The staff headcount at Persimmon Homes is likely to fall by 700 this year as the housebuilding company enforces strict spend controls and maintains a current ‘recruitment freeze’.
It comes as build rates in the third quarter were 30 per cent lower than last year as the result of a sluggish market.
“We continue to operate from a lean fixed cost base and pursue a highly disciplined approach to [Work in Progress] management,” it wrote in its Q3 trading update. “As a consequence, build rates in the third quarter were 30 per cent lower year-on-year reflecting the slower sales environment.
“Disciplined management of costs remains a key focus for the Group and in addition to careful spend controls, the hiring freeze we have in place means that headcount is likely to reduce by 700 during 2023.”
The impact on P&L of “stubborn” build cost inflation for FY2023 will be 8-9 per cent, the Group anticipates.
Persimmon also reported 1,439 new home completions in the third quarter of FY2023 compared to 2,270 in the same period in the previous year, a 37 per cent drop, which it said was in line with expectations.
This included 1,234 private homes (Q3 2022: 1,894) and 205 partnerships homes (Q3 2022: 376).
The Group said it is on track to deliver around 9,500 homes in 2023, with operating profit “in line with expectations”.
Private selling prices were up two per cent and average partnerships prices increased 20 per cent.
Persimmon also posted a forward sales position of £1.62 billion, a 23 per cent fall from Q3 2022 of £2.09 billion, but up since 30 June 2023 (£1.4 billion).
The Group also managed to get planning approval on 80 per cent of land it owns so far this year.
This should support the opening of 30 new sales outlets in the Spring of 2024, it said.
Persimmon anticipates a cash balance of £300 million to £500 million at the end of the financial year.
“Trading in the period was in line with expectations and pricing was broadly stable,” said Dean Finch, Group chief executive. “We are on track to deliver around 9,500 quality new homes in 2023 with operating profit in line with expectations and at an operating margin similar to the first half.
“While the near term is likely to remain challenging and we remain disciplined on costs, we continue to position the business for growth when the market recovers, as demonstrated by our further progress on planning in the period.
“The Group’s national network of outlets providing a high-quality product at a range of attractive prices is a crucial strength in this market.”
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