TIDMPSN
RNS Number : 4573M
Persimmon PLC
12 January 2023
12 January 2023
Trading Statement
Persimmon Plc today announces the following update ahead of its
Final Results for the year ended 31 December 2022, which will be
released on 1 March 2023.
Dean Finch, Group Chief Executive, commented:
"Persimmon has delivered a strong performance for 2022 which has
been achieved despite headwinds from supply constraints in the
early part of the year and a more challenging sales environment in
the second half. We delivered 14,868 new homes to customers in the
year, towards the top end of our guidance, whilst maintaining
five-star quality. Customers remain at the heart of our business
with our continued focus on quality and affordability.
"In the second half of the year, rising interest and mortgage
rates, inflation and weaker consumer confidence began to impact
customer behaviour across the housing market. This change in market
conditions gathered pace in the fourth quarter and is reflected in
the reduction in our recent weekly sales rates and a lower forward
sales position as we enter the new financial year . However, with
high quality land holdings, a strong balance sheet and an
experienced management team, Persimmon is well placed to navigate
this challenging short-term backdrop, whilst continuing to take
advantage of any opportunities that may arise.
" The longer-term demand for new homes remains strong. We have
made significant progress over the past two years in augmenting the
Group's longstanding commercial excellence with renewed operational
capabilities building a stronger, more sustainable business for the
future.
"I would like to thank our colleagues, sub-contractors and
suppliers for their commitment and support in 2022. Their hard work
has helped ensure that Persimmon remains well positioned to serve
customers across the UK who seek high quality, sustainable and
energy efficient homes at a price they can afford."
Highlights
2022 2021 % change
New home completions 14,868 14,551 +2%
Average selling price c. GBP248,600 GBP237,078 +5%
Average open sales outlets 259 260
Cash at 31 December GBP0.86bn GBP1.25bn
Current forward sales position GBP1.0bn GBP1.6bn -36%
Of which private forward sales GBP0.5bn GBP1.1bn -56%
Land holdings (plots owned and
under control) c. 87,200 88,043
Trading
The Group traded well in 2022 completing the sale of 14,868 new
homes, towards the top end of previous guidance. This has been
achieved despite the Group only beginning the rebuild of its outlet
position during the year. Execution of our build programmes was
strong, particularly in the second half, with a 15% increase in
build rates compared with H2 2021, supporting the delivery of over
8,200 homes in H2 2022. Overall build rates in the year tracked c.
8% ahead of 2021, with an average of 276 equivalent units built per
week (2021: 255). This significant achievement has been
accomplished while maintaining our focus on building high quality
homes, with the "Persimmon Way" embedded across the business, and
our teams working hard to further improve build efficiency. We
continue to put our customers at the heart of the business and we
are delighted to be a five-star homebuilder, delivering high
quality homes to our customers at a price they can afford.
The Group's private average selling price increased by c. 5% to
c. GBP272,200 (2021: GBP259,231) reflecting the mix of developments
and house types sold along with overall house price inflation
during the course of 2022. The Housing Association average selling
price increased by 8% to c. GBP142,000 (2021: GBP 131,976) . House
price inflation along with our focus on build efficiency helped
offset cost inflation during 2022 with our industry-leading
operating margins broadly maintained.
Our vertically integrated manufacturing facilities continue to
support delivery across the business with Brickworks, Tileworks and
Space4 all increasing production compared with the prior year and
plans for the new Space4 factory remain on track.
In line with the broader market, we saw notably weaker customer
demand in the second half of the year as concerns over the economy,
mortgage rates and the cost of living weighed heavily on consumer
confidence. Overall in 2022 private net sales were 0.69 per outlet
per week for the year (2021: 0.83). The change in market conditions
gathered pace in the final months of the period, with private net
sales reducing to 0.30 per outlet per week in Q4 (Q4 2021: 0.77),
with the last 7 weeks of 2022 at 0.19 per outlet per week (2021:
0.61). The trading performance weakened across all geographies with
the biggest impact on sales seen in our Southern regions. We saw a
particularly sharp fall in demand on those sites where Help to Buy
was more widely used once the scheme in England closed for new
applications from 31 October.
