Persimmon to return £1.9bn to investors
SHARES IN PERSIMMON soared to their highest in almost four years yesterday after the UK housebuilder unveiled plans to return £1.9bn in surplus cash to shareholders.
Persimmon said it will pay investors a total of 620p per share through dividends over nine-and-a-half years starting in 2013, and will remain largely debt-free throughout the period.
The announcement was made as the housebuilder reported a 55 per cent rise in a pre-tax profit to £148.1m in the year to December, compared with £95.5m the previous year.
It ended the year with a net cash position of £41m having reported net borrowings of £51m a year earlier.
Chairman Nicholas Wrigley said Persimmon’s “successful strategy of improving operating margins, investing in high quality land and generating surplus cash to pay down debt proved highly effective, despite difficult prevailing housing market conditions.”
Housebuilders have been widening their operating margins by focusing on houses and building on cheaper land purchased since the downturn.
Persimmon has spent £1bn over the past four years buying 32,000 plots of land, taking the total to 63,300 – representing six and a half years of supply.
Wrigley said the group would continue to pursue its strategy of acquiring high margin land and increasing sales volumes.
Visitors to its developments were 10 per cent higher in the first eight weeks of 2012 than in 2011 and forward sales revenue is 9.4 per cent higher than last year at around £927m.