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Persimmon made £66,000 per house as profits jumped 23%

Persimmon  Builders construct modular Space4 homes on a Persimmon development in Coventry, February 22, 2017. Picture taken February 22, 2017. To match Insight BRITAIN-EU/CONSTRUCTION REUTERS/Darren Staples
Persimmon has benefited from a booming housing market. Photo:Darren Staples/Reuters

Persimmon (PSN.L) made pre-tax profits of £966.8m ($1.2bn) for last year as the house builder racked in a £66,000 profit per house.

The company reported revenues of £3.61bn, up from £3.33bn, and a 23% jump in pre-tax profit from £783.8m to £966.8m as it benefited from rising house prices.

Persimmon built 14,551 new homes in 2021, above 13,575 units a year earlier, with an average selling price of £237,078 and profit of £66,442 per home.

"We are targeting volume growth of 4-7% on 2021 levels although we are mindful of the growing risk of an economic impact as a result of the tragic conflict in Ukraine," said chief executive Dean Finch.

In the year to 31 December 2021 Persimmon made a pre-tax profit of £966.8m, up 23% on 2020’s £783.3m. Turnover was £3.61bn.

Read more: UK house prices surge past £260,000 for first time despite inflation concerns

Finch said the company maintained build rates at pre-COVID levels and improved customer service during the year.

He added: “An agile approach across the business ensured we navigated the supply chain challenges posed by the pandemic, with our Brickworks, Tileworks and Space4 manufacturing facilities providing security of supply for essential materials and helping us maintain our operating efficiency.”

Persimmon saw its share price jump by almost 5% on the back of strong results. Chart: Yahoo Finance UK
Persimmon saw its share price jump by almost 5% on the back of strong results. Chart: Yahoo Finance UK

The company will expand production at its facilities this year as it plans for further growth.

The York based group said its current position of forward sales – the agreement between builder and buyer with a future purchase date – stood at £2.21bn, slightly lower than £2.27bn a year earlier.

Read more: Surge in mortgage approvals fuels UK property boom

The housebuilder also warned it could see disruption to the UK economy as a result of the conflict in Ukraine.

“We are mindful of the growing risk of an economic impact as a result of the tragic conflict in Ukraine,” Finch said.

Persimmon also said it would not claim cash from the government’s building safety fund.

The company had previously put aside £75m to fund any cladding issues following the Grenfell tragedy. It has identified 33 sites in need of work.

Watch: Will UK house prices ever fall?