Persimmon Q4 Earnings Call Highlights

Persimmon (LON:PSN) said it finished 2025 strongly, reporting 12% growth in completions and indicating it expects to report underlying profit before tax at the “upper end of expectations,” alongside margin growth. Chief executive Dean Finch said the increase in completions represented one of the company’s strongest periods of organic growth on record, crediting employees, subcontractors, and the supply chain for delivering a particularly strong fourth quarter.

Completions mix and pricing

Finch said the 2025 completion growth was driven by a mix shift across channels, with affordable completions up 30%, PRS (private rented sector) up 20%, and private completions up 6%. Private growth was “largely driven by growth in outlets,” Persimmon said.

Average selling prices (ASP) also increased, with private ASP up 5% and affordable ASP up 4%, resulting in blended ASP growth of 4% overall. Persimmon ended the year with 277 outlets, and management pointed to outlet expansion as a key driver of future volume growth.

In response to analyst questions on pricing, Finch said incentives have remained broadly stable at around 4% to 5% for roughly the last 18 months. He added that pricing had been “slightly more robust” in the North and North Midlands than in the South East, where higher headline prices make affordability more challenging. Management cautioned that ASP growth implied by the forward order book should not be overinterpreted due to mix effects, including a higher share of open market sales and fewer bulk sales.

Forward sales and early 2026 outlook

Persimmon reported forward sales up 2% in value terms, with private forward sales value up 4%. PRS forward sales value was down, which management attributed to fourth-quarter disruption driven by budget uncertainty.

Looking to 2026, Finch said the company expects “another year of growth” driven by higher outlet numbers, though he expects the overall level of growth to “pare back” compared with 2025 due to slower growth in affordable and PRS sales. The company also highlighted an “excellent pipeline” of land opportunities expected to convert into additional outlet numbers toward the end of 2026 and into 2027, while noting it will carry the costs of opening outlets, land purchases, and work-in-progress financing during 2026.

Taking these factors together, management said it expects 2026 to be another year of “good profit growth,” but profit is expected to fall within the current consensus range.

On volume guidance, finance director Andrew said Persimmon had previously guided to around 12,000 completions for FY2026 and that “for now” this remains the position, though he described himself as “uncomfortable” confirming it just one week into the year. He cited the strong 2025 affordable delivery—units that can only be delivered once—and said the order book is “a little bit lighter on the bulk sales than it was this time last year.” Outlet growth is expected to drive volume growth again, but more in the second half of 2026 than at the start, he added.

Planning, land, and market conditions

Finch welcomed recent government progress, including the Planning and Infrastructure Bill, calling it among the most positive planning developments he and colleagues have seen. However, he warned that policy “takes some years to break through” and stressed ongoing real-world impediments, including disputes over drainage conditions, highways issues, Section 106 delays between local authorities, and nutrient-related constraints in Wales.

On land, Finch said the company is seeing “more opportunities than we can cope with,” with activity escalating toward the end of 2025. He also attributed Persimmon’s improved access to land opportunities to becoming a “much better partner to do business with,” pointing to brand rehabilitation, improved customer service and build quality, and design improvements that can matter to landowners.

Management also discussed demand indicators. Finch said Persimmon’s Boxing Day campaign generated higher website traffic than the prior year, while cautioning it was a single data point. On mortgages, Andrew said the end of 2025 saw incremental improvements—such as lower interest rates and some higher loan-to-salary products with lower deposits—but characterized changes as helpful rather than “transformative,” with affordability and access to sufficient mortgage finance remaining key constraints into 2026.

Cost pressures, taxes, and margin commentary

Persimmon flagged several cost headwinds for 2026. Finch said the introduction of Landfill Tax changes from April will raise the company’s cash cost from £10 million to £20 million in 2026, and he noted the tax rate is expected to rise from £4 per tonne to £25 per tonne by the end of the decade if unmitigated. He also highlighted that the Building Safety Levy is due to come in from October.

In Q&A, Finch said Persimmon is looking at site design to reduce spoil sent to landfill and has signed an external agreement with a third party to help manage soil and landfill. He also said the earlier-than-expected timing of the landfill tax increase reduces the window for mitigation. On the Building Safety Levy, Finch said the company will look to mitigate where possible by securing starting site and building control sign-offs early, where that is not already reflected in land acquisition pricing.

On build-cost inflation, Andrew reiterated that Persimmon has been discussing low single-digit inflation through 2025—roughly 2% to 4%—and said he does not see a reason for it to change materially in 2026. He noted, however, that inflation is occurring on an “already elevated” cost base from prior years.

Asked about margins, Finch said Persimmon’s view remains that margin progression in 2026 should be at a similar rate to that seen in 2025, while acknowledging headwinds and the time it takes for cost inflation from 2022 and 2023 to work through the system without significant house price inflation to offset it.

Fire safety remediation and capital allocation

Persimmon also provided an update on cladding and fire safety remediation. Finch said the company was notified of three additional buildings requiring remediation during the year, meaning a “modest adjustment” to the provision will be required. Even so, he said the provision at the end of 2025 is expected to be lower than at the start of the year. He added that the company has completed, contracted, or agreed tender prices for 90% of known developments, which he said provides reassurance and helps control cost escalation risk.

Andrew said Persimmon continues to expect the provision to come down over time, though it may do so unevenly because remediation projects are complicated. He said the company still expects to complete the bulk of the work in 2026 and 2027, with a longer tail thereafter at a more “business as usual” level. Andrew added that as Persimmon gets closer to the end point of the remediation program—without necessarily needing to be fully finished—it expects to be in a better position to update its capital allocation policy.

Finch also said the remediation “tail is very long,” describing it as a 30-year commitment, and said the company cannot guarantee no further buildings will emerge. He added that Persimmon has begun achieving recoveries and is “rigorously” pursuing them.

Management concluded that 2025 represented a very strong year of organic growth and said it expects 2026 to deliver “really solid growth,” supported by the land pipeline, brand and product diversity—including the Charles Church relaunch—and continued operational focus. Persimmon said it will provide a further update in March.

About Persimmon (LON:PSN)

Persimmon Plc, together with its subsidiaries, operates as a house builder in the United Kingdom. The company offers family housing under the Persimmon Homes brand name; housing under the Charles Church brand name; and social housing under the Westbury Partnerships brand name. It also provides broadband services under the FibreNest brand; and timber frame, insulated wall panels, and roof cassettes under the brand Space4. Further, it offers concrete bricks and roof tile. Persimmon Plc was founded in 1972 and is headquartered in York, the United Kingdom.