Please be advised that today's conference is being recorded. I would now like to hand the conference over to our speaker today, Dean Finch. Thilo, please go ahead.
Thank you. Good morning, and thank you for joining us this morning. As usual, I'm joined by Andrew and Vicky, and I'd just like to take you through a few highlights before we open for Q&A. Our focus today is on the 2024 results, and as you can see from our statement, we've delivered a strong performance. As you can see, we have delivered growth in completions of over 7% to 10,664, increased sales rates by 21% to 0.7 per outlet per week, and grown our ASP by 5% to GBP 268,500, and that is consistent quarter-on-quarter growth compared to the previous year, and that is growth in ASP ex bulk for private over every quarter. Our PBT will come out around the upper end of consensus expectations.
Against the backdrop of a difficult year, this is a great result, and I really believe this performance is testament to the hard work we have been doing over the last three years to reposition the business and create a strong platform for the future. From the investments in land and planning, our sales and marketing capabilities, and vertical integration through to improved build quality and customer service, we've made real progress in building a better-performing business. For example, our investment in land and our improved approach to planning in recent years are showing results. During the year, we spent GBP 440 million on new land, and we achieved detailed or reserved matters on around 13,000 plots, up 21% on the prior year, with a particularly strong performance in Q4. The combination of these actions enabled us to grow outlet numbers in 2024 up by 5% to 270.
That's opening over 100 outlets, or 40% of the business renewed, and is against an industry backdrop of decline of 4.8%, and also sets us up for the future. We ended the year with GBP 260 million of net cash, having made these investments, returned GBP 192 million of cash to shareholders, and having spent GBP 60 million on building safety remediation. Just to remind you, remediation work has either started or completed on over 70% of known developments, and crucially, we have just 7% of known buildings left to tender. None of this has happened by accident. It is the result of a lot of hard work, and I'm extremely grateful to our excellent teams for making this happen.
While we are only a handful of training days into the new year, and it is too soon to give detailed guidance for 2025, we came into the new year in a good position, and we are happy with consensus for 2025. Our costs are well under control, inquiries and customer interest are strong, and there is a lot of pent-up demand in the market. Our forward order book is higher than a year ago, and we have a good pipeline of new land opportunities ahead of us. With our excellent teams across the business actively pursuing new opportunities, I believe that Persimmon is well placed as we head into the new year. So with that, I'll hand it over to questions.
Dean, just before we go to questions, could I just add a couple of my own reflections as well, given it's my first year-end close at Persimmon? So I guess from my perspective, I knew when I joined the group, Persimmon had been investing to improve key areas, but I think what I hadn't fully appreciated until I arrived was the scale and the speed of that improvement. So the improvement in investment in build quality and customer service and what that's meant in terms of being reflected in improved sales rates, the investment in land and the improved approach to planning, and what that's meant in terms of driving increased numbers of outlets against a reducing market across the whole of the U.K.
So I suppose from my perspective, and I can't take any credit for it personally yet because I wasn't here, I guess I just want to reiterate that investment made in the last two or three years, I think, has put the company in a really good position as we go into 2025. So I just thought it's helpful to give those kind of first perspectives as well.
Thank you, Andrew. Any questions, please?
Thank you, dear participants. As a reminder, if you wish to ask a question, please press star, 1-1 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star, 1-1 again. And now we're going to take our first question. And the question comes from the line of Aynsley Lammin from Investec. Your line is open. Please ask your question.
Thanks very much. Happy New Year, everybody. Good morning. Just two questions from me, please. Firstly, obviously, you mentioned good inquiry levels, visitor levels. It's early in the new year, of course, but just wondered if you could give a little bit more color. Are you seeing anything on the reservation side? Just in current trading, as you look into the kind of early part of this year, given what we're seeing and the kind of macro headlines on the media newspapers, etc., any kind of bit more context around how that may be kind of coloring your view into the early part of this year would be helpful.
And then secondly, just on, I think you're flagging up maybe 2%-4% kind of level of type of build cost inflation, what you've seen there, which costs are rising, labor materials, any more color there would be quite interesting as well? Thank you very much.
