Persimmon to return £1.9bn to shareholders
Housebuilder Persimmon posted a slightly stronger than expected jump in full-year profit on Tuesday and said it would return £1.9bn of surplus cash to shareholders.
The York-based company said it would return the cash through dividends over nine-and-a-half years, starting in 2013, and remain largely debt-free throughout the period.
The company is still investing in growth, however. It added 14,300 plots to its landbank during 2011, taking the total to 63,300, representing 6.5 years of supply. At the same time it managed to end the year with a net cash position of £41m having reported net borrowings of 51 million a year earlier.
Persimmon is proposing a 10 pence total dividend for 2011, 33 per cent higher than the year before.
Britain’s largest housebuilder by market value reported a 55 per cent rise in underlying pretax profit to 148.1 million pounds, beating a consensus forecast of £142m.
“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,” chairman Nicholas Wrigley said in a statement.
“Visitor levels and reservations continue on an improving trend and, although we expect the UK housing market to remain difficult, Persimmon is in a strong position to meet this challenge.”
The company said visitor numbers 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.
Persimmon said it would continue to pursue its strategy of acquiring high margin land and increasing sales volumes.