Persimmon plc

Last updated

Persimmon plc
Company type Public limited company
LSE:  PSN
FTSE 100 Component
Industry Housebuilding
Founded1972;52 years ago (1972)
Headquarters York, England, UK
Key people
Roger Devlin (Chairman) [1]
Dean Finch (CEO) [2]
RevenueDecrease2.svg £2,773.2 million (2023) [3]
Decrease2.svg £346.9 million (2023) [3]
Decrease2.svg £255.4 million (2023) [3]
Number of employees
6,000 (2023) [4]
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.

Contents

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. [5] 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. [6]

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. [5]

In 2001, Persimmon acquired Beazer Homes UK, for £612m, taking output to over 12,000 a year. [5] The deal came about after Beazer and Bryant announced a 'merger of equals' to create a new house builder called Domus. [7] 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. [8]

In January 2006, Persimmon acquired Westbury, another listed UK house builder, for a total consideration of £643 million. [9]

Operations

Driveway entrance to the offices of Persimmon plc in York Driveway entrance to the HQ of Persimmon PLC - geograph.org.uk - 278190.jpg
Driveway entrance to the offices of Persimmon plc in York

It builds homes under the Persimmon Homes, Charles Church and Westbury Partnerships brands. [10]

Criticism

Build quality

Persimmon has regularly been criticised for the poor build quality of some of its homes. [11] [12] [13] [14] [15] [16]

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. [17]

Persimmon's build quality was the subject of a Channel 4 Dispatches documentary broadcast on 15 July 2019. [18] [19] In August 2019, Persimmon appointed an independent team of construction quality inspectors to ensure its homes are built to required standards. [20]

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. [21] The review, published in December 2019, criticised Persimmon for not having minimum construction standards, increasing the risk of build defects, [22] with a "systemic nationwide failure" of missing and/or incorrectly installed fire cavity barriers in its timber frame properties. [23] [24] 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. [2]

In 2021, Persimmon built a block of properties the wrong way round in Colchester. The local authority required them to ensure the building was completed to the original designs submitted. [25]

Censorship

In 2019 Persimmon paid to take control of and then shut down a Facebook group, called Persimmon Homes Unhappy Customers, which detailed complaints about the company, and had almost 14,000 members. [26] The company defended deleting the group. [27]

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". [28]

Executive pay

In December 2017, Persimmon's chairman, Nicholas Wrigley, resigned over his role in awarding Jeff Fairburn, the CEO, a £128 million bonus. [29] 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. [29]

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 forgo 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. [30] 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). [31] [32] He left the following month in a decision that the company described as being by "mutual agreement and at the request of the company". [33]

Late payment

In April 2019, Persimmon Homes was suspended from the UK Government's Prompt Payment Code for failing to pay suppliers on time. [34] It was reinstated around 10 months later. [35]

Competition

In February 2024, Persimmon was among eight UK house-builders targeted by the Competition and Markets Authority in an investigation into suspected breaches of competition law. The CMA said it had evidence that firms shared commercially sensitive information with competitors, influencing the build-out of sites and the prices of new homes. [36]

