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Persimmon rides out Brexit storm with higher home sales

FILE PHOTO - A sign is displayed at a Persimmon construction site in Dartford, southern Britain August 21, 2015. REUTERS/Neil Hall/File Photo

By Tanishaa Nadkar

(Reuters) - Profit at Persimmon rose by 13 percent last year as Britain's second-biggest housebuilder sold more homes despite uncertainty from Britain's impending European Union exit.

Shares in Persimmon, which last year faced an investor mutiny over its former chief executive's pay, rose by 4 percent to 2,446 pence at 1221 GMT after it said pretax profit rose 13 percent in 2018 to £1.09 billion.

Persimmon, which has focused on building cheaper family houses, said interim CEO Dave Jenkinson would take on the role permanently after Jeff Fairburn stepped down last year amid criticism of his $100 million (£76 million) bonus package.

Jenkinson has agreed not to receive a bonus in 2019, with Persimmon and other housebuilders facing an overall sluggish housing market, with people shying away due to smaller household incomes and Brexit keeping foreign investors at bay.

"The lack of clarity with respect to the UK's exit from the EU is currently creating additional unpredictability," Persimmon said in a statement, adding that it was working with suppliers to identify materials whose availability may be restricted.

British property surveyors are the most downbeat about the short-term outlook for house prices in nearly eight years, and sellers are shying away from putting homes on the market, a survey showed.

Reuters reported on Saturday that Britain's housing minister, James Brokenshire, has been pressing Persimmon on how it operates within the "Help to Buy" public funding scheme for new home buyers.

Persimmon, which sold 7,970 homes under the scheme, up from 7,682 in 2017, had not had any "direct communications with the government" on the issues raised, Jenkinson told analysts.

"The group's relatively poor record on customer satisfaction has come under increased scrutiny and we expect Dave Jenkinson ... to invest more in build quality over the next few years," Peel Hunt analysts said.


(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Shounak Dasgupta, Bernard Orr and Alexander Smith)