Construction Enquirer News In-house brick and tile factory maintains house builders industry leading margins

House builder Persimmon managed to raise operating margins to 28% in the face of worsening materials and labour shortages in the first half of this year

The firm said it was successfully deflecting the worse impacts of the materials supply squeeze from a timely investment in its own brick and tile factory.

Persimmon group chief executive Dean Finch predicted margins would remain resilient, despite forecast cost inflation of 5% this year.

He said that alongside price increases on home sales secured,  vertical integration and strong cost management had helped maintain its industry-leading margin.

“We have invested in expanding our off-site manufacturing hub at Harworth, near Doncaster, to strengthen security of supply.

“Our brick plant and roof tile manufacturing facility provide a significant proportion of these materials to our sites.

“This complements our existing off-site manufacturing capability at Space4, which produces timber frames, highly insulated wall panels and roof cassettes as a modern method of constructing new homes.”

Finch said that with the security of availability of its in-house manufactured build components, Persimmon remained in a strong position to support its build programmes to deliver targeted growth in output while also achieving a resilient closing stock position at the end of 2021.

In the first half of the year, pre-tax profits rebounded to £480m, as sales rates rose 20% against the pre-pandemic 2019 first half.

The house builder reported good forward sales of £2.23bn, including legal completions in the second half so far, up 9% on the more normal trading year of 2019.

This would keep it on track to deliver 10% growth in sales completions this year.

Persimmon ended the first half with a strong cash balance of £1.32bn.


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