PERSIMMON has hailed its quick response to rising demand for homes around the UK as it posted a near 50% rise in profits to £330 million last year, before exceptional items.
The housebuilder, led by chief executive Jeff Fairburn, said its results had been driven by a 30% increase in mortgage approvals, the impact of Help to Buy shared equity schemes, and rising consumer confidence on the back of improving economic data. Persimmon said these factors helped it hike turnover by 21% to £2.1 billion, with its average selling price up by 4% to £181,861 and legal completions rising by 16% to 11,528.
Finance director Mike Killoran said: "Those three elements put some good support behind the market, which we were able to respond to quite quickly in terms of increasing our build rate. And that allowed us to deliver a 30% increase in volume of legal completions in the second half of the year compared with the first half."
Mr Killoran noted 2013 had been positive for Persimmon's Scottish business.
The division, Scotland's largest housebuilding operation, built 25% more homes in 2013 than it did the previous year, with its tally reaching 1100.
And it plans to continue in a similar vein this year. The company plans to bring 17 new sites on stream in Scotland this year, in locations such as Perth and the Glasgow areas of Newton Mearns and Baillieston.
Mr Killoran said: "I think the Scottish market was good for us in 2013. [Given] the fact Help to Buy was not introduced until really quite late on in 2013, I think the Scottish market performed pretty well.
"For us, we have always been keen to offer the right product mix on our sites, which might mean changing the mix from time to time, [and] re-planning different phases of a site to continually reflect what customers are looking for. Scotland is no different on that.
"We did deliver more than 900 units in the central belt of Scotland in 2013, which was 25% up on the prior year, with an average selling price of around £160,000. [It] represents a good market for us."
Persimmon noted the progress it made in 2013 on the capital return plan it instigated in early 2012. The strategy has the dual aim of growing the business over the next nine to 10 years while returning around £1.9bn of surplus share capital to shareholders.
Mr Killoran said improving market conditions had allowed Persimmon to accelerate the plan. Shareholders will be paid 70p per share on July 4, brought forward from the final planned payment of 115p scheduled for 2021. Persimmon previously stated there would be no instalment paid this year.
Mr Killoran said he was satisfied house prices were stable, but questioned price sustainability in parts of London. Persimmon does not build in central London. Shares closed down 8p at 1463p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article