REG - Persimmon Plc - Full Year Results
Today 07:00
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RNS Number : 9449V Persimmon PLC 10 March 2026
FULL YEAR RESULTS FOR THE YEAR ENDED 31 DECEMBER 2025
Strong growth; strong platform for further growth
Persimmon Plc today announces its full year results for the year ended 31
December 2025.
Dean Finch, Group Chief Executive, said:
"Persimmon delivered a strong performance for 2025, with completions growing
12% and underlying profit before tax increasing 13%. This reflects our
sustained investment in the business and our commitment to self-help, enabling
us to grow in a challenging market. I want to thank all my colleagues for
their dedication and expertise in delivering this result; I am proud to work
alongside them.
"Sales in the opening weeks of the year have been strong and the build to rent
market is recovering from the slowdown around November's Budget. Whilst we
have good visibility of both our costs for 2026 and our demand from registered
providers and BTR, the impact of the Iran conflict on customer sentiment
remains to be seen. Assuming the conflict with Iran and its impact is short,
Persimmon is set to grow again in 2026.
"Our three distinctive brands all grew last year, diversifying our market
reach. Our strengthened brands, strategic land bank, on-going investment and
operational improvements, supported by our balance sheet and unique vertically
integrated model, position Persimmon well to grow into the medium term."
Financial highlights
2025 2024 Change
New home completions 11,905 10,664 +12%
New home average sales price £278,203 £268,499 +4%
New housing revenue £3.31bn £2.86bn +16%
Underlying operating profit(1) £472.1m £405.2m +17%
Underlying operating margin(1) 14.3% 14.1% +20bps
Underlying profit before tax(1) £445.6m £395.1m +13%
Underlying return on average capital employed(2) 11.7% 11.1% +60bps
Dividend per share 60p 60p -
Cash at 31 December £117.0m £258.6m £(141.6)m
Statutory measures
Total Group revenue £3.75bn £3.20bn +17%
Profit before tax £397.3m £359.1m +11%
Operational highlights
Land holdings at 31 Dec - plots owned and under control 84,879 82,084 +3%
Number of sales outlets at 31 December 277 270 +3%
Current private forward sales position(3) £1.25bn £1.15bn +9%
· 12% increase in completions to 11,905 new homes with growth across all three
brands.
· 17% increase in underlying operating profit(1), driven by increased volume and
on-going operational excellence; 20bps improvement in underlying operating
margin(1).
· Net private sales rate per week excluding bulk in the period up 4% at 0.59
(2024: 0.57). Total net private sales rate of 0.70 per outlet per week (2024:
0.70) affected by slower bulk sales in Q4 2025.
· Continue to track at five-star HBF rating and 'Excellent' Trustpilot score.
· 3% growth in outlets to 277 at 31 December as we progress towards our target
of at least 300 outlets, with average outlets in the year up 4% to 271 (2024:
261).
· 12,815 plots achieved detailed planning in the period, equivalent to 108% of
completions, continuing to benefit from our enhanced planning approach.
· Continuing to invest in growth, with £541m net spend on land (2024: £437m);
strong strategic land pipeline, up 10% to over 77,000 potential plots, and
investment in strategic capabilities.
· Underlying return on average capital employed(2) including land creditors up
60bps to 11.7% (2024: 11.1%).
· Further building safety progress: c.90% of known developments either fully
tendered, on site or completed.
Current trading and outlook
Market conditions have been supportive - including greater mortgage
availability and real wage growth - which, when combined with our increasing
outlet base, has underpinned growth. We welcome the beneficial changes to the
planning environment that the Government has introduced, which should support
further outlet growth over time. Our diversified value-positioned brands and
strong platform position us well to meet increasing demand, supported by our
sustained investment in land, continued success in planning, vertical
integration and commitment to quality and customer service.
In the first nine weeks of this year our net private sales rate per outlet per
week was 0.73, up 9% compared to the same period last year (2025: 0.67). The
private average selling price in the order book is up 6%, which combined with
increased reservations has resulted in a 9% increase in our private forward
sales position to £1.25bn as at 1 March compared with a year ago
(2025: £1.15bn). Total forward sales as at 1 March have increased by 6% to
£1.80bn (2025: £1.69bn).
With stable build cost inflation and our unique vertical integration, we are
managing ongoing cost pressures effectively while investing in further
capacity and innovation. This, together with our investment in land and plans
to open more than 100 outlets in 2026, positions us well. We are monitoring
the impact the conflict with Iran could have on our markets in 2026, including
on customer sentiment, build cost inflation and interest rates. Assuming the
conflict and its impact is short, we expect to deliver between 12,000 and
12,500 completions in the year, with underlying operating profit towards the
upper end of current consensus(4). Our investment for growth at this point in
the cycle, will result in increased finance costs and therefore underlying
profit before tax is expected to be in line with current consensus(4).
The enduring aspiration for home ownership remains strong and provides the
opportunity for growth into the medium term. Continued strategic investment
in the business and our self-help strategy over recent years has positioned us
well for future expansion. This investment, along with capital allocation
choices as we progress our building safety remediation work, will enable us to
convert market opportunities into sustainable growth in support of our
medium-term ambitions to deliver an underlying operating margin and ROCE of
20% and increased returns for our shareholders.
Footnotes
1 Underlying measures are stated before net exceptional charge of £44.9m (2024:
£34.4m), and goodwill impairment (2025: £3.4m; 2024: £1.6m). Margin based
on new housing revenue (2025: £3.31bn; 2024: £2.86bn).
2 12 month rolling average calculated on operating profit before net exceptional
charge and goodwill impairment and total capital employed. Capital employed
being the Group's net assets less cash and cash equivalents plus land
creditors
3 As at 1 March 2026; comparative figure as at 2 March 2025.
4 Company compiled full year 2026 consensus as at 6 March of 12,136 homes, an
underlying operating profit range of £486m to £517m and underlying profit
before tax mean of £470m.
For further information please contact:
Victoria Prior, Group IR Director Giles Kernick, Teneo
Anthony Vigor, Group Director of Strategic Partnerships and External Affairs Olivia Lucas, Teneo
Persimmon Plc persimmon@teneo.com
Tel: +44 (0) 1904 642199 Tel: +44 (0) 7817 913 082
There will be an analyst and investor presentation at 09.00 today, hosted by
Dean Finch, Group Chief Executive and Andrew Duxbury, Chief Financial Officer.
Analysts unable to attend in person may listen live via webcast using the link
below. All participants must pre-register to join the webcast. Once
registered, an email will be sent with important details for this event, as
well as a unique Registrant ID. This ID is to be kept confidential and not
shared with other participants.
Live webcast: https://edge.media-server.com/mmc/p/cudgg43d/
(https://edge.media-server.com/mmc/p/cudgg43d/)
An archived webcast of today's analyst presentation will be available from
this afternoon on www.persimmonhomes.com/corporate
(http://www.persimmonhomes.com/corporate) .
Appendices
1 March 2026 2 March 2025 Change
Forward sales Value Homes Value Homes Value Homes
Private £1.25bn 4,110 £1.15bn 3,971 +9% +4%
Housing Association £0.55bn 3,383 £0.54bn 3,406 +0% (1)%
Total £1.80bn 7,493 £1.69bn 7,377 +6% +2%
Chairman's statement
Building momentum from a strong platform
Introduction
I am delighted to report another year of positive progress in 2025, achieving
meaningful growth of 12% in completions in a challenging market environment.
The progress that we have made over recent years - expanding our outlet base,
enhancing our planning capability, developing our brands, investing in our
people and strengthening our vertically integrated model - continues to
differentiate our operational platform from others and support our long-term
strategy.
We remain true to our three core principles of high standards of build
quality, a strong balance sheet, and excellent operational efficiency enhanced
by vertical integration.
We were delighted to be awarded five-star status by the Home Builders
Federation ('HBF') for a fourth year in a row, with customer excellence firmly
embedded within the Group's strategic ambitions.
Our strong balance sheet has enabled us to make disciplined investments at the
appropriate point in the cycle, expanding our land bank to support future
growth, guided by clear principles that ensure our long-term ambitions remain
firmly on track. In line with our focus on core competencies and disciplined
capital allocation, we completed the sale of FibreNest, the broadband provider
business in August 2025, enabling us to reinvest proceeds into areas that best
support Persimmon's long-term growth ambitions and operational excellence.
Our three distinct brands - the core Persimmon product, a revitalised Charles
Church range, and Westbury Partnerships focused on housing for our
institutional and registered provider customers - have all contributed to
deliver strong results for the year. This diversified portfolio enables us to
address a broad spectrum of customers.
Our vertically integrated model helps secure our supply chain and support our
capacity to consistently deliver high-quality, affordable homes with
industry-leading margins. I have been delighted to see the progress made,
particularly at Space4 following the installation of a new robotic line during
the year.
Persimmon is in an excellent position to continue growing, with a focused
strategy and differentiated platform to deliver strong financial results and
value for its shareholders.
Industry leadership
The UK's housing need is well documented, and the Government is committed to
an ambitious housebuilding target. Persimmon is positively engaged with
Government, and we welcome the beneficial changes to the planning environment
that the Government has introduced, which should improve over time.
We remain dedicated to our building safety remediation programme. In line with
this, we were the first housebuilder to sign the Scottish Government's
developer remediation contract in December, demonstrating our commitment to
dealing with the programme diligently and swiftly. Thanks to our proactive
efforts, we have begun or finished work on 77% of identified developments. We
remain on track to complete most of the required works over the course of the
next two years, and further progress on our remediation work will allow us the
opportunity to update our future capital allocation priorities.
Shareholder returns
Our Capital Allocation Policy balances returns to shareholders with investment
for future growth. For 2025, the Board proposes a final dividend of 40p per
share, payable on 10 July 2026 to shareholders on the register at 19 June
2026, following shareholder approval at the AGM. This dividend, combined with
the interim dividend of 20p per share paid in November 2025, totals 60p per
share for the 2025 financial year.
Board changes
As previously announced, Anand Aithal formally joined the Board on 1 January
2025, and we are already seeing the benefit from his wealth of experience
across many sectors.
Nigel Mills retired from the Board in May 2025 after nine years of service. On
behalf of the Board, I would like to extend my sincere thanks to Nigel for his
contribution during his time as a member of the Board and wish him all the
best for the future.
Duncan Davidson
I wish to pay heartfelt tribute to our esteemed founder, Duncan Davidson,
whose passing in October 2025 marks the loss of a visionary leader and the
guiding force behind Persimmon. Duncan was instrumental to my appointment as
Chairman and was always available to provide help and guidance. Since
establishing the Company in 1972, Duncan's unwavering dedication, integrity,
and principled leadership shaped our values and left an enduring legacy - not
only within our business but also in the communities we serve across the UK.
His memory will forever inspire our commitment to excellence and our belief in
building thriving communities, reflecting the spirit and standards Duncan
championed throughout his remarkable life. I am delighted that we are
establishing an Apprenticeship Programme in his honour funded by the Persimmon
Charitable Foundation.
In conclusion
I would like to thank all our colleagues, partners and stakeholders for their
unwavering support and commitment during what has been a period of challenge
and achievement.
Although we operate within a challenging geopolitical, economic and policy
environment, our focus remains on what we can control, executing on our
strategy and building our business. As we look ahead, I am confident that
Persimmon's strong foundations, clear strategic direction and dedicated team
will ensure we continue to deliver growing value for customers and
shareholders alike.
Roger Devlin
Chairman
9 March 2026
Group Chief Executive's statement
Delivering a strong performance through strategic investment and self help
Persimmon's performance exceeded expectations in 2025, with earnings growth
underpinned by our sustained investment in the business and focus on self-help
over the past few years. Our strategy is focused on choosing where we build,
what we build and how we build. This strategic focus drove 12% growth in
completions and 13% increase in underlying profit before tax(1), supporting
cash generation and improvements in margin and ROCE. Our three strong,
well-positioned and distinct brands all grew and remain a key differentiator:
the core Persimmon brand is well placed for today's market, Charles Church
grew strongly as we invested in our premium offering, and Westbury continues
to drive growth in the partnerships and Build to Rent ('BTR') markets.
We increased the number of outlets we operated from, against industry trends.
We sold more homes, with ex-bulk sales rates up 4% to 0.59 per outlet per week
and we successfully launched innovative products like New Build Boost and
Rezide to help address affordability challenges for customers. Our current
forward order book is up 6% year on year. Our investment in our vertical
integration benefited delivery in 2025 and will continue to do so for years to
come. Enhanced house type ranges are meeting customer needs while also
improving build efficiency. The addition of new sites to our already strong
strategic land bank provides us with an expanding platform for future growth.
Our strategy enables us to build more routes to more markets to deliver more
homes and growing returns. Our plans for further investment, innovation and
self-help all support our medium-term growth ambitions, driving further margin
improvement and enhanced returns. As an already growing company at this point
of the cycle, we are well positioned to secure further expansion when market
conditions improve and the Government's welcome planning reforms take effect.
During the year, we also made further progress in building safety remediation
and expect the programme of works to be largely completed in the next two
years. As proudly the first major housebuilder to protect leaseholders from
the cost of building safety remediation, we have always recognised this action
is the right thing to do as a responsible business. The works' completion
alongside the continued delivery of our broader growth strategy paves the way
for improved shareholder returns.
Our achievements are only possible thanks to our exceptional people. I would
like to sincerely thank every member of the Persimmon team for their
dedication, expertise and commitment. I am proud to work alongside so many
industry-leading experts and committed colleagues. Their efforts and passion
are fundamental to our success, delivering value for shareholders and helping
to build thriving communities across the UK.
Trading performance
Our 2025 results demonstrate the success of the strategy to position the
business for growth, despite a challenging market backdrop. We delivered
11,905 new homes in the year (2024: 10,664) and grew our net sales rate
excluding bulk by 4% year on year to 0.59 per outlet per week (2024: 0.57). We
achieved a further 0.11 per outlet per week contribution from bulk sales
(2024: 0.13), lower than the prior year reflecting the November Budget's
widely documented effect on the broader BTR market. Our continued investment
in sales and marketing helped to drive increased customer enquiries and
overall sales figures, with both ahead of the prior year. Private average
selling prices on reservations remained robust, with incentives controlled at
c.4.6% per gross reservation (2024: c.4.5%).
