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Annual Report 2021
PLACING CUSTOMERS
AT THE HEART
OF OUR BUSINESS
12
DELIVERING ON
OUR FIVE KEY
PRIORITIES
Read more
on page 12
17
OUR SUSTAINABILITY
PILLARS
Read more
on page 17
Contents
1–75
STRATEGIC
REPORT
01 Our mission
02 At a glance
04 Our integrated approach
06 Chairman’s statement
08 The UK housing market
10 Our business model
12 Our strategic objectives and five
key priorities
14 Our key performance indicators (KPls)
17 Our sustainability approach
18 Sustainability Accounting Standards
Board (SASB) disclosures
20 Group Chief Executive’s Statement
26 Our strategic objectives
50 Financial review
54 How we manage risk
55 Our principal risks
62 Task Force on Climate Related Financial
Disclosures (TCFD)
67 Climate change risks and opportunities
68 Viability statement
70 Section 172 statement
75 Non-financial information statement
76–132
GOVERNANCE
Directors’ Report
76 Chairman’s introduction
toCorporateGovernance
78 Board leadership
80 Corporate Governance Statement
90 Nomination Committee
Chair’s statement
92 Nomination Committee Report
98 AuditCommittee Chair’s Statement
100 Audit Committee Report
105 Other disclosures
Remuneration
108 Remuneration Committee
Chair’sStatement
112 Remuneration at a glance
114 Annual Report on Remuneration
129 Summary of Directors’
Remuneration Policy
133–181
FINANCIAL
STATEMENTS
133 Statement of Directors’ Responsibilities
134 Independent Auditor’s Report
140 Consolidated Statement ofComprehensive Income
141 Balance Sheets
142 Statement of Changes inShareholders’Equity
144 Cash Flow Statements
145 Notes to the Financial Statements
182–183
OTHER
INFORMATION
182 Shareholder Information
182 Financial Calendar 2022
182 Five Year Record
26
PLACING
CUSTOMERS AT
THE HEART OF
OUR BUSINESS
Read more
on page 26
Persimmon Plc | Annual Report | December 2021
Our mission
Number of
homessold
14,551
2020: 13,575
Construction and supply
chain jobs supported
1
c.92,000
2020: c.86,000
Investment in
local communities
2
c.£2.6bn
over the last six years
Average
selling price
£237,078
2020: £230,534
Owned land
holdings (plots)
67, 0 8 9
2020: 67,205
Current customer
satisfaction score
3
92.0%
2020: 89.7%
Environment: our homes
in use by 2030 will be
NET ZERO
Build
quality
3
87.9 %
2020: 84.7%
1. Estimated using an economic toolkit.
2. The value of homes delivered to housing associations, the value of Discounted Open Market Value Housing plusthevalue of planning contributions we have made.
3. We participate in a National New Homes Survey run by the Home Builders Federation (HBF). The Survey year covers the period from 1 October to30 September. The customer satisfaction rating
system is based on the number of customers who would recommend their builder toa friend. The build quality score is based on how satisfied customers are with the quality of their new home.
“ We have recently launched our Mission,
Vision and Values. They build on Persimmon’s
many strengths and our recent progress to
strive even higher, to be Britain’s leading
homebuilder, with core values that demonstrate
how we will achieve it. I am delighted that
our values have been warmly embraced
across the business and look forward to
delivering on the ambition they set out.”
DEAN FINCH
Group Chief Executive
To build homes with quality our
customers can rely on at a price
theycan afford.
Highlights
Read more on our mission,
vision and values on pages 4 & 5
Strategic report Governance Financial statements Other information
01
At a glance
We are a leading national homebuilder. We have three brands,
three off-site manufacturing facilities, and an ultrafast full fibre broadband
service, delivering high quality homestoserve local communities.
BUILDING SUSTAINABLE
AND INCLUSIVE COMMUNITIES
ACROSS THE UK
Contribution to Group housing revenue
The Charles Church brand complements
and differentiates itself from Persimmon
by delivering larger, higher specification
homes in premium locations across the UK.
We build homes under this brand tailored
to local markets where our research and
experience has identified a strong demand
for a premium product.
Westbury Partnerships is our brand with a
focus on affordable social housing. We sell
these homes to housing associations
across the UK. This brand plays a key part
in the delivery of sustainable homes for
the benefit of lower income occupiers,
offering solutions to some of the country’s
affordable housing needs.
Persimmon Homes is our core brand
which delivers a range of traditional family
housing throughout the UK in places
where customers wish to live and work.
With a focus on delivering value and
quality for our customers, we sell most
of our homes under this brand.
Average selling price 2021
£249,498
2020: £239,318
Persimmon Homes, see page 30
Average selling price 2021
£360,575
2020: £361,147
Charles Church, see page 30
Average selling price 2021
£131,976
2020: £125,930
Westbury Partnerships, see page 31
National coverage, local presence
We have 31 operating businesses
across the UK
Persimmon Plc | Annual Report | December 2021
02
17%
7%
9%
72%
19%
76%
Homes sold
Landholdings
Persimmon Homes
Charles Church
Westbury Partnerships
11%
10%
79%
£3.4bn
Read more on our office
locations on our website
Northern offices
Southern offices
Off-site manufacturing
FibreNest
FibreNest is the Group’s own ultrafast,
nationwide full fibre broadband service
to the home, which aims to ensure all our
customers are connected to the internet
from moving in day. FibreNest provides
ultrafast speeds coupled with excellent
levels of service.
Brickworks
Brickworks produces concrete bricks
and is entirely focused on supplying
the Group’s housebuilding operations.
During 2021, the brickworks supplied
c.45m bricks to the Group. The factory
has the capacity to produce c.80m bricks
a year, which approximates to two thirds
ofthe Group’s brick requirements.
Bricks supplied to
the Group in2021
c.45m
Homes built
using timber frames
33%
Our average SAP rating
87%
Space4
Our Space4 manufacturing business produces timber
frames, highly insulated wall panels and roof cassettes
as a ‘fabric first’ solution to the construction of new
homes. Space4’s modern method of construction
system helps us to improve site productivity, increase
build capacity and mitigate construction industry skills
shortages. Space4 supports all of our brands and
supplied 4,315 timber frame kits and roof systems
to the Group in 2021.
Tileworks
Tileworks, the Group’s own concrete
rooftile manufacturing facility, produces
tiles solely for the Group. During the year,
Tileworks supplied c.9mtiles to 227 sites
across the Group.
Tiles supplied
to the Group in 2021
c.9m
INVESTING IN INNOVATION AND TECHNOLOGY
OUR INVESTMENT CASE
Persimmon is one of the UK’s leading
homebuilders, with high quality land holdings,
a strong balance sheet and a highly experienced
management team. We are well positioned
in our market, providing high quality homes at
attractive prices for our customers.
Read more at www.persimmonhomes.com/
corporate/investors/investment-case/
Investing in our people, resources
and capabilities to drive superior
performance.
Strong focus on sustainability with
clear targets.
Drive industry leading performance
through entrepreneurship,
innovation and cost-efficiency.
High quality land holdings.
UK wide outlet network.
Highly experienced
managementteam.
Vertical integration providing
security of supply over certain
key material components.
Strategic report Governance Financial statements Other information
03
DELIVERING ON
OURMISSION
Building for tomorrow
We will achieve net zero carbon homes in
use and in our operations, supported by
carbon reduction commitments, aligned
toclimate science.
UNDERPINNED BY OUR
SUSTAINABILITY PILLARS
Our integrated approach
Our mission
To build homes with quality
our customers can rely on
ataprice they can afford.
Our vision
To be Britain’s leading
homebuilder, withquality
and customer service at
its heart,building the best
value homes on the market
in sustainable and inclusive
communities. Wewill invest in
innovation andtechnology to
extend our low cost strengths
and enhanceour five-star
capabilities to enableas many
people aspossible tobuythe
homes we build.
WE DELIVER OUR MISSION THROUGH OUR SIX STRATEGIC OBJECTIVES.
OUR VALUES UNDERPIN OUR BEHAVIOUR AND CULTURE.
Our mission
Our vision
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Persimmon Plc | Annual Report | December 2021
04
CREATING VALUE FOR
ALL OUR STAKEHOLDERS
Customers
Read more on page 26
Colleagues
Read more on page 32
Communities
Read more on page 46
Suppliers and contractors
Read more on pages 42 to 45
Our unique expertise, relationships, vertical integration and
culture make us a driving force in the housebuilding industry.
Government regulators
Read more on page 38
Shareholders
Read more on page 48
Transforming communities
We will positively transform
communities directly connected
toPersimmon’s activities.
Safe and inclusive
We will create a safe and inclusive
culture focused on the wellbeing
of our customers, communities
and workforce.
Our values
Customer focused
They are our priority and we aim to
build consistently high quality homes
in communities people love to live.
We will earn customers’ trust by
treating them fairly and with integrity.
Value driven
We will deliver the best value, high
quality homes to our customers
by encouraging entrepreneurship,
innovation and cost-efficiency to
drive industry-leading performance
and competitive and sustainable
returns for shareholders.
Team work
We are one team, working in an open
and collaborative manner to deliver
for customers and communities.
We embrace diversity and new ideas
and will develop the careers and
reward the talents of colleagues.
Social impact
We build homes for the future in
sustainable communities. We uphold
the highest safety standards
and leave a legacy that delivers
economic, social and environmental
value to the communities we build.
Excellence always
We strive to be excellent in
all that we do. We relentlessly
focus on providing the dream of
homeownership to thousands of
families by building the best value,
high quality homes in the most
cost-efficient manner, delivering
for customers, communities and
stakeholders alike.
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Strategic report Governance Financial statements Other information
05
AN INDUSTRY LEADING
PERFORMANCE WITH A
WELL-EXECUTED STRATEGY
Chairman’s statement
This is a pleasing performance and a
credit to our highly experienced and agile
teams right across our business. They have
expertly managed the challenges presented
by the pandemic, material and labour
shortages, and cost inflation, to achieve it.
We have increased our land investment,
bringing in over 20,750 plots into the
business, whilst maintaining our industry-
leading margins. This strengthens our
platform for future growth.
Over a year ago, in February 2021
we announced our industry-leading
commitment to protect leaseholders from
having to pay towards cladding removal or
fire related safety issues on any building we
constructed and set aside £75m to fund this.
Whilst accounting for less than one percent
of high rise buildings constructed we wanted
to protect our customers and remove
uncertainty for them. With 33 developments
identified, including four where successful
EWS1 forms have now been secured, we are
already showing leadership and protecting
leaseholders and will continue to engage
positively with government.
Persimmon was also the first major
developer to agree voluntary undertakings
with the Competition and Markets Authority
(“CMA”) in respect of leaseholds, extending
our existing schemes to offer leaseholders
an even greater discount on the purchase
of their freeholds. We were also delighted
to become a Living Wage Foundation
accredited employer and have our carbon
targets accredited by the blue ribbon
Science Based Target initiative during
the year.
Introduction
I am pleased to report that Persimmon has
had a strong year. The Group has sold more
homes and built them to a consistently
higher standard, while improving both
profit and underlying operating margin.
In combining improvements in quality,
customer service and financial performance
we are making the broader progress we set
as our objective.
Since I joined as Chairman I have been clear
that there were areas for improvement in
customer care and build quality especially.
Dean Finch’s appointment around 18 months
ago recognised the need to drive both our
industry-leading financial performance and
enhance our capabilities in key areas to
sustain our success. I am therefore delighted
to note that throughout the year we have
been consistently trending above five-star
on the Home Builders Federation (HBF)
customer satisfaction score
1
and anticipate
our first ever annual five-star award will be
confirmed in the coming weeks.
This is a tangible demonstration of our
progress but there is of course further to go
to sustain and improve on it. This remains
the clear focus of the Board and the senior
management team.
Trading
The UK housing market remains supportive,
with strong customer demand, good
mortgage availability and low interest
rates. The Group saw an increase in legal
completions of nearly 1,000 homes to 14,551
last year (2020: 13,575). Average private
sales rates per site were around 9% ahead
of 2020 and around 22% ahead of 2019.
Group total revenue increased by 8% to
£3.61bn (2020: £3.33bn). Our continued
disciplined cost control, combined with
a positive pricing environment, drove
underlying operating margin
2
up to
28.0% (2020: 27.6%) and our underlying
pre-tax profit
3
increased to £973.0m
(2020: £863.1m). Cash generation remains
strong at £762.1m (pre-capital return).
Revenue
£3.61bn
2020: £3.33bn
Dividend paid
in the year
235p
2020: 110p
Underlying new housing
operating margin
1
28.0%
2020: 27.6%
Forward sales*
£2.21bn
2020: £2.27bn
Affordable homes
2
2,759
2020: 2,433
I am pleased to report that Persimmon has had a strong year.
The Group has sold more homes and built them to a consistently higher
standard, while improving both profit and underlying operating margin.
1. Stated on new housing revenue of £3,449.7m
(2020: £3,129.5m) and underlying profit from operations of
£966.7m (2020: £862.8m) stated before legacy buildings
provision of £nil (2020: £75.0m) and goodwill impairment
of £6.2m (2020: £4.3m). The Group’s operating margin
is 26.6% (2020: 23.5%) based on revenue of £3,610.5m
(2020: £3,328.2m) and profit from operations of £960.5m
(2020: £783.5m).
2. Homes provided to our housing association partners
andDiscounted Open Market Value homes.
* As at 1 March 2022 (2020 figure as at 2 March 2021).
Persimmon Plc | Annual Report | December 2021
06
Long term strategy and
Capital Return Programme
Persimmon has delivered an industry-
leading performance over many years with
a well-executed strategy which recognises
the cyclical nature of the housing market.
Over the last 20 years, the Group’s average
return on capital has been c. 23% reflecting
the Group’s long-term performance.
With an experienced management team,
the Group’s strong positioning in its markets,
reflected in robust forward sales of £2.21bn,
and our high quality land holdings, we are
determined to sustain this for many years to
come by delivering on the five key priorities
Dean Finch, our Group Chief Executive,
sets out in his statement. We are investing
in our platform for future growth, whilst
maintaining our disciplined strategy around
land investment, improving the Group’s
operational efficiencies and placing our
customers at the heart of our business.
The Board continues to consider that,
under normal circumstances, cash
holdings of c. £700m are appropriate for
the business, providing the right balance
between ensuring appropriate liquidity
levels are maintained to cover the Group’s
annual working capital requirements and
providing sufficient funds to take advantage
of attractive investment opportunities.
This cash retention policy demonstrates that
we intend to continue to exercise caution
through the cycle.
