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Remediation spend helps puts £160m dent in net cash at Persimmon
House builder Persimmon has reported a £160m decrease in net cash in its latest trading update, down from £420m in 2023.
The 38% drop in cash was driven by £60m spent on remediation in the year, with work underway or completed on 70% of its known developments. The firm also returned £192m to shareholders.
The house builder released the trading update earlier ahead of its full results for the 2024 calendar year, which will be published on 11 March.
Persimmon completed a total of 10,664 homes in 2024, up 7% from 2023. This growth was driven by an 18% increase in private home completions to 9,075.
By contrast, 1,589 partnership homes were delivered in 2024, down 29% from 2023.
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The house builder said it expected underlying profit before tax for 2024 to be “around the upper end of market expectations” at £349m to £390m, with underlying operating margins “similar to last year”.
Persimmon’s forward sales position increased 8% to £1.15bn, up from £1.06bn in 2023. Of this, private forward sales were £653m on 2,360 homes, up 31% including bulk sales from £499m in 2023.
Forward sales to housing associations generated £493m on 3,110 homes, down 12% from the previous year.
The trading update said Persimmon entered 2025 with an “improved forward order book and strong land bank”. However, it added: “We are mindful of evolving macroeconomic and geopolitical uncertainties, including the timing of future interest rate changes, and the effect that they may have on our market and consumer confidence in the short term.”
It added that it was managing “sector-wide challenges”, including expected “low, single-digit build cost inflation”, the effects of the National Insurance increase and regulatory changes such as to stamp duty and the Building Safety Levy.
Dean Finch, group chief executive of Persimmon, said: “We performed well through 2024 delivering 7% growth in completions, ahead of market expectations.
“We expect to report an underlying operating margin in line with the prior year, as previously guided, with 2024 underlying profit before tax expected to be around the upper end of market expectations.
“Customer enquiries and sales rates have been consistently ahead of the prior year since the spring selling season.
“Persimmon has worked hard and is well positioned for the future, supported by the land and planning investment we have made in recent years, our vertical integration capabilities and our excellent teams.
“This investment, coupled with the government’s ambitious planning reforms which demand more of the high-quality, affordable homes which are Persimmon’s core strength, supports our growth ambitions in the medium term.”
The firm is not the only one grappling with building safety costs. House builder Crest Nicholson also announced that it has delayed its annual financial accounts as it reviews its estimated £250m remediation bill for hundreds of buildings.
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