength of our land bank and our focus on cost control and efficiency
continue to differentiate the business as we manage sector-wide challenges,
including expected low single digit build cost inflation, the effects of the
national insurance increase and regulatory changes such as to stamp duty and
the proposed Building Safety Levy. The ongoing investment we have made in our
unique vertical integration model helps us to manage these cost pressures and
provides security of supply.

The disciplined investment that we have made in land and effective management
of the planning system is seen in our increasing outlet base, which grew by 5%
at the start of the year compared to the previous year. The government's
welcome changes to the National Planning Policy Framework, while likely to
take some time to fully make a difference, further support our medium-term
ambition to expand our outlet base to over 300.

Overall, Persimmon is well positioned for 2025 and will continue to deliver
high-quality affordable homes for our customers.

Persimmon will host a conference call with analysts at 09.00am today.

All participants must pre-register to join this conference using the
Participant Registration link. Once registered, an email will be sent with
important details for this conference, as well as a unique Registrant ID.

 

Participant registration page:
https://register-conf.media-server.com/register/BI0ab9cce88ce74901a3139a07b6739f6d
(https://register-conf.media-server.com/register/BI0ab9cce88ce74901a3139a07b6739f6d)

 

For further information please contact:

 Victoria Prior, Group IR Director                                              Olivia Peters

 Anthony Vigor, Group Director of Strategic Partnerships and External Affairs   Teneo
 Persimmon Plc                                                                  persimmon@teneo.com
 Tel: +44 (0) 1904 642199                                                       Tel: +44 (0) 7902 771 008

 

 

Appendices:

 

                      31 December 2024      31 December 2023      Variance
 Forward sales        Value      Homes      Value      Homes      Value  Homes
 Private              £653m      2,360      £499m      1,877      +31%   +26%
 Housing Association  £493m      3,110      £561m      3,530      -12%   -12%
 Total                £1,146m    5,470      £1,060m    5,407      +8%    +1%

 

Cautionary statements

Some of the information in this document may contain projections or other
forward-looking statements regarding future events or the future financial
performance of Persimmon Plc and its subsidiaries (the Group). You can
identify forward-looking statements by the terms such as "expect", "believe",
"anticipate", "estimate", "intend", "will", "could", "may" or "might", the
negative of such terms or similar expressions. Persimmon Plc (the Company)
wishes to caution you that these statements are only predictions and that
actual events or results may differ materially and as such undue reliance
should not be placed on these statements. The Company does not intend to
update these statements to reflect events and circumstances occurring after
the date hereof or to reflect the occurrence of unanticipated events. Many
factors could cause the actual results to differ materially from those
contained in projections or forward-looking statements of the Group, including
among others, general economic conditions, the competitive environment as well
as many other risks specifically related to the Group and its operations. Past
performance of the Group cannot be relied on as a guide to future performance.

 

Please see the most recent Annual Report and Accounts of Persimmon plc and
other disclosures through the Regulatory News Service ("RNS") for further
details of risks, uncertainties and other factors relevant to the business and
its securities.

 

The information in this trading statement is unaudited.

 

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