Under-pressure housebuilder’s profits to rise

Housebuilder Persimmon has marginally upgraded its full-year profits forecast.

Revenues at the group rose 9% to £3.42 billion in 2017, with completion volumes growing 6% to 16,043 and the average selling price up 3% at £213,300.

Persimmon – whose Scottish division is pursuing developments across Tayside and Fife – said it saw healthy customer demand for new homes in the autumn, with the value of its forward sales book standing at £1.35 billion, 10% ahead of 2016.

As a result, the firm anticipates pretax profits for the year to come in “modestly ahead of market consensus”.

“The group continues to pursue disciplined high-quality growth in its regional markets in support of the Government’s desire to increase housing supply across the UK,” Persimmon said.

“We remain mindful of market risks, including those associated with the uncertainty arising from the UK leaving the EU. However, we are keen to deliver further improvement in our housing output and remain ready to invest wherever the local planning environment is supportive.”

The housebuilder said completion volumes grew 6% to 8,249 in the second half of the year versus the first six months.

The results come as Persimmon is embroiled in a row over excessive executive pay, which led to chairman Nicholas Wrigley’s resignation late last year.

It follows investor consternation over a long-term incentive plan introduced in 2012, which could see the management share £600 million depending on profit and housebuilding targets.

CEO Jeff Fairburn is in line for the biggest payout, set to top £100m.

Shares in Persimmon closed down 1.20% or 33p at 2,175p.

Group CEO Jeff Fairburn.