Our objective is to be the leading national housebuilder, building homes ranging from small affordable starter homes to large premium family homes and selling to both the private market and housing associations. Our strategy to achieve this objective is set out below.
Continued focus on cash generation
- Appropriate capital structure
- Reduce finance costs
- Good flexibility
The housing market continues to be constrained by the lack of mortgage availability which affects housing demand throughout the country. Our strategy of cash generation, which was very successful during 2010, will continue to reduce our debt, maintain liquidity and an appropriate capital structure for our balance sheet.
Our current landbank represents over six years supply. Our strategy is to continue to optimise the scale of our landbank to a size that supports the level of trading achievable within the current market. We consider that a landbank equivalent of c. five years supply would align our landbank with expected future customer demand for our homes.
The planned optimisation of our landbank will release capital, reduce debt and improve our return on capital employed.
Improving margins
- Lower build costs
- Re-plan existing sites
- Acquisition of new land at attractive prices
- Pull through of strategic land at enhanced margins
Our business requires in depth knowledge of local markets in order to engage subcontractors, plan sites in accordance with local demand, anticipate customer taste and to assess the regulatory environment. Our divisional structure is designed to utilise our local market expertise.
We continue to review our business processes to control costs and rebuild our operating margin. We have dual branded our regional housebuilding operations with both Persimmon Homes and Charles Church brands to capture best working practices and economies of scale.
We have a very strong and diverse supply chain and we ensure we are not dependent on a single supplier or subcontractor for the construction of our new homes.
We maintain efficient operations by utilising standardised materials available from a variety of sources and suppliers, thereby lowering our build costs. We continue to re-plan our existing sites to maximise sales opportunities.
Selective new site acquisitions
- Increased southern exposure
- More traditional site layouts
- With the right product
We reduce our exposure to local market volatility by maintaining operations across markets throughout the UK to enhance our sales potential.
We acquire new sites in locations where our market experience confirms good levels of customer demand for new homes.
We will acquire new land at attractive prices from the promotion of our strategic landbank and selectively acquire land that will deliver enhanced margins in the future.
We will undertake selective new site starts closely controlling our working capital expenditure to ensure that we have the right product availability in the right locations across the UK.
Build sustainable homes
- Reduce costs and improve the energy efficiency of our homes
- Support site production rates to overcome any potential labour shortages
- Invest in Space4
In order to meet increasing sustainability requirements for our new homes and improved operational efficiency, we will continue to invest in our closed panel timber frame manufacturing facility at Space4.
Space4’s new Eco-housing range will reduce costs and improve the energy efficiency of our homes. The strategy of using modern methods of construction will continue to support site production rates and overcome any potential labour shortages.
Space4 will continue to work closely with our social housing division, Westbury Partnerships, to supply affordable, sustainable, energy efficient new homes into the public sector housing market.