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- Persimmon plc delivered a profit before tax of £784 million for FY 2020 ending 31 December.
- The leading UK housebuilder handed over a dividend of 110p per share to its shareholders.
- The company said demand for homes was strong at the beginning of 2021 and forward orders were 15 per cent higher compared to last year.
British home building company Persimmon plc (LON: PSN) has released its results for the year ended 31 December 2020 on Wednesday, 3 March, generating a profit before tax of £784 million (2019: £1,041 million). Despite the challenges due to Covid-19 outbreak, the company delivered a robust performance. The company reported that its average selling prices rose by a healthy 6.9 per cent for the year.
The builder makes and sells 'homes for all' in a wide range of house types at varied price points. The number of new homes completed by Persimmon was 13,575 for 2020 (2019: 15,855) with an average selling price of £230,534 (2019: £215,709). The firm expects to sell similar number of homes this year as it did in 2019. Further, the FTSE 100 firm displayed a strong balance sheet with quality land holdings. There were 84,174 plots owned by 31 December 2020 (2019: 93,246).
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Strong demand for homes
The company said that the demand for homes remained strong in the beginning of 2021 with forward orders up by 15 per cent while sales higher by 7 per cent as compared to the same period previous year.
The stamp duty holiday announced by the UK government last year in July has been instrumental in pushing up the demand and prices of homes across the nation despite a sluggish economy.
Profits fell to £784 million for 2020 by 25 per cent compared to 2019 due to lower housing activity mainly during the coronavirus lockdowns. At the same time, the company’s net cash balance jumped to £1.2 billion for the year ((2019: £844 million).
The company had already resumed paying dividends after its brief suspension during the first lockdown in March last year. The UK housebuilder handed over a dividend of 110p per share for 2020 (2019: 235p per share).
The company plans to pay out a postponed dividend this year. A regular yearly payment of £1.25 would be moved forward to March from June. In 2020, Persimmon would return to an annual dividend payout of £1.25.
Dean Finch, CEO of Persimmon, said that the firm will focus on improving its build quality going forward. It plans to strengthen its inspection regime in this regard, he added.
After the results, the company stock (LON: PSN) was trading at a value of GBX 2,835.00 at 9.57 am on 3 March, up by 4.61 per cent from its previous day’s close value. The volume of shares traded were reported to be 282,887.