PSN Persimmon Plc

14 January 2025           

2024 Trading Statement

Completions up 7%; full year underlying profit before tax to be around the upper end of expectations  

Persimmon Plc today announces the following update ahead of its Final Results for the year ended 31 December 2024, which will be released on 11 March 2025.

Dean Finch, Group Chief Executive, commented:

"We performed well through 2024 delivering 7% growth in completions, ahead of market expectations.  We expect to report an underlying operating margin in line with the prior year, as previously guided, with 2024 underlying profit before tax expected to be around the upper end of market expectations. Customer enquiries and sales rates have been consistently ahead of the prior year since the spring selling season.

Persimmon has worked hard and is well positioned for the future, supported by the land and planning investment we have made in recent years, our vertical integration capabilities and our excellent teams. This investment, coupled with the government's ambitious planning reforms which demand more of the high-quality, affordable homes which are Persimmon's core strength, supports our growth ambitions in the medium-term.

I want to extend my gratitude to our colleagues, subcontractors and suppliers for their dedication and support. Their efforts have been instrumental in keeping Persimmon well-placed to provide high-quality, sustainable homes at affordable prices to customers across the UK."

2024 Highlights

Trading

The Group delivered a total of 10,664 homes, up 7% year-on-year (2023: 9,922), ahead of market expectations. We did this whilst retaining our HBF five-star rating for the third consecutive year, with the investment that we have made in quality and customer service driving value. This growth was driven by an 18% increase in private home completions to 9,075 (2023: 7,681) with 1,589 partnership homes delivered in the period (2023: 2,241).

The Group's private average selling price was slightly ahead of the prior year at c.£287,150 (2023: £285,774). Pricing improved as the year progressed, largely due to mix, but also reflecting improving market conditions. Incentives have continued to run at c.4-5%. Our partnerships average selling price increased by 6% to c.£161,900, (2023: £152,852) resulting in a 5% increase in the blended average selling price to c.£268,500 (2023: £255,752).

Net private sales per outlet per week increased by 21% during the period to 0.70 (2023: 0.58), 0.57 excluding bulk sales (2023: 0.50), with demand consistently higher than the prior year since the spring. Our strategic investment in land and planning in recent years enabled us to open c.100 new outlets during the year, ending the year with 270 open outlets, a 5% increase from the beginning of the year (2023: 258 outlets). We operated from an average of 261 outlets during the period (2023: 266).

We expect full-year underlying profit before tax for 2024 to be around the upper end of market expectations (£349m to £390m) with underlying operating margins similar to last year, in line with previous guidance.

Our forward sales position has increased by 8% to £1.15bn compared to the prior year (31 December 2023: £1.06bn), showing the value of our three strong brands (Persimmon Homes, Charles Church and Westbury Partnerships). Of this £653m relates to private forward sales (31 December 2023: £499m), up 31% including bulk sales (+16% excluding bulk sales), with a private average selling price of c.£276,850 (31 December 2023: c.£266,100).

Balance sheet and land investment

During the year we achieved detailed or reserved matters planning on c.13,050 plots in 2024, up 21% on the prior year (2023: 10,809), equivalent to 123% of 2024 completions and further supporting our high quality land bank.

Net land spend was c.£440m during the year (2023: £398m) of which c.£210m was the settlement of land creditors (2023: £253m). Our owned and under control land holdings stood at c.82,100 plots at 31 December 2024 (31 December 2023: 82,235 plots).

We ended the year with net cash of c.£260m, ahead of previous guidance, having returned £192m to shareholders and spent c.£60m on building safety remediation during the period (bringing our total remediation spend to date to c.£120m). We continue to make good progress with remediation works underway or completed on over 70% of known developments.

Outlook

We are pleased with the progress we have made in developing our capabilities and we entered 2025 with an improved forward order book and strong land bank. Our Boxing Day campaign has started well driving strong levels of enquiries and visitors to our website. However, we are mindful of evolving macroeconomic and geopolitical uncertainties, including the timing of future interest rate changes, and the effect that they may have on our market and consumer confidence in the short-term.

The strength of our land bank and our focus on cost control and efficiency continue to differentiate the business as we manage sector-wide challenges, including expected low single digit build cost inflation, the effects of the national insurance increase and regulatory changes such as to stamp duty and the proposed Building Safety Levy. The ongoing investment we have made in our unique vertical integration model helps us to manage these cost pressures and provides security of supply.

The disciplined investment that we have made in land and effective management of the planning system is seen in our increasing outlet base, which grew by 5% at the start of the year compared to the previous year. The government's welcome changes to the National Planning Policy Framework, while likely to take some time to fully make a difference, further support our medium-term ambition to expand our outlet base to over 300.

Overall, Persimmon is well positioned for 2025 and will continue to deliver high-quality affordable homes for our customers.

Persimmon will host a conference call with analysts at 09.00am today.

All participants must pre-register to join this conference using the Participant Registration link. Once registered, an email will be sent with important details for this conference, as well as a unique Registrant ID.

Participant registration page:
https://register-conf.media-server.com/register/BI0ab9cce88ce74901a3139a07b6739f6d

For further information please contact:

Appendices:

Cautionary statements

Some of the information in this document may contain projections or other forward-looking statements regarding future events or the future financial performance of Persimmon Plc and its subsidiaries (the Group). You can identify forward-looking statements by the terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could", "may" or "might", the negative of such terms or similar expressions. Persimmon Plc (the Company) wishes to caution you that these statements are only predictions and that actual events or results may differ materially and as such undue reliance should not be placed on these statements. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Group, including among others, general economic conditions, the competitive environment as well as many other risks specifically related to the Group and its operations. Past performance of the Group cannot be relied on as a guide to future performance.

Please see the most recent Annual Report and Accounts of Persimmon plc and other disclosures through the Regulatory News Service ("RNS") for further details of risks, uncertainties and other factors relevant to the business and its securities.

The information in this trading statement is unaudited.