The Board remains committed to its well-
established strategy of returning capital
that is surplus to the needs of the business
to its shareholders. Having assessed and
concluded on the availability of surplus
capital for 2021, the Board is pleased to
re-iterate its intention to return 235p per
share in 2022. The first payment of 125p per
share will be made on 1 April 2022 (rather
than July 2022 as was originally indicated)
to shareholders on the register on 11 March
2022 as an interim dividend. The second
payment of 110p per share will be made in
July 2022 (rather than March 2022 as was
originally indicated), subject to continuous
assessment in line with our strategy.
Board changes
Mike Killoran retired as Group Finance
Director in January 2022 after more than
25 years with Persimmon. Mike has played
a key part in Persimmon’s success and he
leaves with our thanks and best wishes. I am
delighted that we have appointed Jason
Windsor as Chief Financial Officer and we
expect him to join us in the summer.
The Board also welcomed Shirine Khoury-Haq
who joined as a Non-Executive Director
during the year. Rachel Kentleton decided to
stand down from the Board during the year
given other commitments and the Board
thanks her for her contribution.
In what was again a very difficult year
operationally, the Board would like to
thank our colleagues, sub-contractors
and suppliers for their hard work and
determination to deliver for our customers.
Roger Devlin
Chairman
1 March 2022
" The Group has sold more
homes and built them to a
consistently higher standard,
while improving both profit
and underlying operating
margin. In combining
improvements in quality,
customer service and financial
performance we are making
the broader progress we set
asour objective.”
ROGER DEVLIN
Chairman
1. The Group participates in a National New Homes
Survey, run by the Home Builders Federation. The rating
system is based on the number of customers who would
recommend their builder to a friend.
2. Based on new housing revenue (2021: £3,449.7m,
2020: £3,129.5m) and underlying operating profit
(2021: £966.7m, 2020: £862.8m) (stated before legacy
buildings provision of £nil (2020: £75.0m) and goodwill
impairment (2021: £6.2m, 2020: £4.3m)).
3. Stated before legacy buildings provision (2021: £nil,
2020: £75.0m) and goodwill impairment (2021: £6.2m,
2020: £4.3m). Profit before tax after legacy buildings
provision and goodwill impairment is £966.8m
(2020: £783.8m).
Strategic report Governance Financial statements Other information
07
The UK housing market
OUR MARKETPLACE
Private weekly sales rate
+9%
year on year
New homes per year
300,000
The Government’s target to tackle
thelong-term housing crisis
Mortgage approvals
c.952,600
approved in 2021
The housing market has performed well throughout the year,
with strong demand for our high quality homes across each
of our regions around the UK.
Through 2021, the UK housing market
hasperformed well. Strong demand
throughout the year has been supported by:
low interest rates, good levels of mortgage
availability, government support measures
and changing customer preferences brought
about by flexible working and the ‘search
for space’. Early indications are that 2022
will continue to benefit from this supportive
market backdrop. The Zoopla Price Index
forJanuary, for example, showed a c.50%
rise in demand for homes in the first few
weeks of 2022.
The Group has experienced strong sales
rates and enquiry levels throughout the
year,the Group’s average private weekly
sales rate was c.9% higher year on year
andc.22% ahead of 2019. 2021 saw a
number of challenges including rising
costinflation and supply chain restrictions.
The Group’s experienced management
team, high quality land holdings and
verticalintegration through its Brickworks,
Tileworks and Space4 manufacturing
facilities provided a strong financial and
strategic platform to continue to deliver
high quality homes at affordable prices.
This together with increasing average
sellingprices lead to the Group continuing
todeliver industry-leading margins.
A substantial shortage of homes is still
evident in the UK, with an estimated
shortfall of 1.26 million homes in England
since 2010. The Government’s ambition
to deliver 300,000 new homes per year
in order to tackle the long-term housing
crisis in the UK remains. The Group has
continued to play its part in addressing
this need, delivering 14,551 homes in 2021
(including 2,533 homes to our housing
association partners) and 141,156 homes
over the last 10 years. Due to its strong
liquidity, high quality land holdings in
desirable areas and strong network of
sites across the UK, the Group remains in
a healthy position to continuously deliver a
high number of quality homes throughout
the UK at a range of competitive prices.
Group average private
selling price
£259,231
2020: £250,897
HOUSING
SUPPLY
Market backdrop
Persimmon Plc | Annual Report | December 2021
08
Mortgage availability strengthened
throughout 2021, with gross overall
lending reaching record levels of £316bn.
Strong demand for homes and record low
interest rates led to increased affordability
and availability within the mortgage market.
The number of high percentage loan to
value ratio mortgages also increased in
2021. The full stamp dutyholiday remained in
place until June, with an additional extension
on properties bought up to £250,000 until
September. The Bank of England recorded
c.952,600 mortgage approvals in 2021, an
increase of 16.4% from c.818,500 in 2020.
The Group occupies a strong position
within the UK housing market, providing a
range of house types at attractive prices,
enabling its customers to benefit from
the security of owning their own home.
The Group provides quality homes for all,
with an average private selling price of
£259,231, which is over 20% below the
UK national average
1
. In addition, c.50%
ofprivate sales went to first time buyers.
The current Help to Buy: Equity Loan
scheme, whereby the government lends
first time homebuyers up to 20% (40%
in London) of the cost of a newly-built
home, is available until 31 March 2023.
Deposit Unlock, a scheme devised
in collaboration with lenders and the
housebuilding industry, enables buyers
to purchase a new-build home with just a
5% deposit. Given the demand for home
ownership within the UK, Persimmon is
wellplaced to continue to provide homes
for its customers given its range of house
types and price points.
1. Rolling 12 month national average selling price for newly
builthomes sourced from the UK House Price Index as
calculated by the Office for National Statistics from data
provided by HM Land Registry.
The Government remains committed
to its target of supplying 300,000 new
homes per year across the UK and
continues to support the industry with
reforms aimed at streamlining the planning
process. In July 2021, the National
Planning PolicyFramework was revised
with majorupdates aimed at providing
sustainable developments, improving
biodiversity and improving design quality.
The Environmental Act published in
November 2021, states that biodiversity
gain is to be a condition of planning
permission in England. The Group is
supportive of all these objectives and well
placed to continue delivering sustainable
and attractive developments through our
Group master-planning team. The time
taken to achieve planning consents is
increasing as Local Authority planning
teams are experiencing resourcing issues.
We welcome initiatives aimed at increasing
the efficiency of this system.
Amendments to Part L of the Buildings
Regulations require a c.30% improvement
in the efficiency of a new home. As a result
of this change in regulation, new homes
will have improved insulation, ventilation,
more efficient boilers and some may have
solar panels. The Future Homes Standard,
which is likely to be implemented in 2025,
requires a c.80% improvement in the
efficiency of a new home, for example new
homes will no longer have gas fired boilers.
In addition, the Government released its
‘Net Zero Strategy: Build Back Greener’
policy in October 2021, outlining its
strategy for greener construction methods
with the aim of becoming Net Carbon
Zero by 2050, including an increase in
timber frame construction. The Group
strongly supports these initiatives and is
already heavily involved in the research
and implementation of greener building
methods through our Low Carbon Homes
steering group.
Rising material prices and a shrinking
skilled labour force continue to impact
the construction industry. The Group
continues its investment innew talent,
with over 650 trainees andapprentices
across the business. Space4, the Group’s
timber frame manufacturing facility,
supports increasedsite production
andefficienciesby reducing the time
tobuild the ‘superstructure’ of a new home
by almost two thirds whilst easingthe
reliance onsite of some of the traditional
construction skills (e.g. bricklaying).
Trainees and apprentices
over 650
2020: c.680
Low Carbon Homes Steering Group
(See page 42 for more details)
PLANNING AND
REGULATION
MORTGAGE
AVAILABILITY AND
AFFORDABILITY
SKILLED
LABOUR
Market backdrop
Strategic report Governance Financial statements Other information
09
SOLD
WHAT WE DO
Our business model
The Group’s established strategy, which recognises the cyclical nature
of the housing market by maintaining financial flexibility and deploying
capital at the appropriate time in the cycle, provides a high quality
foundation to secure superior, sustainable returns for all stakeholders.
HOW WE CREATE SUSTAINABLE
VALUE FOR ALL OF OUR STAKEHOLDERS
THE RESOURCES
WE NEED
High quality
land holdings
Read more on pages 38 to 39
A diverse and
talented workforce
Read more on pages 32 to 37
Good relationships
with our local communities
Read more on pages 46 to 47
Well-established relationships
with our supply chain and
wider workforce
Read more on pages 42 to 45
Good relationships
with local government
Read more on page 39
Financial strength
Read more on pages 48 to 49
THE SUSTAINABLE VALUE WE CREATE
Link to
strategy
Link to
strategy
New homes delivered
14,551
2,533 delivered to
housingassociations
‘Homes for all’
over 20%
our private average sellingprice
isover 20% lower than the
UKnationalaverage*
Employment
5,121
people directly employed
onaverage in 2021
Financial strength
£3.63bn
balance sheet net assets
at31December 2021
Identify areas
of housing need
We have skilled land, planning and design
teams who have a good knowledge of their
local communities’ needs. Our teams work
closely with local government, landowners
and their communities to identify and plan
developments in areas where people want
to live and work.
Execute disciplined
land investment
The Group has high quality land holdings
providing it with continuity of supply, a
geographically diverse network of upcoming
and current developments and the flexibility
to invest only when it is the right time in the
cycle and when the investment meets the
Group’s strict criteria. The Group prioritises
strategic land investment to secure options
on areas of land which will give a stronger
return on investment in the future.
* National average selling price for newly built homes sourced from the UK House Price Index ascalculatedbytheOfficeforNational Statistics from data provided by HM Land Registry.
Persimmon Plc | Annual Report | December 2021
10
Our business model facilitates this
strategy and creates long-term returns
for all of our stakeholders. The Group’s
financial resilience has been generated
by its ability toinvest in land opportunities,
work inprogress and operations at the
right time in the cycle and only when the
relevant investment meets the Group’s
stringent criteria. This well judged
investment provides the business with
the solidfoundations required to navigate
through uncertain times for the benefit
ofallof our stakeholders.
Link to
strategy
Link to
strategy
Link to
strategy
Investing in communities
c.2.6bn
over the last six years
HBF score
92.0%
HBF survey – percentage of customers who
would recommend Persimmon to a friend
Surplus capital returned
to shareholders
£749.6 m
in the year to
31 December 2021
Jobs supported**
c.92,000
construction and
supply chain jobs
Create sustainable
communities
The Group’s highly experienced planning and
design teams aim to design developments
with open space and the right balance of
house types to meet local communities’ needs.
The Group has well designed core house
types which provide a range of affordably
priced homes meeting the lifestyle needs of
our customers from first time buyers to larger
family homes.
Build quality and
material supplies
The Group owns Space4 (a timber frame,
wall panel and roof cassette manufacturing
facility) and has built its own Brickworks
and Tileworks facilities. This vertical integration
provides security of supply and quality of key
materials. This is supported by Group and local
buying teams who secure the best deals on
other material requirements. The Persimmon
Way is also making a real difference to
improving build quality across the Group.
Deliver high levels
ofcustomerservice
The Group has dedicated sales advisers
and customer care teams to look after our
customers throughout their home buying
journey. We have invested significantly
in increased training and improved
communication for our customers and
have seen continued progress in our
HBF 8 week customer survey score.
** Estimated using an economic toolkit.
Strategic report Governance Financial statements Other information
11
Our strategic objectives and five key priorities
PLACING CUSTOMERS AT THE
HEART OF OUR BUSINESS
Persimmon Plc | Annual Report | December 2021
12
Build right, first time, every time –
consistently deliver high quality homes
to our customers in places where they
wish to live and work
Continue to put our customers and
quality before volume
Invest in new technologies to enhance
customer service
Provide affordable new homes to our
housing association partners
92.0%
1
of customers that have moved
into their new home say they would
recommend Persimmon to a friend
The Persimmon Way is fully operational
across the business
The number of Independent Quality
Controllers (IQCs) across the Group
has almost doubled since the start of
the year
Over 650 trainees and apprentices
across the business
c.13,200 training days delivered
28% females on our senior executive
management team and direct reports
c.90% of our Site Managers now hold
arelevant NVQ qualification
Owned and controlled land holdings
of88,043 as at 31 December 2021
Brought over 20,750 plots into the
business across 101 sites, representing
143% of current consumption levels
Underlying new housing gross margin
of 31.4%
2
delivered during 2021
reflecting the quality of the Group’s
land holdings
Continue to invest in the development
and training of our workforce and
ensure talent is recognised, nurtured
and supported
Provide exceptional career
opportunities to all colleagues
Encourage our workforce to live
our values through training and
reward schemes
Increase the diversity of our workforce,
enriching our culture and enhancing
our skills base
Address the labour skills shortage
across the industry through investment
in training and apprenticeships
Identify and fulfil the needs of local
communities and Local Planning
Authorities through our on market
and strategic planning and land
acquisition processes
Deliver sustainable high quality
land holdings with industry-leading
embedded margins, providing a robust
platform for disciplined growth
Deliver our strategic land holdings
for development
How these support our five key priorities
Place customers at the
heart of our business
with a compelling brand
1. The Group participates in a National New Homes Survey, run by the HBF. The Survey year covers the period from 1 October to 30 September.
The rating system is based on the number ofcustomers who would recommend their builder to a friend.
2. Based on new housing revenue (2021: £3,449.7m).
GROWTH
4
SUSTAINABLE
COMMUNITIES
5
INDUSTRY-LEADING
FINANCIAL PERFORMANCE
BUILD QUALITY
2
REINFORCE TRUST
IN THE BRAND
3
GROWTH
BUILD QUALITY
2
REINFORCE TRUST
IN THE BRAND
3
GROWTH
Investing in high
quality land
A diverse and
talented workforce
How we measure
Our strategic objectives
Read more on our Group Chief Executive’s review on page 20
1 1 3
Strategic report Governance Financial statements Other information
13
How we measure
Annual injury incidence rate of 2.5 per
1,000 workers
5,865 pro-active site inspections
GHG emissions of 1.80 tonnes CO
2
e
per home sold (market based)
Our average private selling price of
£259,231 is over 20%
1
below the UK
national average
Approximately 50% of our private home
completions for the year have been to
first time buyers
£490m
2
invested in our local
communities in 2021
c.92,000
3
construction and supply
chain jobs supported
FibreNest currently supports c.21,000
customers over 270 sites
High quality land holdings with
industry-leading embedded margins
Strong levels of liquidity with a cash
balance of £1,246.6m at 31 December
2021 and deferred land creditors of
£407.6m
Total dividend payment of 235p per
share paid during 2021 in respect of
the2020 financial year
Return on average capital employed
of35.8%
4
Maintain excellent health and safety
standards across each of our sites and
in our off-site manufacturing facilities
Minimise our environmental impact
Strengthen and invest in our off-site
manufacturing facilities, improving
efficiencies, increasing security of
supply and improving the sustainability
of our new homes
Continue to embed sustainability
considerations into our core operations
Create attractive neighbourhoods with
high amenity value in places where
people wish to live and work
Provide a range of house types,
widening the opportunity of home
ownership whilst creating attractive
neighbourhoods for people to enjoy
Play an active role in supporting our
local communities
Deliver FibreNest, the Group’s ultrafast,
full fibre broadband service to our
customers, providing an increasingly
important service which families rely on
to support their efforts to work from home
and to access essential services online
Maintain a resilient balance sheet and
financial flexibility through the cycle
sustaining continued investment and
future returns
Invest in appropriate levels of working
capital and land replacement opportunities
Maintain discipline over the appropriate
level of capital employed within the
business through the housing cycle
Identify capital that is surplus to the
operational needs of the business and
distribute to shareholders
Support and
createsustainable
communities
Maintaining financial
strength through the
housing cycle
How these support our five key priorities
Working safely,
responsibly
and efficiently
1. Rolling 12 month national average selling price for newly built homes sourced from the UK House Price Index as calculated by the Office for National Statistics from data provided by HM Land Registry.
