Persimmon has announced a 30% reduction in new home builds rate for quarter one of 2023 after making the decision to protect its cash reserves amid the economic turmoil that occurred towards the end of last year.
In its most recent trading update, the volume housebuilder said that its build rate for the year to 31 March dropped by 30% year-on-year from 252 units a week to 176. The total number of completions over the quarter also fell from 1,950 in Q1 2022 to 1,136, a decrease of 42%.
The housebuilder stated that the reduction in completions was a result of forward sales dropping by 36% as of 1 January 2023 brought about by what it called a ‘challenging trading environment” after the announcement of the mini-budget.
Persimmon also said that it acted swiftly to the ensuing downward market trend by “controlling our costs and managing our build programmes to conserve cash.”
Despite the negative year-on-year results, Persimmon suggested that trading was improving over recent weeks, while seeing an increase in some key figures compared to the end of 2022. Net private sales per outlet saw a significant increase to 0.62 in the last quarter, up from 0.30 in Q4 2022, but markedly down on 0.98 recorded in quarter 1 last year.
Persimmon expects to achieve the top end of its predictions for completions for the year, a target that it previously set at 8,000 to 9,000.
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Dean Finch, chief executive of Persimmon, said: “Our performance in the first quarter was as we expected and reflects the challenging trading conditions in Q4 2022 and consequent lower forward order book as we entered the year.”
“Trading over recent weeks has offered some signs of encouragement with visitor numbers up, cancellation levels normalising and sales rates continuing the steady improvement evident since the start of the year.”
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