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Persimmon sees 21% jump in revenue

Persimmon has voiced concern over sluggish planning consents but has predicted a 21 per cent jump in its revenues for the 2013 financial year.

The prediction comes ahead of its annual results, to be released next month, after a full-year trading update released this week showed a 16 per cent increase in new house sales for 2013 compared with the previous year.

The group expects its full revenue to come in at £2.1bn for 2013.

Persimmon group finance director Mike Killoran told Construction News the team had “kept our foot down” during the traditionally quiet summer months, which resulted in the its increased revenue prediction.

Persimmon credited the government’s Help to Buy scheme with increasing new sales during 2013.

Asked whether Persimmon was concerned about sales after March 2016, when the scheme is set to come to an end, Mr Killoran said he was “mindful of what the future holds” but said it was “a little way out”.

However, he said that in the event of Help to Buy finishing, the group had the liquidity for other incentives to encourage sales, including part-exchange schemes, and Persimmon’s own shared equity offering – although the latter would not be a preference.

Mr Killoran said the time it takes to get planning consents would continue to be a concern for the UK housebuilder as it moves forward with projects in 2014.

Local authorities were slowing the process down with weighty consents during initial negotiations, he added.

“I think you will see continued liaison with government on trying to simplify [the planning process] because we feel it is in everyone’s interest to keep processes as simple as possible, since it is most cost-efficient to do so.”

He said the government had already started to respond via its National Planning Policy Framework, which had made efforts to simplify planning, but there was still “work to do between the industry, planning authorities and government to try to reduce the red tape associated with that”.

Mr Killoran recognised wider concerns from the industry over materials constraints in 2014, although he said that the supply chain “had supported us really well” throughout the year and would “gradually gear up to provide the extra volume the market needs” this year and beyond.

On future contracts, Mr Killoran said he expects “more of the same” as Persimmon continues to focus on traditional family housing developments in the provinces.

He added that the York-based group had no real aspiration to work and develop in central London, and would leave that to other developers.

Mr Killoran said Persimmon would continue to acquire consented land across the country.

Persimmon said in its trading update that it “now forecasts 15 per cent volume growth in 2014, supported by the forward order book and the strong sales momentum driven by the Help to Buy scheme.”

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