We are pleased to have achieved an underlying operating margin1 of 14.3%
(2024: 14.1%). Our vertical integration and operational efficiencies enabled
us to mitigate the substantial impact of embedded build cost inflation coming
into the year. These unique capabilities have helped underpin the margin
performance and will help drive further growth.
High-quality land bank and growing outlets
Our land acquisition strategy is founded on disciplined, targeted assessments
to ensure control over our development pipeline. We carefully select sites
aligned with our growth ambitions, market demand and margin potential. In 2025
we increased our investment, with net land spend of £541m, up from £437m in
the previous year. Our improved reputation, including our enhanced placemaking
approach, helped us access more opportunities, with more promoters and agents
working with us. We had some excellent land opportunities in 2025 and as a
result secured 16,309 new plots at strong embedded margins, achieving a
replacement rate of 137%. This underpins our confidence in our medium-term
targets, as this land comes into production and older land acquired before the
spike in build cost inflation begins to unwind. Overall, our total land
holdings increased to 84,879 plots giving us good visibility over our future
pipeline (2024: 82,084).
Our proactive approach to planning is removing barriers to consent and
securing more approvals, converting our sustained land investment into a
growing number of active sites. We opened 103 new outlets in the year (2024:
103 outlets) and finished the year with 277 outlets, up 3%, while the sector
reduced outlet numbers by c.2%(2).
We obtained detailed or reserved matters planning for 12,815 plots in 2025,
108% of our completions for the year. Examples include at Madgwick Lane,
Chichester and Hull Road, York, where we combined enhanced placemaking with
proactive engagement to navigate local planning and stakeholder challenges to
secure approvals and outlet openings. These successes are helping to develop a
strong pipeline, with plans for more than 100 outlet openings in 2026. We
expect to see net growth in outlets this year and remain on track to meet our
target of at least 300 outlets.
Our strategic land portfolio is already a strong asset for our business,
making an important contribution to our current growth. Over one third of the
plots we secured detailed planning approval for in 2025 came from our
strategic land bank. It is also an important asset to support our medium-term
growth ambitions and we have therefore invested to strengthen our strategic
land portfolio further. During the year, we acquired the Midlands-based land
promoter Lone Star Land and have already identified significant new
opportunities amongst their portfolio. We have also invested in our in-house
strategic land teams across Persimmon, broadening our reach and influence in
the market. Overall, we added c.10,000 potential plots to our strategic land
bank in 2025 and ended the period with over 77,000 potential plots up from
c.70,000 potential plots, equivalent to 10% growth. Our ability to choose the
right locations and navigate the planning process is central to our growth
strategy.
The Planning and Infrastructure Act passed in December was a positive step.
While it will take time for planning reforms to take effect, we are
proactively shaping our pipeline, identifying 68 sites for accelerated
planning of which 25 planning applications are expected to be submitted by the
end of the first quarter. This will include 300 plots at Dudley, West Midlands
and 200 plots at Keynsham, Severn Valley. These sites combined represent about
13,000 plots to support medium-term delivery. Following extensive discussions
with Government, we were delighted to see the launch of 'Phase 2' of its 'New
Homes Accelerator Programme'. The accelerator is now more focused on speed,
unblocking stalled sites that can deliver in the short term. We immediately
submitted sites and have identified a longer list of additional opportunities.
We look forward to working closely with Government to accelerate the opening
of new outlets.
Three strong brands providing diversification
Our three-brand strategy - Persimmon Homes, Charles Church, and Westbury
Partnerships - allows us to target diverse and distinct market segments. This
approach delivered robust growth in 2025, with each brand delivering more
homes than the previous year. Across all three brands we have invested to
enhance the customer proposition, the quality of the homes we offer and the
efficiency in which we build them. By strengthening each brand and sharpening
their distinct positions in the market, we have built a platform that not only
supports current performance but also positions us for sustained progress
towards our medium-term ambitions.
Core Persimmon remains our largest brand and the cornerstone of the Group. In
2025, our outlet network and sales and marketing initiatives led to a 7%
increase in core Persimmon completions. We continued to invest in the core
Persimmon brand, refining our approach to placemaking, creating standout
developments with quality street scenes and landscaping. We streamlined our
core product range making them more efficient to build and harnessing in-house
manufacturing capabilities. By utilising our own bricks, tiles, and timber
frames, we not only enhance supply chain security and accelerate delivery
times but support our margins with estimated savings of up to £6,000 per
plot.
We also invested further in our sales and marketing to drive customer
interest. Core Persimmon is well placed in the market with private selling
prices around 19% below the market average(3). We augmented this market
positioning by offering innovative shared equity products to proactively
address our customers' affordability challenges and make homeownership more
accessible to more people. Alongside our broader sales and marketing campaigns
and disciplined use of tailored incentives that meet individual customer
needs, we have driven increased interest in our homes. We saw a 21% rise in
website visitors, with good interest observed across all regions in 2025. We
will build further on this progress in 2026, with a new customer website and
marketing platform launched in the first half of the year. Persimmon is well
placed for continued growth.
The relaunch of Charles Church, our premium brand, has generated real
momentum, with completions up 16% in 2025. Customers have embraced our new
house types and enhanced specifications, supporting the premium pricing
Charles Church achieves and demonstrating the opportunity to drive further
growth in this market segment. Indeed, we closed the year with 64 Charles
Church outlets, up from 48, including 41 dual-branded sites. We achieved both
these extra completions and outlet expansion using our existing teams and
structure, demonstrating the efficiency benefits.
With clear brand distinction, we are expanding into new regions, actively
pursuing both standalone and dual-branded opportunities. Charles Church is
allowing us to secure land opportunities in new markets we are unlikely to
have otherwise accessed. As well as serving distinct markets, a dual-branded
presence can generate additional sales for each brand as customers explore the
breadth of homes on offer. Our medium-term target remains to double Charles
Church's contribution to the Group and its first bespoke marketing strategy is
helping drive increased interest and enquiries. So far in 2026, enquiries are
up 48% and website visitors are up 127%. With Charles Church also launching
its own new and enhanced customer website in the coming months, alongside the
marketing platform mentioned above, we are confident it will continue to drive
growth and enhance returns for the Group.
Our Westbury Partnerships brand is becoming a trusted partner for
institutional investors and registered providers. Our flexible model lets us
match each site to local demand, whether private homes, affordable housing or
BTR. We have invested in both the homes we are building, to ensure they
efficiently meet the requirements of these customers, and the relationships to
open up and sustain new market opportunities.
The BTR market continues to offer good opportunities for capital-efficient
sales to our institutional customers. We increased the number of partners we
worked with in 2025 and introduced new BTR house types - drawing on our
knowledge of investors' requirements - to meet their needs efficiently. This
improved offering and expanded partner network, led to a 21% increase to 1,758
in the homes we delivered for our partners (2024: 1,456). Despite some
partners pausing investment decisions ahead of the Budget, all planned deals
completed in 2025. This budget-related pause is reflected in our current
forward order book. Investor interest remains high, however, and we are
working closely with a number of partners to complete deals shortly.
Persimmon's national footprint and single-family housing expertise position us
well to capitalise on this market, particularly where we have larger sites
that offer the opportunity of mixed-tenure development, enabling us to
maximise value and returns.
Completions to housing associations rebounded strongly in the second half and
in total we delivered 2,075 homes for our partners, up 31% on the prior year
(2024: 1,589). Delivery was particularly strong in the fourth quarter of 2025
and consequently we do not anticipate this level of growth to be replicated in
2026. Our relationships across the housing association market remain strong
and we are focused to ensure we meet partner requirements, especially for the
forthcoming Social and Affordable Homes Programme to maximise future
opportunities.
With three distinct brands serving unique customer segments and market
channels, we have built a dynamic platform to drive our medium-term ambitions.
Alongside our growing outlets we are building more routes to more markets to
deliver more homes and growing returns.
Build quality and customer service
At Persimmon, our commitment to build quality and customer service is central
to our business operations. During 2025, we delivered a step change in growth,
without compromising on the consistently high standards we have achieved in
recent years. This provides a strong platform to meet our medium-term targets.
By combining strong growth with a reputation for consistent build quality and
service excellence we will meet customers' aspirations, increase the number
investors, landowners and suppliers who want to partner with us and further
enhance our attractiveness as an employer of choice.
Our combined quality and service HBF score ended the survey year at 4.30(4)
and continues to track at five-star homebuilder status, reflecting our ongoing
focus on the quality of our customers' experience. We are delighted to have
maintained our five-star HBF rating, awarded to us for the fourth year running
in March 2025. Delivering this while growing the business demonstrates the
embedded culture of consistently delivering high-quality homes. This is
further reflected in our Trustpilot scores, which remain at their 'Excellent'
rating with 4.6 stars for both Persimmon Homes and Charles Church (December
2024: Persimmon 4.5 star; Charles Church 4.4 star).
We also sustained our improvements in build quality, with reportable items
continuing to track at low levels at 0.29 (2024: 0.26). Our increased
investment in site work in progress alongside more accurate and efficient
build programmes has meant we built 22% more homes on average per week than in
the prior year. Our improved build programmes also ensure a more rigorous
alignment to our key stage inspections process, providing build quality checks
and reducing the need for and costs of rework. This has been further
strengthened by investment in more Independent Quality Control officers and
more training for our people. These initiatives led to a 310bps improvement in
our NHBC Construction Quality Review scores to 92.6% (2024: 89.5%), which is a
great achievement.
We are continuing to invest in our people, systems and processes, to drive
further progress. The continued roll out of digitised systems is helping to
drive further efficiency and quality benefits. A materials management system
that will help automate call-offs in line with build programmes, will help
manage cash flow and reduce lost, stolen and damaged costs. Granular analysis
of our build programme progress, measuring site-level labour rates and
plot-level progress, is allowing a greater focus on areas for improvement and
best practice sharing to secure further improvements in our efficiency. Tools,
platforms and processes such as these are crucial to us driving the growth
necessary to meet our medium-term targets efficiently.
Innovation and vertical integration
Our vertically integrated model has continued to benefit the business, with
increased production at Brickworks, Tileworks and Space4 to meet the demands
of our expanding business. Further investment across all three facilities will
also play a pivotal role in supporting our growth ambitions. Our in-house
materials are now the preferred choice throughout the business. This approach
delivers significant advantages in cost, efficiency and quality, ensuring
reliable supply and consistent high standards, allowing us to deliver
affordable high-quality homes for our customers.
To meet the increasing demand for our next-generation brick during the year,
we implemented a third shift at the Brickworks facility. Brickworks delivered
c.60 million bricks, 23% more than in 2024, to 258 sites during 2025. With the
factory now operating, 24 hours a day and seven days a week, plans are in
place to further expand capacity in 2026 by introducing an additional
production line, opening in 2027.
Our own tile is now our preferred option for every region, except where local
planning rules require an alternative product. Demand again grew in 2025, with
c.12 million tiles, 54% more than in 2024, delivered to 282 sites. We
anticipate adding a third shift this year, further enhancing cost efficiency.
The new state-of-the-art automated timber frame line at our Space4 factory
became fully operational in the second half of 2025 and has improved both the
efficiency of the factory as well as the consistent quality of the product
being delivered to site. We are also the first developer to install an
automated roof truss line. This truss line gained certification in November
2025 and began delivery to site in January 2026. The investment made in the
factory reflects the significant growth in demand for the product. Space4
supplied 3,666 timber frame products as well as 964 room-in-roof kits, a 36%
increase in delivery during 2025. By the end of 2026 all of our regions
outside of Scotland (where we use third-party suppliers), will be taking
product from our Space4 factory. We continue to see the use of timber frame as
key to delivering future growth and to improving on-site efficiency, by not
only shortening build times but also reducing demand for scarce labour.
We are looking to innovate and further increase our use of AI, including
seeking out new opportunities to leverage advanced tools for compliance, site
management, and land assessment. By exploring AI-powered insights, we aim to
strengthen decision making and enhance operational efficiency across our core
business areas. To support this, we have launched a pilot Persimmon Data
& AI Academy to build practical, immediately usable data and AI
capability across the organisation. The first cohort of colleagues will begin
their training in March.
Current trading and outlook
Market conditions have been supportive - including greater mortgage
availability and real wage growth - which when combined with our increasing
outlet base, has underpinned our growth. We welcome the beneficial changes to
the planning environment that the Government has introduced, which should
support further outlet growth over time. Our diversified value-positioned
brands and strong platform position us well to meet increasing demand
supported by our sustained investment in land, continued success in planning,
vertical integration and commitment to quality and customer service.
In the first nine weeks of this year our net private sales rate per outlet per
week was 0.73, up 9% compared to the same period last year (2025: 0.67). The
private average selling price in the order book is up 6%, which combined with
increased reservations has resulted in a 9% increase in our private forward
sales position to £1.25bn as at 1 March compared with a year ago
(2025: £1.15bn). Total forward sales as at 1 March have increased by 6% to
£1.80bn (2025: £1.69bn).
With stable build cost inflation and our unique vertical integration, we are
managing ongoing cost pressures effectively while investing in further
capacity and innovation. This, together with our investment in land and plans
to open more than 100 outlets in 2026, positions us well. We are monitoring
the impact the conflict with Iran could have on our markets in 2026. Within
private sales, we have not assumed mortgage rate reductions or the
introduction of any government demand stimulus, with the most important
short-term factor being any changes to customer sentiment in response to
increased uncertainty. However, sales in the opening weeks of the year have
been strong and our BTR and partnerships customers have funds mostly in place
for our planned delivery this year. The potential impact of the current
uncertainty on build cost inflation is not yet known, but we would anticipate
limited impact on the current year due to our existing agreements with key
suppliers and our accelerated production levels coming into 2026. More
widely, our increased banking facilities provide additional balance sheet
strength.
