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Persimmon plc: Difference between revisions

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Persimmon plc

Company type	Public limited company
Traded as	LSE: PSN FTSE 100 Component
Industry	Housebuilding
Founded	1972; 52 years ago (1972)
Headquarters	York, England, UK
Key people	Roger Devlin (Chairman)[1] Dean Finch (CEO)[2]
Revenue	£3,328.3 million (2020)[3]
Operating income	£783.5 million (2020)[3]
Net income	£638.4 million (2020)[3]
Number of employees	5,221 (2020)[3]
Subsidiaries	Charles Church Westbury Partnerships Space 4
Website	www.persimmonhomes.com

Persimmon plc is a British housebuilding company, headquartered in York, England. The company is named after a horse which won the 1896 Derby and St. Leger for the Prince of Wales (the future Edward VII). It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.

History

Persimmon was founded by Duncan Davidson in 1972. After leaving George Wimpey, Davidson had formed Ryedale Homes in 1965, selling it to Comben Homes in 1972 for £600,000. Davidson restarted development again in the Yorkshire area; Persimmon began to expand regionally with the formation of an Anglian division in 1976 followed by operations in the Midlands and the south-west.^[4] In 1984, Persimmon bought Tony Fawcett’s Sketchmead company; Fawcett had been a director of Ryedale and he became deputy managing director at Persimmon. The enlarged company was floated on the London Stock Exchange in 1985, by which time the Company was building around 1,000 houses a year.^[5]

Steady regional expansion took volumes up to 2,000 by 1988 with a target of 4,000 following the housing recession. Tony Fawcett had died in 1990 and in 1993 John White was appointed as chief executive with Davidson remaining as an executive chairman. In 1995, Persimmon made the first of a series of major acquisitions. Ideal Homes, once the largest housebuilder in the country and then part of Trafalgar House was bought for £176m giving the Group a much stronger presence in the south-east. This was followed by the purchase of the Scottish housing business of John Laing plc and Tilbury Douglas Homes.^[4]

In 2001, Persimmon acquired Beazer Homes UK, for £612m, taking output to over 12,000 a year.^[4] The deal came about after Beazer and Bryant announced a 'merger of equals' to create a new house builder called Domus.^[6] However, Taylor Woodrow stepped in with a £556 million bid for Bryant, and Persimmon bought Beazer, a company named after its founder Brian Beazer, and originally started in Bath. The acquisition of Beazer brought with it Charles Church, an upmarket housing business founded by Charles and Susanna Church in 1965.^[7]

In January 2006 Persimmon acquired Westbury, another listed UK house builder, for a total consideration of £643 million.^[8]

Operations

It builds homes under the Persimmon Homes, Charles Church and Westbury Partnerships brands.^[9]

Criticism

Poor build quality

Persimmon has regularly been criticised for the poor build quality of some of its homes. Examples include wiring up sockets dangerously giving the potential to shock, installing wobbly bannisters, laying turf on builder's rubble rather than on newly laid soil and radiators being not properly fixed to the wall.^{[10][11][12][13][14]}

In addition, Persimmon has been criticised for its sales and aftercare processes which do not always live up to the "enjoyable" and "stress-free" experiences promised in the company's own pledge.^[15]

In 2008 a boy was killed by a falling mantelpiece. Persimmon, which sub-contracted company KD Childs to fit the fireplaces, had not checked the standards and had never received documents about how fireplaces were fitted. A mantelpiece had previously fallen at another Persimmon Home but was treated as a "one-off" incident.^[16]

In 2013, Persimmon sold a house with a garage that was too narrow for some cars to fit into.^[17]

In 2018 a couple created signs warning potential neighbours against buying homes in their Newquay estate, citing multiple faults which Persimmon had, as of 19 July 2018, failed to correct, including patio doors which did not close properly, protruding nails, and damp and mould resulting from poor plumbing.^[18]

Persimmon's poor new build quality was the subject of a Channel 4 Dispatches documentary broadcast on 15 July 2019.^[19][20] In August 2019, Persimmon appointed an independent team of construction quality inspectors to ensure its homes are built to required standards.^[21]

In April 2019 Persimmon launched an independent review of customer care and quality of work following criticism. Persimmon had been ranked the lowest major housebuilder in the Home Builders Federation annual customer satisfaction survey.^[22] The review, published in December 2019, criticised Persimmon for not having minimum construction standards, increasing the risk of build defects,^[23] with a "systemic nationwide failure" of missing and/or incorrectly installed fire cavity barriers in its timber frame properties.^[24][25] In March 2021, Persimmon CEO Dean Finch announced plans to double the firm's team of independent quality inspectors to over 60 by the end of 2021.^[26]

Health and safety failure

In 2001 Persimmon was fined £125,000 after an employee was crushed to death. HSE investigating inspector Tony Mitchell said: "Companies need to ensure that all safety devices are fully operational. In this case properly fitted interlocks would have prevented access to the enclosure, and saved a life".^[27]

Executive pay

In December 2017, Persimmon's chairman, Nicholas Wrigley, resigned over his role in awarding Jeff Fairburn, the CEO, a £128 million bonus.^[28] The Persimmon bonus scheme was believed to be the UK's "most generous ever", scheduled to pay more than £800m to 150 senior staff from 31 December 2016.^[28]

In October 2018, Fairburn received widespread criticism after refusing to discuss the bonus awarded to him the previous year. When the bonus was awarded he said he would forego half his shares: the final bonus which therefore was awarded £75 million. This was the largest bonus award by a listed UK company in history.^[29] Fairburn has said he would give a "substantial proportion" of the bonus to charity; however no details of the charities were given (and no charitable involvement could be identified three years later).^[30] In addition, analysis carried out showed the shares he retained were the most beneficial to him.^[31] Although the method used was legal, a more arbitrary cut across all the stock would have reduced his bonus to £60 million. He left the following month in a decision that the company described as being by "mutual agreement and at the request of the company".^[32]

Late payment

In April 2019, Persimmon Homes was suspended from the UK Government's Prompt Payment Code for failing to pay suppliers on time.^[33] It was reinstated around 10 months later.^[34]

References

External links

• Official website
• Persimmon plc corporate website