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Persimmon sees FY profits 'modestly ahead' of expectations
House builder Persimmon, where chief executive Jeff Fairbairn is set to rake in a £110m bonus, said full year pre-tax profits would be "modestly ahead" of expectations as it continued to benefit from the government's controversial help-to-buy scheme.
In a trading update, the company said revenues for 2017 of £3.42bn were up 9% year on year with legal completion volumes up 6% to 16,043. The group's average selling price increased by 3% to around £213,300.
The company added that it was still mindful of market risks including those associated with uncertainty arising from the UK leaving the EU in 2019.
There was no mention of Fairbairn's bumper payday, which has outraged many and led to the resignation of Persimmon chairman Nicholas Wrigley, who said he regretted not capping the firm's bonus scheme. Another 140 managers are set to share an estimated bonus pool of £800m.
Help-to-buy was introduced by the sacked former Chancellor George Osborne and has been attacked by its critics for increasing house prices and largely benefiting house builders instead of people trying to buy their first home.
"We continued to experience healthy customer demand for new homes through the autumn sales season and the value of our forward sales at 31 December 2017 of £1.3bn was 10% ahead of the prior year. Second half legal completion volumes of 8,249 were 455 stronger than for the first half of the year," Persimmon said.
"We have made excellent progress in expanding our manufacturing capabilities to support our desire to achieve sustainable growth. Our new brick manufacturing plant in Harworth, near Doncaster, is now complete and deliveries of bricks to site have commenced, underpinning our ability to increase house building volumes."
Persimmon said it had bought 17,300 plots of new land at "excellent margins" in more than 80 locations throughout the UK during the year.
However, we are keen to deliver further improvement in our housing output and remain ready to invest wherever the local planning environment is supportive.