Persimmon : Half Year Results 2020 slides and presentation

"Focused delivery of our purpose - producing a resilient first half performance for the benefit of all stakeholders

AGENDA

		Page	Presented by
 Company purpose and strategic focus	3	Dave Jenkinson
	Covid-19	5	Richard Stenhouse
	Operational review	11	Dave Jenkinson
	Financial review	21	Mike Killoran
	Strong platform	32	Dave Jenkinson
	Summary	38	Dave Jenkinson
	Appendices	39

LONG TERM SUSTAINABLE RETURNS FOR ALL

• A clear vision which the whole company is working towards, to produce long term sustainable returns for all
• Our company purpose on how we achieve that vision is now fully embedded within the business
• Company purpose
• • To build good quality homes at a range of price points to meet the UK's housing needs
  • To create and protect superior long term value through the housing cyclefor:
  • • shareholders
    • customers
    • workforce
    • wider stakeholders

3

OUR CLEAR COMPANY PURPOSE HAS NEVER BEEN MORE IMPORTANT IN PERIODS OF UNCERTAINTY AND DISRUPTION

• This clear purpose has been fundamental to:
• 1. How we responded to the threat of Covid-19
  2. The Group's half year performance
  3. Our strong platform to deliver the country's homes

4

PRIORITISED SAFETY OF WORKFORCE, COLLEAGUES, CUSTOMERS AND LOCAL COMMUNITIES

• Response was responsible, swift and effective
• Compliance with Government guidance in England, Wales and Scotland
• Safe operating procedures developed covering all disciplines
• Oversight and enforcement of Covid-19 controls
• Covid Secure workplace environment established

5

MINIMISED AND CONTAINED DISRUPTION - ENSURING SOUND FUTURE PLANNING

• Persimmon has not taken advantage of any Covid-19 Government support
• • All taxes paid in full and on time
• This ensured responsible stewardship whilst maintaining operational momentum
• • All staff paid in full throughout ensuring efficient return to work when permitted
  • Skeleton staff presence maintained in regional offices with home working fully supported
  • Strong control over operations maintained throughout
  • Progress continued to be made across all business areas
• Over 5,500 hours of training provided to c. 5,300 participants during Covid disruption

6

SAFE AND AGILE RESPONSE TO CONSTRUCTION ON SITE

• Orderly shutdown of all sites through April 2020
• • Close contact with key suppliers maintained throughout
• Persimmon's operational agility enabled safe and efficient restart of build programmes
• • From 27 April 2020 construction recommenced in England and Wales (from 15 June 2020 in Scotland)
  • "Passport to work scheme" introduced for all sub- contractors
  • • Covid-19enforcers provide on-site supervision
  • Safe and efficient return to operational capacity
  • • Proven operating model to deal with future disruption

7

EFFECTIVE SALES PROCESS DURING LOCKDOWN

• A remote sales presence provided throughout the lockdown period
• From 25 March 2020 all site sales offices closed
• Online reservation procedure
• Site sales offices now open in all regions
• Strong sales performance since the end of lockdown

8

CUSTOMER COMMUNICATION MAINTAINED

• Emergency appointments only
• Routine maintenance commenced from 15 June 2020 in England and Wales (from 13 July 2020 in Scotland)
• "Passport to work scheme" introduced for all operatives
• • Individual risk assessments for each customer
• Digital New Home Demonstrations

9

CONTINUED COMPREHENSIVE, FLEXIBLE RESPONSE TO COVID-19

• Health and safety protocols implemented and monitored in line with official guidance
• All areas of the Group can react to local and national restrictions if required
• Persimmon is maintaining strict Covid Secure working practices
• Fully prepared and ready to respond to future Covid-19 challenges

10

AGILE RESPONSE TO COVID-19

• The challenges of Covid-19 were responded to sympathetically and with agility
• Reflected in the key areas of our business focus:
• 1. Financial performance
  2. Implementation of Customer Care Improvement Plan
  3. Providing homes for all
  4. Workforce training and relationships
  5. Support for communities and wider stakeholders
  6. Building sustainable homes and communities

11

RESILIENT FINANCIAL PERFORMANCE

	H1 2020	H1 2019	Change
New home legal completions	4,900	7,584	(35%)
Average selling price	£225,066	£216,942	+ 3.7%
New housing revenue	£1,102.8m	£1,645.3m	(33%)
Operating profits *	£293.2m	£510.1m	(43%)
Operating margin - New housing **	26.6%	31.0%	(4.4%)
Profit before tax	£292.4m	£509.3m	(43%)
Net cash inflow from operations (pre working capital)	£298.6m	£516.2m	(42%)
Cash	£828.9m	£832.8m	n/a
Land creditors	£374.5m	£484.0m	(23%)
Return on Average Capital Employed ***	32.5%	50.6%	(36%)
Net asset value per share	1081.9p	890.8p	+ 21%