As a result of the lower sales rates and elevated cancellations
in the second half, and against a strong comparative at the start
of 2022, our forward sales position has reduced year on year to
GBP1.0bn (2021: GBP1.6bn), of which GBP0.5bn relates to private
forward sales (2021: GBP1.1bn).
Land
Land spend for the year was c. GBP665m (2021: GBP460m) of which
c. GBP210m was the settlement of land creditors (2021: GBP179m).
Land payments in Q4 were at a lower level compared with the first
three quarters at c. GBP120m of which c. GBP52m was in relation to
the settlement of land creditors. Our owned and under control land
holdings stood at c. 87,200 plots at 31 December 2022 (2021: 88,043
plots) and the embedded margin of the land portfolio remains
industry-leading. With this strong position, we are taking action
to manage the impact of the uncertain outlook for the UK housing
market and have already taken action to either renegotiate or pause
the start of around 30 sites. We expect land spend in 2023 to
predominantly relate to the settlement of land creditors, and we
will take a highly selective approach to any new land purchases,
investing only where we see the very best opportunities.
WIP and cash
We ended the year with a strong and well capitalised balance
sheet with c. GBP860m of cash and c. GBP475m of land creditors. We
also start 2023 with a healthy level of work in progress with c.
3,900 equivalent units on the balance sheet. In response to the
uncertain market conditions, we will continue to pursue a highly
disciplined approach to work in progress investment taking into
account current levels of demand, and the cash cost of fire safety
remediation works and land creditor commitments. The Group operates
from an already lean fixed cost base and our well established and
disciplined cost control processes will continue.
Building Safety
We remain committed to undertaking any cladding or life-critical
fire safety remediation works for buildings that we constructed, as
quickly as practicable, and to protecting leaseholders from the
cost. Many developments have either been completed or we are on
site, and we expect works will be commenced on all other
developments by the end of 2023. We have continued to
constructively engage with Government to agree the 'Long Form
Contract' which turns the Building Safety Pledge into binding
commitments for the industry and welcome its finalisation
shortly.
New Homes Quality Code
The Group became one of the first homebuilders to formally
commence the registration process for the New Homes Quality Code
(NHQC) in 2022. We welcome the introduction of the NHQC, which aims
to drive up quality, consistency and customer service standards
across the industry. Compliance with the code will require all new
homes to be build complete further ahead of legal completion.
Outlook
Higher mortgage rates, inflation, heightened market uncertainty
and the end of reservations under Help to Buy in England, had a
sharp impact on the Group's private sales rates in the fourth
quarter and will have an adverse impact on the outlook for 2023.
Taking together the absence of Help to Buy and the increase in
mortgage rates, we estimate that the monthly cash cost of mortgage
payments for some first time buyers has approximately doubled over
the past year(1) compounded by limited availability of high loan to
value mortgages. While we are promoting initiatives to stimulate
demand, including the recent launch of our "10 months mortgage
free" customer offer, which generated a strong increase in website
enquiries in its first week, it is too early to predict when there
will be a recovery in demand. We remain focused on achieving
quality returns rather than volume and we will provide a further
update on the market outlook for 2023, at our 2022 results on 1
March.
The Group has entered this period of uncertainty with a strong
balance sheet, including a robust cash position and
industry-leading embedded margins in our land holdings. We
currently anticipate average outlets will remain broadly similar
during 2023 at 250-260 open selling outlets, although we have
opportunities to increase this if demand improves as we progress
through the year.
The longer-term demand outlook for new homes remains favourable
. We have made significant progress over the past two years in
augmenting the Group's longstanding commercial excellence with
renewed operational capabilities. As a five-star builder, with
private average selling prices below the market average(2) , high
quality land holdings, and a robust balance sheet, Persimmon
remains well-positioned for the recovery when it emerges.
Persimmon will host a conference call with analysts at 08.30am
today.
A ll participants must pre-register to join this conference
using the Participant Registration link. Once registered, an email
will be sent with important details for this conference, as well as
a unique Registrant ID.
