2 March 2022
If you are covering Persimmon’s latest financial results, please find below a comment from Oli Creasey, property research analyst at Quilter Cheviot:
“Persimmon’s results paint a picture of a company that has successfully transformed itself, without requiring considerable financial resource at the expense of sales or profits. Of particular interest is the upcoming Home Builders Federation customer satisfaction survey result, to be published later this month. Every indication is that Persimmon will receive a 5* rating, the first time the company has achieved the maximum. This is a genuine boost when marketing to new customers and it is a credit to the company that they were able to achieve this in just a few years, having received only three stars in the 2019 results.
“What is perhaps more impressive is that the company has been able to achieve this improvement without suffering a noticeable financial hit. The company’s pursuit of vertical integration, building their own brick, tile and timber factories has helped to shield the company from supply chain shortages and some of the cost inflation experienced in 2021. The increased average sale price (+3%) and focus on cost control meant that the company’s operating margin increased slightly to 28.0%. Further investment in their own capacity is being made and should support further efficiency going forward.
“Persimmon reiterated its intention to pay two dividends this year, although bringing forward some of the dividend (which is over 10% of the share price) so that the 125p will be paid in April rather than June, with the smaller 110p to be paid in the Summer instead. The switch is a show of confidence, accelerating the payout – though it won’t materially affect investor returns.”