• Underlying performance presented before goodwill impairment of £1.6m (H1 2019: £4.1m)

• Stated before goodwill impairment and based on new housing revenue
• 12 month rolling average pre goodwill impairment of £4.8m (H1 2019: £8.9m)

12

RESILIENT FINANCIAL PERFORMANCE

• Trading performance resilient through period of disruption
• • Profit before tax of £292m
  • Industry leading operating margin of 26.6%* (2019: 31.0%)
  • Strong liquidity with cash of £829m (2019: £833m)
• Work in progress of £1.22bn to support positive second half outturn (Dec 2019: £1.09bn)
• • Carrying c. 14% more equivalent new homes constructed than a year ago
  • WIP as % of forward sales at 66%** (2019: 63%)
• Reduction in deferred land commitments to £374m
• Dividend equal to 40p per share in September - review a further payment later in the year
• 
  * Stated before goodwill impairment and based on new housing revenue

  • Based on forward sales as at 1 July

13

CUSTOMER CARE IMPROVEMENT PLAN PROGRESSING AND

DELIVERING

• Significant progress across a suite of measures
• Communications improved and customer portal being rolled out
• Homebuyer Retention Scheme delivering customer and behavioural benefits - highlighted as good practice by the Consumer Code
• Persimmon Way progressing well and will be operational Q4 2020
• All new sites have access to full fibre to the home through FibreNest
• Financial investment stabilised

14

STRONG SIGNS OF PROGRESS

 HBF star rating only one metric

• Star rating trending above 5* since the start of 2020

• Currently scoring 89.5% for the 2019/20 HBF reporting year

 Over 40% of customers now using the Homebuyer Retention Scheme  Over 8,000 FibreNest customers

 We welcome the introduction of the industry ombudsman

Trustpilot

15

PROVIDING HOMES FOR ALL

• 31 regional housebuilding offices across the UK
• • Ability to flex output to over 20,000 new homes per annum
  • Wide range and choice of new homes across all developments
• House prices range from £40,000 to £900,000
• • 32% of private sales priced below £200,000
  • 10% of private sales priced lower than £150,000
  • Average private selling price c. 17% lower than the UK national average*
• c. 50% of private new homes sold to first time buyers

• 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. Group average private selling price is £246,208

16

WORKFORCE TRAINING - LONG STANDING COMMITMENT TO PROVIDE OPPORTUNITIES FOR ALL

• Career development opportunities
• • Further 95 colleagues promoted during H1 2020
  • c. 15% of our workforce across all disciplines are trainees - including over 420 traditional apprentices
• Significant training programme investment
• • c. 5,700 training days delivered during first half
  • Over 330,000 minutes of online training since the start of April
• Recognised as an industry leader by the Social Mobility Pledge and Women into Construction

17

SYMPATHETIC WORKFORCE RELATIONSHIP

• Continued to invest and support staff during lockdown
• • Introduction of remote working
  • Retained all staff on full pay
  • Pay increases and bonus paid to staff
• Provided additional mental health support and resource
• Positive feedback from Employee Engagement Panel
• Staff never been more important than in uncertain times

18

BUILDING SUSTAINABLE HOMES

• Continued development of focused sustainability strategy
• • Dedicated resource established
• Work underway to assess appropriate science based carbon reduction targets
• • Evaluation of the impact of Future Homes Standard
• Full environmental assessment undertaken on all sites prior to commencement
• • Engagement with local authorities and communities
• Environmental champions introduced covering all regions
• • Promotion of awareness on environmental and sustainability issues across the Group

19

BUILDING SUSTAINABLE HOMES …. AND COMMUNITIES

• Supporting customers, colleagues and communities
• • Signatory to the Covid-19 Business Pledge
  • c. 50,000* jobs supported across our communities and supply chain
• In first half of 2020 over £370,000 donated to our Community Champions
• £1m pledge for 2020 to Building Futures campaign
• Significant investment in our communities in last 18 months
• • Over £675m invested in local communities
  • 4,263 new homes delivered to our housing association partners

* Estimated using an economic toolkit

20

FINANCIAL REVIEW

		Page
 Robust first half performance	22
 Margins and cost recoveries	23
 High quality land holdings at 30 June 2020	24
 Off-site manufacturing - commitment to self help	25
	Strong balance sheet	26
	Strong liquidity	27
	Managing the cycle	28
	Capital return	29
	Future value delivery	31

21

ROBUST FIRST HALF PERFORMANCE

	H1 2020	H1 2019	Change
Legal completions
Private	4,029	5,963	(32%)
Partnerships	871	1,621	(46%)
Total	4,900	7,584	(35%)
Average selling price
Private	£246,208	£242,912	+ 1%
Partnerships	£127,266	£121,413	+ 5%
Group	£225,066	£216,942	+ 4%
New housing revenue
Private	£992.0m	£1,448.5m	(32%)
Partnerships	£110.8m	£196.8m	(44%)
Total	£1,102.8m	£1,645.3m	(33%)