Assuming the conflict with Iran and its impact is short, we expect to deliver
between 12,000 and 12,500 completions in 2026, with underlying operating
profit towards the upper end of current consensus(5). Our investment for
growth at this point in the cycle will result in increased finance costs and
therefore underlying profit before tax is expected to be in line with current
consensus(5).
The enduring aspiration for home ownership remains strong and provides the
opportunity for growth into the medium term. Continued strategic investment
in the business and our self-help strategy over recent years has positioned us
well for future expansion. This investment, along with capital allocation
choices as we progress our building safety remediation work, will enable us to
convert market opportunities into sustainable growth in support of our
medium-term ambitions to deliver an underlying operating margin and ROCE of
20% and increased returns for our shareholders.
Dean Finch
Group Chief Executive
9 March 2026
Footnotes:
1. Stated before net exceptional charge (2025: £44.9m; 2024: £34.4m), and
goodwill impairment (2025: £3.4m; 2024: £1.6m). Margin based on new housing
revenue (2025: £3.31bn; 2024: £2.86bn).
2. HBF industry data based on 12 months to 31 December 2025.
3. Based on the Persimmon Homes private average selling price of
£286,145 for the year to 31 December 2025 compared with the national average
selling price for newly built homes sourced from the UK House Price Index as
calculated by the Office for National Statistics from data provided by HM Land
Registry.
4. The Group participates in the House Building Federation (HBF)'s Five
Star Scheme. The HBF star ratings are based on results from the National New
Homes Customer Satisfaction Surveys run by the NHBC. From the 2024/2025 survey
year the HBF has moved to a combined mean score (not percentage satisfied) for
build quality and service after score based on the 8-week and 9-month survey
responses. In the first year, a score of greater than 4.15 is equivalent to
five-star status.
5. Company compiled full year 2026 consensus of 12,136 homes, an
underlying operating profit range of £486m to £517m and underlying profit
before tax mean of £470m.
Financial review
Disciplined investment driving growth
The Group generated total revenue1 of £3.75bn (2024: £3.20bn), with new
housing revenue up 16% at £3.31bn (2024: £2.86bn).
In total, the Group delivered 11,905 new homes in 2025, up 12% on the prior
year (2024: 10,664), at a blended average selling price up 4% at £278,203
(2024: £268,499).
Of these, 9,830 homes were delivered to private customers, an increase of 8%
on last year (2024: 9,075) and representing 83% of total completions (2024:
85%). The private average selling price of £301,392 was up 5% on the prior
year (2024: £287,162) reflecting an increase in delivery from Charles Church
and the strength of the market in some of our regions, partially offset by an
increase in the number of plots sold to investors. During the year, we
completed the sale of 1,758 homes to investors, up 21% from the 1,456
delivered last year. Our ongoing focus on strengthening strategic partnerships
has contributed to growth in this key market segment. As some of our partners
delayed investment decisions ahead of the November Budget, our forward BTR
order book was reduced coming into 2026. We remain confident that investor
sales will continue to be an important market for Persimmon.
The Group delivered 2,075 new homes to housing associations, up 31% on the
prior year with particularly strong delivery in the fourth quarter (2024:
1,589). As a result, we would expect a similar number of homes to be delivered
in 2026 with over 80% of 2026 delivery already secured. The average selling
price of £168,347, was 4% higher than the prior year (2024: £161,916),
reflecting the geographic mix and size of properties.
The Group's performance continues to be supported by our high-quality land
portfolio, with land cost recoveries2 of 11.5% of new housing revenue for the
year (2024: 11.9%). This decrease in the year reflects the mix of completions.
The Group's underlying gross profit3 for the year increased by 13% to £656.3m
(2024: £582.4m). The Group's reported gross profit for the year is £616.5m
(2024: £580.4m) after exceptional items, as described below. Our underlying
gross margin(3) reduced to 19.8% (2024: 20.3%), partly reflecting the higher
proportion of BTR and housing association completions within the year and the
impact of embedded build cost inflation.
The Group has maintained its focus on cost control and with the benefit of
greater volume delivery has been able to increase its operating margin in the
year. Underlying operating profit4 for the Group increased 17% to £472.1m
(2024: £405.2m), generating an underlying operating margin4 of 14.3% (2024:
14.1%). On a reported basis, operating profit increased 15% to £423.8m (2024:
£369.2m) including the net exceptional charge described below.
In August we sold FibreNest, our non-core broadband service, to BUUK
Infrastructure. This allowed us to use the proceeds to invest further in our
growth strategy as set out in March 2025 and eliminates the requirement for
further investment in FibreNest. Under BUUK's ownership, FibreNest will offer
improved choice for customers, with access to up to 18 internet service
providers.
The Group has reported a net exceptional charge of £44.9m (2024: £34.4m).
This comprises a net exceptional charge within gross profit of £39.8m (2024:
£2.0m), relating to anticipated costs for the removal of combustible cladding
and other building safety remediation works (see below). Additionally, a
further exceptional charge of £5.1m has been recognised within operating
profit, reflecting Persimmon's £15.2m voluntary contribution to the
Government's affordable homes programme following the closure of the CMA
investigation (see below) and associated fees of £1.0m, partially offset by
the £11.1m profit realised from the disposal of FibreNest. These items are
classified as exceptional due to their non-recurring nature. Further details
can be found in note 4 to the financial statements.
Net finance cost for the year was £26.5m (2024: £10.1m) being a result of
lower average cash balances, increased utilisation of our £700m Revolving
Credit Facility, £12.0m of imputed interest payable on land creditors (2024:
£3.8m) and £7.0m of imputed interest payable on the legacy buildings
provision (2024: £7.4m).
The Group generated an underlying profit before tax4 of £445.6m (2024:
£395.1m), and a reported profit before tax of £397.3m (2024: £359.1m).
The Group has an overall tax charge of £111.6m for the year (2024: £92.0m)
and an effective tax rate of 28.1% (2024: 25.6%), marginally lower than the
standard rate of 29% (including both corporation tax and the Residential
Property Developers Tax) (2024: 29.0%).
Underlying basic earnings per share4 for the year was 100.7p, 9% higher than
the prior year (2024: 92.1p). Reported basic earnings per share was 7% higher
than last year at 89.3p (2024: 83.6p).
Underlying return on average capital employed ('ROCE') including land
creditors was 11.7%5, 60bps higher than the prior year (2024: 11.1%),
reflecting the increase in underlying operating profit4 in the year. ROCE
excluding land creditors was 13.1%5 compared with 12.2% at 31 December 2024.
On a statutory basis, ROCE including land creditors was 10.5%5 (2024: 10.1%).
Building safety
The Group has committed to make progress on its building safety remediation
programme, as well as investing in future building quality. Our proactive work
has been recognised through our status as a Building a Safer Future Charter
Champion.
Across our Legacy Building Programme, we continue our proactive approach of
working with management companies, factors (in Scotland) and their agents to
carry out necessary remediation as soon as possible.
Of the total of 87 developments in our programme, 43 (49%) have already had
any necessary works completed. Of the remaining 44 developments, 24 currently
have work on site and 20 are at varying stages of pre-tender, live tender,
progressing to contract or agreed contract and works starting very soon. As we
actively progress the programme, the number of developments at or before the
tender stage has reduced to 8. With over 90% of developments fully tendered,
this gives some reassurance over our future cost estimates. The number of
developments on site or completed has increased 10% to 67. For further
information please see note 12.
During the year, the provision has been increased by £39.8m, following a
review of the projected costs to complete rectification work, along with the
identification of four additional developments requiring remediation, offset
by works assumed by, or recoveries secured from, historical subcontractors. We
continue to pursue cost recoveries from third parties. Due to the
non-recurring nature of these changes, they have been disclosed as exceptional
items to support the understanding of financial performance and improve the
comparability between reporting periods.
We utilised £56.1m of the provision in the year, with total aggregate
expenditure now over £175m, whilst a further £7.0m of imputed interest was
charged to the Income Statement through finance costs. The remaining provision
at 31 December 2025 was £226.0m, a £9.3m reduction on the position as at 31
December 2024. The next 18 to 24 months are projected to be the peak period of
cash expenditure on this programme.
Competition and Markets Authority ('CMA')
On 9 July 2025, the CMA announced its intention to close its investigation on
whether Persimmon, along with six other UK housebuilders, had exchanged
competitively sensitive information, accepting voluntary commitments from all
parties. The CMA has not made any findings that Persimmon Plc and its group
companies has infringed UK competition law and the voluntary commitments
offered do not constitute an admission of any wrongdoing. As part of these
commitments, Persimmon made an ex-gratia financial contribution of £15.2m to
the Government's Affordable Homes Programme in January 2026. This has been
accounted for in the period as an exceptional cost.
Balance sheet
Total equity increased by £0.1bn to £3.61bn at 31 December 2025 (2024:
£3.51bn). This is after returning £192.1m of capital to shareholders through
a final dividend of 40p per share in respect of the 2024 financial year and an
interim dividend of 20p per share for the 2025 financial year. Retained
earnings increased to £3.04bn (2024: £2.94bn). Reported net assets per share
of 1,127p represents a 3% increase from 1,096p at 31 December 2024.
Land holdings
A core strength of the business remains its disciplined approach to land
replacement. Over the last three years we have maintained our selective land
purchase strategy, positioning us well for the future as we look to grow our
outlet position. At 31 December 2025, we had 277 outlets, 3% higher than 31
December 2024, and remain on track to increase outlets in 2026 as we position
the business for further growth.
At 31 December 2025, the carrying value of the Group's land assets increased
by 14% to £2.59bn (2024: £2.27bn), reflecting continued investment in the
Group's future and our ongoing focus on converting owned land with outline
planning permissions to implementable consents. The Group's land cost
recoveries for the year of 11.5%(2) of new housing revenue is 40bps lower than
the prior year, reflecting the mix of completions in the year, and remains an
excellent position.
During the year, the Group brought 16,309 plots into its owned and under
control land holdings across 71 locations throughout the country, equivalent
to a replacement rate of 137%. 1,639 plots were converted from our strategic
land portfolio, which continues to be a strength for the business. In August
2025, we bought a Midlands-based land promoter, Lone Star Land, further
strengthening our strategic land capabilities. Further detail is provided in
note 8.
At the end of the year, the Group had owned and under control land holdings of
84,879 (2024: 82,084) representing approximately seven years of forward supply
at 2025 volumes. Owned plots totalled 70,236 (2024: 69,189) of which 40,215
have a detailed implementable planning consent, providing excellent visibility
(2024: 40,430). The Group's owned land holdings represent approximately six
years of forward supply at 2025 volumes, with an overall pro-forma site gross
margin(6) of c.28% (2024: c.29%), slightly lower year on year, partly due to
fewer conversions from high-margin strategic land in the period. The land cost
to revenue ratio within the owned land bank of 12.8%(7) (2024: 11.9%) reflects
both the lower conversion from strategic land, the purchase of more serviced
land in the period, where infrastructure costs (reflected in build costs) are
expected to be lower and weighting towards land purchases in the south.
We have made some excellent additions to our owned land bank during the
period, and together with our controlled and strategic land pipeline, we
remain confident in our ability to deliver our medium-term growth targets.
In addition to its owned plots, the Group controls 14,643 plots (2024: 12,895)
through exchanged contracts. These contracts to acquire the site will be
completed once all outstanding unfulfilled planning conditions have been
satisfied. Cash invested in these under control plots is limited to deposits
paid on the exchange of contracts and fees associated with progressing the
sites through the planning system. During the year, the Group secured detailed
or reserved matters planning for 12,815 plots (2024: 13,064).
The Group incurred net land spend of £541.3m during 2025 (2024: £437.0m),
including £211.2m of payments in satisfaction of deferred land commitments
(2024: £210.6m).
In 2025, the Group acquired interests in a further c.10,000 potential plots of
strategic land opportunities resulting in a total of over 77,000 plots at 31
December 2025 (2024: c.70,000 plots). This will provide a long-term supply of
forward plots for future development by the Group.
Work in progress
At 31 December 2025, the Group had work in progress of 4,114 equivalent units
of new homes under construction, 12% higher than the position we entered the
year with (2024: 3,684) as we position the business for further growth in
2026. On average, overall weekly build rates tracked 22% higher in the year,
with an average of 245 equivalent units of build per week, compared to 201 per
week in 2024.
Our work in progress investment at 31 December 2025 of £1.63bn was up 15% on
the prior year (2024: £1.43bn). This reflects the anticipated growth in
completions and investment in expanding our outlet base in 2026, along with
accelerating our build programmes to drive continued high standards of quality
and customer service.
As at 31 December 2025, we owned 894 part exchange properties (2024: 739
properties) at a value of £198.8m (2024: £154.4m). Part exchange continues
to be a key sales incentive for our customers, and we are progressing sales of
part exchange properties promptly at around expected values.
Cash generation and liquidity
During the year, we continued our targeted investment into the business to
enhance quality, efficiency and returns as we build a more sustainable
business and position for further growth. Our long-standing financial
discipline will continue to maintain our robust balance sheet.
At 31 December 2025, the Group had a cash balance of £117.0m (2024: £258.6m)
with land creditors of £623.4m (2024: £423.2m), of which c.£355m are
expected to be settled during 2026. This increase in land creditors is in line
with our strategy to increase our outlet base as we continue to target
reaching over 300 outlets.
The Group generated £487.9m of cash from operating activities in the year
(2024: £419.6m), before investing £349.4m in working capital (including a
£590.1m increase in inventories offset by a £321.4m increase in trade and
other payables), the net receipt of £68.1m in relation to the disposal of
FibreNest and returning £192.1m of capital to shareholders through dividend
payments (2024: £191.8m).
The Group's shared equity loans have generated £4.0m of cash in the year
(2024: £4.6m). The carrying value of these outstanding shared equity loans,
reported as 'shared equity loan receivables', is £25.7m at 31 December 2025
(2024: £29.0m).
