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Persimmon confident building sites will not shut under tighter lockdown measures

Sales levels over recent weeks have subsided slightly with the number of currently active sales outlets down 14% after the strong uptake of properties in the second half and “some constraints on stock availability”

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Persimmon PLC (LON:PSN) reported a 9% fall in revenue for 2020 but said it remains confident that its ‘Covid-secure’ procedures will enable its building sites to continue operating through the current UK lockdowns.

There have been reports this week that the government may need to close some workplaces like building sites in order to tighten lockdown measures amid continuing surges in coronavirus cases and a struggling NHS.

The FTSE 100-listed housebuilder said it has maintained a stringent two-metre social distancing rules at its construction sites and recently “further adjusted” its procedures amid the tighter restrictions this month, while also stressing that it continues to churn out houses at the same rate as before the pandemic.

However, sales levels over recent weeks have subsided slightly with the number of currently active sales outlets down 14% to 300 after the strong uptake of properties in the second half and “some constraints on stock availability”, the company said in a trading statement, while also noting that first-time buyers were seeing delays to reservations as they awaited the start of the new Help to Buy scheme last month.

Persimmon has around 10 sites under construction awaiting their first sales release and it plans to open another 50 or so new sites in the first half of the year, with forward sales at the end of December at £1.689bn, 25% ahead of last year.

For the 12 months to that point, the company generated revenue of £3.33bn, which was down from £3.65bn a year earlier. This came from 13,575 completed sales, down 14% year on year, but with average selling prices increased 7% to roughly £230,500, resulting from a higher proportion of new homes delivered to owner-occupiers.

Cash balances at the year-end were £1.2bn, with the group having paid a 70p per share dividend in December and a 40p payment in September to replace the 110p final dividend for last year that had been withheld due to the coronavirus pandemic.

No payment has been made for the 2020 financial year, with the board promising to provide an update it's capital return plan with March’s full-year results.

Quick facts: Persimmon

Price: 2690 GBX

LSE:PSN
Market: LSE
Market Cap: £8.58 billion
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