• Covid-19related build disruption
• • Housing revenues down 33%
  • Mitigated by operational continuity
• 2,140 customers used the Government Help to Buy scheme (2019: 3,451)

• £292.4m profit before tax (2019: £509.3m)
• Selling prices have remained firm
• Period of reduced build and site overhead cost efficiencies
• Covid-19cost impact assessed at c. £11m

* Stated before goodwill impairment

22

INDUSTRY LEADING MARGINS MAINTAINED

New housing	2020	2019		2020	2019		2019	2019
Per plot:	H1	H1	Change	H1	H1	Change	H2	H2
Revenue	£225,066	£216,942	+ 3.7%	100.0%	100.0%		£214,579	100.0%
Land costs	(£31,682)	(£30,309)	+ 4.5%	(14.1%)	(13.9%)	(0.2%)	(£30,272)	(14.1%)
Build and other direct costs	(£122,926)	(£113,393)	+ 8.4%	(54.6%)	(52.3%)	(2.3%)	(£114,760)	(53.5%)
Gross profit / margin	£70,458	£73,240	(3.8%)	31.3%	33.8%	(2.5%)	£69,547	32.4%
Operating expenses *	(£11,310)	(£6,656)	+ 69.9%	(5.0%)	(3.1%)	(1.9%)	(£6,321)	(2.9%)
Other operating income	£679	£668	+ 1.6%	0.3%	0.3%	(0.0%)	£450	0.2%
Operating profit / margin *	£59,827	£67,252	(11.0%)	26.6%	31.0%	(4.4%)	£63,676	29.7%

• • Underlying performance presented before goodwill impairment of £1.6m (H1 2019: £4.1m; H2 2019: £3.2m)
• Housing gross margin remained resilient at 31.3% (H1 2019: 33.8%; H2 2019: 32.4%)
• Supported by high quality land holdings
• Continued investment in all our workforce and operations without recourse to Government funding

23

HIGH QUALITY LAND HOLDINGS UNDERPIN FUTURE MARGINS

	Number	Anticipated	Average	Cost to
	of plots	ave. revenue	plot cost	revenue
Plots owned with detailed planning	47,053	£218,811	£29,994	13.7%
Plots owned proceeding to planning	23,155	£200,211	£19,493	9.7%
Total owned	70,208	£212,677	£26,531	12.5%
Plots under control	19,024	£204,562	£27,973	13.7%
Total owned & under control	89,232	£210,947	£26,838	12.7%
Proceeding to contract (terms agreed)	8,753	£204,808	£28,663	14.0%
Grand total of all plots June 2020	97,985	£210,398	£27,001	12.8%
Grand total of all plots December 2019	99,462	£207,754	£28,003	13.5%

• Cost to revenue percentage of owned & controlled plots of 12.7% (Dec 19: 13.3%)
• Cautious, disciplined approach to land replacement

• Proforma margin based on owned land mix
• Industry leading land holdings

* Estimated weighted average gross margin - based on assumed revenues and costs at 30 June 2020 and normalised output levels

	60.0%
	50.0%
	40.0%
%
marginGross	30.0%
	20.0%

10.0%

0.0%

40% gm*

33% gm*

24% gm*

29% of plots

50% of plots

21% of plots

Owned plots - 70,208

24

OFF-SITE MANUFACTURING - COMMITMENT TO SELF HELP

• Vertical integration allows security over key material availability and cost
• • Over 100m bricks manufactured by Brickworks to date
  • Tileworks commenced deliveries to sites in spring 2020 - c. 2m tiles manufactured
• Self-helpaction - supporting improvements in supply chain capacity and industry output
• Site skill pressures eased through use of Space4 and modern methods of construction

25

STRONG BALANCE SHEET

		H1 2020	H1 2019	Change
	Work in progress	£1,224m	£1,024m	+ £200m
	Land	£1,897m	£2,013m	(£116m)
	Land creditors	£374m	£484m		(£110m)
	Cash	£829m	£833m		(£4m)
	Net cash *	£454m	£349m		+ £105m
	ROCE **	27.8%		40.5%		(12.7%)
				H1 2020		H1 2019	Change
	Cash inflow from operations		£299m		£516m	(£217m)
	Decrease in land			£47m		£69m	(£22m)
	Decrease in land creditors		(£63m)		(£67m)	+ £4m
	Increase in WIP			(£113m)		(£150m)	+ £37m
	Other working capital movments		(£40m)		(£65m)	+ £25m
	Tax paid			(£130m)		(£64m)	(£66m)
	Other			(£10m)		(£10m)	+ £0m
	Cash (out)/inflow before financing		(£10m)		£229m	(£239m)

