Persimmon unveils £966.8m 2021 pre-tax profit

Persimmon has announced a significant jump in 2021 pre-tax profits to £966.8m, with gross profit margin rising slightly at 31.4%. This compared to 2020 figures of £783.8m pre-tax profit and 30% margin respectively.

The figures were announced in the group's full year results for the year ended 31 December 2021, with the company also confidently forecasting another strong year ahead with current forward sales of £2.21bn, a 2% year on year increase in the group’s average private weekly sales rate for the first eight weeks of 2022 and strong weekly build rates.

The company also expects to deliver volume growth of 4–7% for the full year 2022 from 2021 levels whilst maintaining the group’s industry-leading margins.

The figures also reaffirmed the group’s commitment, first announced in February 2021, that no leaseholder living in buildings it developed would pay for cladding related defects or fire related safety issues. Persimmon set aside £75m to pay for rectification works with 33 developments identified. Persimmon will not claim from the government’s Building Safety Fund and, in line with government’s request, have extended the search back 30 years.

Dean Finch, Persimmon group chief executive, said: "Persimmon’s performance was strong in 2021 as we delivered more homes, built better and strengthened our platform for future growth. Maintaining build rates at pre-Covid levels, we delivered almost 1,000 additional new homes, and improved customer service such that we anticipate receiving a five-star rating in the annual HBF survey later in March 2022, a first in the company’s history, whilst also improving our underlying operating margin.

“An agile approach across the business ensured we navigated the supply chain challenges posed by the pandemic, with our Brickworks, Tileworks and Space4 manufacturing facilities providing security of supply for essential materials and helping us maintain our operating efficiency. We will significantly expand production capacity at our Brickworks and Tileworks facilities this year and invest in a new Space4 timber frame facility.

“We are taking advantage of exciting opportunities in the land market, bringing in over 20,750 plots into our business last year at industry-leading embedded margins, and we expect to open around 75 new outlets in the first half of 2022.

“A year ago, we adopted an industry-leading position regarding the remediation of all cladding and fire related defects on a small number of buildings developed by Persimmon over the last 30 years, which is consistent with the recent amendments to the Building Safety Bill. We await further details including any widening in scope of those developments brought within the Building Safety Levy.

“The new year’s trading has started well, with private sales rates ahead by c. 2% in the opening weeks and a robust forward sales position of £2.21bn. We expect to grow our outlet position in 2022 and are targeting volume growth of 4–7% on 2021 levels, whilst maintaining our industry-leading margins, although we are mindful of the growing risk of an economic impact as a result of the tragic conflict in Ukraine.”