Morning, Aynsley. Happy New Year to you. So look, we're a handful of days in. We've had two data points so far pretty much in line with last year. Pricing is very good at the moment, so we're pleased with what we're seeing so far. And look, obviously, we see the headlines, we read the press, and obviously saw what happened with Gilts last week. But all I can tell you is there's a lot of pent-up demand in the market. And our sense overall, and what we saw during the course of 2024, is a picture improving consistently across the course of the year, which I thought was very encouraging. And why is that?
Well, obviously, the pent-up demand, but I think it's good to step aside from the broader macro picture and realize we deal with a multitude of smaller individual markets, which each have got their own dynamics. Employment is strong, and real wages actually are strong. I think while the affordability challenges remain, and clearly, if interest rates don't come down as fast as projected or even go up this much, that is unhelpful. But I think you've got to set that against the backdrop of high employment and strong wage growth and a desire to own, which is unabated, in my opinion. So that's all helpful. Clearly, sentiment is critically important, but I'd take you back to what we saw during the course of 2024, which is consistent quarter-on-quarter growth on a previous year and consistent ASP growth, if you exclude bulk.
So I think let's not get blown off by the headlines of a few days, and let's see how 2025 unfolds. We are in a very strong place. We are growing our business, and we think we will grow again into 2025. Turning to your point on build cost inflation, I actually took the time last week to meet every single one on a one-to-one basis of my Op Cos. And I came away from that very encouraged by what we are seeing on the ground. Costs are being strongly controlled. Across our 29 businesses, maybe four of them are reporting some form of cost increasing, labor cost increases. The rest of them are not, and where they're encountering it, they're pushing back and re-tendering. So we're seeing some material increases, but nothing material, and labor costs are well under controlled.
I guess I'd make the point that there's a bit of self-help going on in that as well, because we're growing the business, because we opened 100 outlets last year, and other things being equal, we'll probably do broadly the same this year. That gives us opportunities to give more work in a market, which is at the moment declining. As I said at the top of the call, we grew outlets by 5% last year, whereas the industry on average declined by 5%. People are hungry for work, and that puts us in a good place. Costs are well under control. Very pleased with that. We're projecting, nevertheless, this year, low single digits because of the combination of national insurance increase and one or two other things of regulatory nature. Overall, we're in a very good place, and I think our businesses are very well controlled.
Thank you very much.
Thank you. Now we're going to take our next question. Just give us a moment, and the next question comes from the line of Will Jones from Redburn Atlantic. Your line is open. Please ask your question.
Thank you. Morning. I'll try three if I can, please. First, just if you could help us with the mix of HA and private in the year finished, which was less HA than I would have expected within a better volume number and how that might affect mix in 2025, please. Second was just coming back to the planning consent wins of 13,000. Do you think that reflects any of the early momentum on NPPF, or do you think that's really more about the company itself? And if NPPF gets going, could that 13,000 start to trend higher? And perhaps you could just tie that in with broad expectations on outlets. I think you mentioned another 100 or so for the year ahead, but maybe a view on the net figure. And then lastly, just I guess around pricing, you mentioned improving trends through the year.
We can see the order book position, but there's obviously bulk and non-bulk kind of influences in there. But just where you are on light-to-light pricing, as best you can describe it, and the tactics, I guess, as you head into spring? Thanks.
Morning, Will. Thanks for that. Andrew, do you want to pick up the first one?
Yeah. So let me pick up the first one, Will. So I think we were about 15% HA in the year. I would say typically would be 15%-20%. It depends a bit on geographic mix. Different local authorities have got different requirements. It was a little bit higher in 2023, and that's partly because we did push it a little bit harder because the private market was a bit softer. But I think overall, that general run rate at 15%-20% is about what we said in the past, and I suspect that's where it will be as we go forward. So I think overall, what that does show is the strength of the private sales through 2024, which, as Dean said earlier, we saw that growth quarter on quarter in terms of sales rate.
I think it demonstrates the strength of our private business there as well. That's what I take out rather than reading too much into the lower HA number.
Okay. Thanks, Andrew. So I'll comment on the other two. I think the answer, Will, is it's a combination of the two. It's a strong degree of self-help, which has undoubtedly helped us, being far more forensic and detailed and targeting on a case-by-case basis, almost individual-by-individual basis on planning committees, what's required, coupled with improving the product and improving the places we are building, has all gone into the success in planning. But I'm not going to take all of the credit. I think it is early days with the NPPF. Look, we are delighted with what's being proposed with the NPPF, and congratulate the government for the measures it has taken there. I think it's very brave, very bold, and good for them. It is, in my view, the right thing to do. I think that will build through time.