On 26 January 2026, the Group agreed an increase to its secured funding
arrangements with the syndicate of partnership banks. The Group's existing
syndicated facility of £700m committed to July 2030 was expanded to £750m
and an additional fixed term facility of £250m was agreed to 31 January 2028,
giving an increased total secured funding level of £1bn, supporting the
continued investment programme over the coming years. The extra facilities
will allow the Group to prudently manage growth at this stage of the cycle,
while maintaining ample headroom.
The Group's defined benefit pension asset is in line with last year at
£130.7m at 31 December 2025 (2024: £130.7m).
Capital allocation
The Group is creating value by investing in growth. The Group's Capital
Allocation Policy is to invest in future growth through disciplined expansion
of our land portfolio while maintaining a strong balance sheet and delivering
sustainable returns to shareholders.
For 2025, the Board proposes a final dividend of 40p per share to be paid on
10 July 2026 to shareholders on the register on 19 June 2026, following
shareholder approval at the AGM. This dividend is in addition to the interim
dividend of 20p per share paid on 7 November 2025 to shareholders on the
register on 17 October 2025 to give a total dividend of 60p per share in
respect of the financial year 2025 (2024: 60p).
As we deliver on our medium-term growth ambitions, coupled with further
progress on our Building Safety Remediation Programme, we anticipate
increasing our returns to shareholders.
2026 outlook
The strong desire for home ownership, together with our strategic investments,
positions us well to deliver sustainable growth and shareholder returns.
Our current private forward sales position stands at £1.25bn, a 9% increase
year on year (2024: £1.15bn). With this progress in our forward order book,
we are targeting 12,000-12,500 completions for 2026 assuming stable market
conditions. We are conscious of geo-political uncertainty and are monitoring
the impact this could have on our markets. Benefiting from our improved
operational capabilities and disciplined investment in our land holdings, we
aim to achieve further growth in profit and returns. We expect underlying
operating profit to be towards the upper end of the current market consensus
range8 and, with increased financing costs reflecting our investment for
growth, underlying profit before tax is expected to be in line with current
market expectations(8).
The next two years are expected to see peak expenditure on our building safety
remediation programme, with approximately £100m anticipated to be spent in
2026. Our net cash position at the end of 2026 is currently forecast to be
between £100m net debt and £100m net cash, reflecting our ongoing investment
for growth.
Andrew Duxbury
Chief Financial Officer
9 March 2026
1. The Group's total revenues include the fair value of consideration received or
receivable on the sale of part exchange properties, planning promotion
contracts and income from the provision of broadband internet services. New
housing revenues are the revenues generated on the sale of newly built
residential properties only.
2. Land cost value for the plot divided by the revenue of the new home sold.
3. Underlying gross profit stated before a net exceptional charge of £39.8m
(2024: £2.0m) and margin based on new housing revenue (2025: £3.31bn; 2024:
£2.86bn).
4. Underlying measures stated before a net exceptional charge of £44.9m (2024:
£34.4m), and goodwill impairment (2025: £3.4m; 2024: £1.6m) and margin
based on new housing revenue (2025: £3.31bn; 2024: £2.86bn).
5. 12-month rolling ROCE calculated on underlying operating profit and total capital employed. Capital employed being the Group's net assets less cash and cash equivalents plus land creditors. ROCE excluding land creditors is calculated on capital employed being the Group's net assets less cash and cash equivalents excluding land creditors. Statutory ROCE including land creditors is calculated on reported operating profit and capital employed with capital employed being the Group's net assets less cash and
cash equivalents plus land creditors.
6. Estimated weighted average site gross margin based on assumed revenues and
costs at 31 December 2025 and normalised output levels.
7. Land cost value for the plot divided by the anticipated future revenue of the
new home sold.
8. Company compiled full year 2026 consensus of 12,136 homes, an underlying
operating profit range of £486m to £517m and underlying profit before tax
mean of £470m.
PERSIMMON PLC
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2025
2025 2024
Total Total
Note £m £m
Revenue 3 3,751.3 3,200.7
Cost of sales (3,134.8) (2,620.3)
Gross profit 616.5 580.4
Analysed as:
Underlying gross profit 656.3 582.4
Exceptional items 4 (39.8) (2.0)
Other operating income 21.4 9.8
Operating expenses (225.2) (196.0)
Exceptional item - Profit on disposal of a business 4 11.1 -
Exceptional item - Impairment of a financial asset 4 - (25.0)
Profit from operations 423.8 369.2
Analysed as:
Underlying operating profit 472.1 405.2
Exceptional items 4 (44.9) (34.4)
Impairment of intangible assets (3.4) (1.6)
Finance income 11.4 11.1
Finance costs (37.9) (21.2)
Profit before tax 397.3 359.1
Analysed as:
Underlying profit before tax 445.6 395.1
Exceptional items 4 (44.9) (34.4)
Impairment of intangible assets (3.4) (1.6)
Tax 5 (111.6) (92.0)
Profit after tax (all attributable to equity holders of the parent) 285.7 267.1
Other comprehensive expense
Items that will not be reclassified to profit:
Remeasurement loss on defined benefit pension schemes 15 (6.7) (1.5)
Tax 5 1.9 0.4
Other comprehensive expense for the year, net of tax (4.8) (1.1)
Total recognised income for the year 280.9 266.0
Earnings per share
Basic 6 89.3p 83.6p
Diluted 6 88.2p 82.7p
PERSIMMON PLC
Consolidated Balance Sheet
As at 31 December 2025
2025 2024
Note £m £m
Assets
Non-current assets
Intangible assets 8 182.5 164.6
Property, plant and equipment 115.4 154.6
Investments accounted for using the equity method 0.3 0.3
Shared equity loan receivables 10 23.6 25.7
Trade and other receivables 1.9 -
Deferred tax assets - 9.2
Retirement benefit assets 15 130.7 130.7
454.4 485.1
Current assets
Inventories 9 4,492.3 3,902.8
Shared equity loan receivables 10 2.1 3.3
Trade and other receivables 249.9 167.8
Current tax assets 2.5 15.8
Cash and cash equivalents 14 117.0 258.6
4,863.8 4,348.3
Total assets 5,318.2 4,833.4
Liabilities
Non-current liabilities
Trade and other payables 11 (283.1) (196.2)
Deferred tax liabilities (54.4) (73.1)
Partnership liability (5.8) (10.3)
Legacy buildings provision 12 (142.8) (123.9)
(486.1) (403.5)
Current liabilities
Trade and other payables 11 (1,123.8) (806.3)
Partnership liability (11.0) (5.6)
Legacy buildings provision 12 (83.2) (111.4)
(1,218.0) (923.3)
Total liabilities (1,704.1) (1,326.8)
Net assets 3,614.1 3,506.6
Equity
Ordinary share capital issued 32.1 32.0
Share premium 28.0 25.6
Capital redemption reserve 236.5 236.5
Other non-distributable reserve 276.8 276.8
Retained earnings 3,040.7 2,935.7
Total equity 3,614.1 3,506.6
PERSIMMON PLC
Consolidated Statement of Changes in Shareholders' Equity
For the year ended 31 December 2025
Share capital Share premium Capital redemption reserve Other non-distributable reserve Retained earnings Total
£m £m £m £m £m £m
Balance at 1 January 2024 31.9 25.6 236.5 276.8 2,847.7 3,418.5
Profit for the year - - - - 267.1 267.1
Other comprehensive expense - - - - (1.1) (1.1)
Transactions with owners:
Dividends on equity shares - - - - (191.8) (191.8)
Issues of new shares 0.1 - - - - 0.1
Own shares purchased - - - - (0.2) (0.2)
Share-based payments - - - - 14.0 14.0
Balance at 31 December 2024 32.0 25.6 236.5 276.8 2,935.7 3,506.6
Profit for the year - - - - 285.7 285.7
Other comprehensive expense - - - - (4.8) (4.8)
Transactions with owners:
Dividends on equity shares - - - - (192.1) (192.1)
Issues of new shares 0.1 2.4 - - - 2.5
Own shares purchased - - - - (2.3) (2.3)
Share-based payments - - - - 18.5 18.5
Balance at 31 December 2025 32.1 28.0 236.5 276.8 3,040.7 3,614.1
PERSIMMON PLC
Consolidated Cash Flow Statement
For the year ended 31 December 2025
2025 2024
Note £m £m
Cash flows from operating activities:
Profit for the year 285.7 267.1
Tax charge 5 111.6 92.0
Finance income (11.4) (11.1)
Finance costs 37.9 21.2
Depreciation charge 21.1 20.1
Amortisation of intangible assets 0.1 -
Impairment of intangible assets 3.4 1.6
Exceptional items (non-cash) 4 55.0 27.0
Profit on disposal of a business 4 (11.1) -
Profit on disposal of fixed assets (1.5) (2.5)
Share-based payment charge 16.1 14.7
Net imputed interest expense (18.3) (10.0)
Other non-cash items (0.7) (0.5)
Cash inflow from operating activities 487.9 419.6
Movements in working capital:
Increase in inventories (590.1) (200.4)
(Increase)/decrease in trade and other receivables (84.7) 12.7
Increase/(decrease) in trade and other payables 321.4 (49.6)
Decrease in shared equity loan receivables 4.0 4.6
Cash generated from operations 138.5 186.9
Interest paid (16.7) (9.3)
Interest received 3.8 5.1
Tax paid (96.1) (97.8)
Net cash inflow from operating activities 29.5 84.9
Cash flows from investing activities:
Acquisition of a subsidiary 8 (3.5) -
Disposal of a business 4 68.1 -
Acquisition of loan notes - (17.5)
Purchase of property, plant, equipment and software (40.6) (32.3)
Proceeds from sale of property, plant and equipment 2.8 4.8
Net cash inflow/(outflow) from investing activities 26.8 (45.0)
Cash flows from financing activities:
Lease capital payments (5.1) (4.0)
Payment of Partnership liability - (4.6)
Bank fees paid (0.9) (0.9)
Own shares purchased (2.3) (0.2)
Share options consideration 2.5 0.1
Dividends paid (192.1) (191.8)
Net cash outflow from financing activities (197.9) (201.4)
Decrease in net cash and cash equivalents 14 (141.6) (161.5)
Cash and cash equivalents at the beginning of the year 258.6 420.1
Cash and cash equivalents at the end of the year 14 117.0 258.6
Notes
1. Basis of preparation
The results for the year have been prepared on a basis consistent with the
accounting policies set out in the Persimmon Plc Annual Report for the year
ended 31 December 2025.
The preparation of the financial statements in conformity with the Group's
accounting policies requires the Directors to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the balance sheet date and the reported
amounts of revenue and expenses during the reported period. Whilst these
estimates and assumptions are based on the Directors' best knowledge of the
amount, events or actions, actual results may differ from those estimates.
The financial information set out above does not constitute the Group's
statutory accounts for the years ended 31 December 2025 or 2024 but is derived
from those accounts. Statutory accounts for 2024 have been delivered to the
Registrar of Companies, and those for 2025 will be delivered in due course.
The auditor has reported on those accounts; their reports were (i)
unqualified, (ii) did not include reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain statements under Section 498(2) or (3) of the Companies
Act 2006.
Whilst the financial information included in this announcement has been
computed using the recognition and measurement requirements of UK adopted
International Accounting Standards (IAS), this announcement does not itself
contain sufficient information to comply with IAS. The Company expects to send
its Annual Report 2025 to shareholders on 23 March 2026. A copy of the Annual
Report 2025 will be submitted to the National Storage Mechanism and will be
available for inspection
at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://gbr01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fdata.fca.org.uk%2F%23%2Fnsm%2Fnationalstoragemechanism&data=05%7C02%7Cvictoria.prior%40persimmonhomes.com%7C01a89dd7544a49a45b0c08de7dc60b84%7Ca7e38ec197c44170b474f371e5db4101%7C0%7C0%7C639086486720367010%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=nRYgohOkq9cVfSBpxW1Ojo%2FRb06vKTNauxAgDK0uqXk%3D&reserved=0)
.
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Strategic
Report in the Annual Report and the financial statements and notes. The
Directors believe that the Group is well placed to manage its business risks
successfully. The principal risks that may impact the Group's performance and
their mitigation are outlined in note 17. After making enquiries, the
Directors have a reasonable expectation that the Group has adequate resources
to fund its operations for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the annual financial
statements.
Adoption of new and revised International Financial Reporting Standards
(IFRSs) and Interpretations (IFRICs). The following relevant UK endorsed new
amendments to standards are mandatory for the first time for the financial
year beginning 1 January 2025:
· Amendments to IAS 21 Lack of Exchangeability
The above amendment has no effect on the Group's financial statements.
The Group has not applied the following new amendments and improvements to
standards which are not yet effective:
· Contracts Referencing Nature-dependent Electricity (Amendments
to IFRS 9 and IFRS 7), effective 1 January 2026
· Amendments to IFRS 9 and IFRS 7 Amendments to the Classification
and Measurement of Financial Instruments, effective 1 January 2026
· Annual Improvements to IFRS Accounting Standards - Volume 11,
effective 1 January 2026
· IFRS 18 Presentation and Disclosure in Financial Statements,
effective 1 January 2027
The Group is currently considering the implication of these amendments and
improvements with the expected impact upon the Group being limited to
disclosures if applicable.
Going concern
Our disciplined and strategic financial investment in the business has
resulted in the Group operating from a strong balance sheet position,
delivering an improved financial performance and growth in volume of new homes
delivered. Persimmon's long-term strategy, which recognises the risks
associated with the housing cycle by maintaining operational flexibility,
investing in high quality land, minimising financial risk and deploying
capital at the right time in the cycle, has equipped the business with strong
liquidity and a robust balance sheet.
The Group completed the sale of 11,905 new homes (2024: 10,664), generating a
profit before tax of £397.3m (2024: £359.1m). At 31 December 2025, the
Group's strong financial position included £117.0m of cash (2024: £258.6m),
high quality land holdings, and land creditors of £623.4m (2024: £423.2m).