2. The value of homes delivered to our housing association partners, the value of Discounted Open Market Value Housing plus the value of planning contributions we have made.
3. Estimated using an economic toolkit.
4. 12 month rolling average calculated on underlying operating profit and total capital employed (including land creditors). Underlying operating profit is stated before goodwill impairment of £6.2m.
4
SUSTAINABLE
COMMUNITIES
5
INDUSTRY-LEADING
FINANCIAL PERFORMANCE
BUILD QUALITY
4
SUSTAINABLE
COMMUNITIES
Our strategic objectives
Read more on our Group Chief Executive’s review on page 20
1
Our Key Performance Indicators (KPIs)
HOW WE PERFORMED
1. Stated before legacy buildings provision of £nil (2020: £75.0m) and goodwill impairment (2021: £6.2m, 2020: £4.3m). After legacybuildings provision
and goodwill impairment the figures are as follows: Housing operating margin: 27.8%(2020: 25.0%; 2019: 30.1%;2018: 30.5%;2017: 27.9%).
2. Stated before legacy buildings provision of £nil (2020: £75.0m) and goodwill impairment (2021: £6.2m, 2020: £4.3m). After legacybuildings provision
and goodwill impairment the figures are as follows: Profit before tax: £966.8m(2020: £783.8m; 2019: £1,040.8m;2018: £1,090.8m; 2017: £966.1m).
Profit measures
We have a strong track record of delivering industry-leading
returns. Our disciplined land replacement processes, cost
management and efficiency programmes aim to generate
superior returns which provides a platform for further investment
in the Group’s resources to support our future growth.
Underlying new housing operatingmargin (%)
1
+1%
2021
2020
2019
2018
2017
28.0
27.6
30.3
30.8
28.2
Link to
strategy
Underlying profit before tax (£m)
2
+13%
2021
2020
2019
2018
2017
973.0
863.1
1,048.1
1,100.0
977.1
Link to
strategy
Financial KPIs
Revenue measures
Strength of housing revenue is an important measure
of thesuccess of our strategy. Our range of house types
and emphasis on traditional housingputsusina strong
position inour markets.
New housing revenue (£m)
+10%
2020
2019
2018
2017
Link to
strategy
Forward sales at 31 December (£m)
-4%
2020
2019
2018
2017
Link to
strategy
Persimmon Plc | Annual Report | December 2021
14
1. Free cash generation is defined as net cash flow before financing activities and before £nil of employers’ National Insurance
contribution payments in respect ofshare-basedpayments(2020: £0.7m; 2019: £13.9m; 2018: £46.7m; 2017: £nil).
2. 12 month rolling average calculated on underlying operating profit and total capital employed (including land creditors). Capital employed is the Group’s
net assets less cash and cash equivalents plus land payables. Afterlegacy buildings provisionand goodwill impairmentthefiguresareasfollows:
Return on average capital employed: 35.6% (2020: 26.7%; 2019: 36.7%; 2018: 41.0%;2017: 39.8%).
Return measures
A combination of higher operating profitability and capital
discipline will deliver higher levels of return on investedcapital.
We will continue our disciplined approach toworking capital
management to meet market demand.
Return on average capital employed (%)
2
+22%
2021
2020
2019
2018
2017
35.8
29.4
37.0
41.3
40.3
Link to
strategy
Net assets per share (pence)
+3%
2021
2020
2019
2018
2017
1,135.7
1,102.7
1,021.7
1,006.0
1,036.6
Link to
strategy
Cash and cash flow measures
Cash and free cash generation are used to measure balance
sheet strength and liquidity. Ensuring we have an appropriate
capital structure to support our business through the cycle
iskeyto our success.
Free cash generation (£m)
1
+2%
2020
2019
2018
2017
Link to
strategy
Cash (£m)
+1%
2020
2019
2018
2017
Link to
strategy
Financial KPIs Financial KPIs
Strategic report Governance Financial statements Other information
15
Customer Survey
The Group participates in a National New
Homes Survey, run by the Home Builders
Federation. The customer satisfaction
rating system is based on the number of
customers who would recommend their
builder to a friend. The build quality score
is based on how satisfied customers are
with the quality of their new home.
Customer satisfaction score
2021
2020
2019
2018
2017
92.0
89.7
83.7
78.9
79.1
Quality
2021
2020
2019
2018
2017
87.9
84.7
79.2
77.6
78.3
Land holdings
The Group’s high quality land holdings
with industry-leading embedded margins
are a key strength of the business.
Plots
2021
2020
2019
2018
2017
88,043
84,174
93,246
99,088
98,445
Construction work
related incidents
Our priority is the health and safety of
our workforce, visitors and home owners
on our sites. We regularly monitor and
review our performance based on our
accident rate of RIDDORs reported per
1,000 workers in our house building
operations (including, where relevant,
those reported by our contractors).
Number
2021
2020
2019
2018
2017
4.0
3.4
3.8
3.2
3.6
Percentage of waste recycled
To monitor and improve our operational
and environmental efficiency, we
collect data on the amount of waste we
generate and recycle for each home
we sell.
Percentage recycled
2021
2020
2019
2018
2017
94%
96%
97%
96%
92%
Our Key Performance Indicators (KPIs)
How we performed continued
Invest in high
qualityland
Place customers at the
heart of our business
with a compelling brand
Working safely,
responsibly
and efficiently
Non-financial KPIs
Linkage to remuneration onpages 108 to 128
Persimmon Plc | Annual Report | December 2021
16
Our sustainability approach
OUR SUSTAINABILITY PILLARS
Transforming
communities
Building for
tomorrow
Safe and
inclusive
Key targets and achievements
We have set science-based carbon
reduction targets for our operations
and our indirect emissions (i.e.
our homes in use and our supply chain,
see page 42 for more detail).
Our targets have been accredited by
the Science Based Target initiative.
We aim tobe net zero for our homes
inuse by 2030 and in our operations
by 2040 (see page 42).
We aim to have 50% of our homes built
usingtimber frames from our off-site
manufacturing facilities by 2025.
Our current customer satisfaction score
is 92.0%. We believe we will achieve a
five-star rating when the HBF’s annual
results are published in March 2022.
From 2022, we will be proactive to
ensure compliance with 10% Biodiversity
Net Gain when it isexpected to be
introduced during2023.
In 2021 we reduced our NHBC
Reportable Incidents by17%.
In 2022 we are targeting to further
improve our NHBC Reportable
Incidents by 18%.
We will report our Annual Injury
Incidence Rate and will aim to improve it
yearon year.
Aim to have females composing:
40% of our employees, 35% of our
senior management team and 45%
ofemployees in management roles
bythe end of 2025.
The Group became a Living Wage
Foundation accredited employer
during 2021.
We will achieve net zero carbon homes in
use and in our operations, supported by
carbon reduction commitments, aligned
to climate science.
We will positively transform
communities directly connected
toPersimmon’s activities.
We have a safe and inclusive culture
focused on the wellbeing of our
customers, communities and workforce.
Link to strategy
Sustainability pillars and targets
Strategic report Governance Financial statements Other information
17
Our sustainability approach
SUSTAINABILITY ACCOUNTING
STANDARDS BOARD (SASB)
DISCLOSURES
Sustainability Disclosure Topics and Accounting Metrics
Activity metric Code Category Unit of measure Data
Number of owned and controlled plots IF-HB-000.A Quantitative Number 88,043
Number of homes delivered IF-HB-000.B Quantitative Number 14,551
Number of active selling communities IF-HB-000.C Quantitative Number c.290
The Group has chosen to continue to report in line with the HOME BUILDERS
Sustainability Accounting Standard, where possible, to aid comparability
and transparency.
Topic Accounting metric 2021 data SASB code
Land use and
ecological impacts
Number of (1) plots and (2) homes
delivered onredevelopment sites
(1) 21,070 plots (2020: 21,979 plots)
(2) 3,504 homes (2020: 3,414 homes)
IF-HB-160a.1
Number of (1) plots and
(2)homesdelivered in regions with
High or Extremely High Baseline
Water Stress.
(1 ) 2,058 plots (2020: 2,842 plots)
(2) 633 homes (2020: 598 homes)
IF-HB-160a.2
Total amount of monetary lossesas a
result of legal proceedings associated
with environmental regulations.
There have been no material instances of monetary losses as a
result of legal proceedings associated with the environment.
IF-HB-160a.4
Discussion of process to integrate
environmental considerations into
site selection, site design, and
sitedevelopment andconstruction
The Group performs a ‘Planning and Environmental Risk
Assessment’for each potential site identified covering
matters includingcontaminated land, water contamination
and biodiversity impacts. This assessment is used to plan
and design the site and putinplace appropriate measures
to mitigate adverse environmental impacts. The Group’s
technical and construction teams are involved in site planning
and development from an early stage in the planning
process through ‘land technical team meetings’ and ‘pre-start
meetings’to discuss progressing the scheme and ensure the
environmental conditions are effectively implemented on site.
Public open spaces and
gardensprovided for families*
662 acres (2020: 635 acres)
Workforce
Health and Safety
(1) Total recordable incident
rate (TRIR) and (2) fatality rate
for (a) direct employees and
(b)contract employees
(1) (a) Annual Injury Incidence Rate of 2.5 per 1,000 workers
(2020: 1.7 per 1,000 workers) (reported inline with
UKHealthandSafety Executive
(HSE) methodology).
(2) (a) 0, (b) 0
IF-HB-320a.1
Construction work related incidents
per 1,000 workers
4 (2020: 3.4)
Health and safety training
daysdelivered
915 days (2020: 1,028 days)
SASB was founded in 2011 as a not-for-profit, independent standards setting organisation to assist
companies in disclosing financially material, decision-useful sustainability information toinvestors.
It is a US standard, therefore where possible, theUK equivalent has been provided as an alternative
measure. In addition, we have provided additional metrics wherewebelievethey will provide
furtherinformation regardingaspecific sustainability topic.
Persimmon Plc | Annual Report | December 2021
18
Topic Accounting metric 2021 data SASB code
Design for
resource efficiency
Average energy efficiency score
ofour new homes (SAPrating)**
87 (2020: 86) IF-HB-410a.1
Percentage of installed
waterfixturescertified to
WaterSense® specifications
This is a program sponsored by the US Environmental
Protection Agency and as such, not specifically relevant
toPersimmon. For information on the efficiency of our
homes,please see page 42.
IF-HB-410a.2
Number of homes delivered certified
to a third party multi-attribute green
building standard
Note that there are no equivalent multi attribute green
building standards in the UK.
IF-HB-410a.3
Description of risks and opportunities
related to incorporating resource
efficiencyinto home design,
andhow benefits are communicated
tocustomers
All of our homes are designed to achieve high levels
ofenergyefficiency, see page 42 for more details.
IF-HB-410a.4
Climate change
adaptation
Description of how proximity and
access to infrastructure, services, and
economic centresaffect site selection
anddevelopment decisions
When selecting sites for development, Persimmon’s objective
is to develop natural extensions to existing communities that
have the leastenvironmental impact. As such, proximity to
existing infrastructureandlocal amenities such as schools,
shops and townsisakey consideration for the Group’s land,
planning and designteams when identifying potential sites.
IF-HB-410b.1
Number of (1) plots and (2) homes
delivered on infill sites
(1) 60,108 plots (2020: 60,205 plots)
(2) 11,140 homes (2020: 9,819 homes)
IF-HB-410b.2
(1) Number of homes delivered
incompact developments and
(2) average density
(1) 7,621 homes (2020: 6,644 homes)
(2) 18 plots per net developable acre (2020: 17)
IF-HB-410b.3
First occupation expenditure –
customers’ expenditure onfurnishing
and decorating their new home**
£80m (2020: £74m) Additional
information
Residential expenditure – spending
within local shops andservices by
residents ofnewhomes delivered**
£433m (2020: £402m) Additional
information
Number of plots located
in 100-year flood zones
The Group does not build directly on 100-year flood zones.
Ifanyareawithin our sites fall into this category,
it is not developed,inline with the planning requirements,
which willhavebeenagreed before land investment.
IF-HB-420a.1
Percentage of sites withsustainable
urban drainagesystems
82% (2020: 78%) Additional
information
Description of climate change
risk exposure analysis, degree of
systematic portfolio exposure, and
strategies for mitigating risks
Please see the Group’s Task Force on Climate
relatedRiskDisclosures(TCFD) on page 62.
IF-HB-420a.2
* Estimated using an economic toolkit.
** SASB requirement refers to a US regulation/standard. The UK equivalent has been provided as an alternative measure where possible.
Strategic report Governance Financial statements Other information
19
Group Chief Executive’s statement
BUILDING ON
PERSIMMON’S STRENGTHS
Our vertical integration, through our own
Brickworks, Tileworks and Space4 timber
frame manufacturing facilities were key
in providing the business with security of
supply of essential materials. In addition,
using timber frames in our build improves
on-site efficiencies and reduces our reliance
on constrained skills.
The Group continues to deliver industry-
leading margins, a key strength I am
determined to build on. Our rigorous cost
control helped mitigate material and labour
cost inflation, while a disciplined approach
to pricing helped more than offset its impact.
Underlying operating margin
1
increased to
28.0% (2020: 27.6%), reflecting a benefit
from the mix of legal completions achieved
in the second half of the year.
Underlying profit before tax
3
grew to
£973.0m (2020: £863.1m) and our cash
generation to £762.1m (pre-capital return)
(2020: £740.9m). The Group’s profit before
tax increased to £966.8m (2020: £783.8m).
Our increased investment in land
opportunities is strengthening our platform
for disciplined future growth, with over
20,750 plots brought into the business
during the year, at a replacement rate of
143% of current consumption levels. Further,
these opportunities were secured with
attractive embedded margins, enabling
Persimmon to continue to deliver leading
financial performance. With this strong
pipeline we will increase our UK-wide outlet
position providing an excellent platform for
the Group’s future disciplined growth.
