Persimmon PLC Trading Update (6505X)
01 Mayo 2019 - 01:00AM
UK Regulatory
TIDMPSN
RNS Number : 6505X
Persimmon PLC
01 May 2019
TRADING UPDATE
WEDNESDAY 1 MAY 2019
Persimmon plc ("the Group") announces the following trading
update covering the period from 1 January 2019 to date, ahead of
its Annual General Meeting ("AGM") which is being held at 12.00
noon today.
Persimmon is focussed on building good quality homes at a range
of prices offering customers great choice across the UK. Since the
start of the year the new build housing market has proved resilient
with high levels of employment and low interest rates continuing to
support consumer confidence. With mortgage lenders continuing to
offer attractive products, the level of customer activity has been
encouraging with visitor levels to site, sales conversion rates and
cancellation rates all running in line with our expectations.
As part of our previously communicated plans to improve our
service to customers, in particular providing greater accuracy of
anticipated moving-in dates, we are continuing to take a more
targeted approach to the timing of sales releases on a number of
sites and to progress build to a more advanced stage before
releasing homes for sale to the market where demand is strong. As
expected, these measures have reduced the number of sales
reservations made since the start of the year but we remain
confident that, with the continuation of current market conditions,
these sites will make a good contribution to sales once build has
progressed and homes are released for sale. Overall, sales
reservations remain in line with our expectations and we currently
anticipate achieving a similar level of legal completions in the
first half as last year. The Group's legal completions for the
second half of the year will be similarly determined by our
continued focus on progressing our build programmes ahead of sales
release together with prevailing market conditions.
The Group's current forward sales position is strong with total
forward sales revenue, including legal completions taken to date in
2019, of GBP2,698 million (2018: GBP2,798 million). After
recognising the actions taken to improve customer service as
described earlier the Group had 350 active sales outlets for the
year to date (2018: 375) and our weekly private sales rate per site
since the start of the year was 5% lower than the previous year.
Pricing conditions remain firm across our regional markets, the
average selling price of sales to the private market in our forward
order book being c. GBP237,850 (2018: c. GBP236,500). The Group has
also maintained a substantial forward order book of new homes for
delivery to our Housing Association partners.
The Group has opened 43 of the c. 90 new outlets planned for the
first half of the year and is building new homes on all sites that
have an implementable detailed planning consent. Given the
increased uncertainties around the future performance of the UK
economy we have remained very selective with the acquisition of new
land during the period.
Since the start of the year we have announced a broad range of
initiatives to improve the Group's customer satisfaction levels.
These include the actions taken to deliver greater accuracy of
anticipated moving-in dates discussed above, together with a broad
range of improvements and investments in our customer care team,
operations and technology. These measures underpin our commitment
to delivering a step change in the Group's customer focussed
culture and service performance. The initiatives are already
beginning to make an impact and we are confident they will deliver
significant improvement once they have had time to take full
effect.
In order to assess the effectiveness of these new measures and
processes, and to determine whether they appropriately position the
business for the future, in April the Group commissioned an
independent review. The review will report to the Board and it is
anticipated that the initial overall findings will be presented in
the final quarter of 2019.
We have continued to develop our off-site manufacturing
capability based at our hub in Harworth, Doncaster to support the
Group's construction programmes. Our brick manufacturing factory,
Brickworks, is now producing at close to optimal capacity and the
construction of a new roof tile manufacturing facility, Tileworks,
is well advanced. We anticipate that Tileworks will be commissioned
and commence deliveries to site during the second half of this
year. We continue to expect our overall build costs to increase by
c. 4% for the year. This includes ongoing investment to enhance
specification in support of improved levels of customer
satisfaction and is after mitigation through progressing our
off-site manufacturing activity and reviewing our approach to
infrastructure development costs.
The Board is pleased to announce that the Group has recently
concluded the renewal of its GBP300m Revolving Credit Facility with
strong support from the Group's five relationship banks. The
facility has a five year term out to 31 March 2024 and remains an
important element in providing support to the Group's working
capital flexibility.
Last year the Board announced that three additional payments
would be made under the Capital Return Plan ("the Plan") of 125p
per share, paid each year for the three years ending 2020. The
second of these additional payments amounting to GBP398m was made
as an interim dividend on 29 March 2019. The Board has also
recommended a scheduled return of 110p per share, or c. GBP350
million, to be paid to shareholders on 2 July 2019 as a final
dividend.
The Board remains confident of the future prospects of the
Group.
We will provide a further report in our Trading Update on
Thursday 4 July 2019.
For further information please contact:
Dave Jenkinson, Group Chief Executive Simon Rigby
Mike Killoran, Group Finance Director Kevin Smith
Persimmon plc Ellen Wilton
Citigate Dewe Rogerson
Tel: +44 (0) 1904 642199 Tel: +44 (0) 20 7638 9571
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END
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