There's obviously a big distance between Whitehall and some of our local planning committees that we deal with. And some of them have got the memo, and some of them haven't got the memo. But what I would point to is a strong Q4 performance, in particular, in terms of planning approvals. And so I would conclude that it is a combination of the two. I think somewhere in there, you tried to goad me into saying, "Am I going to give you a net number?" No, I'm not. So that is the answer to that. And in pricing, look, we're seeing a mixed picture, it's fair to say, across the country, as I think I consistently said during the course of 2024. And that continues to be the case. So Scotland in the North, strong. The South East and the South West, weaker. But obviously, it's nuanced within that.
I was encouraged towards the end of the year to see, anecdotally, improving affordability positions in some of our bellwether companies, as I would see them at the moment, down in Thames Valley and Kent and places like that. The affordability challenges remain, but on the ground, we're seeing signs that things are improving, and obviously we will do what is sensible within that and look at pricing and see how we will tickle things along, but as we said at the top of the call, it's too early yet to call the trends for 2025. We will be nimble as we were in 2024. I think the business was very proactive and nimble in 2024 in terms of responding to events, and so we will be again in 2025.
Great. Thank you.
Thank you. Now we're going to take our next question. And the question comes from the line of Harry Goad from Berenberg. Your line is open. Please ask your question.
Yeah. Hi, good morning. I've got two, please. So firstly, can you just remind us what your ambitions are on building the partnerships business over the next few years and whether some of the sort of news flow we hear about sort of funding constraints for housing associations impacts that at all in 2025? And then secondly, different topic, land prices. Do you think some of those moves we've seen on NPPF result in lower land prices as we progress through this year with more consented land coming up for sale? Thank you.
I think you're right. Morning, Harry. I think your real question on partnerships is, are we okay for 2025? And yes, we are. Again, take you back to what I said. I spoke to each of the operating companies last week. The financial difficulties of the sector have been well-trailed in the news, and so it is not new news to anyone. But we are well set for 2025. And where we have a handful of RPs in difficulties, we are able. We've done the groundwork, and we are able to cascade to move to DOM. And frankly, when we do that, they fly out the door like hotcakes. So no concerns there. Over time, I mean, I think the Deputy Prime Minister has made no secret of her desire, her ambitions to grow the affordable sector.
We hear talk of it doubling or even trebling, which would be very ambitious indeed. We want to be well-positioned to take advantage of that and build our capabilities. In terms of land pricing, it's demand and supply, isn't it? All I can say really is that I think we did exactly the right thing over the course of the last couple of years in terms of actively pursuing land opportunities. You never buy the same piece of land twice, so you can never really tell what's going on with pricing in the land market. I think as we look back, we bought what we saw as great opportunities at the right hurdle rate where we feel we can sell. Whilst we continue to see those opportunities, we will continue to be active in the market.
Lovely. Thank you.
Thank you. Now we're going to take our next question. And the next question comes from the line of Ami Galla from Citi. Line is open. Please ask your question.
Yeah. Thank you. Just a couple of questions for me as well. First one on keeping trading in the market. What are you hearing from mortgage lenders in terms of how are they seeing the sort of current market trends and the volatility around the rates? The second one was on the government measures. Is there incrementally what are you hearing from the government on potential measures for the housing market given the affordability challenges? Is there any scope for any demand-side support to come through later in the year? And the last one was on the order book. Can you give us some color in terms of what's the gross margin embedded in an order book today? Or any color in terms of where does underlying pricing sit in that order book? Thank you.
Morning. Andrew, do you want to take one and three, and I'll come back to the government?
Yeah, so in terms of mortgage lending, I think it comes back to the point Dean made earlier about affordability. Including affordability is important, but there are more first-time buyers, 95%-90% mortgages on the market now than there were two years ago, and that's helpful in terms of our customers qualifying. I think sentiment is, of course, still important, and our customers read the newspapers as much as well as we do in terms of what will happen to mortgage rates, so I think interest rates are helpful for sentiment, but I think the fact there's more products available than there were a couple of years ago is very helpful for us as well in terms of allowing our customers to qualify as they come through the door.
