Persimmon forward order book to £2.3bn
Persimmon, the FTSE 100 homebuilder, confirmed its profit fell during 2020, while the company saw an increase in the value of its forward order book to £2.3bn.
Profit before tax fell to £783m from £1bn, as revenues also dropped by £0.1bn to £3.3bn.
The company confirmed its dividend for the year at 110p a share, down from 235p per share at the end of 2019.
At early morning trading, Persimmon’s share price is up by 0.89% to 2,734p. This follows a strong performance by homebuilders on the FTSE 100 yesterday in anticipation of Rishi Sunak’s budget announcement.
As the firm benefitted from the stamp duty holiday throughout the pandemic, as well as low interest rates, it will now look to further announcements by the UK Government.
Ben Nuttall, senior analyst at Third Bridge, singled out Wednesday’s budget announcement as a policy area of significance to Persimmon.
“All eyes will be on the budget later today as stamp duty plans come through. Many are expecting a stamp duty holiday extension so if the chancellor takes a different path housebuilders such as Persimmon will feel the repercussions.”
While the government’s Help To Buy scheme I unlikely to impact Persimmon as it will other construction companies, the homebuilder could be affected by environmental regulations, according to Ben Nuttall.
“Something that Persimmon won’t escape dealing with will be new environmental building regulations, which are expected to add around £5k to each house build. However, our experts say it is unlikely to impact Persimmon’s profitability as the cost is more likely to be shared by house buyers and land values,” Nuttall said.
Dean Finch, chief executive of Persimmon, outlined the company’s ambitions for the future.
“We must build on this important progress and further enhance our build quality and customer care so we are known for both outstanding service as well as outstanding value. To achieve this we will further strengthen our build quality and independent inspection regime within the Persimmon Way. This will both drive efficiencies that will pay for these improvements and enhance our capabilities, enabling us to build a greater volume of homes at five-star. We have also set new environmental targets in line with the Paris Agreement and will seek to further develop the Persimmon Way to embed the specific measures that will deliver on these targets in the future.”