Persimmon had a successful year in 2016. We continued to achieve strong build volumes, we improved standards across all parts of the business and we replenished our land supply pipeline to ensure future growth. These actions all contribute to making Persimmon a sustainable business and are consistent with our long term strategic vision. As we work with the rest of the housebuilding industry to help address Britain’s housing need, the enormous efforts to recruit and train personnel continue and the focus on customer service remains constant. In addition, in 2016 we focused on our supply chain taking direct responsibility for a significant proportion of our future brick requirements and we have further increased our community engagement in the areas where we are building. As a result, we are creating a more sustainable business from which our stakeholders will benefit.

While sustainability is embedded into the individual operating businesses, in practice we monitor and evaluate corporate responsibility across Persimmon centrally using five themes which are all integral to business strategy: Our Customers, Our People, Our Wellbeing, Our Environment and Our Communities. In 2016 we made improvements in all of these, and this work is described in this report.

We have increased the number of homes sold by over 60% since the launch of our current strategy in 2012.  At the same time as achieving a high build rate we have remained focused on our sustainability values, which are:

  • The houses we build are family homes;
  • We build nationwide, but not in central London;
  • We focus on larger schemes, creating new communities and improving local infrastructure;
  • We begin to build as soon as full planning and technical consents are received; and
  • Our Space4 factory uses off-site manufacturing techniques to supply highly insulated timber frame and roof cassette kits to the Group.

In 2016:

  • Over 40% of our house sales were to first-time buyers;
  • Our average selling price, at £206,765, was accessible to many buyers;
  • Just under 50% of our private sales were for less than £200,000;
  • Around 73% of our customers used our panel of independent financial advisors when buying their home to help them access and understand mortgage products best suited to them; and
  • We built approximately 40% on brownfield land, improving the local environment.

We have used concrete bricks for a number of years to secure the availability of a high quality product, particularly as production in the industry has grown. In 2016, we commissioned our own concrete brick factory which will have the capacity to produce 80 million concrete bricks a year. These are more sustainable than clay bricks, using less energy during manufacture and will secure availability of a key material component. The speed of build is also important and we have continued to invest in modern methods of construction at our Space4 factory in Birmingham which produces timber frames, highly insulated wall panels and roof cassettes as a “fabric first” solution to the construction of new homes. Space4 is well positioned to support the Government’s drive to increase housing supply by achieving growth in off-site construction methods which were recently promoted in the Housing White Paper. The Space4 construction process delivers high levels of thermal efficiency and uses wood which is carbon neutral and a naturally renewable building material, making this a sustainable way to build houses. In 2016 c. 5,500 houses included this Space4 technology, helping to improve productivity, ease resource pressures and increase our build capacity by simplifying site processes and reducing traditional skills content within these processes.

We have continued to engage with the local communities where we work at all stages of the build process, from planning consultations through to the end sale. Through our Community Champions initiative and the Persimmon Charitable Foundation we support local good causes by matching the efforts of local fundraisers up to a value of £1,000. As our staff are mostly local themselves, this creates a genuine and lasting bond in the new communities that we are helping to create. We are pleased to report that we have supported over 1,200 different organisations since this campaign began.

In an industry under pressure to increase output, it is important to retain effective communication throughout a business which operates with a decentralised structure. We increased our Human Resources team in 2016 and improved the quality of training for site based staff including management. We also maintained our programme of “Chairman’s dinners” around the businesses; the Chairman and Chief Executive visit each of the operating businesses to talk to staff, visit sites and hear feedback from the business. Non-Executive Directors also attend a selection of these events. In addition, to highlight the focus, we changed our reporting line so that the Corporate Responsibility Committee now reports directly to the Board.

We believe Persimmon is in a strong position to continue its high rate of build and volume output in a sustainable way. We are working to improve all parts of the business and taking responsibility for security of supply, from materials to land, investing in our own resources. We have set a carbon reduction target and we will further analyse the priorities of our various stakeholders so our Corporate Responsibility continues to be in line with our business strategy. We believe this long term and self-reliant approach will benefit our stakeholders throughout the housing cycle.

Marion Sears, Chairman Corporate Responsibility Committee March 2017