And then in terms of, I mean, if I cover off demand side as well in government, I mean, I think the short answer is that we're not really seeing anything at the moment. I think the government is, Dean's referred to the supply side, the planning side, which is, I think, where we're seeing the primary focus at the moment if you just put aside the funding for the affordable sector. Whether that will stay the case or whether the government in due course will look to do something on whether it be first-time buyers or some other kind of demand stimulus to help with affordability, we shall see. But at the moment, that's not something which we're, if you like, expecting or certainly we're talking to them about at the moment. So. And then I think in terms of your first question, Ami, was on the order book.
So we set out in the back of the statement the split between the private and HA numbers in the order book. So you can see the private ASP in the order book is just under £277,000. It's about 4% higher than this time last year. So I think that reflects some of that stronger pricing which Dean's referred to. Of course, it's not the same order book. It's in different geographies, and it's different products and all the rest of it. But across the piece, there's 2,360 homes there, and the average selling price is 4% higher than it was this time last year. So I think that's encouraging as a start point as we go into 2024. And then we'll see how we progress pricing as we go forward from here.
Thank you.
Thank you. Now we're going to take our next question. And the question comes from the line of Marcus Cole from UBS. Your line is open. Please ask your question.
Good morning. Thanks for taking my questions. I've got two. The first one's just on sales outlook. It's probably building on Will's question. I just wondered if you think you can hold on to that 5% sales outlook growth on average for the whole of 2025. And then the second one is just on margins. How should we think about margin evolution in 2025 given what you said on build costs and pent-up demand and likely volume growth? Thanks.
Morning, Marcus. I think you're asking the same question the same way, and you're going to get the same in a different way, and you're going to get the same answer. So need I say any more? And I will pass. It will probably give you just as much joy.
So Marcus, obviously, we're not giving any explicit guidance on margins for 2025. We'll talk about that more when we come out in March. I suppose what I would say is two things. One is I'm really pleased that we are able to say that our margins this year are in line with guidance and in line with last year because it has been in a difficult market. So I think we are pleased with our margin performance in 2024. And then what we've said in the past is that actually, it's that embedded inflation from 2022 and 2023. Of course, that's still impacting the speed of margin progression. Most of the houses that we sell in 2025 will be on sites that have been impacted by that abnormally high inflation in 2022 and 2023.
So that's why the margin growth we've always said will be a little bit slower, but we'll give more guidance on that in March.
Okay. Thanks very much.
Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star, 1, 1 on your telephone keypad. And now we're going to take our next question. And the question comes from the line of Christopher Millington from Deutsche Bank. Your line is open. Please ask your question.
Thank you very much. Morning, Dean, Andrew, Becky. Thanks for taking my question. Three, if I may. I may as well continue the theme. Firstly, probably for you, Andrew, can you just talk us through what you think the kind of key cash movements are going to be in 2025? And perhaps if you expect any major change at the year-end. Cash. I'd love Dean's thoughts on the building safety levy and its impact. Obviously, we've seen some reference in the press there. And the last one I wanted to ask is a slightly theoretical one. But what would you guys regard as a good recovered sales rate? The reason I ask that is I'm looking at your sales rate this year of 0.7, very similar to historic averages in the last 10 years. Obviously, it's got bulk in there.
I mean, do you think this is a good level and you would look to wean yourself off bulk, or do you think the sales rate could move somewhat further? Thanks very much.
Can you answer the first question?
I'll answer the first one, Chris. But I'm not going to give you a huge amount of detail because, again, we'll talk more about the guidance in March, once we've seen how the year starts. But obviously, I mean, cash, that will be a function of what we decide we want to continue investing in land. Obviously, we'll be continuing to invest in the building safety remediation program and so on. So what we'll do, Chris, we'll give a bit more guidance on that when we give you a bit more guidance on the trading for 2025 in due course.
Okay, Chris, I will try and give a diplomatic answer to my views on the building safety levy. I mean, I do feel, I suppose, that this is now something we have paid for at least three or four times over. One, with fixing our own. Two, with the extra tax. Now, three, with the levy. And I haven't seen a penny come back in from those who were responsible, which I think is utterly disgraceful. In terms of the need to remediate, well, of course, the industry does need to remediate, and it is remediating. And I am very pleased with the progress we are making. As I took you to, I'll take you back to what I said at the top of the call. We have only 7% of known buildings left to tender.