During the year the Group extended by one year to July 2030 its £700m
Revolving Credit Facility (RCF). The facility was undrawn at the year end.
During January 2026 the Group increased the £700m RCF by £50m to £750m. In
addition the Group agreed with its banking partners a £250m two-year term
loan with the ability to extend for an additional year.
The Group's forward order book at 1 January 2026 includes 2,318 new homes sold
forward into the private owner occupier market (1 January 2025: 2,360 new
homes forward sold) with an average selling price of c.£293,400. In addition,
the cumulative average private sales, excluding bulk, reservation rate for the
first nine weeks of 2026 is c.3% stronger than for the same period last year.
The Directors have carried out a robust assessment of the principal risks
facing the Group, as described in note 17 of this announcement. The Group has
considered the impact of these risks on the going concern of the business by
performing a range of sensitivity analyses to the latest base case forecast,
covering the period to 30 June 2027, including severe but plausible scenarios
materialising together with the likely effectiveness of mitigating actions
that would be executed by the Directors. For further detail regarding the
approach and process the Directors follow in assessing the long-term viability
of the business, please see the Viability Statement in note 17.
The scenarios emphasise the potential impact of severe market disruption,
including for example the effect of economic disruption from a cost-of-living
crisis or a war, on short to medium-term demand for new homes. The scenarios'
emphasis on the impact on the cash inflows of the Group through reduced new
home sales is designed to allow the examination of the extreme cash flow
consequences of such circumstances occurring. The Group's cash flows are less
sensitive to supply side disruption given the Group's sustainable business
model, flexible operations, agile management team and off-site manufacturing
facilities.
The first scenario modelled is a severe but plausible downside scenario that
models a fall in housing revenue, when compared to full year 2025, of c.53%
for full year 2026 followed by gradual recovery. The housing revenue modelled
factors in changes in both volumes and average selling prices. The assumption
used in this scenario reflects the experience management gained during the
Global Financial Crisis from 2007 to 2010, it being the worst recession seen
in the housing market since World War Two.
A second, even more extreme, scenario assumes the same significant downturn in
2026 followed by a period of enduring depression of the UK economy and housing
market during 2027, assuming that neither volumes nor revenue recover.
In each of these scenarios, cash flows were assumed to be managed
consistently, ensuring all relevant land, work in progress and operational
investments were made in the business at the appropriate time to deliver the
projected new home legal completions. Each scenario fully reflects the current
estimate of cash outflows, value and timing, associated with the legacy
buildings provision. In each of these scenarios, the Group is able to operate
within its facilities.
The Directors have also considered a 'Reverse Stress Test' to demonstrate the
point at which the Group runs out of liquid funds or breaches covenants but
note the likelihood of this is less than remote.
In addition, the Group has been increasingly assessing climate related risks
and opportunities that may present to the Group. During the period assessed
for going concern no significant risk has been identified that would
materially impact the Group's ability to generate sufficient cash and continue
as a going concern.
Having considered the inherent strength of the UK housing market, the
resilience of the Group's average selling prices and the Group's scenario
analysis as detailed above, the Directors have a reasonable expectation that
the Group has adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going concern
basis in preparing these financial statements.
Goodwill and brand intangibles
The key sources of estimation uncertainty in respect of goodwill and brand
intangibles are disclosed in note 15 of the Group's annual financial
statements for the year ended 31 December 2025, other than set out below no
trigger events have been identified.
The goodwill allocated to the Group's acquired strategic land holdings is
further tested by reference to the proportion of legally completed plots in
the period compared to the total plots which are expected to receive
satisfactory planning permission in the remaining strategic land holdings,
taking account of historic experience and market conditions. This review
resulted in an underlying impairment charge of £3.4m recognised during the
period. This impairment charge reflects ongoing consumption of the acquired
strategic land holdings and is consistent with prior years.
2. Segmental analysis
The Group has only one reportable operating segment, being housebuilding
within the UK, under the control of the Executive Board. The Executive Board
has been identified as the Chief Operating Decision Maker as defined under
IFRS 8 Operating Segments.
3. Revenue
2025 2024
£m £m
Revenue from the sale of new housing - private 2,962.7 2,606.0
Revenue from the sale of new housing - housing association 349.3 257.3
Revenue from the sale of new housing - total 3,312.0 2,863.3
Revenue from the sale of part exchange properties 426.7 322.6
Revenue from the provision of internet services 10.7 14.8
Revenue from planning promotion contracts 1.9 -
Revenue from the sale of goods and services as reported in the statement of 3,751.3 3,200.7
comprehensive income
4. Exceptional Items
2025 2024
£m £m
Legacy buildings provision (through Cost of Sales) 39.8 2.0
Profit on disposal of a business (11.1) -
Impairment of a financial asset - 25.0
Affordable Homes Programme contribution (through Operating expenses) 15.2 -
Project fees (through Operating expenses) 1.0 7.4
Exceptional items net charge 44.9 34.4
During 2025 the Group recognised a net exceptional charge of £39.8m in
relation to the increase in the anticipated costs of the Group's commitments
to support leaseholders in buildings we had developed with the cost of removal
of combustible cladding and other fire related remediation works. This
reflected the identification of further developments for which we are now
responsible and a greater understanding of remediation costs. Further details
on this matter is provided in note 12.
On 5 August 2025 the assets of £65.9m, primarily Property, plant and
equipment of £59.2m, and liabilities of £8.9m, mainly deferred tax
liabilities of £8.7m, associated with the Group's FibreNest operation were
sold to BUUK Infrastructure No2 Limited. Net proceeds received on the sale
were £68.1m generating a profit on sale of £11.1m.
On 26 February 2024, the CMA launched an investigation under Chapter I of the
Competition Act 1998 into suspected breaches of competition law by eight
housebuilders (following the Barratt/Redrow mergers, seven housebuilders),
including Persimmon, relating to concerns that they may have exchanged
competitively sensitive information. On 10 January 2025, the CMA extended the
timeline for the initial investigation by five months to May 2025.
On 9 July 2025, the CMA announced that it proposed to accept commitments and
close its investigation, without making any findings that Persimmon Plc and
its group companies had infringed UK competition law. Persimmon's decision to
offer voluntary commitments does not constitute an admission of any wrongdoing
nor does it imply that Persimmon agrees with the concerns expressed by the CMA
in the investigation. The commitments include an ex-gratia financial
contribution from all seven housebuilders to the Government's Affordable
Housing Programme totalling £100m. Persimmon's proportionate contribution was
£15.2m.
On 30 October 2025, the CMA officially closed its investigation accepting
binding commitments from the seven housebuilders. The £15.2m ex-gratia
contribution due from Persimmon was paid on 30 January 2026 and is reported
within Trade and other payables at 31 December 2025.
In total there was a net exceptional charge of £44.9m (2024: £34.4m) in the
year, of which £55.0m (2024: £27.0m) is non-cash related.
Given the non-recurring nature and scale, the net increase in the legacy
buildings provision, the profit generated from the sale of FibreNest, the
Affordable Housing Programme contribution and the associated fees (£1.0m)
have been reported as exceptional to aid the understanding of the financial
performance of the Group and to assist in the comparability of financial
performance between accounting periods.
5. Tax
Analysis of the tax charge for the year
2025 2024
£m £m
Tax charge comprises:
UK corporation tax in respect of the current year 95.8 78.8
RPDT in respect of the current year 13.7 12.3
Adjustments in respect of prior years (0.7) (9.1)
108.8 82.0
Deferred tax relating to origination and reversal of temporary differences 5.8 13.7
Adjustments recognised in the current year in respect of prior years deferred (3.0) (3.7)
tax
2.8 10.0
Tax charge for the year recognised in statement of comprehensive income 111.6 92.0
The tax charge for the year of £111.6m includes a credit of £11.5m relating
to the exceptional items detailed in note 4. The Group has agreed to waive the
tax deductibility of the £15.2m contribution to the Affordable Homes
Programme. In addition, the profit on disposal of the FibreNest business is
not subject to corporation tax due to the availability of reliefs.
The tax charge for the year can be reconciled to the accounting profit as
follows:
2025 2024
£m £m
Profit from continuing operations 397.3 359.1
Tax calculated at UK standard corporation tax rate of 29.0% (inclusive of 115.3 104.1
RPDT) (2024: 29.0%)
Goodwill impairment losses that are not deductible 1.0 0.5
Expenditure not allowable for tax purposes 2.2 2.1
Items not deductible for RPDT (1.6) (0.3)
Enhanced tax reliefs (1.6) (1.6)
Adjustments in respect of prior years (3.7) (12.8)
Tax charge for the year recognised in statement of comprehensive income 111.6 92.0
The tax charge for the year includes both current and deferred tax. The tax
charge is based upon the expected tax rate for the full year, which is applied
to taxable profits for the year, together with any charge or credit in respect
of prior years and the tax impact of one-off/non-recurring items arising in
the same year. Current tax includes both UK corporation tax and the
Residential Property Developer Tax (RPDT).
Deferred Tax is calculated as the tax payable or recoverable in future
accounting periods in respect of temporary differences which may be taxable or
allowed as deductible. Temporary differences represent the difference between
the carrying amount of an asset or liability in the financial statements and
the relevant tax base.
The effective rate of tax for the period was 28.1% which was higher than in
the prior year (2024: 25.6%) primarily as a result of deductions arising in
the 2024 calculations from the finalisation of prior year tax returns,
including one-off items in respect to the treatment of building safety
remediation provisions.
Deferred tax recognised in other comprehensive expense
2025 2024
£m £m
Recognised on remeasurement loss on pension schemes (1.9) (0.4)
Tax recognised directly in equity
2025 2024
£m £m
Arising on transactions with equity participants
Current tax related to equity settled transactions 0.6 (0.1)
Deferred tax related to equity settled transactions (3.1) 0.9
(2.5) 0.8
UK adoption of OECD Pillar 2: There is no impact from the implementation of
the UK's domestic top-up tax, as the Group does not have any profits arising
in any entities which are located in a non-UK jurisdiction, and which are
taxed below the minimum rate of tax of 15%.
6. Earnings per share
Basic earnings per share is calculated by dividing the profit for the year
attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the year, excluding those held in the employee
benefit trusts and any treasury shares, all of which are treated as cancelled,
which were 320.1m (2024: 319.6m).
Diluted earnings per share is calculated by dividing the profit for the year
attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue adjusted to assume conversion of all potentially
dilutive ordinary shares from the start of the year, giving a figure of 323.8m
shares (2024: 323.1m).
Underlying earnings per share excludes the net exceptional charge and goodwill
impairment. The earnings per share from continuing operations were as follows:
2025 2024
Basic earnings per share 89.3p 83.6p
Underlying basic earnings per share 100.7p 92.1p
Diluted earnings per share 88.2p 82.7p
Underlying diluted earnings per share 99.6p 91.1p
The calculation of the basic and diluted earnings per share is based upon the
following data:
2025 2024
£m £m
Underlying earnings attributable to shareholders 322.5 294.2
Net exceptional charge (net of tax) (33.4) (25.5)
Goodwill impairment (3.4) (1.6)
Earnings attributable to shareholders 285.7 267.1
At 31 December 2025 the issued share capital of the Company was 320,681,126
ordinary shares (2024: 319,914,868 ordinary shares).
7. Dividends/Return of capital
2025 2024
£m £m
Amounts recognised as distributions to capital holders in the period:
2023 final dividend to all shareholders of 40p per share paid 2024 - 127.9
2024 interim dividend to all shareholders of 20p per share paid 2024 - 63.9
2024 final dividend to all shareholders of 40p per share paid 2025 128.1 -
2025 interim dividend to all shareholders of 20p per share paid 2025 64.0 -
Total capital return to shareholders 192.1 191.8
The Directors propose a 40p final dividend in respect of the financial year 31
December 2025 to shareholders for each ordinary share held on the register on
19 June 2026 with payment made on 10 July 2026. The total anticipated
distributions to shareholders is 60p per share (2024: 60p per share) in
respect of the financial year ended 31 December 2025.
8. Group acquisition of subsidiary undertaking
On 20 August, the Group acquired 100% of the share capital of Lone Star Land
Limited (Lone Star), a land promoter that operates principally in the
Midlands. Details of the purchase consideration, net identifiable assets
acquired and the resulting provisional goodwill are as follows:
Purchase consideration
£m
Cash paid on acquisition date 3.4
Contingent consideration at fair value 12.0
Total purchase consideration 15.4
Net assets and liabilities recognised as a result of the acquisition
£m
Intangible assets 7.9
Property, plant and equipment 0.1
Inventories 4.1
Trade and other receivables 0.6
Deferred tax liability (1.4)
Trade and other payables (6.4)
Net overdraft (0.1)
Net identifiable assets acquired at provisional fair value 4.8
Provisional goodwill 10.6
Net assets acquired at provisional fair value 15.4
The assets and liabilities acquired have been recognised at their acquisition
date provisional fair value, which may be amended during the 12 months
following acquisition. The fair value of trade and other receivables is equal
to the gross contractual amounts receivable.
Goodwill represents the value of intangible assets such as the expertise of
the retained employees of Lone Star and the geographical area and land
contacts they have that do not qualify for separate recognition under
accounting standards. For tax purposes, none of the goodwill arising will be
deemed deductible.
Revenue of £1.9m and a profit contribution of £0.7m are recognised in the
Consolidated Income Statement in respect of Lone Star.
The Group's cash outflow in respect of the acquisition is as follows:
£m
Cash paid on acquisition date 3.4
Net overdraft acquired 0.1
Net outflow of cash 3.5
As part of the acquisition £14.3m of the consideration is contingent and
payable on satisfaction of obligations by the previous shareholders. The
amounts payable are fixed amounts per the acquisition contract. Management
currently assesses the likelihood of all obligations being satisfied as high
and that all of the contingent consideration will be payable. The fair value
of the contingent consideration, after discounting, is reported within other
payables at the 31 December 2025.
