National housebuilder, Persimmon, has seen its annual profit fall by 52% as it expects to encounter subdued market conditions throughout 2024.
The developer saw its pre-tax profit reach £351.8million for its financial year ending 31 December 2023, a significant drop from £730.7million in the previous year. The figure also came in below forecasts of £359.5million.
Persimmon’s completions also dropped considerably from 14,868 in 2022 to 9,922 this year. As a result, revenue also fell by over a quarter to £2.77billion and, despite its average house price growing to £255,752 in 2023 from £248,616 the previous year, the housebuilder’s gross margin also fell over 10% to 20.5%.
Dean Finch, chief executive of Persimmon, said: “Although the near-term outlook remains uncertain, the significant pent-up demand for homes remains unchanged.”
“During the year, we have continued to take further steps to strengthen the business and we are well-placed to meet this demand through our three excellent brands offering different price ranges with overall private average selling prices that are below the market average.”
“The investments and operational changes that we have made in the past few years mean we are trusted by our customers to deliver consistently high-quality homes.”
“We can achieve this while positioning the business to maintain industry-leading financial returns as markets recover, supported by our vertically integrated business model, strategic land buying and disciplined approach to cost control. Through further investments in innovation, I believe we can build even higher-quality homes better, faster and more efficiently over time.”
Despite the largely negative figures, Persimmon finished the year stronger than expected. Towards the end of 2023, the developer’s private net sales per outlet rose to 0.41 compared to 0.28 for the same period the year before. Persimmon also surpassed its revised forecast of 9,500 home completions for the year after it built 4,000 houses in the final quarter of 2023.
