Persimmon turns down government coronavirus help

The UK’s most profitable housebuilder has committed itself to not take up any of the government’s coronavirus support measures as it responds to the pandemic crisis.

Persimmon has been alone among the listed volume housebuilders in not furloughing a significant proportion of staff, with the £3.6bn-turnover firm continuing to pay all its staff in full even while sites have lain dormant.

In a regular trading update to the City this morning, Persimmon said its forward order book had dropped to £2.4bn, compared to £2.7bn at the same point last year, following the impact of lockdown measures.

However, it said that, prior to the lockdown, the sales rate at the firm had been around 10% above the same period last year.

Persimmon shut down all housebuilding sites on March 25 but this week commenced a phased re-start to construction work.

The statement said: “The Group has not made use of the Government’s Coronavirus Job Retention Scheme to furlough staff and has no current plans to access any UK Government’s COVID-19 funding.”

Group chief executive Dave Jenkinson said the firm’s strong financial position had enabled it to retain all staff on full pay through lockdown, without recourse to government financial assistance “despite the economic shock of COVID-19.”

He said that decision had also enabled it to maintain operational capacity to allow it to restart work quickly.

Jenkinson added: “The Government has been clear that it wants the UK’s housebuilders to get back to building and this week we have started the phased process of getting back to work safely on site in order to deliver the new homes the country needs.”

Persimmon is holding its Annual General Meeting this morning, at which it said it will provide an update to shareholders on the purpose and culture of the business, as part of its drive to rebuild its reputation following fierce criticism in recent years.

The firm, which has in recent years sold around half of its homes under the government-subsidised Help to Buy scheme, saw its previous chief executive step down last year following uproar over a £75m bonus payment, while the quality of its homes have also been severely criticised.

In December an independent report commissioned by Persimmon found chronic build quality issues, with a widespread failure to install safety critical fire stops in its timber frame homes, and no national build standards. Former housing minister Nick Boles last year branded the firm “the unacceptable face of capitalism”, and the government was at one point reported to be considering barring it from receiving any further support from Help to Buy.

Persimmon’s management have instituted a number of changes at the builder which they say will address many of the criticisms levelled at the firm. Dave Jenkinson, who was second in command under previous chief executive Jeff Fairburn, has already announced his intention to step down “in due course”.

Cenkos analyst Kevin Cammack said the decision not to take any government assistance during the pandemic “stands Persimmon apart – we can all speculate on the reasons - but will mean a higher cash burn rate [than competitors] on fixed overhead.”