There were no acquisitions in the year ended 31 December 2024.
9. Inventories
2025 2024
£m £m
Land 2,592.0 2,265.6
Work in progress 1,634.0 1,426.3
Part exchange properties 198.8 154.4
Showhouses 67.5 56.5
Inventories 4,492.3 3,902.8
The Group has conducted a further review of the net realisable value of its
land and work in progress portfolio at 31 December 2025. Our approach to this
review has been consistent with that conducted at 31 December 2024 and was
fully disclosed in the financial statements for the year ended on that date.
This review gave rise to a reversal of £4.0m (2024: £nil) of provision of
land that were written down in a previous accounting period and an impairment
of land of £3.1m (2024: £nil). The key judgements and estimates in
determining the future net realisable value of the Group's land and work in
progress portfolio are future sales prices, house types and costs to complete
the developments. Sales prices and costs to complete were estimated on a site
by site basis. If the UK housing market were to improve or deteriorate in the
future, then further adjustments to the carrying value of land and work in
progress may be required.
Net realisable value provisions held against inventories at 31 December 2025
were £15.7m (2024: £16.8m). Following the review, £37.0m of inventories are
valued at net realisable value rather than historical cost (2024: £26.4m).
10. Shared equity loan receivables
2025 2024
£m £m
Shared equity loan receivables at 1 January 29.0 32.1
Settlements (4.0) (4.6)
Net gains 0.7 1.5
Shared equity loan receivables at 31 December 25.7 29.0
All gains/losses have been recognised in the statement of comprehensive
income. Of the gains recognised in finance income for the period £nil (2024:
£nil) was unrealised.
11. Trade and other payables
2025 2024
£m £m
Non-current liabilities
Land payables 269.8 183.3
Other payables 13.3 12.9
Total 283.1 196.2
Current liabilities
Trade payables 475.4 277.7
Land payables 353.6 239.9
Other payables 81.0 65.9
Accrued expenses 213.8 222.8
Total 1,123.8 806.3
Land payables are reduced for imputed interest, which is charged to the
Statement of Comprehensive Income over the credit period of the purchase
contract.
12. Legacy buildings provision
2025 2024
£m £m
Legacy buildings provision at 1 January 235.3 283.2
Additions to provision in the year 39.8 25.0
Imputed interest on provision in the year 7.0 7.4
Provision released in the year - (23.0)
Provision utilised in the year (56.1) (57.3)
Legacy buildings provision at 31 December 226.0 235.3
In 2020 the Group made an initial commitment that no leaseholder living in a
building we had developed should have to cover the cost of removal of
combustible cladding. During 2022 we signed the Building Safety Pledge
(England) and worked constructively with the Government to agree the
'Long-Form Contract' that turned the pledge into a legal agreement. The Self
Remediation Contract was signed on 13 March 2023. In December 2025 we were the
first housebuilder to sign the Scottish Government's developer remediation
contract.
In the year we have been informed by management companies of further potential
liabilities for fire remediation costs, and we have added four developments to
the total number of developments. The number of developments we are now
responsible for stands at 87, of which 43 have now either secured EWS1
certificates or concluded any necessary works. It is assumed the majority of
the work will be completed over the next two years and the amount provided for
has been discounted accordingly.
Identified developments As of As of
31 Dec 2025 31 Dec 2024
Recently made aware and under investigation 1 1
Pre-tender preparation ongoing 4 9
Live tender process 3 -
Sub-total: progressing through tender 8 10
Progressing to contract 8 8
Contracted but works yet to start 4 4
Sub-total: pre-works starting 20 22
Currently on site 24 21
Sub-total: to complete 44 43
Completed developments 43 40
Total identified developments 87 83
During the year £56.1m of the provision has been utilised for works
undertaken whilst £7.0m of imputed interest has been charged to the statement
of comprehensive income through finance costs. During the year £39.8m has
been charged, following a review of the projected costs to complete
rectification work. This includes estimation of the costs of rectification of
the four additional developments requiring remediation and additional
complications and works identified once site works commenced and facades
stripped, offset by works assumed by, and recoveries secured from, historic
subcontractors. Due to the non-recurring nature of these charges they have
been disclosed as exceptional items to support the understanding of the
financial performance and improve the comparability between reporting periods.
Based on current cashflow forecasts management forecast that £83.2m of the
provision will be utilised within the next 12 months and as a result has been
reported as a current liability in the 31 December 2025 balance sheet.
The assessment of the provision remains a highly complex area with judgments
and estimates in respect of the cost of the remedial works, with investigative
surveys on-going to determine the full extent of those required works. Where
remediation works have not yet been fully tendered, we have estimated the
likely scope and costs of such works based on experience of other similar
sites. Whilst we have exercised our best judgement of these matters, there
remains the potential for variations to this estimate from multiple factors
such as material, energy and labour cost inflation, limited qualified
contractor availability and abnormal works identified on intrusive
surveys. Should a 20% variation in the costs of untendered projects occur
then the overall provision would vary by +/- £17.2m.
The financial statements have been prepared on the latest available
information; however, there remains the possibility that, despite management's
endeavours to identify all such properties, including those constructed by
acquired entities well before acquisition, further developments requiring
remediation may emerge.
13. Financial instruments
In aggregate, the fair value of financial assets and liabilities are not
materially different from their carrying value.
Financial assets and liabilities carried at fair value are categorised within
the hierarchical classification of IFRS 7 Revised (as defined within the
standard) as follows:
2025 2024
£m £m
Level 3 Level 3
Shared equity loan receivables 25.7 29.0
Other payables (12.0) -
Shared equity loan receivables
Shared equity loan receivables represent loans advanced to customers and
secured by way of a second charge on their new home. They are carried at fair
value. The fair value is determined by reference to the rates at which they
could be exchanged by knowledgeable and willing parties. Fair value is
determined by discounting forecast cash flows for the residual period of the
contract by a risk adjusted rate.
There exists an element of uncertainty over the precise final valuation and
timing of cash flows arising from these loans. As a result the Group has
applied inputs based on current market conditions and the Group's historical
experience of actual cash flows resulting from such arrangements. These inputs
are by nature estimates and as such the fair value has been classified as
Level 3 under the fair value hierarchy laid out in IFRS 13 Fair Value
Measurement.
Significant unobservable inputs into the fair value measurement calculation
include regional house price movements based on the Group's actual experience
of regional house pricing and management forecasts of future movements,
weighted average duration of the loans from inception to settlement of ten
years (2024: ten years) and discount rate 7.5% (2024: 8.8%) based on current
observed market interest rates offered to private individuals on secured
second loans.
The discounted forecast cash flow calculation is dependent upon the estimated
future value of the properties on which the shared equity loans are secured.
Adjustments to this input, which might result from a change in the wider
property market, would have a proportional impact upon the fair value of the
loan. Furthermore, whilst not easily accessible in advance, the resulting
change in security value may affect the credit risk associated with the
counterparty, influencing fair value further.
Other payables
As part of the acquisition of Lone Star Land Limited, £14.3m of the
consideration is contingent and payable on satisfaction of obligations by the
previous shareholders. The amounts payable are fixed amounts per the
acquisition contract. Given the nature of the obligations the previous
shareholders face there exists an element of uncertainty over the actual
consideration that will be paid. Management currently assesses the likelihood
of all obligations being satisfied as high and that all of the contingent
consideration will be payable. Since management's assessment of likelihood is
an estimate, the fair value has been classed as Level 3 under the fair value
hierarchy laid out in IFRS 13 Fair Value Measurement. A discount rate of 9.0%
based on the Group's weighted average cost of capital has been applied. The
fair value of the contingent consideration, after discounting, is reported
within Other payables at 31 December 2025.
14. Reconciliation of net cash flow to net cash and analysis
of net cash
2025 2024
£m £m
Cash and cash equivalents at 1 January 258.6 420.1
Decrease in net cash and cash equivalents in cash flow (141.6) (161.5)
Cash and cash equivalents at 31 December 117.0 258.6
IFRS 16 lease liability (14.7) (14.5)
Net cash at 31 December 102.3 244.1
Net cash is defined as cash and cash equivalents, bank overdrafts and interest
bearing borrowings.
On 26 January 2026 the Group's Revolving Credit Facility was amended,
increasing the loan facility from £700m to £750m with a term to 5 July 2030,
and securing a further £250m fixed term facility to 31 January 2028, giving
an increased total secured funding of £1,000m. The facility was undrawn at 31
December 2025.
15. Retirement benefit assets
As at 31 December 2025 the Group operated four employee pension schemes, being
two Group personal pension schemes and two defined benefit pension schemes.
Remeasurement gains and losses in the defined benefit schemes are recognised
in full as other comprehensive income within the statement of comprehensive
income. All other pension scheme costs are reported in profit or loss.
The amounts recognised in the Consolidated Statement of Comprehensive Income
are as follows:
2025 2024
£m £m
Current service cost - 0.2
Administrative expense 0.5 0.4
Curtailment cost - 0.1
Pension cost recognised as operating expense 0.5 0.7
Interest cost 20.0 18.6
Return on assets recorded as interest (27.2) (24.3)
Pension cost recognised as net finance credit (7.2) (5.7)
Total defined benefit pension credit recognised in profit or loss (6.7) (5.0)
Remeasurement loss recognised in other comprehensive income 6.7 1.5
Total defined benefit scheme gain recognised - (3.5)
The amounts included in the balance sheet arising from the Group's obligations
in respect of the Pension Scheme are as follows:
2025 2024
£m £m
Fair value of Pension Scheme assets 502.0 504.3
Present value of funded obligations (371.3) (373.6)
Net pension asset 130.7 130.7
16. Contingent Assets & Liabilities
As disclosed in note 12 the Group has undertaken a review of all its legacy
buildings that used cladding on their facades.
The financial statements have been prepared on the latest available
information; however, there remains the possibility that, despite
management's, endeavours to identify all such properties, including those
constructed by acquired entities well before acquisition, further developments
requiring remediation may emerge. There is also the possibility that estimates
based on preliminary assessments regarding the scale of remediation works
relating to buildings yet to be fully surveyed may prove incorrect. The cost
of remedial works will remain under review and be updated as works progress.
17. Principal Risks and Viability Statement
Key priorities:
1. Build quality and safety
2. Customers at the heart of our business
3. Disciplined growth: high-quality land investment
4. Industry-leading financial performance
5. Supporting sustainable communities
External Risks
1. UK economic and market conditions
Risk rating Very high
Risk trend No change
Risk appetite Averse
Within tolerance
Risk owners Executive Committee and Regional Chairs
Link to strategic priorities 3 and 4
Risk description
Failure to anticipate, respond or adapt to changes in the UK macroeconomic
environment, including any significant events or trends affecting employment
levels, inflation, and mortgage availability or affordability could impact on
overall consumer confidence, reducing demand and pricing for new homes. This
could reduce revenues, margins, profits and cash flows and potentially result
in the impairment of asset values. Changes in economic and market conditions
could also drive competitors to make different strategic choices or take
actions that could pose a threat to our overall strategy and business model,
such as increased consolidation within the sector.
Key mitigations
· Highly disciplined approach to investments in land and work in
progress, factoring in both current and anticipated levels of demand.
· Continuous focus on pricing structures to align with local market
conditions. Our UK-wide network (with no significant presence in London) and
product range (including our premium Charles Church product) provides some
insulation against the effects of regional economic fluctuations.
· The Board's annual strategic review assesses anticipated changes in
external conditions to determine appropriate strategic responses. Sales prices
and incentives to support sales are kept under constant review.
· Introduction of innovative products, including our New Build Boost and
Rezide shared equity products, to support affordability.
· Economic and market risks are subject to designated material
controls within our internal control framework.
Risk Monitoring measures
· The Board, Executive Committee and Management Risk Committee
closely monitor UK economic trends, using both internal and external sources,
with regular market and economic briefings from expert advisors.
· Sales rates and pricing patterns are reviewed on a weekly basis.
· The Board considers the effectiveness of the Group's risk management
and internal control framework, including controls over economic and market
risks as part of its annual review process.
2. Government policy and political risk
Risk rating Very high
Risk trend No change
Risk appetite Averse
Within tolerance
Risk owners Group Director of Strategic Partnerships and External Affairs
Group Planning Director
Regional Chairs
Link to strategic priorities 1 and 5
Risk description
Failure to anticipate, respond or adapt to changes in Government policy could
materially affect the delivery of our strategy. The housebuilding industry is
becoming increasingly regulated, and can be heavily impacted by political
decisions at both national and local level. The delivery of our strategy can
be materially affected by political decisions in areas such as planning,
regulatory costs, support schemes or specific industry taxation. These have
the potential to adversely affect our revenues, margins, tax charges and asset
values, and impact on the viability of future land investments.
Key mitigations
· Alignment of our mission and strategy to the UK Government's
objective of accelerating the delivery of new homes over the course of the
current Parliament.
· We have expertise in managing and responding to relevant areas
subject to Government involvement at both local and national level, including
through our Group Land, Planning, Technical and External Affairs departments,
and through engagement with industry bodies.
· A focused and methodical approach has been established to build
relationships with councils and support alignment of development with
local priorities.
· We also engage and participate in industry groups, including
the HBF.
· Government policy and political risks are subject to designated
material controls within our internal control framework.
Risk monitoring measures
· The Executive Committee and Board are routinely apprised of
likely evolutions in Government housing policy through the close monitoring of
our External Affairs, Technical and Land and Planning departments.
· Planning refusal rates are monitored closely to ensure our
approach can be adjusted where necessary.
· Routine principal risk reporting to the Board includes updates on
political evolutions at national and local levels.
3. Climate change and sustainability
Risk rating Medium
Risk trend No change
Risk appetite Averse
Within tolerance
Risk owners Group Strategy & Regulatory Director
Group Sustainability Director
Link to strategic priorities 2 and 5
Risk description
Failure to respond effectively to the UK's transition to a lower-carbon and
more sustainability-focused economy, including evolving legal and regulatory
requirements and changes in customer perceptions and priorities could
adversely affect planning decisions, our cost base and access to key materials
and skills. Increased physical risks are also developing from climate change,
with greater frequency of extreme weather events such as storms and flooding
having the potential to cause increased disruption to construction activities.
