Persimmon increases profit despite £25m write-off for investment in failed modular developer Top Hat

Persimmon has increased its pre-tax profit by 2% last year despite writing off a £25m investment in failed modular developer TopHat.

The housebuilding giant, in its results for the year to 31 December, reported pre-tax profit of £359.1m, up from £351.8m on 2023’s figure.

Its results included £39m in exceptional costs, including the £25m to TopHat, which wound down its operations last year after making losses over several years

The figure also includes £7.4m for costs for one-off projects including prospective merger opportunities and expenditure relating to the ongoing investigation into large housebuilders, including Persimmon, by the Competition & Markets Authority.

Persimmon’s underlying profit, excluding one-off costs, rose by 14.3% from £354.5m to £405.2m.

This was higher than market expectations, with previous guidance indicating underlying profit of between £349m and £390m.

The group’s turnover rose by 16% from £2.8bn to £3.2bn, buoyed by an increase in overall sales.

The firm sold 10,664 homes in the year, up on last year’s figure of 9,922. Its current private forward sales position is £1.2bn, 27% higher year-on-year.

The group is expecting to increase its completions to between 11,000 and 11,500 units this year.

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However, the housebuilder’s sales to housing associations fell 29% from 2,241 in 2023 to 1,589 last year. It added: “We are aware of the financial challenges facing many registered providers, and the impact on their ability to bid for section 106 housing plots, and so are pleased that we have nearly all of our expected s106 housing delivery for 2025 already secured.”

Dean Finch, group chief executive of Persimmon, said: “The underlying market fundamentals remain strong and we are encouraged by the further improvement in our sales rates in the early weeks of this year.”

Finch said the government’s planning reforms and ‘pro-housebuilding agenda’ provides a “positive tailwind” to the group’s housing delivery.