Persimmon build rate tumbles as firm hangs onto cash

Persimmon has reported a 30% drop in its new home build rate for the first quarter of 2023 after looking to conserve cash in the wake of last autumn’s economic turmoil.

The housebuilding giant, in a trading update for the three months to 31 March, said its build rate for the three months to 31 March, when comparing equivalent homes, fell 30% from 252 a week in the first quarter of 2022 to 176 units. Its completions fell 42% from over the same period from 1,950 to 1,136 homes.

Persimmon said the fall in completions was due to a 36% drop in forward sales as of 1 January following the ‘challenging trading environment” last year following the mini-Budget in September.

It also said it “responded” quickly to the deterioration in the market by “controlling our costs and managing our build programmes to conserve cash”.

But the firm said trading has improved in recent weeks with sales rates improving compared to the last quarter of 2022. Its net private sales per outlet rose to 0.62 in the three months to 31 March, up from 0.30 in the fourth quarter of 2022 but down on the 0.98 seen in the same period last year.

The housebuilder said it now expects its completions for the full year to be at the “top end” of the 8,000 to 9,000 range it previously indicated.

Persimmon also revealed that its share of its investment with Aviva in modular developer TopHat is £25m. The housebuilder announced yesterday that it and Aviva have invested a combined £70m in TopHat to enable it to increase its output from 800 to 4,000 homes a year through building what it describes as Europe’s largest modular housing factory in Corby, Northamptonshire.