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 16,043 homes in 2017, 872 more homes than in 2016. Our underlying operating margin* was 28.2% for the year ended 31 December 2017 (2016: 24.8%) and our underlying profit before tax* increased 25% to £977.1m (2016: £782.8m).
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 45% 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 51.5% in the year ended 31 December 2017 (2016: 39.4%).
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.16,100 acres of strategic landholdings at 31 December 2017 and our success at converting this asset to land with planning permission means that c.51% 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 the Group’s off-site manufacturing capability. The Group’s brick manufacturing facility commissioned during the year is progressing well and has started deliveries to site. We have also decided to establish a roof tile manufacturing plant to aid the Group’s build programmes, which will be developed on the site shared with Brickworks at Harworth, near Doncaster. In addition, we anticipate further investment in the Group’s Space4 timber frame construction technology over future years to increase capacity and coverage for the Group across the UK.
* stated before goodwill impairment
** 12 month rolling average stated before goodwill impairment.