Persimmon’s gross profit per plot rose three-and-a-half fold over the last eight years, while its land costs have fallen by a quarter, according to analysis by Neal Hudson of Residential Analysts.
The analysis shows that in 2010 the housebuilder’s gross profit per plot was just £20,763. In the four years to 2014 this had more than doubled to £42,330 before reaching £70,013 in H1 2018.
Land costs per plot were £42,814 in 2010 and have declined gradually over the years to reach £32,476 in 2018. Build and other direct costs saw a small rise from £103,672 to £113,324 over the same period.
The eagle-eyed will notice that land costs and build costs combined were almost exactly the same in both 2010 and 2018, while gross profit soared.
It’s likely that a number of factors have contributed to these figures, including UK economic performance, Brexit-related issues and the Help to Buy scheme. However, investors might wonder what part ex-CEO Jeff Fairburn, who was appointed to his position in 2013, may have played.