Key mitigations
· We consider sustainability issues and the potential impacts of
climate change routinely in key business decisions, from land acquisition
through to planning and build processes.
· Development of a decarbonisation pathway to 2045.
· Land appraisals reflect cost impacts from regulatory changes
(e.g. Future Homes Standard).
· Our UK-wide network of sites minimises the potential impact of
localised extreme weather events.
· Climate and sustainability risks are subject to designated
material controls within our internal control framework.
Risk monitoring measures
· The Sustainability Committee meets regularly to review progress
on our climate and sustainability-related initiatives.
· Management reporting includes key climate and sustainability
indicators such as CO2 emissions, diesel usage and waste generation.
· Our Scope 1, Scope 2, Scope 3 category 1 (purchased goods and
services) and Scope 3 category 11 (use of sold products) emissions are subject
to external review.
· The Board considers the effectiveness of the Group's risk management
and internal control framework, including controls around climate and
sustainability risks as part of its annual review process.
Health, safety and environment (HS&E) risks
4. HS&E event
Risk rating Medium
Risk trend Decrease
Risk appetite Averse
Within tolerance
Risk owners Group HS&E Committee
Group HS&E Director
Group Construction Director
Group Special Projects Director
Link to strategic priorities 1
Risk description
Failure to safeguard our sites, or to fully adhere to the Group's robust
framework of HS&E management system could result in serious injury or loss
of life, or damage to the natural environment. In addition to the human
impacts of any health, safety or environmental breach or incident, there is
potential for reputational damage, construction delays and financial
penalties.
Key mitigations
· Comprehensive HS&E management system, certified to the
ISO45001 standard, to support safe working practices.
· Training programmes to embed our policies effectively.
· Award-winning Target Zero initiative to drive awareness of
workplace safety and reduce the volume of safety-related incidents in our
operations.
· Inspection regime led by our Group HS&E department.
· Engagement with industry forums and best practice groups.
· HS&E risks are subject to designated material controls within
our internal control framework.
Risk monitoring measures
· The Group HS&E Director provides regular narrative and KPI
reporting to the Board on HS&E matters.
· Data from inspections by the Group HS&E department feeds into
management reports at all levels of the Group.
· Health & Safety Committees are in place for the Group as a
whole, and at operating company level, to monitor HS&E performance and
trends.
· Assurance provided through Group Risk & Internal Audit
department programme of HS&E audits, with results and follow-up of actions
reported to both Executive management and the Audit & Risk Committee.
· The Board considers the effectiveness of the Group's risk management
and internal control framework, including HS&E controls as part of its
annual review process.
5. Building safety and legacy buildings
Risk rating High
Risk trend No change
Risk appetite Averse
Within tolerance
Risk owners Group Construction Director
Group Head of Building Safety
Group Special Projects Director
Link to strategic priorities 1 and 2
Risk description
Failure to execute construction activities in line with applicable legal and
regulatory requirements could result in building safety defects, which could
pose potential risk to resident safety, reputational damage, and remediation
costs.
Good progress has been made on legacy building safety remediation, with many
developments resolved and interim measures established to ensure resident
safety for those awaiting remediation. Risks remain if remediation is subject
to delay or disruption due to the complex nature of the works, lack of
availability of skilled contractors or evolutions in regulation or should
further buildings requiring remediation be identified. These could expose us
to additional costs and reputational damage.
Key mitigations
· The Group Construction department, including the specialist Building
Safety function, provides oversight to ensure continued alignment to good
practice in building safety over the lifecycle of the homes we build.
· For legacy buildings, our dedicated Special Projects team provides
oversight on the assessment of any remediation required, the contracting,
inspection and completion of works.
· Independent Quality Controllers, reporting centrally, provide
assurance on the quality and status of remediation works.
· assumptions on the estimated financial costs associated with the
legacy remediation works have been subject to comprehensive challenge and are
regularly reassessed.
Risk monitoring measures
· The Board receives routine reporting on the progress of the works
on legacy buildings.
· The Finance team monitors costs incurred and provides assurance
on the utilisation and ongoing appropriateness of our provision.
· The Group Risk & Internal Audit department conducts routine
audit engagements on construction activities and their alignment to internal
procedures and regulatory requirements.
Operational risks
6. Land and planning
Risk rating High
Risk trend No change
Risk appetite Cautious
Within tolerance
Risk owners Group Planning Director
Group Director of Land Operations
Group Director of Transformation and Land Strategy
Group Strategic Land Director
Regional Chairs
Link to strategic priorities 3
Risk description
Failure to maintain an adequate supply of high-quality land, due to delays in
planning approval, or inability to identify and procure land at appropriate
levels of return, could affect our ability to grow our outlet position,
impacting future sales, margins and profits, jeopardising the delivery of our
strategic objectives.
Key mitigations
· Robust scrutiny for all potential land transactions through
comprehensive viability assessments, with Land Committee process to approve
transactions which demonstrate both appropriate returns and alignment with our
overall strategy.
· Established processes to build relationships with councils, land
agents and promoters, supporting alignment of potential development with local
priorities.
· Strengthened processes for development of strategic land, including
investments in our in-house teams and the acquisition of Lone Star Land.
· Land and planning risks are supported by designated material
controls within our internal control framework.
Risk monitoring measures
· The Group's Land Committee meets regularly to review our current
land holdings and future needs, and to assess potential land transactions.
· Volume of planning permissions obtained is monitored and reported on
routinely, including tracking against legal completions via principal risk
reporting.
· Outlet numbers are tracked routinely by management and subject to
detailed reporting.
· The Board considers the effectiveness of our land and planning
controls as part of its annual review process.
7. Supply chain
Risk rating Medium
Risk trend No change
Risk appetite Cautious
Within tolerance
Risk owners Chief Commercial Officer
Group Commercial Director
Group Procurement Director
Link to strategic priorities 1 and 4
Risk description
Failure to secure reliable access to materials and skilled subcontract labour
at an appropriate cost could adversely affect build programmes, construction
quality and margins. This risk may become more acute as the UK strives to
deliver a greater volume of new build homes, heightening demand for materials
and labour. Similarly, disruption to our vertical integration model could
constrain supply, causing cost inflation and disruption to build programmes.
Key mitigations
· We benefit from vertical integration, with security of supply on
some key materials through our Brickworks, Tileworks and Space4 facilities.
· Long-term relationships exist with key suppliers and
subcontractors at both Group-wide and operating company levels.
· Strategic approach to procurement, led by our Group Procurement
team, with supply chain engagement, established processes for appointing
suppliers and ongoing performance monitoring.
· Detailed forecasting and planning of material requirements to
inform supplier negotiations, driving value and ensuring availability to align
with build programmes.
· Group Commercial oversight and monitoring of operating company
controls, including robust processes to monitor material purchases and stock
holdings to minimise potential for loss or damage during construction.
Risk monitoring measures
· The Group Procurement department provides routine monitoring of
trends and supplier performance.
· Site budgets and performance, including availability and pricing of
materials, are assessed through the bi-monthly valuation process.
· The Chief Commercial Officer attends the Management Risk Committee
and provides updates on key supply chain issues.
· The Board reviews the effectiveness of the Group's risk
management and internal control framework, including supply chain controls, as
part of its annual review process.
8. Finance and liquidity
Risk rating Low
Risk trend No change
Risk appetite Cautious
Within tolerance
Risk owners Group CFO
Group Financial Controller
Senior Group Accountant
Link to strategic priorities 3 and 4
Risk description
The Group's strategy relies upon access to significant working capital to fund
investments in land and work in progress. This includes periods when we will
be required to draw upon our Revolving Credit Facility (RCF). Failure to
manage and optimise cash requirements effectively could lead to unnecessarily
high borrowing costs, breaches of loan covenants, or an inability to take
advantage of land or other investment opportunities that could benefit the
Group.
Key mitigations
· We closely monitor our cash position and forecast cash utilisation
to ensure these are sufficient to support land investments, fund work in
progress and meet other requirements identified through annual budgets and
business planning processes.
· Established governance processes are in place to scrutinise land
investment decisions through the Land Committee, and work in progress through
the bi-monthly valuations.
· The Group's RCF is considered sufficient to meet all our
projected funding requirements in the short to medium term. The RCF is in
place to July 2030.
· Liquidity and financing risks are supported by material controls
within our internal control framework.
Risk monitoring measures
· Utilisation of the RCF and optimisation of cash deposits are
monitored daily by the Group Finance team.
· Covenants on the RCF are monitored and subject to periodic
certification.
· The Board is provided with routine reporting on our actual and
forecast cash positions.
· The Board considers the effectiveness of the Group's risk
management and internal control framework as part of its annual review
process, including controls relating to liquidity and treasury management.
9. Skilled workforce, retention and succession
Risk rating Medium
Risk trend No change
Risk appetite Cautious
Within tolerance
Risk owners Chief HR Officer
Director of Talent & Diversity
Link to strategic priorities 1
Risk description
Failure to attract, retain and develop a suitably skilled workforce, supported
by effective leadership and succession planning, could adversely impact upon
delivery of our strategy. An ageing workforce and continued competition for
skilled labour in our sector risks exacerbating labour shortages and potential
for increased costs, operational disruption and delays to build programmes.
Key mitigations
· Attraction of high-quality workforce through the development of a
compelling employee value proposition.
· Development of talent through comprehensive training programmes
including apprenticeships, Graduate Scheme and the Persimmon Pathways in core
disciplines.
· Succession planning programmes to support career development and
retain talent.
· Competitive remuneration packages to attract and retain talent at all
levels, including our Real Living Wage commitment, Sharesave and other
employee benefits.
· Employee engagement monitoring through surveys and our Employee
Engagement Panel.
Risk monitoring measures
· The Group HR department provides reporting, including metrics
such as training hours, to management at all levels of the Group.
· The Chief HR Officer is a member of the Group Executive
Committee, and provides additional periodic reports and updates to the Board
on employment trends.
· Feedback from the Employee Engagement Panel and annual Employee
Engagement Survey is reviewed by the Board and shared with operational
management.
· Routine principal risk reports to the Audit & Risk Committee
include staff turnover data and commentary from the Group HR department.
10. Business resilience
Risk rating High
Risk trend Increase
Risk appetite Averse
Within tolerance
Risk owners Management Risk Committee
Chief Information Officer
Chief Information Security Officer
Group Risk Manager
Link to strategic priorities 2, 4 and 5
Risk description
Failure to prevent, detect or respond effectively to a cyber attack or other
material event causing the failure or disruption of core systems, data loss,
or supply chain interruption could adversely affect operational activities,
resulting in significant financial costs and reputational damage.
Key mitigations
· Oversight and challenge from the Management Risk Committee.
· Disaster recovery protocols and supporting fallback options for
key operational processes and systems under Business Continuity Planning (BCP)
measures.
· Robust IT security measures aligned to Cyber Essentials Plus, subject
to continuous improvement through programmes of investment including our
initial Cyber Security Infrastructure Improvement Programme (CSIIP) in the
first half of 2025 and the subsequent and ongoing Cyber Risk Reduction (CRR)
programme.
· Routine in-house training and communications to promote awareness of
cyber security and data protection issues, including threats evolving from the
increased use of Artificial Intelligence.
· Regular reviews by external partners, including penetration testing,
audit engagements and scenario planning, to provide assurance on the
effectiveness of our cyber control environment.
· Business resilience, including cyber risk, are subject to
material controls within our internal control framework.
Risk monitoring measures
· Regular Board updates provided by the CIO, with periodic
presentations by the CIO and CISO to the Audit & Risk Committee on
evolutions in our cyber posture.
· Routine CIO reporting to the Group Executive Committee, ensuring
IT and cyber risks are actively considered in all key business decision
making.
· The CIO attends the Management Risk Committee and provides
updates on key cyber issues, supported by reporting and presentations from the
Group CISO.
· The Management Risk Committee monitors the implementation of actions
arising from BCP tests, with updates provided to the Executive Committee.
Reputational and regulatory risks
11. Reputation
Risk rating Medium
Risk trend No change
Risk appetite Cautious
Within tolerance
Risk owners Group Director of Strategic Partnerships and External Affairs
Group Investor Relations Director
Group Construction Director
Chief Customer Experience Officer
Regional Chairs
Link to strategic priorities 1, 2, 4 and 5
Risk description
Failure to deliver and maintain high standards across areas such as build
quality, customer experience and health and safety, could damage our
relationships with key stakeholders such as landowners, local authorities,
customers, the supply chain, regulatory bodies and investors. This could
affect our ability to deliver our strategic objectives.
Key mitigations
· Board and Executive Committee-level commitment to a culture of
excellence, with particular emphasis on high-quality in construction, health
and safety and customer care.
· Significant and ongoing investments in operational capabilities to
deliver high-quality new homes and customer experience.
· Processes to build positive relationships with all our
stakeholders, including local authorities and the communities in which we
build, through addressing housing need, supporting local employment and making
valuable contributions to local infrastructure and community causes.
· Reputational risk considerations are subject to material controls
within our internal control framework.
Risk monitoring measures
· Reporting to the Executive Committee and Board on key operational
performance measures covering build quality and customer experience.
· The Board also oversees stakeholder engagement, including
monitoring feedback from shareholders, and the results of our Employee
Engagement Surveys and the Employee Engagement Panel.
· Routine principal risk reports issued to the Audit & Risk
Committee include a range of internal and external indicators on reputation,
such as NHBC survey data, Trustpilot scores and management of customer
complaints.
12. Regulatory compliance
Risk rating Medium
Risk trend No change
Risk appetite Averse
Within tolerance
Risk owners Chief Customer Experience Officer
Group Construction Director
Group Director of Legal Services
Company Secretary
Group Strategy & Regulatory Director
Link to strategic priorities 1, 2 and 5
Risk description
Failure to comply with any of the increasingly complex regulations we face,
whether specific to our housebuilding operations or those applicable to other
large UK listed businesses, could result in reputational damage, operational
disruption and the imposition of financial penalties.