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References

  1. ↑ "Persimmon appoints Roger Devlin as new chairman". Scottish Construction Now. 15 March 2018. Retrieved 1 August 2021.
  2. 1 2 "New Persimmon chief on quality control drive". The Construction Index. 3 March 2021. Retrieved 3 March 2021.
  3. 1 2 3 "Preliminary Results 2023" (PDF). Persimmon plc. Retrieved 12 March 2024.
  4. ↑ "Chairman addresses prestigious Cardiff Business Club". Persimmon. 5 June 2023. Retrieved 11 February 2024.
  5. 1 2 3 Wellings, Fred: Dictionary of British Housebuilders (2006) Troubador. ISBN   978-0-9552965-0-5
  6. ↑ Company Prospectus
  7. ↑ "BUSINESS - Persimmon to enter Beazer race". BBC News. Retrieved 21 March 2015.
  8. ↑ "About Charles Church". charleschurch.com. Retrieved 21 March 2015.
  9. ↑ "Business - UK housebuilders announce tie-up". BBC News. Retrieved 21 March 2015.
  10. ↑ Persimmon: Corporate Profile
  11. ↑ BBC Watchdog: "More moans about new homes" Archived 6 June 2011 at the Wayback Machine
  12. ↑ ITV New Homes from Hell
  13. ↑ "Poorly-fixed lintel killed child". BBC News . Retrieved 21 March 2015.
  14. ↑ "£30k damage after plumbing nightmare". Wiltshire Times. Retrieved 21 March 2015.
  15. ↑ "Dream homes turn into a nightmare for neighbours on Persimmon's Hunters Gate development in Grantham". Grantham Journal. 23 May 2014. Archived from the original on 10 August 2016. Retrieved 15 May 2016.
  16. ↑ "Persimmon homeowners in Newquay warn would-be buyers with signs". BBC News. 19 July 2018. Retrieved 19 July 2018.
  17. ↑ "Death of boy was caused by poorly fixed mantelpiece". Herald Scotland. Retrieved 12 May 2016.
  18. ↑ O'Dwyer, Michael (15 July 2019). "Market report: Persimmon slips as it apologises for TV show's home truths". Telegraph. Retrieved 17 July 2019.
  19. ↑ "Britain's New Build Scandal: Channel 4 Dispatches". Channel 4. Retrieved 17 July 2019.
  20. ↑ Morby, Aaron (20 August 2019). "Persimmon calls in independent site quality enforcers". Construction Enquirer. Retrieved 20 August 2019.
  21. ↑ Busby, Mattha (6 April 2019). "Persimmon launches review in drive to rebuild its image". The Guardian. Retrieved 6 April 2019.
  22. ↑ Prior, Grant (17 December 2019). "Report blasts Persimmon over construction standards". Construction Enquirer. Retrieved 18 December 2019.
  23. ↑ "Persimmon faces up to its failings". The Construction Index. 18 December 2019. Retrieved 18 December 2019.
  24. ↑ Neate, Rupert (17 December 2019). "Persimmon accused of building homes with 'intolerable' fire risk". The Guardian.
  25. ↑ "Cowdray Centre: Developer has to alter homes after mistake". Colchester Gazette. Retrieved 13 October 2021.
  26. ↑ "Persimmon profits fall as housebuilder looks at repairing reputation". The Guardian. 20 August 2019. Retrieved 27 February 2024.
  27. ↑ "Persimmon defends shutting Facebook group to 'gag critics'". The Times. 5 July 2019. Retrieved 27 February 2024.
  28. ↑ Stewart, Dan. "Persimmon fined £125,000 after crush death". Building. Retrieved 12 May 2016.
  29. 1 2 Neate, Rupert (15 December 2017). "Persimmon chair resigns over chief executive's 'obscene' £128m bonus". The Guardian. Retrieved 15 December 2017– via www.theguardian.com.
  30. ↑ "£75m bonus boss walks off over pay question". BBC News. 19 October 2018. Retrieved 25 November 2018.
  31. ↑ Neate, Robert (14 February 2021). "Ex-Persimmon chief fails to set up charity three years on from bonus row". Guardian. Retrieved 3 March 2021.
  32. ↑ Treanor, Jill (11 November 2018). "Persimmon bonus row boss retained £15m". BBC News. Retrieved 25 November 2018.
  33. ↑ "Building boss out over £75m pay row". BBC News. 7 November 2018. Retrieved 7 November 2018.
  34. ↑ Morby, Aaron (29 April 2019). "Industry giants shamed over late payment". Construction Enquirer. Retrieved 29 April 2019.
  35. ↑ Prior, Grant (12 February 2020). "F M Conway suspended from Prompt Payment Code". Construction Enquirer. Retrieved 13 February 2020.
  36. ↑ Morby, Aaron (26 February 2024). "Competition probe launched into 8 major house builders". Construction Enquirer. Retrieved 26 February 2024.
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