Persimmon shares rally despite losses

Mar 4 2009 by Peter McCusker, The Journal

HOUSEBUILDER Persimmon's shares rallied strongly despite announcing a £780m loss for 2008 which included more than £900m of writedowns on its landbank.

The York-based firm, which was founded by Duncan Davidson, owner of Northumberland’s Lilburn Estates, revealed it had secured more than £1bn of new credit facilities for three years, giving it a secure long-term platform.

The company recorded underlying pre-tax profits of £126.6m, down 78% from £585.1m in 2007.

The UK’s second biggest housebuilder, which currently employs 2,300 people, axed more than 1,000 jobs last year but maintained its 25 regional offices, including those in Newcastle and County Durham.

While it warned that 2009 would be another difficult year, Persimmon offered some encouragement on recent trading. It said weekly sales volumes so far this year were ahead of expectations with an order book worth £698m.

John White, group chairman, said: “This has been a difficult year for Persimmon and the industry as a whole. We have taken decisive steps to refocus the business accordingly and have generated significant cashflow.

“We will continue to reduce debt and we believe that, with a strong balance sheet and recently agreed financing, we have a strong platform for future growth.”