"Although the near-term outlook remains uncertain, the significant pent-up demand for homes remains unchanged. Customers want quality homes in the places where they want to live and work, and affordability is crucial"
- Dean Finch - Persimmon
Reporting on its full-year results for the year ending December 31 2023, Persimmon said that its pre-tax profits sank from £730.7m in 2022 to £351.8m. The firm stated: "2023 was always going to be a challenging year. Following on from the sharp rise in mortgage rates in autumn 2022 and a general climate of economic uncertainty.”
Total group revenue dropped from £3.82bn to £2.77bn, with housing revenue falling 31% to £2.54bn. As expected, its underlying operating margin was 14%, down 48%.
As Persimmon reported in its trading statement of January 10, its completions were ahead of guidance at 9,922 new homes, thanks to “strong delivery” in Q4. It said it “saw a sustained pick up in interest in our homes from the lows of Q4 2022”. The private average selling price of the homes in 2023 lifted 5% to £285,774.
Persimmon’s average private net sales rate for the year was 0.58 per outlet per week against the previous year’s 0.69.
Full-year completions were still 33% below 2022’s 14,868; Persimmon's new housing gross margin decreased to 20.5% from 30.9%.
The business acknowledged the “disappointing” performance, reflecting the widely experienced economic headwinds, but it insisted that it did not reflect “the future strong prospects for the group”.
The volume housebuilder also said it expected market conditions to remain “subdued” throughout 2024, with interest rates anticipated to remain at current levels and a general election looming.
Dean Finch, Persimmon’s Group CEO, said: "The group successfully navigated the challenging market conditions in 2023. Completions were ahead of expectations, margins were industry-leading, we maintained our strong balance sheet and we continued to deliver further improvements in our product quality and service.
“Although the near-term outlook remains uncertain, the significant pent-up demand for homes remains unchanged. Customers want quality homes in the places where they want to live and work, and affordability is crucial.
He concluded: "During the year we have continued to take further steps to strengthen the business and we are well placed to meet this demand through our three excellent brands offering different price ranges with overall private average selling prices that are below the market average. The investments and operational changes that we have made in the past few years mean that we are trusted by our customers to deliver consistently high-quality homes.”
