Persimmon to return £1.9bn to shareholders

The move follows a strategy review designed to grow and strengthen the business.

Chairman Nicholas Wrigley said: “On completion of the capital return plan, the board anticipates that Persimmon will be achieving a greater level of sales activity, enhanced margins, and will possess the same robust capabilities that it holds today.  We believe that the successful execution of this strategy will optimise the financial performance of the business and enhance value for shareholders.”

The plan was revealed as Persimmon unveiled its final results for the year to 31 December 2011, showing a 55% improvement in underlying pre-tax profits to £148.1m (2010: £95.5m) and revenue down 2% to £1.54bn (£2010: £1.57bn).

Legal completions were steady at 9,360 (2010: 9,384) and average selling price reduced by 2% to £166,142 (2010: £169,339) reflecting a greater proportion of first time buyer homes in the sales mix.

Margins improved from 9% in the first half of the year to 10.8% in the second half. “We expect a further improvement in the current year and continue to believe that the business can return to operating margins of 15 - 17% over the medium term,” said chief executive Mike Farley.

Forward sales were up 9.4% to £927.4m (2010: £848.1m).

“The encouraging improvement in visitor levels and reservations noted first in the autumn of 2011 has so far continued into 2012,” said Mr Farley. “Our weekly private sales rate per site is c. 22% ahead of the prior year over the first eight weeks of 2012.  We currently have total forward sales of c. £927.4 million (2010: £848.1 million) for 2012, including legal completions taken so far this year which is 9% up on the previous year.  Prices remain stable and we have seen some further improvement in gross margins for reservations taken in early 2012.”

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