TIDMPSN
RNS Number : 4710H
Persimmon PLC
25 March 2020
Covid-19, Capital Return Plan and AGM Updates
Persimmon plc ("Persimmon" or the "Company") today announces how
it is responding to the Covid-19 virus and is providing an update
to its Capital Return Plan payments in 2020 and forthcoming Annual
General Meeting ("AGM").
Responding to the Covid-19 Virus
Since the outbreak of the virus in the UK, Persimmon has closely
followed Public Health England's guidance including instituting
social distancing practices to ensure the safety of its customers,
staff, contractors and suppliers throughout this period. Following
enhanced Government and Public Health England guidance on Monday 23
March, we are now taking further measures including closing all of
Persimmon's sales offices from Thursday 26 March until further
notice. While we will continue to support existing and new
customers on the telephone and / or online, all customer care site
visits will cease except for emergencies. All Persimmon regional
offices will also close, with only a skeleton staff to facilitate
the wider workforce working from home. Construction sites are
commencing an orderly shutdown with only essential work taking
place which will be focused on making partly built homes safe and
secure and where failure to complete the build could put customers
in a vulnerable position.
Balance Sheet Conservatism and Capital Return Plan Update
Persimmon entered this period of uncertainty with a robust
operational performance in the year to date and a strong forward
order book. Despite this encouraging start to the financial year we
are preparing for a significant delay in the timing of legal
completions, a rise in cancellation rates and a material slowdown
in new sales, the extent and duration of which is uncertain.
In light of the current uncertainty caused by the Covid-19 virus
and its operational impact on UK economic activity, and in line
with the Group's strategy of minimising the financial risk through
the cycle, the Board believes that conserving cash and maximising
financial flexibility is in the long term best interests of the
business and all its stakeholders.
Accordingly, the Board of Persimmon has decided to: (i) cancel
the proposed 125p per share interim dividend payment of surplus
capital to shareholders on 2 April 2020; and (ii) to postpone the
proposed annual, final dividend payment of 110p per share on 6 July
2020 and reassess it later in the calendar year when the effects of
the virus will be clearer. Whilst the Company's regular annual
payment of at least 110p per share has been stress tested for
payment through the housebuilding industry cycle, the Covid-19
virus presents an exceptional set of circumstances.
Persimmon entered the current year with a strong balance sheet
including cash holdings of GBP844m, land creditors of GBP435m
(GBP268m payable over 2020) and industry leading land holdings of
93,246 plots owned and under control. The Board remains confident
of the Group's future prospects. The Group's current cash position
of c. GBP610m (as at 20 March 2020), deferred land commitments of
c. GBP195m to the end of the current year, availability of the
Group's GBP300m Revolving Credit Facility, together with the
measures the Board is taking to manage the cash flows of the
business, will preserve the strength of the Group during this
unprecedented period of uncertainty.
The decisions taken by the Board today in no way diminishes its
confidence in the long-term outlook for the Company and the
strength of the through-the-cycle model, which is set up to
withstand reasonable downside scenarios and to take advantage of
opportunities as they arise. The Board remains committed to
evaluating an ordinary course payment of 110p per share to
shareholders this year, should economic and business disruption
abate in the next several months. Whilst the Board is disappointed
in cancelling the 125p per share payment of surplus capital, the
Board does not believe it would be prudent at this time to regard
this cash as surplus, and the cancellation reflects a change in the
Board's assessment of the Company's financial prospects this year
and the broader economic risk profile, in line with the stated
policy.
At this stage, given the level of continued uncertainty around
economic and business activity, it is not possible to provide
financial guidance for the FY20 financial year.
Annual General Meeting Update
The Company's AGM is due to be held on Wednesday 29 April 2020.
In light of the Government's and Public Health England's advice,
the Board has taken the decision to move the location of the AGM to
the Company's Head Office at Persimmon House, Fulford, York, YO19
4FE.
The well-being of our shareholders is vitally important to us
and we recommend that shareholders adhere to the current
instructions to stay at home. To enable shareholders to listen to
the proceedings of the meeting from their homes, the proceedings
will be available by a webcast. There will be an opportunity for
shareholders to ask the Board of Directors questions on the formal
business of the meeting and further details will be on our website
in due course.
The Company will ensure that the meeting adheres to the
Government's and Public Health England's advice around social
distancing and enhanced hygiene measures will be in place. To
further support these efforts there will be only limited Company
representation at the meeting. We will also reduce the length of
the meeting by limiting it to the formal business required.
We encourage shareholders to submit their proxies as early as
possible. Further information on how shareholders can submit their
proxies can be found in the Notice of 2020 Annual General Meeting
(the "Notice") and is available on our website. Please note the
deadline for submitting proxies will be 12.00pm on Monday 27 April
2020.
In view of the Company's decision to postpone the proposed 110p
per share payment, the Board announces its intention to withdraw
Resolution 2 as set out in the Notice, dated 17 March 2020,
relating to the proposed payment of a final dividend for 2019.
A trading update will be provided by the Company in advance of
its AGM.
Dave Jenkinson, Group Chief Executive, said:
"Our primary concern is the safety and well-being of our
customers, staff, contractors and suppliers and we have today set
out a number of further measures throughout the business to protect
them for the duration of the pandemic. We will listen carefully to
the Government's future advice as the situation develops and will
make further adjustments where necessary.
"The Group's long-term strategy of minimising financial risk and
maintaining capital discipline over the long term through the
housing cycle, ensures that we are well placed as we enter this
period of uncertainty. Whilst the impacts of this pandemic go
beyond the normal cyclical nature of the housing market, the
Group's high quality land holdings, significant liquidity and
strong balance sheet will allow us to work through these challenges
and emerge in a strong position for the benefit of all our
stakeholders."
This announcement contains inside information. The person
responsible for arranging the release of this announcement on
behalf of the Group is Tracy Davison, Company Secretary.
For further information please contact:
Dave Jenkinson, Group Chief Executive Simon Rigby
Mike Killoran, Group Finance Director Kevin Smith
Persimmon Plc Jos Bieneman
Tel: +44 (0) 20 7638 9571 (on Ellen Wilton
25 March 2020)
Tel: +44 (0) 1904 642199 (thereafter) Citigate Dewe Rogerson
Tel: +44 (0) 20 7638 9571
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END
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