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Persimmon profit drops as focus on quality leads to delivery delays

The company, which builds homes in more than 350 locations in the UK, said it spent 40% more compared to a year earlier to improve customer service. The higher spending would lead to about 15 million pounds more in annual customer care costs.

Article originally published by Reuters. Hargreaves Lansdown is not reponsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Britain's second largest housebuilder Persimmon reported a fall in first-half profit on Tuesday as it spent on initiatives aimed at quashing a public row over complaints about the quality of its homes.

Confronted with criticism over the quality and fire safety of its homes, the FTSE 100 builder launched a review of its business practices in April and decided to push back the timing of handovers to ensure homes were checked more thoroughly. That led to a 1.4% drop in profit to 509.3 million pounds ($617.63 million) for the six months ending June 30.

The company, which builds homes in more than 350 locations in the UK, said it spent 40% more compared to a year earlier to improve customer service. The higher spending would lead to about 15 million pounds more in annual customer care costs.

Persimmon plc

Sell: 2,056.00 | Buy: 2,058.00 negative 53.00 (-2.52%)
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"We have continued to experience some pressure with respect to the cost and availability of certain materials in the supply chain as the output from the industry continues to expand", Persimmon said, adding that it expects cost inflation to be around 4% for the full year.

Average selling prices of its homes in the first half rose to 216,942 pounds from 215,813 pounds a year earlier, while revenue fell 1.75 billion pounds from 1.84 billion pounds a year earlier.

($1 = 0.8246 pounds)


Copyright (2019) Thomson Reuters. This article was from Reuters and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Article originally published by Reuters. Hargreaves Lansdown is not reponsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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