UK housebuilder Persimmon’s profits to jump to £1bn as firm moves past pay controversy

Persimmon’s profits are expected to jump close to the £1bn mark this week as the housebuilder continues to bat off criticism for the pay awards it handed to executives.

Analysts are expecting pre-tax profits to rise 25 per cent, up from £775m to £965m, when the firm announces its 2017 figures on Tuesday. The news comes after the housebuilder cut its chief executive’s pay award by £51m in response to complaints from shareholders.

Read more: Persimmon slashes controversial bonuses by £51m

Persimmon’s share price has been tempered in recent months after the Bank of England raised interest rates in November, and said rates would continue to rise this year. Mortgage approvals fell by nine per cent year-on-year in December, suggesting the market could be cooling. Analysts are also concerned about house price affordability as house price inflation continues to outpace wage growth.

On Friday, Persimmon said that it was amending the company’s pay awards for executives under its 2012 long term incentive plan. The firm’s 2012 share plan was approved by 85 per cent of its shareholders, but has been described as “excessive” by Standard Life Aberdeen, Persimmon’s sixth-largest investor. In December, Nicholas Wrigley, Persimmon’s chairman, resigned over the controversy, saying there should have been a cap on pay awards.