We are preserving Persimmon’s great
strengths and continuing to deliver an
industry-leading performance whilst making
good progress in enhancing our build quality
and customer service on a consistent basis.
Trading
The Group delivered 14,551 new homes
in 2021 (2020: 13,575) underpinned by a
supportive housing market. Total Group
revenues were £3.61bn, an 8% increase year
on year (2020: £3.33bn). Our new housing
revenues increased to £3.45bn in 2021 from
£3.13bn in the prior year.
Demand was strong throughout 2021: the
Group’s average private sales rate per site
was c.9% ahead of 2020 and c.22% ahead
of 2019 reflecting Persimmon’s positive
positioning within a healthy housing market.
This backdrop has supported positive
pricing conditions with increased average
selling prices for private sales seen across
each of our regions. Our average selling
price increased by 2.8% to £237,078
(2020: £230,534) reflecting a combination
of the mix of homes sold in the year and the
increased proportion of homes sold to our
housing association partners. The Group’s
private average selling price increased by
3.3% to £259,231 (2020: £250,897) reflecting
the mix of developments and house types
sold in the year.
Our build rates were maintained at pre-
Covid levels throughout 2021 as our highly
experienced and responsive management
teams navigated through the challenges
posed by the pandemic and the supply
chain restrictions experienced.
Persimmon has performed very strongly in 2021. I am delighted that we
havedelivered nearly 1,000 more legal completions and generated
a 40 basispointincrease in the Group’s underlying operating margin
1
year on year (2021: 28.0%, 2020: 27.6%) while further improving our
five-star HBF 8 week customer satisfaction score to 92.0%
2
.
“ We are preserving
Persimmon’s great strengths
and continuing to deliver an
industry-leading performance
whilst making good progress
in enhancing our build quality
and customer service on a
consistent basis.”
DEAN FINCH
Group Chief Executive
Persimmon Plc | Annual Report | December 2021
20
This strong performance was delivered
whilst continuing to make good progress
in bringing our customers into the heart of
our business, putting them before volume,
and taking important steps in recognising
our role as a responsible developer.
We were one of the first developers to give
leaseholders a commitment they would
not have to pay to remove cladding; led the
industry in agreeing voluntary undertakings
with the CMA on leaseholders purchasing
their freeholds; and, became a Living
Wage Foundation accredited employer.
A new Mission, Vision and Values has been
launched clearly setting out our ambitions
and ways of working as a business.
Persimmon has a unique balance of
strengths and skill-sets:
• Our market positioning, with an average
private selling price that is over 20%
4
lower
than the UK national average together
with our role in developing communities
in places where people wish to live and
work, uniquely positions us to widen
the opportunity of home ownership to
our customers;
• Our high quality land holdings with
industry-leading embedded margins –
theGroup increased its owned and under
control land holdings to 88,043 plots at
31 December 2021 supporting our UK-wide
outlet network and providing a strong
platform for disciplined growth;
• Our strong and experienced management
teams, a large number of whom have been
with the business for many years;
• Our focus on all aspects of operational
efficiency and relentless pursuit of build
cost efficiencies, including our disciplined
approach to land buying, our carefully
designed standardised house type range,
rigorous master planning and market
mix analysis;
• Our innovation and entrepreneurship
resulting in us establishing, for example,
our own vertical integration capabilities,
with our Brickworks and Tileworks
manufacturing facilities that provide us
with security of supply and our Space4
timber frame manufacturing facility that
reduces our reliance on constrained
skills and increases on-site efficiencies.
In addition, FibreNest, our ultrafast full
fibre to the home broadband service,
provides our customers with connection
from the point they move into their
new home.
At every stage of the process we have
teams diligently focused on maximising
value for customers and our business alike.
Placing customers at the heart of our
business and our continuing pursuit of
improvements in build quality and customer
service is further strengthening our position.
Our high quality land holdings, effective
operational management and diverse
network of sites across the UK provide
an excellent platform to help deliver the
homes that the country needs. Our focus on
our five key priorities for the business will
further enhance Persimmon’s strengths and
continue to drive real improvements across
the Group, sustaining our industry-leading
financial performance.
Delivery against our
five keypriorities
In short, during the year we delivered more
homes, built better and strengthened our
platform for future growth. As our results
demonstrate, the five key priorities I set out
last year are driving important progress,
building on Persimmon’s great strengths and
enhancing our focus in certain key areas.
These five key priorities will underpin and
sustain our future success:
• Build quality: our ambition is to
build right, first time, every time;
• Reinforce trust in the brand: we will be
consistently trusted to deliver a home
to be proud of and a builder customers
would readily recommend to others;
• Disciplined growth: through our
improvements in build quality and
increased focus on customer care
wewill be strengthening our capability
to deliver more five-star homes to
meetthestrong demand;
• Maintaining an industry-leading
financial performance: sustaining our
strong margins and returns and driving
healthy profit and cash generation;
• Sustainable communities: we will play
a full and active role in the imperative of
achieving a net zero carbon economy,
as well as setting new biodiversity and
sustainable community targets.
1. Based on new housing revenue (2021: £3,449.7m, 2020: £3,129.5m) and underlying operating profit
(2021: £966.7m, 2020: £862.8m) (stated before legacy buildings provision of £nil (2020: £75.0m)
and goodwill impairment (2021: £6.2m, 2020: £4.3m)).
2. The Group participates in a National New Homes Survey, run by the Home Builders Federation.
The rating system is based onthe number of customers who would recommend their builder to a friend.
3. Stated before legacy buildings provision (2021: £nil, 2020: £75.0m) and goodwill impairment
(2021: £6.2m, 2020: £4.3m). Profit before tax after legacy buildings provision and goodwill impairment
is £966.8m (2020: £783.8m).
4. National average selling price for newly built homes sourced from the UK House Price Index as calculated
by the Office forNational Statistics from data provided by HM Land registry. Group average private selling
price is £259,231.
Strategic report Governance Financial statements Other information
21
Group Chief Executive’s statement
Building on persimmon’s strengths continued
We have strengthened oversight to enhance
the assurance of consistent delivery. In the
last year, we have more than doubled our
team of Independent Quality Controllers
(IQCs) from 29 to 60. We believe this is the
largest independent team of inspectors in
the industry. Each key stage of development
must be independently verified as complete
and at the required standard before further
work can continue. Our commitment to
independent oversight is also demonstrated
by undertaking our first external audits
of the Persimmon Way’s implementation
both across our sites and within each of
our 31 operating businesses by a leading
national quality inspection consultancy.
Alongside this, we are investing further in
digitised site inspection, including a site
manager app that provides a clear record
of quality sign off and accountability as well
as prompting tasking and completion of any
necessary work.
To reinforce this renewed focus, our
senior management bonus scheme was
restructured last year to incorporate build
quality and customer service targets.
In the current year, this approach is being
extended across the organisation, including
to our site management teams. We will
shortly announce the first national winner
of our Construction Excellence Awards,
with 31 local and five divisional winners
already recognised for their build quality
standards. I was also delighted to see our
first NHBC Pride in the Job Awards winners
in two years, recognising excellent site
management practice. I look forward to
many more awards in the years to come.
Reinforcing trust
Focusing on consistently delivering quality
is the foundation of our renewed approach.
As I said last year, Persimmon is known for
outstanding value; I want us to equally be
known for outstanding quality and service.
Our recent progress on our HBF 8 week
customer satisfaction score is therefore
welcome and encouraging. From closing
the 2019/2020 survey year at 89.7%, we
are reporting a score of 92.0%
2
for the
2020/2021 survey year. We believe, for the
first time in Persimmon’s history, we will
achieve a five-star rating when the results
are published shortly.
I am determined to build even further on this
progress. To reinforce trust we will continue
to seek further improvement to both our 8
week and 9 month scores. We continue to
invest in training to embed the new priorities
further. For example, we have rolled out a
Persimmon Site Manager Essentials course
and c.90% of our site managers have now
gained an NVQ, up from 21% last January.
Quality
Our focus on build quality is summed up by
our determination to build right, first time,
every time – the mantra of our Persimmon
Way construction excellence programme.
As a responsible developer, we recognise
the importance of delivering high quality
homes to our customers and are aligned
with government’s aims of enhancing
quality across the industry. We welcome
the introduction of the New Homes Quality
Board and our ambition to be an industry
leader is demonstrated by the fact we are an
early signatory to the New Homes Quality
Code. The code is designed to drive build
quality and customer service improvements
across the industry, in line with Persimmon’s
renewed ambition.
Last year, I made build quality my first
priority, as I want Persimmon to be known for
outstanding service as well as outstanding
value, further securing our strong market
positioning and increasing the value of the
homes we build. Improving build quality
will also deliver further improvements
in our build costs as we increase on-
site efficiencies and reduce the cost
of remediation.
We have made good progress. All warranty
provider scores have significantly improved
over the last two years, with NHBC
Reportable Incidents
5
down over 33%.
Our build quality score on the HBF 8 week
survey
6
has improved by 11% over the last
two survey years.
We have achieved this progress by
strengthening our standards, training,
oversight and reward structures. To take
each in turn. A new build standards guide
and more exacting build tolerances which
are set above prevailing industry norms have
been published under our Persimmon Way
programme. These are being augmented
by construction excellence seminars, led by
the Group Construction Director and senior
local leaders, to disseminate best practice.
They are already proving very popular.
Our sub-contract tendering process has
been revised to emphasise quality and
customer service performance alongside
cost efficiency considerations. We are
also seeking to become one of the first
Building a Safer Future Charter Champions,
recognising our renewed level of ambition
for build quality and safety.
HBF 8 week survey
6
build quality
score improved by
11%
over the last two survey years
Independent Quality Controllers
60
2020: 29
5. A Reportable Incident is an area of non-compliance
with NHBC standards. The item is rectified fully before
completion of the house.
6. The Group participates in a National New Homes Survey,
run by the Home Builders Federation.
The build quality score is based on how satisfied
customers are with the quality of their home.
Persimmon Plc | Annual Report | December 2021
22
“ Acting as a responsible
developer, over a year ago,
we led the industry in making
a commitment to leaseholders
that they would not have to
pay to remove any cladding
or correct fire related safety
issues on any buildings we
constructed.”
DEAN FINCH
Group Chief Executive
Our Persimmon Pathway provides tailored
programmes for staff and in the last year
over 21,000 hours of training was delivered
by our in-house team alone. We were also
the first homebuilder to offer sales advisors
a route to professional accreditation
through a partnership with the Institute of
Sales Professionals.
FibreNest continues to be a real strength
for the Group, with over 21,000 customers
across more than 270 developments
now connected to our national ultrafast
broadband network. Created to address
persistent customer frustration that
established internet providers were not
connecting their homes from the day they
moved in, FibreNest has seen a sustained
improvement in day one connection rates,
so they averaged over 85% during 2021, with
the start of 2022 showing a further notable
improvement. Customers increasingly view
broadband as a key utility and FibreNest’s
gigabit ready, ultrafast network is therefore
an important part of our service. Indeed, last
year FibreNest launched a new Wholesale
Services division to encourage other
retail service providers to use our network
and meet our ambition of expanding
customer choice.
Acting as a responsible developer, over a
year ago, we led the industry in making a
commitment to leaseholders that they would
not have to pay to remove any cladding
or correct fire related safety issues on any
buildings we constructed. We created a
£75m fund to pay for this work and set up
a Special Projects Team to complete the
programme as quickly as possible. This team
wrote proactively to the Management
Companies and owners of all potentially
affected buildings going back 22 years
and identified 33 developments where
work is required. Of the 33 developments
identified, 3 are below 11 metres, 16 are
between 11m and 18m and 10 are taller than
18m. The remaining four developments
have already secured successful EWS1
forms. We are working with Management
Companies and building owners to help
expedite their programmes to provide
reassurance to leaseholders as soon
as possible.
In response to the Government’s request
we have extended the search back to 30
years but do not expect the number to
change materially. We will not claim from
the Government’s Building Safety Fund to
complete the works on these buildings and
will reimburse any funding already claimed
by the Management Companies involved.
We hope these actions will lead to us
becoming a member of the government’s
new Building Industry Scheme and
continue to engage in positive discussions
with officials.
Disciplined growth
Alongside the focus on consistent delivery
of quality and service, we are determined to
drive disciplined growth in the business and
sustain our industry-leading performance.
We have highly experienced land and
planning teams in our operating businesses
with in depth knowledge of their local
communities’ needs. In combining this
with expert design and place making skills
we create communities that meet our
customers’ needs.
In the second half of 2021 we operated from
an average of 285 outlets reflecting the high
sales rates achieved and some planning
delays experienced. We have clear visibility
on our pipeline of new outlets and, subject
to planning consents, are forecasting to
open around 75 new outlets in the first half
of 2022. We have had some success in
gaining planning consents in the early part
of this year, however, the process continues
to move at a slow pace. We aim to continue
to grow our UK-wide outlet network to c.320
building on this momentum through 2023
and beyond providing an excellent platform
for disciplined growth.
In 2021 we invested £460m in land
payments (including around £180m
of deferred land creditor payments).
We brought in over 20,750 plots across 101
sites into the business. This represents a
land replacement rate of 143% compared to
our current output level. I am delighted that
we have achieved this while maintaining
our industry-leading embedded margins.
This investment is strengthening our
platform for growth.
Strategic report Governance Financial statements Other information
23
Group Chief Executive’s statement
Building on persimmon’s strengths continued
Our new homes are already 30% more
energy efficient than the second hand
housing stock. We are determined to meet
the demanding targets set for new build
homes through the building regulations and
Future Homes Standard in a cost efficient
way and are running technology trials
to assess options for innovation. On our
Germany Beck site in York, our zero carbon
home will shortly be welcoming its tenants
who will live in the house as part of a joint
project with the University of Salford to
assess the effectiveness of its zero carbon
technologies and build techniques and
to discover what it is like to live in a zero
carbon home.
Renewed focus and
furtheropportunity
We have made important headway but I am
determined to drive even further progress
and have taken steps to achieve it.
We have recently launched our Mission,
Vision and Values. They build on
Persimmon’s many strengths and our recent
progress to strive even higher, to be Britain’s
leading homebuilder, with core values that
demonstrate how we will achieve it. The new
Mission, Vision and Values further embeds
the five key priorities into how we operate as
a business.
Our Mission is simple: to build homes with
quality our customers can rely on at a price
they can afford.
Our Vision is to be Britain’s leading
homebuilder, with quality and customer
service at its heart, building the best value
homes on the market in sustainable and
inclusive communities. We will invest in
innovation and technology to extend our
low cost strengths and enhance our five-star
capabilities to enable as many people as
possible to buy the homes we build.
To achieve this we will live by our five core
values: customer focused, value driven, team
work, social impact and excellence always.
