Persimmon braces for ‘challenging year’ as company reports huge drop in house completions
Housebuilder Persimmon has said it expects 2024 to be another “challenging year,” but the housing market’s robust fundamentals suggest there are green shoots on the horizon.
Today’s warning came as part of its full-year results, with the London-listed firm revealing it completed nearly 5,000 fewer homes in 2023 than it did the year before.
The company only completed 9,922 homes last year, compared to 14,868 in 2022.
Underlying operating profit also fell significantly to £354.5m compared to £1bn last year.
Revenue declined to £2.8bn against £3.8bn recorded for 2022.
“While we are prepared for 2024 to be another challenging year, we are confident of our ability to manage this,” the board said this morning.
“The longer-term fundamentals for the housing market remain positive. Our focus on maintaining a robust balance sheet while investing for growth gives us confidence in our ability to generate strong cash generation and industry-leading returns over the medium term.”
Looking ahead, the firm said it expected to deliver between 10,000 and 10,500 completions for 2024, and it has full planning on 98 per cent of the homes. Its operating margin is expected to remain in line with the level reported for 2023.
Chief Dean Finch, said: “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.
“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.
He added: “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.”