• Excellent platform for future growth - effective management of the housing cycle
• Substantial work in progress investment
• • £200m increase over June 2019 position
  • 13% increase in WIP as a % of revenue ***
• Well judged land investment provides foundations for future growth - land payments of £167m (2019: £239m) including £107m of land creditor settlements (2019: £126m)
• Strong liquidity with cash of £829m (Dec 2019: £844m) - resilient operational cash flows in a period of substantial disruption

* Being cash less land creditors

• 12 month rolling average stated before goodwill impairment and includes land creditors
• Calculated from 12 months new housing revenue

26

STRONG LIQUIDITY

• Free cash absorption before capital returns of £15m (2019: £182m generated) - H1 2020 includes c. £90m of accelerated corporation tax paid on time and in full
• Working capital investment of £170m during first half of 2020 (2019: £212m) - includes £129m in work in
  progress (2019: £142m)

• Strong net cash* of £454m (2019: £349m)

* Being cash less land creditors

27

* Cash generation pre dividend/capital returns, share option related payments to HMRC and land expenditure

SUCCESSFUL MANAGEMENT OF THE CYCLE

• In paying all taxes in full and on time, H1 2020 includes c. £90m of accelerated corporation tax payments when comparing to prior year
• Judging scale and timing of capital deployment through the cycle critically important to strategic success
• Selective land replacement at the right time
• Ongoing investment ensuring appropriate work in progress levels are maintained - strengthening quality and

service

28

MODEST CAPITAL RETURN TO SHAREHOLDERS

• Reinvestment in the business and working capital needs remain a priority
• Covid-19impacts:
• • Cancellation of the 125p per share return of surplus capital due to be paid 2 April 2020
  • Postponement of the 110p per share final dividend for 2019 that was due to be paid 6 July 2020

		Existing Plan			Original Plan
	Regular	Top up	Total
	payments	payments	payments
Total paid to 2019	680p	275p	955p		390p
2020	40p	-	40p		115p
2021	125p	110p	235p		115p
TOTAL	845p	385p	1230p		620p

• Modest interim dividend on account of full year 2019 given strong performance of the business
• Further capital return for the remainder of this year will continue to be assessed
• Future capital returns subject to regular review in line with existing policy

29

MARKET LEADING LONG TERM RETURNS
										Persimmon plc - Long term margin and returns
	45.0%																							5,000.0		Total shareholder returns over the past 20 years (rebased to 100)
	40.0%																							4,500.0		4,200										COVID
																									Change (%)			20 years	10 years	5 years	1 year	YTD	outbreak2
	35.0%																							4,000.0		3,600	Persimmon			2,711.1%	1,002.3%		57.7%	14.5%	(15.2%)	(30.3%)
																									UK Housebuilders1	389.0%	281.0%		(7.7%)	(20.1%)	(42.2%)	(49.0%)
	30.0%																							3,500.0			FTSE 100			100.6%	83.1%		15.5%	(13.8%)	(16.9%)	(15.7%)
																								3,000.0	employedCapital£m	3,000										2,711%
marginGross%
25.0%																							2,000.0
																				22.4%				2,500.0
																									2,400
	20.0%																			21.9%
	15.0%																			£1,556.1m						1,800
																							1,500.0
	10.0%																							1,000.0
																									1,200
	5.0%																							500.0
	0.0%																							0.0		600										389%
	Dec-99	Jun-00	Dec-00	Jun-01	Dec-01Jun-02	Dec-02	Jun-03	Dec-03	Jun-04	Dec-04Jun-05Dec-05Jun-06Dec-06Jun-07Dec-07Jun-08	Dec-08	Jun-09	Dec-09Jun-10	Dec-10	Jun-11	Dec-11Jun-12Dec-12Jun-13Dec-13Jun-14Dec-14	Jun-15	Dec-15Jun-16	Dec-16	Jun-17Dec-17Jun-18	Dec-18	Jun-19	Dec-19	Jun-20
												101%
										Capital employed (inc LCrs)						Gross margin %
																								0
										ROACE % (inc LCrs)						Average - Gross margin %
										Average - ROACE % (inc LCrs)						Average - Capital employed (inc LCrs)								Jun-00	Jun-01Jun-02Jun-03	Jun-04	Jun-05	Jun-06Jun-07	Jun-08Jun-09Jun-10	Jun-11Jun-12	Jun-13Jun-14	Jun-15Jun-16Jun-17Jun-18Jun-19Jun-20

• Industry leading returns generated through effective management of the housing cycle - in the best long term interests of all stakeholders

Source: Datastream as of 30 June 2020 1 UK Housebuilder peers

2 Change since 21 February 2020

30

STRONG PLATFORM TO DELIVER FUTURE VALUE AND TO NAVIGATE POTENTIAL CHALLENGES

• Strong forward sales - £2.5bn

	Half Year Forward Sales	Units	ASP	Revenue
	June 2020	10,105	£184,005 £1,859.4m
	June 2019	9,128	£177,684 £1,621.9m
	Movement	+11%	+4%	+15%
	Current Forward Sales	Units	ASP	Revenue
	(inc. 7 weeks post half year)
	August 2020	12,615	£196,823	£2,482.9m
	August 2019	11,006	£186,102	£2,048.2m
	Movement	+15%	+6%	+21%

