Persimmon plc

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. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.

Persimmon plc
Public limited company
Traded asLSE: PSN
FTSE 100 Component
ISINGB0006825383 
IndustryHousebuilding
PredecessorIdeal Homes, Westbury 
Founded1972 (1972)
FounderDuncan Davidson 
HeadquartersYork, England, UK
Key people
  • Roger Devlin (chair­person) 
  • Dave Jenkinson (CEO) 
Revenue £3,649.4 million (2019)[1]
£1,029.4 million (2019)[1]
£848.8 million (2019)[1]
SubsidiariesCharles Church
Westbury Partnerships
Space 4
Websitewww.persimmonhomes.com

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.[2] 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.[3]

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.[2]

In 2001, Persimmon acquired Beazer Homes UK, for £612m, taking output to over 12,000 a year.[2] The deal came about after Beazer and Bryant announced a 'merger of equals' to create a new house builder called Domus.[4] 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.[5]

In January 2006 Persimmon acquired Westbury, another listed UK house builder, for a total consideration of £643 million.[6]

Operations
Driveway entrance to the offices of Persimmon plc in York

It builds homes under the Persimmon Homes, Charles Church and Westbury Partnerships brands.[7]

Criticism

Poor build quality

Persimmon has regularly come in for criticism due to poor build quality on a number of their 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 not properly fixed to the wall.[8][9][10][11][12]

In addition, Persimmon have been criticised for their sales and aftercare processes which do not always live up to the "enjoyable" and "stress free" experiences promised in the company's own pledge.[13]

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 off at another Persimmon Home but it was treated as a "one-off" incident.[14]

In 2013, Persimmon sold a house with a garage that is too narrow for some cars to fit into.[15]

In 2018 a couple created signs warning potential neighbours against buying homes in their Newquay estate, citing multiple faults which Persimmon have, as of 19 July 2018, failed to correct, including patio doors which do not close properly, nails sticking out for their son to discover, and damp and mould resulting from poor plumbing.[16]

Persimmon's poor new build quality was the subject of a Channel 4 Dispatches documentary broadcast on 15 July 2019.[17][18] In August 2019, Persimmon appointed an independent team of construction quality inspectors to ensure its homes are built to required standards.[19]

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

Health and safety failure

In 2001 Persimmon was fined £125,000 following an employee being 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".[23]

Executive pay

In December 2017, Persimmon's chairman, Nicholas Wrigley, resigned over his role in awarding Jeff Fairburn, the CEO, a £128 million bonus.[24] 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.[24]

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.[25] Fairburn has said he would give a "substantial proportion" of the bonus to charity; however no details of the charities were given. In addition analysis carried out showed the shares he retained were the most beneficial to him.[26] 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".[27]

Late payment

In April 2019, Persimmon Homes was suspended from the UK Government's Prompt Payment Code for failing to pay suppliers on time.[28] It was reinstated around 10 months later.[29]

Community work

The Persimmon Charitable Foundation gives away millions of pounds to local good causes. The winner of its Healthy Communities prize of £200,000 in 2018 was Heart of England Boxing Club.[30] Persimmon’s Community Champions scheme gives away £60,000 every month to local good causes.[31] In 2012 Persimmon gave away a house to charity to celebrate its 40th birthday. The winner was the Harley Staples Cancer Trust.[32]

Persimmon provides over 4,500 jobs with a significant number of long serving employees.[33] In 2017 Persimmon built a new brick factory which will produce around 80 million house bricks every year.[34] Persimmon’s Combat to Construction scheme employs ex-military personnel and trains them to build homes.[35]

References
  1. "Preliminary Results 2019" (PDF). Persimmon plc. Retrieved 28 February 2020.
  2. Wellings, Fred: Dictionary of British Housebuilders (2006) Troubador. ISBN 978-0-9552965-0-5
  3. Company Prospectus
  4. "BBC News - BUSINESS - Persimmon to enter Beazer race". bbc.co.uk. Retrieved 21 March 2015.
  5. "About Charles Church". charleschurch.com. Retrieved 21 March 2015.
  6. "BBC NEWS - Business - UK housebuilders announce tie-up". bbc.co.uk. Retrieved 21 March 2015.
  7. Persimmon: Corporate Profile
  8. BBC Watchdog: "More moans about new homes" Archived 6 June 2011 at the Wayback Machine
  9. ITV New Homes from Hell
  10. "BBC NEWS - UK - England - Northamptonshire - Poorly-fixed lintel killed child". bbc.co.uk. Retrieved 21 March 2015.
  11. "£30k damage after plumbing nightmare". Wiltshire Times. Retrieved 21 March 2015.
  12. "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.
  13. "Persimmon Homes BBC Watchdog". BBC. Retrieved 15 May 2015.
  14. "Death of boy was caused by poorly fixed mantelpiece". Herald Scotland. Retrieved 12 May 2016.
  15. "GALLERY – Couple left fuming after finding garage at £200,000 Scissett home is too small for family cars". Examiner Live. 18 May 2013. Retrieved 20 September 2018.
  16. "Persimmon homeowners in Newquay warn would-be buyers with signs". BBC News. 19 July 2018. Retrieved 19 July 2018.
  17. O'Dwyer, Michael (15 July 2019). "Market report: Persimmon slips as it apologises for TV show's home truths". Telegraph. Retrieved 17 July 2019.
  18. "Britain's New Build Scandal: Channel 4 Dispatches". Channel 4. Retrieved 17 July 2019.
  19. Morby, Aaron (20 August 2019). "Persimmon calls in independent site quality enforcers". Construction Enquirer. Retrieved 20 August 2019.
  20. Busby, Mattha (6 April 2019). "Persimmon launches review in drive to rebuild its image". The Guardian. Retrieved 6 April 2019.
  21. Prior, Grant (17 December 2019). "Report blasts Persimmon over construction standards". Construction Enquirer. Retrieved 18 December 2019.
  22. "Persimmon faces up to its failings". The Construction Index. 18 December 2019. Retrieved 18 December 2019.
  23. Dan Stewart. "Persimmon fined £125,000 after crush death". Building. Retrieved 12 May 2016.
  24. 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.
  25. "£75m bonus boss walks off over pay question". BBC News. 19 October 2018. Retrieved 25 November 2018.
  26. Treanor, Jill (11 November 2018). "Persimmon bonus row boss retained £15m". BBC News. Retrieved 25 November 2018.
  27. "Building boss out over £75m pay row". BBC News. 7 November 2018. Retrieved 7 November 2018.
  28. Morby, Aaron (29 April 2019). "Industry giants shamed over late payment". Construction Enquirer. Retrieved 29 April 2019.
  29. Prior, Grant (12 February 2020). "F M Conway suspended from Prompt Payment Code". Construction Enquirer. Retrieved 13 February 2020.
  30. "Boxing club under threat of closure wins £200k in national competition - Leicestershire Live". Leicestermercury.co.uk. 27 March 2018. Retrieved 20 September 2018.
  31. UK. "Persimmon Charity Programmes". Persimmonhomes.com. Retrieved 20 September 2018.
  32. About Howard Lake (27 September 2012). "Leicester charity wins £250,000 house | UK Fundraising". Fundraising.co.uk. Retrieved 20 September 2018.
  33. "Corporate Profile". Persimmonhomes.com. Retrieved 20 September 2018.
  34. Duncan, Hugo (2 November 2016). "Builder Persimmon forks out £10m on plant to make its own bricks amid booming demand for new homes". This is Money. Retrieved 20 September 2018.
  35. "Combat to Construction Traineeship". Ctp.org.uk. Retrieved 20 September 2018.
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