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Persimmon takes its time over new builds, shrinking sales

As part of a plan to improve build quality and customer care, completed sales volumes sank 6% year-on-year to 7,584 homes

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Persimmon has been focused on rebuilding its reputation since customers complained earlier in the year about shoddy workmanship

Persimmon PLC (LON:PSN) sold fewer new homes in the third quarter as its plan kicked in to improve customer care by pushing back move-dates so properties are completed on time and to a good standard.

The FTSE 100-listed housebuilder said in a trading statement on Thursday that total legally completed sales volumes fell by 6% year-on-year to 7,584 homes, and that it is now “fully sold up” for the year.

READ: Persimmon profits fall in first half as reputation rebuild takes priority

This decline in volumes reduced the number of sales reservations that earlier release would have delivered and, as a result, Persimmon said its forward sales reserved beyond 2019 retreated by 3.8% to £950mln and the builder reported 5% lower average active sales outlets at 350 sites.

The company has been focused on rebuilding its reputation since customers complained earlier in the year about shoddy workmanship in some of its new homes, prompting the builder to invest £140mln in improvements as of June.

The homebuilder said summer trading was in line with expectations and that despite Brexit-related uncertainty, consumer confidence had stayed firm thanks to high employment in the UK, wage growth, and low interest rates.

Persimmon added that its average selling price of £242,912 was 17% lower than the national average for newly built homes.

Chief executive Dave Jenkinson said he was confident that Persimmon’s ongoing customer care improvement plans together with its stronger forward build position, healthy forward sales, robust balance sheet and its landholdings provide a “sound platform for the successful future development” of Persimmon.

In early trading, Persimmon shares were 1.7% higher at 2,315p.

Quick facts: Persimmon

Price: 2478 GBX

LSE:PSN
Market: LSE
Market Cap: £7.9 billion
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