I am delighted that these values have been
warmly embraced across the business and
look forward to delivering on the ambition
they set out.
The Group has generated net cash of
£1,209.8m (2020: £1,066.8m) before capital
returns of £749.6m and net land spend
of £447.7m supporting investment in the
future disciplined growth of the business
and the sustainable delivery of our Capital
Return Programme. The Board is pleased
to re-iterate its intention to return 235p per
share in 2022.
Sustainable communities
Persimmon is proud of the important role
it plays in communities across the country.
With our average selling price over 20%
4
lower than the industry average and the
recent addition of smaller house types to
our core product range, we are opening
up the opportunity of homeownership
to thousands of families who otherwise
might not be able to achieve it. We provide
well-paid, skilled employment across the
country and have been reviewing our
apprenticeship programmes to enhance our
routes into employment for those who might
otherwise either not consider or struggle to
access construction jobs. A new innovative
partnership with Bridgend College, where
we have installed classroom facilities on
one of our sites so the college can deliver
courses to students directly, is a good
example of our work in this area.
Our Community Champions and Building
Futures programmes donated over £1.8m to
local communities and good causes in 2021.
Through our planning contributions we have
paid £127m for new educational, medical
and community facilities that benefit all local
residents near our developments.
We recognise our important role in helping
the UK achieve its climate change targets
and ambitions. That is why we set stretching
targets, accredited by the blue-ribbon
Science Based Targets initiative. As part of
a broader suite of commitments we have
made pledges to have net zero carbon
homes in use from 2030 and net zero
operations from 2040. We have already
taken action, switching all our offices and
manufacturing facilities to 100% renewable
energy last year. We have also introduced
electric vehicle options into our car fleet
and are investigating options to reduce our
diesel use, including through alternative
fuels trials for our construction plant
and equipment.
Industry-leading financial performance
We seek to combine our very strong
platform of experienced and skilled teams
and high quality land holdings with a focus
on quality and re-enforcing trust in our brand
to further enhance our industry-leading
financial performance. I have set out above
how the quality and build right, first time,
every time focus helps here.
Our Space4, Brickworks and Tileworks
factories have also proven crucial tools in
both maintaining security and consistency
of supply and securing build efficiencies,
especially in a period of material and labour
cost inflation. Through the bulk buying of
raw materials and stable labour costs within
our factories, we have been able to maintain
a price advantage compared to the open
market. Further, our use of Space4 timber
frames in 33% of our homes built in the
year, reduces our reliance on bricklayers,
where labour shortages have been
most pronounced.
These factories will play an increasingly
crucial role in our security of supply, quality
control and drive to secure cost-efficiencies.
We are already looking to expand
production – through increased shifts and
product lines – across our Brickwork and
Tilework factories. We anticipate increasing
output at Brickworks by 25% and at
Tileworks by over 50% this year. We also
plan to start building a new Space4 factory
in 2022, updating the technology and
techniques to drive enhanced quality and
further efficiency gains. We anticipate – for
example – that the new factory’s product
will improve our speed of build by up to five
days per house.
This focus on cost efficiency is demonstrated
in our underlying operating margin
1
, which
grew to 28.0% (2020: 27.6%) and further
progress on the Group’s underlying return
on average capital employed
7
, increasing to
35.8% (2020: 29.4%).
7. 12 month rolling average calculated on underlying
operating profit and total capital employed (including land
creditors). Underlying operating profit is stated before
legacy buildings provision of £nil (2020: £75.0m) and
goodwill impairment (2021: £6.2m, 2020: £4.3m).
Persimmon Plc | Annual Report | December 2021
24
Our experienced
managementteams
We have highly experienced management
teams and are proud to provide our
colleagues with rewarding career
opportunities. We continue to build on our
track record of promoting from within, with
177 colleagues promoted during the year.
A new senior management structure has
been established to combine an even
greater focus on consistent build quality
and customer service with an even sharper
commercial approach. These changes
draw on internal experience and expertise
to provide a structure that supports and
challenges local teams to meet their targets
and explore new opportunities for growth.
Paul Hurst (UK Managing Director), John
Eynon (Deputy UK Managing Director) and
Andy Fuller (Group Construction Director)
together provide an operational senior
management team with over 100 years of
industry experience. Our regional teams
will report into Paul and John, with Andy
working closely alongside them, to ensure
we deliver the improved consistency of
standards the Persimmon Way demands
throughout the business, while meeting our
growth ambitions. Both Paul (Space4) and
John (Brickworks and Tileworks) are also
chairmen of our own factories leading our
drive to deliver both enhanced products and
greater efficiency.
Martyn Clark has become our Chief
Commercial Officer, leading on all
commercial aspects, including new
business development and enhancing our
relationships with key external partners.
With a number of Group functions reporting
to him, Martyn will ensure we co-ordinate
our approach, so that the operational teams
have the best possible opportunity to meet
our targets. A key aspect of the role is to
ensure that we maintain the recent progress
in land buying, bringing in assets to the
business at industry-leading margins, while
also seeking to work with local authorities
to secure faster planning permissions.
Martyn will also lead our further innovation
and value creation opportunities.
With this highly experienced team in place,
we will continue to enhance our capability
to deliver five-star performance consistently
and maintain our industry-leading financial
performance. Persimmon has many
opportunities ahead of it and I look forward
to securing the growth, quality and efficiency
opportunities necessary to drive our
continued industry-leading performance.
Outlook
The UK housing market remains supportive
with demand continuing to exceed supply,
favourable interest rates and good levels
of mortgage availability. The business is
in a strong position. We are leading the
industry as a responsible developer; we
were one of the first developers to agree
voluntary undertakings with the CMA on
leaseholders purchasing their freeholds and
to give leaseholders a commitment they
would not have to pay to remove cladding.
We identified 33 developments where work
is required, have already contacted relevant
Management Companies and building
owners to help expedite their programmes
and have successfully secured EWS1 forms
on four of the 33 developments.
With a new senior management structure,
comprising colleagues from within the
business, supporting an experienced and
agile team, a growing outlet network and
high quality land holdings, I expect to deliver
further growth this year and through the
medium term. For 2022, we are targeting
4-7% volume growth whilst maintaining
our industry-leading margins. We currently
anticipate increases in selling prices will
mitigate build cost inflation.
We have already made a strong start to
the year with £2.21bn of forward sales.
Our private average weekly sales rate per
site for the first eight weeks of 2022 is c.2%
ahead of the prior year. We anticipate a
greater proportion of completions in our
second half relative to our first reflecting
more typical trading patterns and the growth
profile of our outlet network. Group margin is
expected to reflect the increased proportion
of homes sold to our housing association
partners. Our build rates, which were at
pre-Covid levels throughout 2021, have
improved in the early weeks of this year.
Some short term uncertainties remain,
particularly regarding cost inflation,
potentially rising interest rates and
the impact of the current geo-political
environment on the UK economy.
The speed of achieving planning consents
remains an issue and the withdrawal of the
Government’s Help to Buy scheme is still
planned for March 2023. In addition, the
recent Building Safety Bill amendments
include the potential significant widening
of those developments brought within the
Building Safety Levy’s scope.
Given our unique market positioning with
attractively priced homes, our high quality
land holdings and strong cash position,
focus on customers and quality, building on
our existing strengths and driving further
operational efficiencies (including the
investment in a new Space4 factory and our
Brickworks and Tileworks facilities securing
build programme and cost efficiencies)
the Board is confident of the Group’s
future success.
Dean Finch
Group Chief Executive
1 March 2022
Strategic report Governance Financial statements Other information
25
Our strategic objectives
“ From the moment a
customer starts their
research into buying a
home, through the sales
journey and then post
legal completion, our
goal is to be a trusted
partner who reliably
delivers outstanding
quality and service.”
SONIA DA COSTA
Chief Customer
Experience Officer
Current customer
satisfaction score
1
92.0%
NHBC RI score
improvement
2
17%
PLACE CUSTOMERS AT THE
HEART OF OUR BUSINESS
WITH A COMPELLING BRAND
Persimmon Plc | Annual Report | December 2021
26
1
1. The Group participates in a National New Homes Survey, run by the HBF. The Survey year covers the period from 1 October
to30 September. The rating system is based on the number of customers who would recommend their builder to a friend.
2. Our % improvement in the number of Reportable Incidents on the NHBC’s inspection of our homes.
The Persimmon Way
The Persimmon Way is a comprehensive
programme covering all aspects of our
build process. Since its initial roll out
during 2020, the business sought to go
further and faster in implementing the
programme, having seen the on-site and
customer service improvements that were
being made. The Persimmon Way became
fully operational across the business in
summer 2021.
The training programmes for on-site teams
were enhanced with the Group seeking
accreditations where relevant. We have
also continued to invest in technology to
track and record quality checks through
thebuild process.
Improving quality;
delivering value
Build Quality
• We have standardised new home design
and construction detail across the
business to support the drive for improved
consistency and efficiency of high quality
build right first time, every time delivery.
• We are introducing more exacting building
tolerances than current industry standards
driving improved quality and efficiency
across the Group.
• We are developing a ‘Good Practice
Guide’, which will be rolled out in 2022 to
share areas of best practice and assist in
the further development of the Group’s
construction disciplines.
• In 2021, we launched the Group’s first
internal ‘Construction Excellence Awards’
to recognise and reward site teams that
demonstrate innovations and outstanding
management skill to achieve excellence
on their development (see page 22 for
further detail).
• Management incentive programmes
have been revised so that successful
achievement of improvement in build
quality and customer care standards are
appropriately rewarded.
• In 2022, a proportion of all colleagues’
bonus schemes will be dependent upon
achieving high standards of build quality
across the Group, aligning all employees
with this key priority for the business.
Our vision is to build
homes with quality our
customers can rely on at
aprice they can afford.
To deliver on this vision we have placed
our customers at the heart of our business.
Being customer focused is one of our values
– our customers are our priority and we aim
to build consistently high quality homes in
communities people love to live. We will
earn customers’ trust by treating them fairly
and with integrity.
We recognise the significant financial and
emotional investment they make when
buying their home with us. We strive to
deliver high quality homes to all of our
customers and to provide them with
excellent service from the point they
choosetheir new home to their moving
inday and beyond.
Build Quality – Build right,
first time, every time
One of the Group’s five key priorities is
build quality: our ambition is to build right,
first time, every time, driving improvements
in consistently building high quality homes
and in on-site efficiencies. The Group
continued to make improvements to
build quality and customer service
throughout 2021 through the Persimmon
Way, our consolidated approach to new
home construction. The Persimmon Way
provides a stable, consistent operational
framework that is scalable – it enhances
the Group’s capabilities in delivering high
levels of build quality across growing legal
completion volumes. This has already
been demonstrated in our 2021 results,
where we delivered c.1,000 more new
homes to our customers than in the prior
year whilst providing five-star levels of
customer satisfaction.
We are pleased that the progress we have
made is being recognised by our customers
– our customer satisfaction score is 92.0%
1
for the Survey year ended 30 September
2021, which is over the threshold required to
achieve the HBF five-star rating. We believe
we will still achieve a five-star rating
when HBF’s annual results are published
in March 2022 for the first time in the
company’s history.
Strategic report Governance Financial statements Other information
27
Delivering on our five key priorities
BUILD QUALITY
2
REINFORCE TRUST
IN THE BRAND
3
GROWTH
Read more on page 21
Our strategic objectives
Place customers at the heart of our business with a compelling brand continued
Our homes
The Group’s IQCs monitor build
quality across 21 key stage processes.
The expansion of the team during 2021 has
provided further opportunity for on-site
coaching of our site teams.
We continue to actively engage with our
subcontractors to drive through further build
quality improvements. For example, we
are encouraging our roofing contractors to
obtain third party accreditation providing
additional assurance over the quality of
their work.
The Group’s training programme, delivered
through the ‘Persimmon Pathway’
complements Persimmon’s ambition of
building right, first time, every time, see page
35 for more details.
We remain focused on increasing
investment in our construction work in
progress throughout 2022 to ensure we
provide our customers with a good range
of house types across our sites. This also
alleviates pressure on our build programmes
and enables effective quality assurance
processes to occur. The Group’s level of
work in progress of c.4,100 units of new
home construction at 31 December 2021
continues to reflect the disruption caused by
Covid-19 in the first half of 2020, the reduced
number of outlets across the business and
the strong demand experienced.
We perform a seven-stage pre-completion
inspection process on each of our
homes before we hand them over to our
customers. During this quality assurance
process each of our homes are inspected
by senior employees from the relevant
regional company.
Each customer receives a ‘New Home
Demonstration’, performed by the site
manager and sales adviser before they
move into their home. To allow these
processes to occur effectively and
demonstrate our commitment to put
“customers before volume”, the construction
of all of our homes must be build complete
21 days prior to handing over the finished
home to our customers.
All of our homes are sold with a 10-year
warranty backed by either the National
House Building Council (NHBC) or Premier
Guarantee. Each warranty provider conducts
their own independent checks at key
build stages.
Alongside the continued development of the
Persimmon Way, we are also working across
the industry to help drive up standards in
important areas. We have, for example,
signed the ‘Building a Safer Future Charter’
as an inaugural member, demonstrating our
determination to drive safety improvements
within our company and across the industry.
Training
• A complementary training programme
is crucial to the successful application
and delivery of the Persimmon Way,
consistently across the business.
• A three day ‘Site Managers Essentials’
programme, mandatory online modules
and on-site Toolbox Talks targeting build
quality support the implementation of the
Persimmon Way.
• The ‘Persimmon Pathway’ provides
a comprehensive internal training
programme for our Site and Assistant Site
Managers driving up build quality and
increasing on-site efficiency.
• Persimmon is an accredited National
Vocational Qualification assessment
centre, a first for a UK housebuilder.
As at 31 December 2021 c.90% of our
site management team held a relevant
NVQ, an increase from 21% at the start
ofthe year.
Quality Assurance
• Our expanding team of IQCs report
directly to the Group Construction
Director. The team, which has more
than doubled since the start of the year,
undertake quality assurance inspections
on each of our developments, monitoring
construction build quality across 21
key stages of new home construction.
Expanding our resource enables the
Inspectors to perform on-site coaching
where needed. This enhanced assurance
process is improving build efficiencies on
our sites and customer satisfaction as we
‘get it right first time’.
IT support
• The Group has invested significantly in
its digital systems which provide support
with regard to our inspection and training
processes. We are increasing on-site
digitisation, including through the Site
Manager Application, currently being
trialled across our Southern region,
which tracks and records pre-completion
assurance processes.
Third Party Audit
• External audits of our processes have
commenced with the aim of covering all
operating companies by summer 2022.
These processes provide additional
assurance over the Group’s build quality
as well as identify areas of best practice
and assist in the further development of
the Group’s construction processes.
NHBC Pride in the
Job Awards
We are delighted that two of our site
managers have won the prestigious
NHBC Pride in the Job Awards.