Key mitigations
· Comprehensive management systems to ensure regulatory and legal
compliance, including policies, procedures and internal training for key areas
of regulation.
· Oversight from specialists within Group-level functions to ensure
compliance with key regulations.
· Second-line inspection regimes (e.g. from IQCs and HS&E
Advisors) supported by internal audits and external reviews to support
regulatory compliance.
Risk monitoring measures
· The Board and Audit & Risk Committee are provided with
regular updates on core areas of regulatory compliance and preparation for
upcoming regulatory change.
· Compliance monitoring activities are subject to regular review
and independent assurance.
· The Board considers the effectiveness of the Group's risk
management and internal control framework as part of its annual review
process, including controls to support regulatory compliance.
Viability Statement
Persimmon's prospects and viability
The long-term prospects and viability of the business are a consistent focus
of the Board when determining and monitoring the Group's strategy. The
identification and mitigation of the principal risks facing the business,
which have been updated to reflect current UK economic conditions and
uncertainties, also form part of the Board's assessment of long-term prospects
and viability*.
Assessing Persimmon's long-term prospects
Persimmon has built a strong position in the UK's housebuilding market over
many years, recognising the potential for long-term growth across regional
housing markets. The Board recognises that the long-term demographic
fundamentals of continued positive population growth and new household
formation, together with the requirement to replace and improve the quality
of the country's housing stock, provide a long-term supportive backdrop for
the industry. However, the Board and the Group's strategy recognises the
inherently cyclical nature of the UK housing market. The Group has therefore
been able to maintain a position of strength with high-quality land holdings
and a strong balance sheet throughout the disruption caused by the cost of
living crisis and ongoing geopolitical uncertainty. The future impacts of
these disruptions in creating uncertainty within the UK economy and subsequent
effect on the Group's sales and construction programmes remain uncertain. The
Board has considered these potential impacts in depth when assessing
the long-term prospects of the Group.
Whilst this uncertainty remains, Persimmon possesses the sound fundamentals
required to realise the Group's purpose and ambitions and deliver sustainable
success:
· talented teams focused on consistently delivering good quality new homes for
our customers;
· high-quality land holdings that allow us to create attractive places in areas
where people wish to live and work;
· strong customer and local community relationships;
· continued investment in the training and development of our teams;
· market knowledge, expertise and industry know-how;
· long-term healthy supplier engagement; and
· vertical integration ensuring internalised supply of key materials.
By continuing to build on these solid foundations through, for example, The
Persimmon Way and our ongoing investments in the customer experience, its
land, development sites and in its supply chain, the Group aims to create
enduring value for the communities we serve and our wider stakeholders. This
is reflected within the Group's materiality assessment, which ensures a
thorough review of stakeholder interests is incorporated within
the assessment of the Group's long-term prospects.
The Group adopts a disciplined annual business planning regime, which is
consistently applied and involves the management teams of the Group's
housebuilding businesses and senior management, with input and oversight by
the Board. The Group combines detailed five-year business plans generated by
each housebuilding business from the 'bottom up', with projections constructed
from the 'top down' to properly inform the Group's business planning over
these longer-term horizons. Zero-based 12-month budgets are established for
each business annually.
This planning process provides a valuable platform, which facilitates the
Board's assessment of the Group's short and long-term prospects. Consideration
of the Group's purpose, current market position, its five key priorities and
overall business model, and the risks that may challenge them are all included
in the Board's assessment of the prospects of the Group.
Key factors in assessing the long-term prospects of the Group:
1. The Group's current market positioning
· Sales network of active developments across the UK providing geographic
diversification of revenue generation.
· Three distinct brands providing diversified products and pricing deliver
further diversification of sales.
· Imaginative and comprehensive master planning of development schemes with high
amenity value to support sustainable, inclusive neighbourhoods which generate
long-term value to the community.
· Disciplined land replacement reflecting the extent and location of housing
needs across the UK provides a high-quality land bank in the most sustainable
locations supporting future operations.
· Long-term supplier and subcontractor relationships providing healthy and
sustainable supply chains.
· Sustained investment to support higher levels of construction quality and
customer service through the implementation of initiatives such as The
Persimmon Way.
· Strong financial position year end net cash and a £700m working capital
credit facility that has during the year been extended to July 2030.
· During January 2026 the existing £700m credit facility was increased by £50m
to £750m. In addition a £250m term loan was agreed with each of our banking
partners. The loan term is two years through to January 2028 with the ability
to extend for a further year.
2. Strategy and business model
· Strategy focuses on the risks associated with the housing cycle and on
minimising financial risk and maintaining financial flexibility.
· Focusing on constructing new homes for our customers to the high-quality
standards that they expect and helping to create attractive neighbourhoods.
· Strategy recognises the Group's ability to generate surplus capital beyond the
reinvestment needs of the business.
· Substantial investment in staff engagement, training and support to sustain
operations over the long-term.
· Disciplined land replacement reflecting the extent and location of housing
needs across the UK provides a high-quality land bank in the most sustainable
locations supporting future operations.
· Long-term supplier and subcontractor relationships providing healthy and
sustainable supply chains.
· Approach to land investment and development activity provides the opportunity
to successfully deliver much-needed new housing supply and create value over
the long-term.
· Differentiation through vertical integration, achieving security of supply of
key materials and complementary modern methods of construction to support
sustainable growth.
· Simple capital structure maintained with no structural gearing.
3. Principal risks associated with the Group's
strategy and business model include
· Disruption to the UK economy and housing market conditions adversely affecting
demand for and pricing of new homes, availability and pricing of land, or
contributing to inflationary pressures.
· Changes in Government policy affecting the housebuilding sector, such as those
relating to taxation, planning conditions or market support.
· Climate change risk, comprising both transition (legal and regulatory changes
affecting the housebuilding sector) and physical (operational disruption
through more frequent and prolonged adverse weather) elements.
· Failure to safeguard our sites, our people, our customers or the environment
we work in could impact our reputation or result in financial penalties.
· Reputational damage and increased costs resulting from disruption or delays to
scheduled remediation works to ensure resident safety.
· Failure to maintain an adequate supply of high-quality land due to planning
constraints or inability to procure land at appropriate levels of return.
· Disruption to supply chains, affecting the availability of key construction
materials.
· Ability of the Group to access significant working capital to fund investments
in land and work in progress.
· Adverse market competition and construction workforce trends, resulting in an
inability to attract and retain high-quality workers and an appropriately
experienced management team.
· Cyber and data risk, including potential for significant or prolonged
operational disruption arising from cyber-attack or failure of critical IT
systems.
· Requirement to maintain a reputation for high standards of business conduct
across all aspects of operations whilst working within an increasingly complex
regulatory landscape.
See above for the full list of principal risks together with detailed
descriptions.
Disciplined strategic planning process
The prospects for the Group are principally assessed through the annual
strategic planning review process conducted towards the end of each year. The
management team from each of the Group's housebuilding businesses produce a
five-year business plan with specific objectives and actions in line with the
Group's strategy and business model. These detailed plans reflect the
development skill base of the local teams, the region's housing market,
strategic and on-market land holdings and investments required to support
their objectives. Special attention is paid to construction programmes and
capital management through the period to ensure the appropriate level of
investment is made at the appropriate time to support delivery of the plan.
Emerging risks and opportunities in their markets are also assessed at this
local level.
Senior Group management review these plans and balances the competing
requirements of each of the Group's businesses, allocating capital with the
aim of achieving the long-term objectives of the Group including our five key
priorities. The five-year plans provide the context for setting the annual
budgets for each business for the start of the new financial year in January,
which are consolidated to provide the Group's detailed budgets. The Board
reviews and agrees both the long-term plans and the shorter-term budgets for
the Group.
The outputs from the business planning process are used to support development
construction planning, impairment reviews, funding projections, reviews of the
Group's liquidity and capital structure, and for the identification of surplus
capital available for return to shareholders via the Group's Capital
Allocation Policy.
Assessing Persimmon's viability
The Directors have assessed the viability of the Group over a five-year
period, taking into account the Group's current position and the potential
impact of the principal risks facing the Group.
The Directors consider the use of a five-year period as the most appropriate
time horizon for the purpose of assessing the viability of the Group, as it
reflects the business model of the Group, with new land investments generally
taking at least five years to build and sell through, and for the development
infrastructure to be adopted by local authorities.
A key feature of the Group's strategy, as documented in the Strategic Report
and set out in the Group's capital allocation priorities, is the Group's
commitment to maintain capital discipline over the long-term through the
housing cycle.
The key principles of the capital allocation policy are:
· maintain a strong balance sheet and low leverage through the
housing cycle, while prioritising our building safety remediation works;
· invest in the long-term performance and growth of Persimmon
through continuing our disciplined approach to land acquisition and investment
into enhancing the Group's operational capabilities;
· pay ordinary dividends at a sustainable level that is well
covered by post-tax profits through the housing cycle, thereby balancing
capital retained for investment in the business with those dividends; and
· return any excess capital to shareholders from time to time,
through a share buyback or special dividend as considered to be appropriate at
the time.
On 11 March 2025, in line with the Capital Allocation Policy, the Directors
declared a final dividend of 40p per share in respect of the financial year
ended 31 December 2024. This final dividend approved at the 2025 Annual
General Meeting and was paid to shareholders on 11 July 2025.
On 13 August 2025, the Directors announced their intention to pay 20p per
share as an interim cash dividend in respect of the financial year to 31
December 2025. This interim dividend was paid to shareholders on 7 November
2025.
On 10 March 2026, the Directors declared a final dividend of 40p per share in
respect of financial year ended 31 December 2025.
On an annual basis, the Directors review financial forecasts used
for this Viability Statement as explained in the disciplined strategic
planning processes outlined earlier. These forecasts incorporate assumptions
on issues such as the timing of legal completions of new homes sold, average
selling prices achieved, profitability, working capital requirements and cash
flows.
The Directors have also carried out a robust assessment of the principal and
emerging risks facing the Group, and how the Group manages those risks,
including those risks that would threaten its strategy, business model,
future operational and financial performance, solvency and liquidity. This
risk assessment was also informed by the performance of the Group's
materiality assessment, incorporating views from the Group's key stakeholders,
and through a comprehensive survey to incorporate input from the Board and
senior management from across the Group. The Directors have considered the
impact of these risks on the viability of the business by performing a range
of sensitivity analyses when compared to base position being the actual
performance for full year 2025, including severe but plausible scenarios
materialising together with the likely effectiveness of mitigating actions
that would be executed by the Directors.
The scenarios emphasise the potential impact of severe market disruption
including, for example, the effect of economic disruption from a cost of
living crisis or a war on the short to medium-term demand for new homes. The
scenarios' emphasis on the impact on the cash inflows of the Group through
reduced new home sales is designed to allow the examination of the extreme
cash flow consequences of such circumstances occurring. The Group's cash flows
are less sensitive to supply side disruption given the Group's sustainable
business model, flexible operations, agile management team and off-site
manufacturing facilities.
The first scenario modelled is a severe but plausible downside scenario that
models a fall in housing revenue, when compared to full year 2025, of c.53%
for full year 2026 followed by a gradual recovery. The housing revenue
modelled factors in changes in both volumes and average selling prices. The
assumption used in this scenario reflects the experience management gained
during the global financial crisis from 2007 to 2010, it being the worst
recession seen in the housing market since World War Two.
A second, even more extreme, scenario assumes the same significant downturn in
2026 followed by a period of enduring depression of the UK economy and housing
market through to 2030, assuming that neither volumes nor revenue recover, but
that mitigations within management's control are exercised.
In each of these scenarios, cash flows were assumed to be managed
consistently, ensuring all relevant land, work in progress and operational
investments were made in the business at the appropriate time to deliver the
projected new home legal completions. Each scenario fully reflects the current
estimate of cash outflows, value and timing associated with the legacy
buildings provision. The Directors assumed they would continue to make
well-judged decisions in respect of capital allocation payments, ensuring that
they maintained financial flexibility throughout.
Based on this assessment, the Directors confirm that they have reasonable
expectation that the Group will be able to continue in operation and meet its
liabilities as they fall due over the period to the end of 31 December 2030.
* The Directors have assessed the longer-term prospects of the Group in
accordance with provision 31 of the UK Corporate Governance Code 2024.
Statement of Directors' Responsibilities
The Statement of Directors' Responsibilities is made in respect of the full
Annual Report and the Financial Statements not the extracts from the financial
statements required to be set out in the Announcement.
The 2025 Annual Report and Accounts comply with the United Kingdom's Financial
Conduct Authority Disclosure Guidance and Transparency Rules in respect of the
requirement to produce an annual financial report.
We confirm that to the best of our knowledge:
· the Group and Parent Company financial statements, contained in
the 2025 Annual Report and Accounts, prepared in accordance with the
applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company and
the undertakings included in the consolidation taken as a whole; and
· the Strategic Report includes a fair review of the development
and performance of the business and the position of the issuer and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
We consider the Annual Report and Accounts taken as a whole, is fair, balanced
and understandable and provides the information necessary for shareholders to
assess the Group's position and performance, business model and strategy.
The Directors of Persimmon Plc and their function are listed below:
Roger Devlin Chairman
Dean Finch Group Chief Executive
Andrew Duxbury Chief Financial Officer
Annemarie Durbin Senior Independent Director
Andrew Wyllie Non-Executive Director
Alexandra Depledge Non-Executive Director
Colette O'Shea Non-Executive Director
Paula Bell Non-Executive Director
Anand Aithal Non-Executive Director
By order of the Board
Dean Finch Andrew Duxbury
Group Chief Executive Chief Financial Officer
9 March 2026
The Group's Annual financial reports, half year reports and trading updates
are available from the Group's website at www.persimmonhomes.com/corporate.
LEI: 213800XI72Y57UWN6F31
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