Now, I can't tell you whether that means we will have to put more money in the pot or less money in the pot. It could go, frankly, either way. But what I can tell you is that we are materially correct in our provision. We might make some recoveries. We might get some VAT back, or we might find another building pops out at us. But the levy, the provision is materially correct. I think the other point I would make for you to consider is that the thing that I think we did absolutely right was get after it. Because the acceleration program that has been set out by the Deputy Prime Minister for the rest of the industry is, frankly, only going to take costs one way. So I think we are in a strong place.
With regard to sales rates, you're obviously absolutely right, and I think you have a point about PRS. And I do think that what I'd love to see is that we recover to the long-term historic sales rate, and then we still have a PRS. Because I think the PRS market is now here to stay. It's a big and growing market. We are getting better at it. We are building our capabilities in that regard. We are now looking at multi-year deals, so we would see it as additional and additive, and over time, I hope it is a driver for growth within Persimmon and a good return and a good margin.
Got you. That's all very clear. Many thanks, gentlemen and Becky.
Thank you. Now we're going to take our next question. And the question comes from the line of Charlie Campbell from Stifel. Your line is open. Please ask your question.
Morning, everyone. A couple from me. One, just wondered if you could shed some light on sort of first-time buyer activity, either sort of through the end of last year, beginning of this year, any notable changes there? And secondly, just our spreadsheets. Just wondered what the land creditor position was at the end of December? That'd be helpful too. Thank you very much.
Morning, Charlie. So it's around about 30% for us. We're seeing a recovery in interest through first-time buyers. And I think it grew slightly during the course of the year. Land creditors.
Yeah, Land Creditors, Charlie. I think we've guided 250 to 450. We'll be towards the higher end of that. We'll be within that range, but towards the higher end, partly because we're able to take advantage of land opportunities through Q4, some of that in being a bit agile in the run-up to the budget as well. But we'll be within that range, but towards the upper end.
Thank you very much.
Thank you. And now we're going to take our last question for today. And the question comes from the line of Zane Bikawa from J.P. Morgan. Your line is open. Please ask your question.
Morning. Thanks for taking my questions. Just two from my side. Just first one is to come back on build cost inflation. Can you elaborate on some of those self-help measures that you're taking and how impactful it can be? And then secondly, how much of a call forward in demand are you expecting due to the upcoming stamp duty changes? Thank you.
Okay. Thank you for that. Well, as I alluded to, I think the strongest self-help measure we're taking is growing. And where you are growing against the backdrop of an industry, a sector that is declining, what we have seen among groundworkers and others is a hunger for work and a willingness to do to be sensible when putting forward costs. And as I said, just to remind you, having spoken to every single one of our operating businesses last week, I was very impressed with the controls that are in place. Every single one of our businesses has a cost action plan for 2025. And that goes into great levels of detail and will help us to protect the margin. And I'm very pleased and grateful for the businesses in terms of doing the detail of the work.
It's a combination of macro growth within the company and very detailed individual plans, including, quite frankly, re-tendering if we don't like what we're seeing. Obviously, there are material price increases. You'll be able to have bricks, plasterboard, plastics. But we see that as a small impact this year so far, early days, but small impact. And then having our own in-house capabilities is a real help for us with our own brick and tile and our own timber frame. That is a real help for Persimmon. Finally, then just turning to the Stamp Duty. You've given our price point in the market. We're not really expecting a big deal to come from that. Only one or two of the companies are seeing the scope for a March stampede within the business.
So overall, I don't think it's going to be very material for us, but that's because of our specific price point.
Great. Thank you.
Thank you.
Did I?
There are no further questions.
Yeah, I gather that was the last question.
Yes, it was. So there are no further questions for today. And I would like to hand the conference over to Dean Finch for any closing remarks. Please go ahead.
Thank you. Thank you for listening to us today. As I said, Persimmon has come into 2025 in a strong place. Our order book is up, as is our outlet position, and we have a good pipeline of further opportunities ahead of us. We've said over the medium term we want to get back to 300 outlets, and I think we are on track over time to get there. The planning environment is getting better. We have a strong team and strong capabilities, including our vertical integration, that we're investing in to further strengthen the business. Our costs are under control, and we are excited by the opportunities ahead. We should speak again in March. Thank you very much, all.
That does conclude our conference for today. Thank you for participating. You may now all disconnect.