Participant registration page:
https://register.vevent.com/register/BIe9f34af65da045dd8472e97ad0ffabad
For further information please contact:
Vicky Prior, Group IR Director Kevin Smith
Anthony Vigor, Group Director of Policy and Holly Gillis
External Affairs Ellen Wilton
Persimmon Plc Citigate Dewe Rogerson
01904 642 199 020 7638 9571
(1) Illustration based on a property price of GBP250,000 with an
estimated monthly mortgage cost of GBP753 in March 2022 (Help to
Buy customer, with 5% deposit, 75% loan to value mortgage at a rate
of 1.53% and 25 year term) compared with an estimated monthly
mortgage cost of GBP1,488 in December 2022 (Deposit Unlock customer
with 5% deposit, 95% loan to value mortgage at a rate of 5.71% and
25 year term).
(2) The Group's private average selling price of GBP272,200 for
the year to 31 December 2021 was lower than the national selling
price for new built homes (GBP375,299 YTD as at August 2022;
GBP334,047 for 2021). Sourced from the UK House Price Index as
calculated by the Office for National Statistics from data provided
by HM Land registry.
Appendices:
1. 2022 quarterly Q1 Q2 HY Q3 Q4 FY
performance
----------------------------- ------ ------ ------ ------ ------ -------
Completions 1,950 4,702 6,652 2,270 5,946 14,868
Net private sales
rate 0.98 0.89 0.91 0.63 0.30 0.69
FTB % (private completions) 33% 46% 42% 42% 42% 42%
HTB% (private reservations) 23% 21% 23% 21% 8% 21%
Average sales outlets 245 255 250 269 267 259
2. Completions (homes) 2022 2021 Variance
------------------------ -------------- ----------- ---------
Private 12,174 12,018 +156
Housing Association 2,694 2,533 +161
------------------------ -------------- ----------- ---------
Total 14,868 14,551 +317
------------------------ -------------- ----------- ---------
3. ASP 2022 2021 Variance
------------------------ -------------- ----------- ---------
Private c. GBP272,200 GBP259,231 +5%
Housing Association c. GBP142,000 GBP131,976 +8%
------------------------ -------------- ----------- ---------
Total c. GBP248,600 GBP237,078 +5%
------------------------ -------------- ----------- ---------
31 December 2022 31 December 2021 Variance
4. Forward Value Homes Value Homes Value Homes
sales
--------------------- ------------ ------ ----------- ------ ----------- --------
Private GBP0.5bn 1,696 GBP1.1bn 4,305 GBP(0.6)bn (2,609)
Housing Association GBP0.5bn 3,966 GBP0.5bn 4,089 - (123)
--------------------- ------------ ------ ----------- ------ ----------- --------
Total GBP1.0bn 5,662 GBP1.6bn 8,394 GBP(0.6)bn (2,732)
--------------------- ------------ ------ ----------- ------ ----------- --------
Cautionary statements
Some of the information in this document may contain projections
or other forward-looking statements regarding future events or the
future financial performance of Persimmon Plc and its subsidiaries
(the Group). You can identify forward-looking statements by the
terms such as "expect", "believe", "anticipate", "estimate",
"intend", "will", "could", "may" or "might", the negative of such
terms or similar expressions. Persimmon Plc (the Company) wishes to
caution you that these statements are only predictions and that
actual events or results may differ materially and as such undue
reliance should not be placed on these statements. The Company does
not intend to update these statements to reflect events and
circumstances occurring after the date hereof or to reflect the
occurrence of unanticipated events. Many factors could cause the
actual results to differ materially from those contained in
projections or forward-looking statements of the Group, including
among others, general economic conditions, the competitive
environment as well as many other risks specifically related to the
Group and its operations. Past performance of the Group cannot be
relied on as a guide to future performance.
Please see the most recent Annual Report and Accounts of
Persimmon plc and other disclosures through the Regulatory News
Service ("RNS") for further details of risks, uncertainties and
other factors relevant to the business and its securities .
The information in this trading statement is unaudited.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTBBMLTMTTBBTJ
(END) Dow Jones Newswires
January 12, 2023 02:00 ET (07:00 GMT)
Persimmon (LSE:PSN)
Gráfico Histórico do Ativo
De Fev 2023 até Mar 2023
Persimmon (LSE:PSN)
Gráfico Histórico do Ativo
De Mar 2022 até Mar 2023
