Persimmon pre-tax profits for 2018 surpassed £1.1 billion, with the company benefiting in particular from the government help-to-buy scheme.
Persimmon reported annual profits of £1.091 billion, up 13% from £966 million in 2017. This was largely as a result of help-to-buy, which accounted for almost half of all homes sold.
However, the housing minister has now launched a review on the scheme, particularly in light of Persimmon’s soaring profits.
The housebuilder also announced that interim chief executive Dave Jenkinson would remain in his role heading the company.
Last year, its previous chief executive Jeff Fairbun left the firm after a shareholder backlash against a £75 million pay-out.
Tom Brown, Managing Director of Real Estate at Ingenious, commented on the results: “Persimmon’s 2018’s pre-tax profits were broadly in line with forecasts however recent sharp falls in its share price and those of other housebuilders in the UK betray a sector which has a lot to lose from a disorderly Brexit and an economic downturn. The company has been in the firing line since the scandal broke of the bonus awarded to its now ex CEO.
“The government is right to put housebuilders under the spotlight as a condition of their inclusion in the key Help to Buy scheme which has underpinned pricing in the sector since being announced in 2013. Alongside good financial governance, the government should drive best practice across the industry in relation to build quality and after sales service. This coupled with local councils demanding funding infrastructure, can ensure that everyone shares in the benefits that new development can bring to communities.”
Persimmon shares (LON:PSN) are currently trading +1.54% as of 9:50AM (GMT).