Persimmon sales and profits down

UK house builder Persimmon recorded 2008 sales of UK£ 1,7 billion (€ 1,9 billion), down from the UK£ 3 billion (€ 3,3 billion) reported for 2007. Pre-tax profits also fell from a UK£ 582 million profit (€ 650 million) in 2007 to a loss of -UK£ 780 million (-€ 870 million) in 2008.

Persimmon completed 10202 homes in 2008, down -36% on the 15905 completions a year earlier.

A review of the company's work in progress during 2008 resulted in an exceptional charge of UK£ 650 million (€ 725 million) as the value of land holdings suffered from the economic crisis, while the deterioration in market conditions resulted in a further goodwill impairment charge of UK£ 210 million (€ 224 million).

"This has been a difficult year for Persimmon and the industry as a whole," said John White, Group chairman. "We have taken decisive steps to refocus the business accordingly and have generated significant cashflow. We will continue to reduce debt and we believe that, with a strong balance sheet and recently agreed credit facilities of UK£ 1 billion (€ 1,2 billion), we have a strong platform for future growth."

Outlook

Mr White said since 1 January weekly sales volumes have "exceeded our expectations", which puts the company in a good position to achieve its short term objectives of generating cash flow and strengthening its balance sheet.

He believes the combination of lower interest rates and an improvement in affordability will assist in increasing first time home buyer activity, although the threat of increased unemployment "remains a concern".

"We consider that 2009 is likely to be another difficult year, but we believe that we will eventually see an upturn in the housing market. We are confident that our business is well positioned to react to take advantage of growth in our markets as they improve in the future," said Mr White.