Housebuilder Persimmon hails quality move despite revenue fall

A housebuilder says it remains undaunted by falling revenues and sales as an overhaul of quality and customer service begins to bear fruit.

Persimmon has praised changes to its sales release programme, which it says is already “beginning to deliver anticipated benefits” and helping strengthen the business’ long-term future.

The company, which has developments across the North East, previously implemented a more targeted approach around sales, wherein it releases homes at a later stage of development to make move-in dates more accurate for buyers.

The move affected Persimmon’s financial performance in the first half of 2019, with total revenues down from £1.83 billion to £1.75 billion, and new housing sales of 7584 lower than the 8072 delivered in the corresponding period 12 months ago.

Housing revenues at the business, which has offices in Newcastle Great Park, Bowburn and Thornaby, near Stockton, were 5.6 per cent lower at £1.6 billion.

However, speaking in a trading update today (Thursday, July 4), Dave Jenkinson, group chief executive, said he was pleased with the business’ progress, adding the short-term financial impact of its changes will be offset by longer-term benefits.

He also revealed the York-headquartered company had a strong reputation with first-time buyers, with 3082 of its new homes sold in the first-half of the year going to people taking their first steps on the property ladder.

“There are some clear early signs that our focus on increasing the quality and service delivered to our customers is beginning to bear fruit, with some encouraging improvements being made right across the business,” said Dave.

“Although we are still in the early days of our improvement plans our customer satisfaction rating, as measured by the Home Builders Federation, has increased during the period.

“Our progress on customer service shows we are listening carefully to all stakeholders and making the changes needed to position the business for the future, while maintaining a robust trading performance.

“While our decision to hold back sites and plots in certain locations for later sales release may lead to a reduction in the volume of new homes handed over to customers in the period, the group is in a stronger build position moving into the second half of the year.

“We enter the second half with healthy rates of sale on site and an encouraging forward sales position.”

He added the value of the group’s total forward sales of new homes at June 30 remained steady at £1.62 billion, compared to £1.68 billion a year ago, with the average selling price of the 4400 new homes sold forward into the private sales market slightly ahead at £238,350.