• Since 1 July, private weekly sales rate of 0.97 homes per site, c. 49% ahead of last year
• Putting customers before volume - disciplined approach to sales release
• c. 55 new outlets to open through the second half of 2020
• Selling prices remain firm
• H2 2020 legal completion delivery to be at least in line with the second half of 2019

31

STRONG PLATFORM TO DELIVER THE COUNTRY'S HOMES

• Skilled management of the housing cycle places Persimmon in a position of strength for the future
• • Strength of the balance sheet
  • Cash deployment
  • Strength of land holdings
  • Benefits of the Customer Care Improvement Plan
  • Existing infrastructure of the business

32

BALANCE SHEET STRENGTH PROVIDES OPTIONS

• Cash at the end of June of £829m
• No debt - £300m revolving credit facility undrawn
• High quality land holdings - c. 6 years supply depending upon volume delivery
• Modest land creditors with a good payment profile
• Strong position to navigate future challenges and take advantage of opportunities

33

MANAGING THE HOUSING CYCLE - SKILFUL CASH

DEPLOYMENT

• Vital to deploy and disinvest capital at the correct time in the cycle - in housebuilding this manifests in how you manage your land holdings
• Strength of land bank gives us options on when we needto buy land
• • Total plots owned and under control at 89,232
  • Represents c. 5.6 years forward supply (depending on volume delivery)
  • c. 29,300 plots held under option that are proceeding through planning
  • c. 14,500 plots controlled and allocated in local plans
• Total visibility - c. 133,000 plots

34

DISCIPLINED LAND ACQUISITION BASED ON STRICT CRITERIA

Strategic interests acquired during H1 2020

• Strategic land bank of c. 15,900 acres - potential to deliver a further 100,000 new homes
• Land creditors reduced to £374.5m with the majority settled over three years
• The ability to deploy more cash if we see compelling opportunities

35

CUSTOMER CARE IMPROVEMENT PLAN - CONFIDENCE FOR

FUTURE GROWTH

• The Customer Care Improvement Plan is in the process of being fully embedded in the business
• Systems and processes proving to be both efficient and resilient
• Culturally the customer is now at the centre of our business
• Confidence to grow output at the appropriate time
• We now have the ability to deliver high quality customer service and volume

36

STRONG INFRASTRUCTURE - SUPPORTING THE

OPPORTUNITIES FOR GROWTH

• 31 operating companies - ability to increase output at the appropriate time
• Excellent range and choice of sites and product across the country
• Skilled and motivated employees with an overwhelming commitment to Persimmon
• Senior management team with a proven track record of delivery

37

COMPANY PURPOSE - AT THE HEART OF THE COMPANY

• Challenges posed by Covid-19 shows the exceptional quality of the business
• Response both principled and agile to balance the needs of all our stakeholders
• Persimmon is positioned in a great place for the future
• • Proven record of managing the housing cycle
  • Industry leading land bank
  • Industry leading balance sheet
  • Customer Care Improvement Plan embedding in the business
  • The exceptional quality of our colleagues
• Confident we can continue to deliver the country's new homes and deliver for all stakeholders

38

APPENDICES

• Appendix 1 - H1 2020 performance

	Appendix	2	- Half yearly profit & loss
	Appendix	3	- Financial record: Income Statement and Balance Sheet

• Appendix 4 - Half yearly sales profile
• Appendix 5 - Trading performance - Brand
• Appendix 6 - Trading performance - Divisional
• Appendix 7 - Analysis of unit sales

 Appendix 8 - Land holdings at 30 June 2020

• Appendix 9 - Balance sheet
• Appendix 10 - Cash flows

	Appendix	11 - Mortgage approvals for house purchase
	Appendix	12 - New housing starts

39

APPENDIX 1: H1 2020 PERFORMANCE

Underlying trading (adjusted for goodwill impairment)
		H1 2020		H1 2019
New housing	Total	% of revenue		Total	% of revenue
Revenue
	£1,102.8m			£1,645.3m
Cost of sales:
- land cost		(£155.2m)	(14.1%)		(£229.8m)	(13.9%)
- build and other direct costs		(£602.4m)		(54.6%)		(£860.0m)		(52.3%)
Total cost of sales		(£757.6m)		(68.7%)		(£1,089.8m)		(66.2%)
Gross profit		£345.2m	31.3%		£555.5m	33.8%
Operating expenses		(£55.4m)	(5.0%)		(£50.5m)	(3.1%)
Other operating income		£3.4m		0.3%		£5.1m		0.3%
Underlying operating profit		£293.2m	26.6%		£510.1m	31.0%
								Change
Finance income		£5.1m			£8.5m
Finance costs		(£4.3m)				(£5.2m)
Underlying pre-tax profit		£294.0m			£513.4m	-43%
Goodwill impairment		(£1.6m)			(£4.1m)			* 12 month rolling profit after tax generated from the
					average of the opening and closing total equity for the
Reported pre-tax profit		£292.4m			£509.3m	-43%		12 month period
Return on equity*
	21.5%				31.0%				Appendix 1 - 1 of 2

