Persimmon’s profit slides in 2020 due to the COVID-19 disruptions

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Mar 3, 2021
  • Persimmon’s profit slides in 2020 due to the COVID-19 disruptions.
  • The housebuilding company reports £3.33 billion of revenue.
  • The board announced 125 pence per share of interim dividend.

Persimmon plc (LON: PSN) said on Wednesday that its profit and revenue posted a decline in 2020 due to the ongoing Coronavirus pandemic. The company said that signs of recovery were evident in H2 of the previous year. Momentum, it added, sustained so far in 2021 as well.   

Persimmon shares, that you can learn to buy online here, jumped roughly 4% on market open on Wednesday. Including the price action, the stock is now exchanging hands at £28.24 per share. In comparison, it had plunged to as low as £15.34 per share in March 2020 when the impact of the COVID-19 crisis was at its peak.

Persimmon reports £3.33 billion of revenue

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Persimmon reported £783.8 million of pre-tax profit in 2020, compared to £1.04 billion in the previous year. The housebuilder valued its revenue in the recently concluded year at £3.33 billion – a decline from £3.65 billion in 2019. Persimmon said that it completed 13,575 houses last year that represents a 14% annualised decline.

In comparison, the York-based company’s revenue had tanked 32% in the first half of 2020 as the health emergency disrupted construction activities.

The board announced 125 pence per share of interim dividend on Wednesday. An additional 110 pence per share payment will dividend evenly later this year between August and December. In 2022, the British firm expects to return to its normal annual per-share dividend of £1.25.

In separate news from the United Kingdom, software company, Avast plc also published its financial report on Wednesday.

Persimmon’s forward order book jumped to £2.3 billion

Persimmon expressed confidence that demand for new homes will remain robust in 2021. On a year over year basis, the rate of weekly private sales on average was 7% up in the first eight weeks of the ongoing year. Its forward order book jumped to £2.3 billion – a 15% increase from last year.  

Persimmon said it was likely to take until the next year before home completions return to the level seen in 2019, before the COVID-19 crisis that has so far infected more than 4.1 million people in the UK, and caused 123 thousand deaths.

Persimmon remained almost flat on average in the stock market last year with an annual gain of close to 3.5%. At the time of writing, the British housebuilding company is valued at £8.96 billion and has a price to earnings ratio of 13.28.

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