The NHBC Pride in the Job Awards,
first launched more than 40 years
ago, is considered the most highly
regarded competition in the
housebuilding industry.
Judging for the Awards is rigorous, with
each of the site managers across a field
of more than 10,000 assessed across six
key areas: consistency, attention to detail,
leadership, interpretation of drawings and
specifications, technical expertise, and
health and safety.
Tom Smith, won the award for his
management at our Whittington Walk
development in Spetchley. Tom Smith,
who started work with Persimmon
as a labourer six years ago has
been managing Whittington Park for
eighteen months.
Dave Richards, who manages Charles
Church’s Regency Park development
at Llanilltern Village in Creigiau, also
scooped this prestigious award.
“ Our focus is firmly on
customer service and quality
and this is a recognition
of that.”
DAVE RICHARDS
Site manager, Charles Church’s
Regency Park development
Persimmon Plc | Annual Report | December 2021
28
HBF score
1
92.0%
2020: 89.7%
Our customer service
We have an established comprehensive
approach to customer service including
focused and clear communication
supporting each customer throughout
their home-buying journey from the date
of reservation of their new home to the bi-
annual anniversary of moving-in day.
Through the ‘Persimmon Pathway’ (see page
35 for more detail), the Group has developed
structured professional qualification
pathways for its sales teams in partnership
with the Institute of Sales Professionals (ISP).
This is an industry first partnership that has
resulted in over 60 of our Sales Advisors
being accredited by the Association
with a further 100 on the programme.
Through the Sales Pathway, Sales Advisors
undertake a structured curriculum that
integrates Persimmon’s Sales Excellence
programme with the ISP’s Continued
Professional Development, culminating in
an ethics examination prior to accreditation.
In addition, the Group has registered with
the Institute of Customer Service, which will
provide an accredited route to training of our
customer service teams.
The Group’s customer portal will be rolled
out in the next few months. The portal, which
will inform all new customers of the build
progress of their new home and provide
them with an accurate and timely anticipated
‘move in’ date, is undergoing final testing
and we are looking forward to providing
this tool to our customers. This new
portal will provide them with the ability to
personalise their home to suit their needs
through the on-line selection of “Finishing
Touches”, the Group’s range of additional
home specifications and will also provide
customers useful information about their
home as well as enable them to raise any
issues directly from the portal.
New Homes Quality Code
Persimmon has completed the New Homes
Quality Board’s initial developer registration
process and we are working through the
steps required in order to activate our
membership to this body in the second half
of this year. We welcome the introduction of
the New Homes Quality Code, which aims
to drive up quality and customer service
standards across the industry together
with the appointment of a New Homes
Ombudsman Service. Persimmon complies
with the Consumer Code.
Our customer care
One of our five key priorities is to build right,
first time, every time improving customer
satisfaction and mitigating the need for
customer care visits and appointments.
However, if problems do occur, we want
to rectify them as quickly and efficiently
as possible.
We have continued to invest in our customer
care resource, in digital technology and in
training. The Group Training Departments
has developed structured training modules
for our customer care teams driving
improvements in the service we provide and
enhancing customer satisfaction.
During the year, the Group has completed
scheduled works where devolved
Government regulations allow. To reduce
the need for visits, where possible, the
customer care team have recorded a
number of videos to assist customers in
their understanding of their new home
systems and appliances. Our customer
care teams have worked tremendously
hard to ensure they are available to support
new home owners safely through these
challenging times.
FibreNest
FibreNest provides ultrafast, full fibre to
the home broadband from moving-in day.
It was developed in response to feedback
from customers and aligns with current
government strategy to deliver modern
technology to new homes. Our aim is to
ensure that FibreNest provides ultrafast
speeds coupled with excellent levels of
service. FibreNest currently serves c.21,000
customers across over 270 sites with further
rollouts continuing. The service, which is
becoming increasingly important as families
rely on it to support their efforts to work
from home and to access essential services
online, is highly ranked compared to other
internet service providers in the UK.
During the year, FibreNest set up a
wholesale offering, enabling other network
providers access to the service should they
choose, in order to provide choice for our
customers. We look forward to providing
this service and delivering choice for
our customers.
1. We participate in a National New Homes Survey run by the HBF. The Survey year covers the period from 1 October
to30 September. The rating system is based on the number of customers who would recommend their builder toa friend.
“ I started as a general
labourer after quitting a
factory job. From the time I
started on site I took a keen
interest in the management
and the opportunities for
progression. I was made
assistant site manager
after three and a half years
and then I was promoted
to site manager here on
January 2, 2020. I would
never have predicted that
after 18 months I would be
winning an NHBC Pride in
the Job Award. I love this
job and I am very happy.”
TOM SMITH
won the award for his
management at our
Whittington Walk
development in Spetchley
Strategic report Governance Financial statements Other information
29
Our strategic objectives
Place customers at the heart of our business with a compelling brand continued
Delivering homes with
quality our customers
can rely on at a price
they can afford.
Our vision is to build homes with quality our
customers can rely on at a price they can
afford. We aim to deliver housing that meets
each of our customers’ needs by providing
a range of house types in areas where they
wish to live and work.
The Group has a UK-wide network of active
sites served by its 31 operating businesses
delivering homes to communities with the
most housing need. Our wide range of
house types, together with the Group’s
three distinctive house building brands;
Persimmon, Charles Church and Westbury
Partnerships, enable us to provide desirable
homes at a range of price points for
our customers.
We are proud to deliver a range of house
types which make owning a home
accessible for all. Our private average
selling price of £259,231 for the year to
31 December 2021 (2020: £250,897) is over
20%
1
below the UK national average and
approximately c.50% of our private home
completions for the year have been to first
time buyers.
Persimmon
The Persimmon brand delivers traditional
family housing at affordable prices to
the private owner occupier market.
The brand completed 10,965 new homes
(2020: 10,283) at an average selling price
of £249,498 (2020: £239,318), which is
over 20% lower than the industry average,
affirming the Group’s commitment to
delivering affordability to a wide range
of customers.
The brand’s new home legal completion
volumes have increased 7% (682 homes)
compared to 2020, (2020 impacted by
the Covid-19 pandemic on the Group’s
build programmes in the second quarter).
Persimmon’s average selling price of
£249,498 (2020: £239,318) has increased
by 4% compared to 2020 largely reflecting
year on year changes in the regional mix
of homes sold. The Group’s Northern
businesses delivered 6,112 Persimmon
homes (2020: 5,584), with 4,853 homes
completed in the Southern regions
(2020: 4,699).
Charles Church
The Charles Church brand offers our
customers executive housing in premium
locations across the UK, with larger
house types and increased specification.
Charles Church generated revenues of
£379.7m in 2021 (2020: £390.0m) from 1,053
new home legal completions (2020: 1,080).
In addition to developing single branded
sites, the Group also benefits from providing
multiple brands on some of our larger sites.
This creates the opportunity for the Group to
secure the benefits of more efficient site and
office operations, resulting in performance
improvements captured across the business
from group wide controls, continuity of build
programmes, site resourcing and customer
care performance, through to health and
safety compliance.
Revenue
£2,735.7 m
Completions
10,965
Our brands’ performance
1. National average selling price for newly built homes
sourced from the UKHouse Price Index as calculated
bythe Office for National Statistics from data provided
byHM Land Registry.
Revenue
£379.7m
Completions
1,053
Persimmon Plc | Annual Report | December 2021
30
10%
79%
11%
£334m
£2,736m
£380m
Revenue generated
in 2021
Contribution to Group
housing revenue
Persimmon
Charles Church
Westbury Partnerships
10%
79%
11%
£334m
£2,736m
£380m
Westbury Partnerships
Westbury Partnerships plays a key part in
the delivery of new homes for the benefit of
lower income occupiers, offering solutions
to some of the country’s housing pressures.
The brand typically provides new homes
to our housing association partners across
the UK.
In total, Westbury Partnerships new
home legal completion volumes of
2,533 represented 17% of the Group’s
legal completions during 2021
(2020: 16%). The average selling price for
these homes increased by 5% to £131,976
(2020: £125,930). We look forward to
delivering further growth in sales to our
housing association partners as the Group
brings through its new outlets planned for
2022 and beyond.
Homes sold to
firsttimebuyer
c.50%
2020: c.50%
Private homes sold for
less than £200,000
25%
Revenue
£334.3m
Completions
2,533
Strategic report Governance Financial statements Other information
31
“ During my first six
months in the business I
have gained invaluable
experiences. In depth
training courses
and working with
incredibly driven
and knowledgeable
colleagues have
provided great insights.
I look forward to
continuing to grow my
skills with Persimmon.”
CONNOR STEEL
Graduate
Management
Trainee
Belief in the Persimmon Way
80%
of our colleagues believe in the
Persimmon Way to help improve
thequality of our homes
Trainees and apprentices
over 650
2020: c.680
A DIVERSE
AND TALENTED
WORKFORCE
Our strategic objectives
Persimmon Plc | Annual Report | December 2021
32
Group HR Department
During 2021 the Group invested significantly
in the Group HR Department including
the recruitment of some key specialists to
provide sustained focus in priority areas.
These new appointments included a
Director of Talent & Diversity, a Group Head
of Reward and an Information Systems
Manager, who, together with additional field-
based HR Advisors, have resulted in the HR
function becoming a key strategic partner
that will play an important role in enabling the
Group to achieve its objectives.
Focusing on diversity
At 31 December 2021 the number of people
we employed was broadly in line with the
prior year at 5,196 (2020: 5,221), of which
27% were female and 73% were male
(2020: 1,453 (28%) female, 3,768 (72%) male).
At 31 December 2021, there were three
female Directors out of a total of nine on the
Company’s Board (33.3%) and there was one
Director from an ethnic minority background.
There were 20 females (28%) and 51 males
(72%) in the Executive Committee and their
Direct Reports.
The median Gender Pay Gap
in 2021 for the Group was 18.1%
(2020: 12.7%). Consistent with our industry
our median Gender Pay Gap is driven by
the composition of our workforce with
a higher proportion of men in skilled
construction roles (such as bricklaying and
site management), the market for which
is competitive.
We recognise that there is an under-
representation of women and ethnic
minority groups, not only in Persimmon,
but throughout the industry as a whole.
However, the Group is focused on attracting
a more diverse workforce across every facet
of our operations, which will be driven by our
new Director of Talent & Diversity. In March
2021, the Group set challenging diversity
targets aiming to have females comprising
40% of our employees, 35% of our senior
management team and 45% of employees
in management roles by the end of 2025.
To assist with this initiative and to prioritise
our D&I Policy, we commissioned a Diversity
& Inclusion Review, which commenced
in October. Undertaken by an external
consultancy, the review analysed a range
of information including employee data and
people policies, supplemented by interviews
with a broad cross-section of colleagues
from the Chief Executive and senior team
to site-based employees, together with
office and site visits. It also canvassed the
perception of Persimmon from outside the
organisation, provided by a representative
sample of sub-contractors, suppliers and
job-seekers.
The Group’s HR strategy is underpinned by
a vision to provide a consistent employment
experience in an organisation offering
industry-leading training and development
and exceptional career opportunities to all
colleagues, enabling them to support the
delivery of our strategic objectives.
Covid-19
Through each phase of the pandemic, we
have continued to follow government and
industry guidance and ensured that the
health, safety and welfare of our colleagues
has remained paramount.
Our safe operating procedures are
now an established part of our normal
operations across all of our sites, offices and
manufacturing facilities and we have kept
our colleagues fully informed of all updates
to these procedures as the pandemic
has evolved.
As the various lockdown restrictions were
eased, we still imposed our own limits on
the number of colleagues whom we allowed
to work in our offices. To assist this we
also introduced our hybrid working policy
to allow colleagues to vary their normal
work location between office and home,
which was welcomed and has proven
to be very popular amongst our office-
based employees.
We continued to recognise that some
people who have had to work remotely have
sometimes found this change difficult and
we delivered training to all our managers
on ‘managing remote workers’ and we
continued to deliver regular mental health
awareness courses. We also trained more
mental health first aiders, bringing the total
across the Group to 193. In addition we
have ensured that all colleagues are aware
of the additional support available to them
from the Group’s Employee Assistance
Programmes, which offer a range of help
from online advice to telephone or face-to-
face counselling.
Delivering on our five key priorities
1
BUILD QUALITY
2
REINFORCE TRUST
IN THE BRAND
3
GROWTH
Read more on page 21
Strategic report Governance Financial statements Other information
33
The results of the YourSay employee
engagement survey confirmed that the
Group has a healthy engagement with a
score of 78%. The survey was conducted
early in the year when the Covid-related
challenges of lockdown and furlough
from the previous year were still fresh in
people’s minds, but despite this there
was only a slight reduction of two points
against the 2020 score. Highlights from the
survey included 85% of colleagues feeling
motivated to do their best at work and 90%
being committed to the Group and our aims
and objectives.
There was also recognition through the
survey of the improvements we have made
to our build quality and the service we
provide to customers. The percentage of
our employees who believe we provide a
good service to our customers before the
handover of their home has increased by
15% on the previous year. The scores for
service provided to customers after the
handover of their home and for the quality
of the houses we build, also saw double-
digit increases of 11% and 10% respectively.
This is an indication of the successful
implementation and acceptance within the
Group of the Persimmon Way, about which
80% of employees believe it has improved
the quality of our homes.
Areas where we still have work to do include
improving our internal communications
and ensuring all colleagues are aware
of the support available to them to help
manage and improve their welfare.
Our communication processes have
improved during the year with the
appointment of an Internal Communications
Manager and we have increased our activity
to ensure colleagues are aware of their
mental health first aiders and the support
available to them through our Employee
Assistance Programmes.
The outcome of the Review will enable
the Group to establish a robust and
impactful D&I Policy that will be relevant to
today’s workforce, providing a kick-start to
improving diversity and inclusion across
the organisation. To assist this process,
our Gender Diversity Panel has been re-
named the Diversity & Inclusion Council
and with an increased and more diverse
membership of a wide cross-section of
senior leaders, it will be responsible for
overseeing the implementation of our D&I
Policy and monitoring progress. To feed
directly into the Council and following the
launch of our Policy, a Diversity & Inclusion
Employee Panel will be established in
2022. Comprising of a varied cross-
section of volunteer members from across
the workforce, it will provide a source of
feedback and employee opinion that will
help the Council to ensure the D&I Policy is
deployed effectively.
Engaging with
ouremployees
During the year, in-line with the UK
Corporate Governance Code, the Board
appointed Joanna Place as the Non-
Executive Director with responsibility for
employee engagement. Joanna now
attends all the meetings of the Employee
Engagement Panel and her presence
has added extra impetus to its value and
effectiveness. The Panel meets quarterly
and comprises a broad cross-section of
employees from all areas of the Group’s
operations and has become an established
route for employees’ ideas and input to be
discussed. All matters raised are considered
and feedback is provided and in many
cases this has led to revisions to policy or
procedure. Some of the changes introduced
as a direct result of comments raised by
the Panel during 2021 include changes to
the provision of IT hardware to improve the
speed of supply, changes to procurement
policies and an amendment to holiday
entitlement for salaried colleagues that
became effective on 1 January 2022.
