Persimmon PLC (PSN) is a British leading housebuilder and designs, develops and builds residential houses, ranging from studio apartments to executive-style family homes. The company has 31 regional offices in the UK, and it trades under brands such as Charles Church, Persimmon Homes and Westbury Partnerships across England, Wales and Scotland.
The company was in the news for executive pay scandal and complaints about its newly-built homes. As a response to move from there misdeeds Persimmon Plc is planning to sell houses near the date of completion to address the complaints of the buyers to overcome the building quality issue. Earlier the company was criticised for its poor construction techniques and had scored lowest in new homes survey conducted by Home Builders Federation.
Persimmon on Wednesday 1st May 2019 released a trading update. Persimmon responded to the problem of the homeowners and the company used more advanced stage before allotting homes to customers and will gradually reduce the risk of issues remained unresolved. Persimmon is one of the major recipients of the government’s help buy scheme. Under the scheme, the company had sold nearly half of available homes to the prospective owners in last year.
According to Euan Stirling, Aberdeen Standard Investments head of stewardship, holds over 3 per cent of shares in the Persimmon and the company was growing rapidly but is not at par with the expectations of its shareholders, policymakers and customers.
Persimmon Plc Share Price Performance
Daily Chart as at May-02-19, before the market close (Source: Thomson Reuters)
On 2nd May 2019, at the time of writing (before the market close, GMT 04:37 PM), Persimmon Plc shares were trading at GBX 2,193.00, down by 1.31 per cent against its previous day closing price. Stock's 52 weeks High and Low is GBX 2,913.00/GBX 1,824.70. At the time of writing, the share was trading 32.83 per cent lower than its 52w High and 20.18 per cent higher than its 52w low. The outstanding market capitalisation was around £7.04 billion with a dividend yield of 10.64 per cent.
The company had launched a retention programme to attract more customers. As per the new policy, the homeowners will hold the full payment until the issues are fixed on the properties. The company started a review of its culture, customer care and quality of work. Government is trying to help the company with the introduction of Buy equity loan scheme. As per the new policy, the buyers will be allowed to put down deposits on a new-build home up to 5 per cent and in return will be provided with an equity loan that will cover 40 per cent of the value of property in London or 20 per cent elsewhere.
With the introduction of Help to Buy in the year 2013, the profit before tax for Persimmon had increased over twice and over the fifth increase in sales of houses.
The company is looking to seek the issue immediately. As per the pay scheme linked with group’s stock price performance, Jeff Fairburn the former chief executive received close to £85 million over 2017 and 2018. Dave Jenkinson received £45.3m in cash and share options over the two-year period.
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