Persimmon has become the latest housebuilder to toast rising revenues and house prices – on the back of a booming housing market.
The York based group, which was founded by Northumberland’s Duncan Davidson, totted up group revenues of £3.61bn, up from £3.33bn, and a 23% jump in pre-tax profit from £783.8m to £966.8m.
However, the company said it could see disruption to the UK economy as a result of the conflict in Ukraine.
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Economists believe inflation will rise higher as a result of tough economic sanctions on Russia and rocketing oil and energy prices hitting global economies.
Persimmon’s chief executive, Dean Finch, said: “We are mindful of the growing risk of an economic impact as a result of the tragic conflict in Ukraine.”
The company remained positive for the year ahead overall, after a strong 2021 that saw the completion of 14,551 homes, compared to 13,575 a year earlier, and new home average selling prices increasing to £237,078 from £230,534 in 2020.
Mr Finch said the company maintained build rates at pre-Covid levels and improved customer service during the year.
He added: “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.”
Looking ahead, the firm said it would expand production at its facilities this year – and also build a new Space4 factory, which produces timber frames, insulated wall panels and roof cassettes – as it plans for further growth, after its factories helped it weather supply constraints affecting the wider industry.
Mr Finch said its Space4, Brickworks and Tileworks factories have proven to be “crucial tools in both maintaining security and consistency of supply and securing build efficiencies, especially in a period of material and labour cost inflation”.
He added: “Through the bulk buying of raw materials and stable labour costs within our factories, we have been able to maintain a price advantage compared to the open market. Further, our use of Space4 timber frames in 33% of our homes built in the year, reduces our reliance on bricklayers, where labour shortages have been most pronounced.
“These factories will play an increasingly crucial role in our security of supply, quality control and drive to secure cost-efficiencies. We are already looking to expand production - through increased shifts and product lines - across our Brickwork and Tilework factories. We anticipate increasing output at Brickworks by 25% and at Tileworks by over 50% this year.
“We also plan to start building a new Space4 factory in 2022, updating the technology and techniques to drive enhanced quality and further efficiency gains. We anticipate - for example - that the new factory’s product will improve our speed of build by up to five days per house.”
Persimmon bought 20,750 plots last year and expects to open 75 new outlets to sell properties from, Mr Finch said.
The company had previously put aside £75m 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.
Persimmon added it would not claim cash from the Government’s Building Safety Fund.
Since the start of the year, private sales have been 2% ahead of the previous year and volumes are expected to grow 4% to 7% on 2021 levels.