Our strategic objectives
A diverse and talented workforce continued
The Group Training
Team delivered c.13,200
training days in 2021
(2020: c.12,600) with
c.3,500 of these days
delivered remotely
(2020: 1,700). Following
the popularity of
remote delivery with
our employees, we will
maintain this blended
approach to learning in
the future.
YourSay employee
engagement survey score
78%
YourSay employee engagement
survey confirmed that the Group
has a healthy engagement score
Colleagues are committed
to the Group and our aims
and objectives
90%
Persimmon Plc | Annual Report | December 2021
34
Recognising success
This year the Group once more invited
nominations for its Achiever Awards,
which recognise colleagues who have
made a special contribution or excelled in
their role. The Awards include recognition
for our best Apprentices and Trainees,
plus The Duncan Davidson Award for
the employee who has demonstrated
exceptional entrepreneurial spirit, and
the Unsung Hero Award that offers the
opportunity to recognise the efforts of an
employee who regularly goes beyond
the call of duty to help their colleagues.
Fair pay
Coinciding with Living Wage Week in
November, the Group announced that it
had been accredited by the Living Wage
Foundation as a Living Wage Employer.
Although the Group has voluntarily paid
its own employees in accordance with the
Living Wage criteria since 2019, achieving
accreditation will mean that everyone who
works at a Group location, regardless of
whether they are directly employed by us or
engaged via a third party, will be assured of
a fair reward for the job they undertake.
This investment in our wider workforce
recognises the skill, hard work and
commitment demonstrated by everyone
who works for the Group, but particularly
that displayed by our lower paid colleagues
who have benefitted significantly from our
accreditation. To help ensure we maintain a
fair approach to the remuneration of all our
employees, we have appointed a Group
Head of Reward, who will review the pay
regimes across the business to make sure
our pay and benefits are commensurate
with the jobs people undertake and
that our approach to rewarding our
colleagues is competitive and drives the
appropriate behaviours.
Developing our colleagues
and our talent pipeline
The strategic focus of the Group HR
Department resulted in the delivery of
training initiatives throughout the year
that supported our drive to improve build
quality and customer service. At the
forefront of this was an initiative to upskill
our site management teams. In addition
to our well-established Site Manager
Essentials Programme, Persimmon
became an accredited National Vocational
Qualification assessment centre, a first for a
UK housebuilder, to increase the provision
of structured training to our on-site teams.
This led to 312 colleagues, from Trainees
and Assistant Site Managers to Site and
Contracts Managers, achieving an NVQ/
SNVQ during the year ranging from Level
3 to Level 7, resulting in c.90% of our
Site Managers now holding a vocational
qualification (2020: 21%).
In addition, The Persimmon Pathways, which
are tailored development programmes
for our colleagues, have become firmly
established in our training portfolio and are
available to colleagues in Construction,
Sales and Customer Service, with further
Pathways programmes in development for
Land, Commercial and Technical functions.
The Pathways ensure the development and
upskilling of colleagues is focused on the
particular needs of their role and provides
a consistent learning experience across the
organisation for each function.
To emphasise the importance of the
service we provide to our customers,
our partnership with the Institute of Sales
Professionals (ISP) has seen over 60 of
our Sales Advisors being accredited by
the Association with a further 100 on the
programme. Through the Sales Pathway,
Sales Advisors undertake a structured
curriculum that integrates Persimmon’s
Sales Excellence programme with the ISP’s
Continued Professional Development,
culminating in an ethics examination
prior to accreditation. This independent
verification of sales training is unique in the
home building sector and provides added
reassurance for our customers that they will
be treated professionally throughout the
sales process.
The Group has continued its investment
in new talent and despite the difficulties
imposed by the pandemic, we still have
c.350 apprentices across the organisation,
from those learning site skills such as
bricklaying and joinery, to colleagues
on higher and degree apprenticeships
in the regional and head offices.
Including our apprentices, the Group has
over 650 colleagues in a trainee role of
some description, which is amongst the
highest number in our sector.
This year we re-launched our centrally
coordinated graduate-level Management
Development Programme, which will see
an annual intake of graduates who will
gain experience across all aspects of our
business during their initial two-years with
the Group, before embarking on their
chosen career path. Three of the eight
graduates recruited in 2021 are female.
“ We are confident that our
ongoing partnership with
VIY will result in further
opportunities for us to
mentor young people
and engage with schools,
which we hope will lead to
young people becoming
interested in joining us for
placement opportunities or
even as apprentices.”
PAUL CURRY
Group Training Manager
Strategic report Governance Financial statements Other information
35
During the year we began a comprehensive
Leadership Development Programme for
the Managing Directors of our 31 operating
businesses, which was the first time the
business had focused on this group in its
entirety. This programme will continue
into 2022, but it has already led to MD’s
requesting similar development for their
individual teams and this will form part of
our talent management and succession
programmes, where we will support our
managers to do their current job better, but
also provide them with the support to enable
them to progress through the organisation.
Building on the Company’s established
track record of promoting from within
(177 colleagues were promoted during the
year) we have commenced a formal talent
review that will lead to a robust Group-wide
succession plan, which will ensure we are
able to identify and nurture our talent and
provide the appropriate support, whatever
an individual’s aspirations may be.
Training delivery
Due to the ongoing Covid-19 restrictions
during the year, the Group Training Team
continued a blended delivery of training
interventions with a mix of remote and
online learning and when in line with
regulation, a return to face to face activity.
Following the popularity of remote delivery
with our employees and the clear advantage
it offers in increasing the Scope and reach
of our training, the blended approach to
learning will remain a feature of most of our
programmes in the future.
During 2021 the department delivered
c.13,200 training days (2020: c.12,600),
excluding apprenticeships and sponsored
higher or further education courses.
The combined total of courses delivered
remotely accounted for c.3,500 of these
days (2020: c.1,700). Our NVQ assessment
centre, which came online this year has
registered our first candidates and our
first in-house NVQs will be awarded in
March 2022.
Community engagement
and social mobility
Since signing the Social Mobility Pledge, the
Company has continued to engage with its
aims and objectives, particularly in the areas
of social mobility and sustainability and we
are pleased to be recognised as the lead for
the home building sector in “The Purpose
Coalition”, working with other like-minded
organisations to share best practice and
contribute to the communities in which we
build our homes.
2021 also saw the start of a partnership with
Volunteer It Yourself (VIY), an organisation
that engages with young people aged 14
to 24 to learn trade and employability skills
whilst providing them with work experience
on local community projects. The majority
of young people who take part and
benefit from this activity are disengaged
or excluded from mainstream education
and training and at risk of unemployment.
They are mentored by professional
tradespeople and can gain vocational
accreditations as well as access to further
training, work placement and apprenticeship
opportunities. In addition to this, in the
wider communities where their projects
are located, VIY delivers ‘early intervention’
construction sector employability skills
and careers training for 10-14 year olds
in schools.
This year, the Group was a key sponsor of a
VIY refurbishment project at Flo Skatepark
in Nottingham, where professional
tradespeople, including from our Nottingham
business, led by VIY’s lead mentors,
supported 30 young volunteers (many of
whom were not in education, employment
or training) to take an active role in the
renovation of the park’s indoor ramp area.
The project has helped them to develop
new employability skills and work towards
Entry Level 3 City & Guilds accreditations in
practical trades such as joinery.
Our strategic objectives
A diverse and talented workforce continued
Persimmon Plc | Annual Report | December 2021
36
Promoting from within
Persimmon is proud to be able to offer
the opportunity for people to develop
long term careers within the Group.
We have recently promoted three of our
Regional Chairs, to senior Group-wide
roles within the business, providing a
structure that supports and challenges
local teams to meet their targets and
explore new opportunities for growth.
Paul Hurst (UK Managing Director)
(promoted from his position as Regional
Chair for the Central region), John
Eynon (Deputy UK Managing Director)
(promoted from his position as Regional
Chair for the Northern region) and Andy
Fuller (Group Construction Director)
together provide an operational senior
management team with over 100 years
of industry experience. This new senior
management structure provides an even
greater focus on consistent build quality
and customer service alongside an
established commercial approach.
Both Paul (Space4) and John (BrickWorks
and TileWorks) are also chairmen of our
own manufacturing facilities leading our
drive to deliver both enhanced products
and greater efficiency. These factories
will play an increasingly crucial role in
our security of supply, quality control and
drive to secure cost-efficiencies.
Martyn Clark has become our Chief
Commercial Officer (promoted from
Regional Chair of our Southern region),
leading on all commercial aspects,
including new business development
and enhancing our relationships with key
external partners.
Human rights
The Group values its reputation for ethical
behaviour, integrity and reliability, and
expects high standards of conduct from
all employees and stakeholders involved
within our operations. The Group’s Code
of Ethics, Human Rights and Anti-Bribery
and Corruption policies, are central to the
Group’s operational activities. This policy
suite, together with a range of operational
controls and management supervision,
support our Modern Slavery Statement,
which is available on our website at
www.persimmonhomes.com/corporate.
As a housebuilder operating solely within
the UK, with the vast majority of our supply
chain and subcontractors also being UK
based, we do not consider that human
rights abuses, modern slavery and bribery
represent a significant risk to our business.
Nonetheless, the Group has established
robust controls and procedures to reduce
the risks further and to provide assurance
that our employees and suppliers continue
to work to the high standards we demand.
We have identified the most significant
potential human rights impact areas in
our operations to be; the labour and
employment rights of our employees,
subcontractors and those working
within our supply chain; the health and
safety of our workforce; and the rights
of communities where we operate. As a
responsible employer, we are committed
to compliance with all UK labour, health
and safety, planning and environmental
legislation. The Group continues to take
its role in combatting modern slavery
and human trafficking seriously, and has
implemented a number of initiatives within
the year to build on existing controls in this
area. Membership with the Gangmaster
and Labour Abuse Authority (GLAA)
‘Construction Protocol’ has been continued,
ensuring ongoing access to industry good
practice in combating modern slavery.
Our modern slavery training provision,
delivered through a module within the ‘Site
Manager Essentials’ course and a GLAA
developed ‘Toolbox Talk’ for site-based
staff, has been supplemented with a general
online training module made available to all
staff. Our Group Internal Audit department
also conducts regular audits on supply
chain awareness and adherence to our
policies. Further details on these measures
are set out within our 2020 Modern Slavery
Statement, available on our website at
www.persimmonhomes.com/corporate.
The Group has comprehensive health and
safety management systems to safeguard
the workforce and all those present
within the areas it operates in. These are
subject to regular internal inspections, with
further assurance through the Safety and
Environment Concerns reporting telephone
line and email address, details of which
are displayed in all Group offices and at all
Group construction sites.
All employees are bound by the Group’s
Anti-Bribery and Corruption policy, which
is supported by anti-bribery and corruption
training modules for key members of staff.
This policy and its associated controls was
subject of an audit by the Group Internal
Audit department within 2021, including
a benchmarking to external standards to
ensure ongoing appropriateness of the
Group’s controls.
As a further safeguard, the Group
maintains a comprehensive whistleblowing
provision to ensure employees and
others can raise concerns confidentially.
Whistleblowing reports can be made
anonymously, and are investigated
independently by our Group Internal Audit
department, with summary reporting
provided to the Audit and Risk Committees.
Within 2021, the whistleblowing provision
has been enhanced with the facility to report
concerns online. Periodic campaigns are
run to ensure ongoing awareness of the
whistleblowing provision.
“ It was a pleasure to give my
time and guidance to the
enthusiastic team of volunteers.
It was a fulfilling project to be
part of and we hope
it has inspired more
young people to pursue
a career in construction,
in particular joinery.”
ZENON POINTON
Contracts Manager for Persimmon
Homes Nottingham, volunteered as
a mentor on the VIY refurbishment
project at Flo Skatepark project
Strategic report Governance Financial statements Other information
37
“ We have a well-
established land investment
strategy which has
delivered high quality
land holdings, providing
security of supply and
ensuring we invest
appropriately duringthe
cycle and can maintain
our industry-leading
embedded margins a key
strength ofour business.”
SIMON USHER
Group Director
ofTransformation
and Land Strategy
Owned and
controlled land
holdings (plots)
88,043
2020: 84,174 plots
Our strategic objectives
INVESTING
IN HIGH
QUALITY LAND
Delivering on our five key priorities
3
GROWTH
4
SUSTAINABLE
COMMUNITIES
5
INDUSTRY-LEADING
FINANCIAL
PERFORMANCE
Read more on page 21
SOLD
Persimmon Plc | Annual Report | December 2021
38
Governance
Each land opportunity is considered by the
Group’s Land Committee. In approving each
opportunity the Committee, which comprises
members of the Group’s senior executive
team, assesses the existing land portfolio of
each of the Group’s operating businesses
together with the needs of the relevant local
community. The Committee meets regularly
and reviews each significant land investment
decision on a consistent basis, taking into
account local needs, environmental issues
and the planned and projected levels of
profitability and return. Only opportunities
that meet relevant criteria will proceed.
The Group’s well-established strategy of
minimising financial risk and investing in
capital at the right time in the cycle has
delivered robust high quality land holdings
that will generate value for all stakeholders
over the longer term and ensures that
Persimmon can maintain its strict criteria in its
land replacement activities moving forward.
Continuously driving value
Once land opportunities have been
identified, the Group focuses on delivering
optimal value for all stakeholders by creating
sustainable attractive communities for
our customers. This is achieved through
innovative design, the use of our core house
types, which meet customers’ needs, and
modern methods of construction which
introduces simplicity and economies of
scale. Throughout the life of a development,
the Group regularly reviews and assesses
the site design and balance of house types,
performing re-plans as necessary to ensure
that we continue to meet our customers’
needs and drive value for the Group.
Our land holdings
At 31 December 2021, the Group owned
67,089 plots of land, with industry-leading
embedded returns. The business has
c.4.6 years of forward land supply at 2021
output levels.
39,079 of the Group’s owned plots of land
are on sites with detailed planning consent,
which are all under development. The Group
has also entered into conditional contracts
for an additional 20,954 plots on land which
we are actively promoting through the
planning system.
The Group’s land recovery rates (i.e.
land cost relative to revenue generated)
were 13.2% in 2021 reflecting our
differentiated, well balanced land holdings
(2020: 14.2%) benefiting our stakeholders for
the longer term.
The Group’s high quality land holdings, with
industry-leading embedded margins, are a
key driver of value for the business and one
of the Group’s core strengths.
