Persimmon profits drop as housebuilder focuses on quality

The housebuilder reported that revenue for the six month period ended 30 June came in at £1.75bn, falling by 4.0% when compared to the same period last year, as a drop in sales volumes from 6,577 homes to 5,963 offset a 1.7% increase in the average property sale price to the private market.

Consequently, profit before tax edged 1.4% lower to £509.3m.

Persimmon, which has faced recent media scrutiny regarding the quality of its new-build properties, said the lower sales volumes were due to its decision to invest additional funds of around £140.0m in work in progress as the company held back some sites for later sales release to give customers more accurate moving-in dates.

The company also noted that it had been impacted by an approximate 40% increase in customer care costs, which was expected to result in a £15.0m increase in its annual costs.

Dave Jenkinson, chief executive of Persimmon, said: "Improving the quality and service delivered to our customers remains our top priority and I am encouraged with the progress made in the first half, which clearly shows that Persimmon is changing. Our customer satisfaction ratings for the current HBF survey year are showing improvement and I am particularly pleased that, in July, Persimmon became the first housebuilder to introduce a retention scheme for customers placing us at the forefront of strengthened consumer rights for homebuyers."

Meanwhile, the FTSE 100-traded company reported that it stands in a strong position to take advantage of high levels of employment, low interest rates, and a competitive mortgage market, even as Brexit uncertainty lingers.