Persimmon completions drop one third as firm cuts headcount by 700

Persimmon has reported a fall in completions of 37% as the housing sector’s struggles continue.

The housebuilder, in a trading update for the three months to 6 November, said it completed 1,439 homes in the period, down on the 2,270 for the same period last year, due to a “slower sales environment”.

It said it expects to build around 9,500 homes in its full year, down 36% on the 14,868 built the previous year.

Persimmon has previously said a drop in completions is expected due to the low forward sales position at the start of the year. Forward sales increased from £1.4bn to £1.6bn quarter-on-quarter but is still down on the £2.09bn for the same period last year.

It said its operating profit is “in line with” expectations and its operating margin is likely to be in line with the reduced figure posted in the first half of the year. Persimmon reported underlying operating margin of 14%, down from 27% year-on-year.

The housebuilder also said it is pursuing a “highly disciplined” approach to cost management and said its hiring freeze will mean a reduction in staff numbers of around 700 in the year.

It said it has also taken a “proactive approach” to secure price reductions on materials and labour from suppliers and subcontractors over the past few months, amid “stubborn” build cost inflation.

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Persimmon’s sales rate has shown “a strong pick up since the start of October” improving to 0.59 from 0.45 last year

Chief executive Dean Finch said: “While the near term is likely to remain challenging and we remain disciplined on costs, we continue to position the business for growth when the market recovers, as demonstrated by our further progress on planning in the period.”