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Persimmon sales fall following house selling model shake-up

Joanna Bourke
Persimmon flags on a housing development: PA Wire/PA Images

Controversial builder Persimmon’s shake-up of how it sells homes in a bid to improve its battered reputation has led to a drop in sales.

The FTSE 100 firm previously sold many properties off-plan, but last year started to sell homes on some high-volume sites closer to construction completion dates. That followed complaints buyers were being rushed into poor quality and incomplete new-builds so targets could be met.

Persimmon, whose former boss Jeff Fairburn left after a backlash over his £75 million bonus, said total revenue for 2019 decreased 2.4% to £3.7 billion.

It completed 15,855 home sales, compared with 16,449 the previous year.

Pre-tax profits are expected to be in line with the £1 billion analysts had pencilled in.

Chief executive Dave Jenkinson said: “Persimmon continues to make good progress with the implementation of its customer care improvement plan. Central to this plan is putting customers before volume.”

Jenkinson has been trying to improve the builder’s reputation following the construction complaints. It last month published the findings from an independent report into the business it commissioned. The report called for an overarching change in the culture of the company.

Persimmon today said it will update on the progress it has made following the report’s recommendations when it announces full-year results in February.

Jenkinson said: “I am pleased with the progress we have made in 2019 and there is more to do.”

The company added that in 2019 it continued to benefit from “resilient consumer confidence, supported by low interest rates, a competitive mortgage market, and robust employment levels”.

Shares in Persimmon gained 44p to 2840p.

Elsewhere in the sector today, Vistry, formerly known as Bovis Homes, said 2019 pre-tax profits should be slightly ahead of the £181.6 million the City had been expecting. The firm, led by Greg Fitzgerald, saw average selling prices rise to £341,000 from £337,400.

Vistry was formed via Bovis’ £1.1 billion deal to buy Galliford Try’s housing arms, completed earlier this month.

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