40

APPENDIX 1: H1 2020 PERFORMANCE

Brand Profile - 6 months ended 30 June 2020:

		Unit	Completions	Average selling	Average price	Plots owned and	Plot count
		completions	change	price	change	under control	change
	Persimmon North	1,872	(40%)	£208,098	+ 2%	34,926	(2%)
	38%				39%
	Persimmon South	1,783	(24%)	£266,871	(2%)	28,984	(6%)
	36%				33%
	Charles Church	374	(24%)	£338,455	(5%)	9,199	(16%)
	8%				10%
	Partnerships	871	(46%)	£127,266	+ 5%	16,123	(9%)
	18%				18%
	Total	4,900		£225,066		89,232
	Change vs 30 June 2019		(35%)		+ 4%		(6%)

Appendix 1 - 2 of 2

41

APPENDIX 2: HALF YEARLY PROFIT & LOSS

Underlying performance:	2020	2019		2019
	H1	H1	Change	FY
New housing
Unit completions	4,900	7,584	(2,684)	15,855
Revenue	£1,102.8m	£1,645.3m	(£542.5m)	£3,420.1m
Operating profit *	£293.2m	£510.1m	(£216.9m)	£1,036.7m
Operating margin *	26.6%	31.0%	(4.4%)	30.3%
Net finance income	(£1.4m)	(£1.5m)	+ £0.1m	(£3.8m)
Net imputed interest income **	£0.6m	(£1.8m)	+ £2.4m	(£7.6m)
Pre-tax profit *	£294.0m	£513.4m	(£219.4m)	£1,048.1m
Pre-tax profit margin *	26.7%	31.2%	(4.5%)	30.6%
Pre-tax profit per plot *	£59,997	£67,692	(£7,695)	£66,102

• Underlying performance presented before goodwill impairment of £1.6m (H1 2019: £4.1m; FY 2019: £7.3m)

** Interest imputed in accordance with IAS 2 and IAS 18

Appendix 2

42

APPENDIX 3: FINANCIAL RECORD - INCOME STATEMENT

	2018	2018	2019	2019	2020
	HY	FY	HY	FY	HY
Unit completions	8,072	16,449	7,584	15,855
4,900
New housing revenue	£1,742.0m	£3,545.8m	£1,645.3m	£3,420.1m	£1,102.8m
Average Selling Price	£215,813	£215,563	£216,942	£215,709	£225,066
Operating profit *	£518.2m	£1,091.9m	£510.1m	£1,036.7m	£293.2m
Pre-tax profit *	£520.7m	£1,100.0m	£513.4m	£1,048.1m	£294.0m
Basic EPS *	136.3p	286.3p	130.6p	269.1p	75.1p
Diluted EPS *	131.5p	283.7p	130.2p	268.6p	74.9p
Return on Average Capital Employed **	41.7%	41.3%	40.5%	37.0%	27.8%

• Underlying performance presented before goodwill impairment of £1.6m (H1 2018: £4.4m; FY 2018: £9.2m; H1 2019: £4.1m; FY 2019: £7.3m)

** 12 month rolling average pre goodwill impairment of £4.8m (H1 2018: £10.0m; FY 2018: £9.2m; H1 2019: £8.9m; FY 2019: £7.3m) and includes land creditors

Appendix 3 - 1 of 2

43

APPENDIX 3: FINANCIAL RECORD - BALANCE SHEET

	2018	2018	2019	2019	2020
	HY	FY	HY	FY	HY
Shareholders' funds	£2,836.3m	£3,194.5m	£2,837.5m	£3,258.3m
£3,450.6m
Cash	£1,154.6m	£1,048.1m	£832.8m	£843.9m	£828.9m
Net asset value per share	906.3p	1006.0p	890.8p	1021.7p	1081.9p
Work in progress	£749.6m	£881.8m	£1,024.0m	£1,094.6m
£1,223.7m
% of revenue *	21%	25%	30%	32%	43%
Land	£2,132.3m	£2,077.2m	£2,013.0m	£1,938.6m	£1,896.6m
% of revenue *	61%	59%	58%	57%	66%
Part exchange stock	£45.8m	£56.2m	£61.8m	£71.8m	£55.2m
% of revenue *	1%	2%	2%	2%	2%
Shared equity debt	£104.0m	£86.9m	£73.7m	£68.6m	£62.7m
% of revenue *	3%	2%	2%	2%	2%
Total % of revenue *	86%	88%	92%	93%	113%
Land creditor	£611.4m	£548.0m	£484.0m	£435.2m
£374.5m
% of land value	29%	26%	24%	22%	20%

