Persimmon Plc is one of the UK’s leading housebuilders. Our financial discipline means we have:
A very strong balance sheet
Excellent margins and profitability
Robust cash generation
We are a team of over 4,500 people focused on the successful growth of our business and our results demonstrate our ability to react swiftly to changes in housing demand whilst improving the quality of shareholder returns. We sold 8,072 new homes in the first half of 2018, 278 more homes than in the same period in 2017. Our underlying new housing operating margin* was 29.7% for the six months to 30 June 2018 (2017: 27.6%) and our profit before tax increased 13% to £516.3m (2017: £457.4m).
The Group remains focused on delivering house types that appeal to customers across the range but with an emphasis on first time buyers and first time movers. Just under 40% of our private sales were delivered at prices of less than £200,000.
We maintain a strong focus on capital efficiency and return on average capital employed, which is supported by strong capital disciplines, controlled investment in our c.370 active sites and a superior turnover of work in progress. Our return on average capital employed** was 53.8% in the six months ended 30 June 2018 (2017: 47.3%).
One of our main strengths and a key element to our strategy is the conversion of our strategic landholdings to land with planning permission and the value this asset can create for shareholders. We have c.15,600 acres of strategic landholdings at 30 June 2018 and our success at converting this asset to land with planning permission means that c.50% of our consented landbank has been converted from our strategic land portfolio.
The expertise of all the Group’s employees and subcontractors are key ingredients in delivering the Group’s superior operational performance. We continue to invest in new systems and processes, and to build the skill base of the business, particularly in the teams engaged in land sourcing and acquisition, design, site management and construction, sales and customer care, to ensure the Group’s operational performance remains strong.
To support our construction operations we continue to invest in our off-site manufacturing capability. In 2017 we opened a new brick manufacturing factory at Harworth, near Doncaster. During 2018 a new roof tile manufacturing facility will be established at the same site to further strengthen the reliability of our new home delivery and to support further growth. In addition, the Board will continue to review plans for the expansion of the Group's Space4 business to extend its reach for the supply of timber frames, highly insulated wall panels and roof cassettes to Group companies across the UK.
*stated before goodwill impairment
**12 month rolling average stated before goodwill impairment