* Calculated from 12 months new housing revenue

Appendix 3 - 2 of 2

44

APPENDIX 4 : HALF YEARLY SALES PROFILE

Appendix 4

45

APPENDIX 5: TRADING PERFORMANCE - BRAND

		2020	2019
New housing		H1	H1	Change
			No.
		No.
Units	Persimmon Core	3,655	5,470	(33%)
	Charles Church	374	493	(24%)
	Partnerships	871	1,621	(46%)
	Total	4,900	7,584	(35%)
		£	£
Average Selling Price	Persimmon Core	236,769	232,547	+ 2%
	Charles Church	338,455	357,917	(5%)
	Partnerships	127,266	121,413	+ 5%
	Group	225,066	216,942	+ 4%
		£m	£m
Revenue	Persimmon Core	865.4	1,272.0	(32%)
	Charles Church	126.6	176.5	(28%)
	Partnerships	110.8	196.8	(44%)
	Total	1,102.8	1,645.3	(33%)		Appendix 5 - 1 of 2

46

APPENDIX 5: TRADING PERFORMANCE - BRAND

		2020	2019
New housing		H1	H1	Change
			£m
		£m
Gross Profit	Persimmon Core	288.6	459.2	(37%)
	Charles Church	36.5	58.2	(37%)
	Partnerships	20.1	38.1	(47%)
	Total	345.2	555.5	(38%)
Gross Margin	Persimmon Core	33.3%	36.1%	(2.8%)
	Charles Church	28.8%	33.0%	(4.2%)
	Partnerships	18.1%	19.4%	(1.3%)
	Total	31.3%	33.8%	(2.5%)

Appendix 5 - 2 of 2

47

APPENDIX 6: TRADING PERFORMANCE - DIVISIONAL

		30 June 2020
New housing	Units	Average Sale	Annual average	Plots owned and
	No.	Price (£)	price change	under control
Yorkshire
341	191,015	+ 1%	5,095
Scotland	271	204,926	+ 10%	9,093
North West	363	165,587	+ 7%	4,135
North East	337	181,226	-	11,327
Midlands	657	207,791	+ 3%	9,098
Eastern	169	210,959	(14%)	2,455
Persimmon North	2,138	193,650	+ 3%	41,203
30 June 2019	3,639	188,041		42,711
Change	(41%)	+ 3%		(4%)

Appendix 6 - 1 of 3

48

APPENDIX 6: TRADING PERFORMANCE - DIVISIONAL

		30 June 2020
New housing	Units	Average Sale	Annual average	Plots owned and
	No.	Price (£)	price change	under control
Shires	828	271,522	+ 9%	14,601
Western	652	226,607	+ 7%	11,807
Southern	455	248,743	(1%)	6,077
Wales	353	169,810	(4%)	5,396
Persimmon South	2,288	238,500	+ 3%	37,881
30 June 2019	3,315	230,689		40,419
Change
(31%)	+ 3%		(6%)

Appendix 6 - 2 of 3

49

APPENDIX 6: TRADING PERFORMANCE - DIVISIONAL

		30 June 2020
New housing	Units	Average Sale	Plots owned and
	No.	Price (£)	under control
Charles Church	474	301,920	10,148
30 June 2019	630	311,549	11,956
Change
(25%)	(3%)	(15%)

Appendix 6 - 3 of 3

50

APPENDIX 7: ANALYSIS OF UNIT SALES

* Persimmon data represents completions in the period ** NHBC data represents registrations in the period NHBC Source: NHBC Housing Market Report (July 2020)

Appendix 7 - 1 of 3

51

APPENDIX 7: ANALYSIS OF UNIT SALES - PRODUCT MIX

Persimmon data represents completions in the period and

NHBC data represents registrations in the period

NHBC Source: NHBC Housing Market Report (July 2020)

Appendix 7 - 2 of 3

52

APPENDIX 7: ANALYSIS OF UNIT SALES - PRICE RANGE

Appendix 7 - 3 of 3

53

APPENDIX 8: LAND HOLDINGS AT 30 JUNE 2020

	Number	Number	Number	Anticipated	Average	Cost to	Cost to
	of plots	of plots	of plots	ave. revenue	plot cost	revenue	revenue
	Dec 2019	Jun 2020	Change			Jun 2020	Dec 2019
Plots owned with detailed planning	46,055	47,053	+ 998	£218,811	£29,994	13.7%	14.5%
Plots owned proceeding to planning	25,887	23,155	(2,732)	£200,211	£19,493	9.7%	10.8%
Total owned	71,942	70,208	(1,734)	£212,677	£26,531	12.5%	13.2%
Plots under control	21,304	19,024	(2,280)	£204,562	£27,973	13.7%	13.8%
Total owned & under control	93,246	89,232	(4,014)	£210,947	£26,838	12.7%	13.3%
Proceeding to contract (terms agreed)	6,216	8,753	+ 2,537	£204,808	£28,663	14.0%	15.6%
Grand total of all plots	99,462	97,985	(1,477)	£210,398	£27,001	12.8%	13.5%
	Grand total of all plots - Dec 2019		£207,754	£28,003	13.5%
			Cost to revenue %
Plot cost to revenue ratio history:	Jun 2020	Dec 2019	Jun 2019	Dec 2018	Jun 2018	Dec 2017	Jun 2017
Plots owned with detailed planning	13.7%	14.5%	13.9%	14.2%	14.8%	14.4%	15.1%
Plots owned proceeding to planning	9.7%	10.8%	11.6%	11.4%	10.5%	10.3%	9.6%
Total owned	12.5%	13.2%	13.1%	13.2%	13.5%	13.2%	13.7%
Plots under control	13.7%	13.8%	15.5%	15.1%	15.4%	15.5%	16.6%
Total owned & under control	12.7%	13.3%	13.5%	13.6%	13.9%	13.7%	14.4%
Proceeding to contract (terms agreed)	14.0%	15.6%	15.3%	15.6%	17.7%	18.8%	21.0%
Grand total of all plots	12.8%	13.5%	13.7%	13.8%	14.2%	14.2%	15.0%

Appendix 8

54

APPENDIX 9: BALANCE SHEET

		2020	2019		2019
		H1	H1	Change	FY
Work in progress		£1,223.7m	£1,024.0m	+ £199.7m	£1,094.6m
Land		£1,896.6m	£2,013.0m	(£116.4m)	£1,938.6m
Land creditors		£374.5m	£484.0m	(£109.5m)	£435.2m
Part exchange stock		£55.2m	£61.8m	(£6.6m)	£71.8m
Shared equity debt		£62.7m	£73.7m	(£11.0m)	£68.6m
Cash		£828.9m	£832.8m	(£3.9m)	£843.9m
Shareholders' funds		£3,450.6m	£2,837.5m	+ £613.1m	£3,258.3m
Capital employed		£2,621.7m	£2,004.7m	+ £617.0m	£2,414.4m
Net asset value per share		1081.9p	890.8p	+191.1p	1021.7p
Capital Returns (paid and accrued)	value	£0.0m	£747.8m (£747.8m)	£747.8m
	per share	-	235p	(235p)	235p

Appendix 9

55

APPENDIX 10: CASH FLOWS

		H1 20		H1 19	Change
		£m		£m
Operating cash (before working capital movements)	298.6	516.2	-42%
Investment in working capital:
	Decrease in gross land	46.8	69.0
	Decrease in land creditors	(63.4)	(66.7)
	Net land movement	(16.6)	2.3
	Increase in WIP, part exchange and showhouses	(112.5)	(149.9)
	Other working capital movements	(40.5)	(64.6)
Cash flow from operations	129.0	304.0	-58%
Net interest and similar charges received	0.1	0.9
Tax paid	(129.7)	(63.6)
JV net funding movement	-	0.9
Net capital expenditure	(9.6)	(12.8)
Cash flow before dividends, share transactions and financing	(10.2)	229.4
Net share transactions	0.6	1.0
Net settlement of shared based payments	-	(42.6)
Capital return paid to Group shareholders	-	(397.7)
Cash flow before financing	(9.6)	(209.9)
Lease capital payments	(1.8)	(2.0)
Payment of Partnership liability to pension scheme	(3.6)	(3.4)
Decrease in cash	(15.0)	(215.3)
		Appendix 10

56

APPENDIX 11: MORTGAGE APPROVALS

	150
		Average monthly
		approvals	since
		beginning of 1993:
		79,650
Volume ('000)	100
			Dec 2013:	Dec 2015:	Dec 2017:	Dec 2019:
-		Dec 2009:		72,800	71,000		62,000	68,200
Approvals
	59,000	Dec 2011:
		52,300
				Dec 2014:	Dec 2016:	Dec 2018:
50				68,400		64,800
			60,100
							Jun 2020:
				Dec 2012:				40,000
	Average monthly	Dec 2010:	55,000
	approvals	since	42,600
	beginning of 2008:
	57,690
		Nov 2008:
		27,000
	0

Appendix 11

Source: Bank of England Data

57

APPENDIX 12: NEW HOUSING STARTS

Source: NHBC Housing Market Report (July 2020)	Appendix 12

58

DISCLAIMER

Important Notice

Certain statements in this results presentation are forward looking statements.

Forward looking statements involve evaluating a number of risks, uncertainties or assumptions that could cause actual results to differ materially from those expressed or implied by those statements.

Forward looking statements regarding past trends, results or activities should not be taken as a representation that such trends, results or activities will continue in the future.

Undue reliance should not be placed on forward looking statements.

59