We consider the needs of local government
and the local communities we serve
when considering each land replacement
opportunity. This is at the heart of our land
investment and management strategy
ensuring that we develop sustainable
locations in areas of greatest housing need
where our customers love to live and work
across the UK.
We aim to develop natural extensions to
existing communities that have the lowest
environmental impact. Our 31 operating
businesses each have highly experienced
in house land, planning and design teams
with excellent knowledge of the local areas
that they serve. They are supported by our
Group Planning Department combining the
strength of local knowledge with shared
best practice across the business.
Experienced teams
Our experienced land, planning and
design teams bring a wealth of cumulative
knowledge to the Group’s land replacement
strategy, which is applied consistently across
the business.
Our teams work closely with relevant
stakeholders, including local planning
authorities, land owners and the local
community to identify areas which have
the most pressing housing need together
with good access to existing infrastructure
and local amenities such as schools, shops
and towns.
Climate change and
environmental risk
management
A ‘Planning and Environmental Risk
Assessment’ is performed for each potential
site identified. This assessment considers
a number of risk factors, including local
housing needs, flood risk, issues of existing
land contamination, water pollution, and
biodiversity impacts.
Throughout the planning process, we
assess the significant environmental risks
for each of our potential sites and conduct
full environmental impact assessments for
each development we acquire. This ensures
that we respect the natural environment,
mitigating adverse environmental impacts
and enhancing biodiversity where possible.
Over the last ten years, the Group has
invested £5.1bn in new land and has
delivered 141,156 homes during this time,
atexcellent levels of return.
The Group has continued to pursue exciting
land replacement opportunities. In 2021,
Persimmon invested around £460m in
land payments (including around £180m
of deferred land creditor payments).
We brought over 20,750 new plots into
the business representing 143% of current
consumption levels. This strong pipeline
provides excellent momentum for the
Group’s future growth.
Our brands’
investment inland
Our strategic land
Investment in new strategic land and its
conversion through the planning system
as effectively and efficiently as possible
continues to be a key feature of the
Group’s strategy and business model.
Successfully promoting our strategic land
portfolio through the planning system in
partnership with local planning authorities
and the communities we serve delivers land
with detailed residential consent allowing
the Group to deliver the much needed new
homes to our local communities.
Interests in a further c.480 acres of
strategic land were acquired during the
year, providing a total of c.13,700 acres
at 31 December 2021. We are confident
that this will, in due course, yield in
excess of 100,000 forward plots for future
development by the Group and will continue
to support planning authorities and local
communities to bring these sites through
theplanning system as quickly as possible.
During the year, the Group successfully
converted 10,220 plots from its strategic
land portfolio into its owned and under
control land holdings, representing 70%
ofplots legally completed in the year.
Strategic report Governance Financial statements Other information
39
“ The health and safety
of our customers,
workforce and all
those visiting our sites
is paramount. We have
maintained the two
metre distancing rule
on our sites throughout
the year and have
been able to respond
effectively to evolving
Government and
Industry Guidance.”
ABIGAIL BAINBRIDGE
Group Health, Safety and
Environment Director
pro-active site
inspectionsundertaken
5,865
Our strategic objectives
WORKING SAFELY,
RESPONSIBLY
ANDEFFICIENTLY
Persimmon Plc | Annual Report | December 2021
40
Training
Investment in training is a key element of
mitigating the Group’s health and safety risk.
All members of our workforce, including our
subcontractors, undergo extensive training
to safeguard the wellbeing of everyone that
comes onto our sites, into our manufacturing
facilities or into our offices.
Training modules comprising ‘Toolbox
Talks’ are regularly delivered to our site
personnel and our supply chain workforce.
These training modules are delivered at
a regional level using Group wide training
material developed by our HS&E Department.
The results of ongoing performance
monitoring undertaken by the Department
determines which topics are covered.
Since the onset of the pandemic, all non-
essential on-site training has been delivered
remotely wherever possible to limit the
number of people on our sites, this method
of training has proved extremely popular with
our teams.
Inspections
Under the direction of our senior
management team, the HS&E Department
perform regular inspections of the Group’s
operating activities. The results of these
inspections are provided to relevant
management and have been used to identify
both areas for improvement and areas of
best practice that can be shared across
the business.
In 2021, the HS&E Department undertook
5,865 pro-active site inspections. They have
considerable experience in providing both a
pro-active advisory and reactive incident led
approach to identify and mitigate health and
safety risk.
Work related injuries
During 2021, the number of construction
work related injuries in our housebuilding
operations we reported to the Health and
Safety Executive (HSE) under the Reporting
of Incidents, Diseases and Dangerous
Occurrences Regulations (RIDDOR) was 32
(2020:20, 2019:39). Injuries per one thousand
workers, which includes injuries sustained
by our contract workforce, has increased
to 4 per one thousand workers (2020:3.4;
2019:3.8). The increase from 2019 (this being
a more relevant comparable given the
pandemic-related disruption to the industry
in 2020) reflects the reduced number of
workers on our sites during the year, rather
than an absolute increase in the number of
injuries. The level of build per injury, including
contractor injuries, was 296 legal completions
per injury which was broadly in line with 2019
(2020:339, 2019:299). Our Group Annual
Incidence Injury Rate (AIIR) for 2021 was 2.5
per 1,000 workers (2020:1.7; 2019:2.8), slightly
lower than the ‘Home Builder’ average AIIR
(2.6). In our manufacturing operations, we
reported 2RIDDORs in 2021 (2020: 3; 2019:2).
Working safely
The wellbeing of our customers, our
workforce and our communities remains
paramount. We take a proactive and
progressive approach to our health and
safety strategy and objectives.
Covid-19
As we continued to respond to the
restrictions imposed as a result of the
pandemic during the year, our overarching
principle to ensure the wellbeing of our
customers, workforce and local communities
remained. We continually updated our
robust and comprehensive Covid-19 policies
and procedures to ensure compliance
with all relevant government and industry
guidance, which covered all of our sites,
offices and manufacturing facilities.
The Group maintained its ‘Covid-19 Passport
to Work’ system, issuing them to our sub-
contractors only once their own operating
procedures had been verified.
The Group’s health, safety and environment
advisors and operational management
teams perform regular independent site
inspections to ensure work is consistently
performed in a Covid-secure manner.
Throughout the year Covid-secure
procedures were in place for customers
visiting our sites and for our customer
care teams when attending a customer’s
home. The Group has continued to deliver
mandatory training in respect of our own
Covid-19 safe operating procedures to all
relevant members of our workforce.
Our health, safety
and environment
(HS&E) approach
Following a comprehensive review of its
health, safety and environment strategy
the HS&E Department are currently
rolling out a set of fully digitalised HS&E
standards, making them more accessible
and interactive for our workforce.
These standards, which will be implemented
consistently across the Group, include
specific guidelines for our relevant work
streams and regional offices together
with guidelines for the Group’s FibreNest
business and manufacturing facilities.
During the year, the Group has recruited a
Group Environment Manager as a dedicated
internal resource for all environmental
matters, to assist us in further enhancing
our environmental management systems
and to deliver appropriate training to
relevant colleagues.
Once our new systems have been fully
embedded across the business, our
processes will be externally verified in line
with the relevant International Organisation
for Standardisations (ISO).
Delivering on our five key priorities
1
BUILD QUALITY
4
SUSTAINABLE
COMMUNITIES
Read more on our Chief
Executive’s review on page 21
Strategic report Governance Financial statements Other information
41
Our strategic objectives
Working safely, responsibly and efficiently continued
Working responsibly
We recognise the important role that we
play in the UK’s ambition to achieve a net
zero carbon economy. In 2021, we set
ambitious carbon reduction targets, which
have been fully accredited by the Science
Based Target initiative.
We are focused on minimising our
environmental impact through our
operations, our supply chain and the
homes and communities we build,
ultimately helping our customers to live
more sustainably.
Our pathway to net zero
As previously reported, Persimmon has
set ambitious targets to be net zero in our
homes in use by 2030 and net zero carbon
1
in our operations by 2040.
This commitment is supported by interim
science-based carbon reduction targets,
aligned to the Paris Agreement, to reduce
carbon emissions from our own operations
by 46.2% (2019 baseline) and our indirect
operations (i.e. those from our homes in
use and our supply chain) by at least 22%
per m
2
completed floor area by 2030 (2019
baseline). These are very challenging
targets requiring product innovation, supply
chain engagement and changes to current
operational processes.
For the first time this year, we have reported
our Scope 3 emissions, i.e. the emissions
from the homes that we build and our supply
chain (see table on page43). As a home
builder, the majority (c.99%) of the emissions
that we generate come from our Scope 3
emissions. We address our homes in use
and our supply chain in turn.
1. Reaching net zero carbon emissions for a company
is achieved by reducing value chain greenhouse gas
emissions in line with 1.5˚C pathways, and by balancing the
impact of any remaining greenhouse gas emissions with
an appropriate amount of carbon removals.
Our supply chain
As part of our commitment to reduce
our Scope 3 indirect emissions, we have
recently engaged an external consultant
to calculate the embodied carbon of our
homes. This will enable us to understand
the carbon impacts of different house types,
and prioritise those materials which have the
greatest carbon impact.
We are partners to the Supply Chain
Sustainability School to assist in the delivery
of a consistent approach to sustainability
and responsible sourcing.
Launched in 2012, the School provides
a learning and engagement platform to
upskill people working within the built
environment sector. Free online learning
materials, seminars, workshops and other
services are available to help assess
and improve environmental, social and
economic sustainability awareness on issues
including waste reduction, resource use and
human rights.
Our homes
The homes we build are designed to
achieve high levels of energy efficiency.
We harness the benefits of good design
and improvements in materials and building
techniques, to construct homes to high
sustainability standards. The average
Standard Assessment Procedure (SAP)
rating of our new homes is 87, which equates
to a ‘B’ EPC rating. Our homes are, on
average, approximately 30% more energy
efficient than the existing national housing
stock, which has an average SAP rating of
c.66, or an EPC rating of C.
Our homes also contain a range of energy
efficient features to promote sustainable
living for our customers.
“ We have a number of
exciting projects underway
across the business as
we seek to identify the
most effective method of
delivering net zero homes.
We want to ensure that
the homes we build are
comfortable and efficient
for our customers and
enable them to live more
sustainably.”
DUNCAN SHAW
Group Technical Director
Net zero homes
in use by2030
The Group has a number of projects
underway to assist in the transition to
the Future Homes Standard and to
deliver net zero homes in use by 2030.
Our Low Carbon Home Steering Group,
established in 2020, has met regularly
throughout the year. Chaired by the
Group Technical Director, the group,
which comprises members of the
Persimmon senior management team,
has monitored, reviewed and assessed
a number of pilot and research projects
aimed at identifying the most effective
method of designing and building a net
zero home, which is scalable.
Our most advanced project is the
Group’s Regional Demonstration Project
at our site in York, Germany Beck.
The home has been completed with
new tenants occupying the property in
March 2022. Working with the University
of Salford, we will monitor the true in-use
carbon savings of the home, impacts
to the occupant as well as potential
additional processes and costs to the
build process.
In addition, the Group has a number
of other projects underway in order to
trial new technologies in our homes as
we strive to increase their efficiency
for our customers. The Group is also
investigating the most effective low
carbon solution to provide heating across
larger community developments.
We are also engaging with our industry
and our supply chain. We actively
participate in the HBF’s Future Homes
Hub and Dean Finch, the Group
Chief Executive, is a member of the
government’s Net Zero Buildings Council.
Net zero homes in use by:
2030
We aim to be net zero homes
in use by2030
Net zero in our operations by:
2040
We aim to be net zero in our
operations by 2040
See our carbon reporting methodology
statement for further information at
www.persimmonhomes.com/corporate
Persimmon Plc | Annual Report | December 2021
42
Reducing our
operationalimpact
We continue to focus on reducing
operational emissions across the Group.
During the year, the Group’s market based
Scope 1 and 2 greenhouse gas emissions
per home sold was 1.82 tonnes CO
2
e
(2020: 2.02 tonnes CO
2
e).
A number of energy efficiency actions
have been undertaken during 2021.
Greenhouse gas emissions from our diesel
consumption on our sites make up 62% of
our operational greenhouse gas emissions.
A study has been performed to reduce
on site diesel usage, to include a forklift
replacement cycle, trials of alternative low
carbon fuels, and driver training to reduce
machinery idling times.
The Group’s Site Manager essentials
training course includes energy awareness
training modules to improve on-site energy
efficiency such as, providing electric and
gas power to our developments as soon
as possible to reduce the use of generator
power, restricting machine idling time and
using appropriate travel speeds when
travelling around the development.
In addition, the Group is now purchasing
100% renewable energy for its offices
and manufacturing facilities and has
introduced electric vehicle options into its
fleet. In addition, all purchased electricity
for our newly built homes, while under our
ownership, is now backed by Renewable
Energy Guarantee of Origins certificates.
The Group participates in the CDP climate
survey, receiving a score of C (Awareness).
Greenhouse Gas Emissions and Energy Consumption Reporting
(Scope 1, 2 and 3)
Greenhouse gas emissions 2021 2020
Scope 1 emissions from gas, travel and
construction site fuel use
tCO
2
e 25,298 25,887
Scope 2 emissions from
electricity use
Location based tCO
2
e 2,380 3,480
Market based tCO
2
e 1,149 1,656
Total Scope 1 & 2 greenhouse
gas emissions
Location based tCO
2
e 27,678 29,367
Market based tCO
2
e 26,447 27,543
Scope 1 energy consumption MWh 96,508 95,110
Scope 2 energy consumption MWh 11,208 14,925
Carbon intensity Scope 1 & 2
emissions (per home sold)
Location based tCO
2
e/per
home sold
1.90 2.16
Market based tCO
2
e/per
home sold
1.82 2.02
Scope 3 emissions: Category 1:
Purchased Services & Goods
tCO
2
e 1,254,243 N/A
Scope 3 emissions: Category 11:
Use of Sold Products
tCO
2
e 1,193,835 N/A
Scope 3 emissions: Employee
commuting
tCO
2
e 14,537 N/A
Total Scope 3 emissions tCO
2
e 2,462,615 N/A
The Scope 1, 2, 3 (category 1 & 11) greenhouse gas emissions data for 2021 has been externally verified to a limited level of
assurance by Bureau Veritas (see www.persimmonhomes.com/corporate/sustainability). The Group’s full GHG Reporting
Methodology can be found at www.persimmonhomes.com/corporate/sustainability.
Continued improvements have been made to data capture and reporting methodologies during 2021; the majority of
diesel fuel usage on sites has been recorded directly in litres, which has improved accuracy and a high proportion of our
regional offices are now on smart meters. As part of the Group’s sustainability commitments, from August 2021all purchased
electricity is now backed by Renewable Energy Guarantee of Origins (REGOs) certificates, which are provided to the Group,
and gas for the offices is backed by Renewable Gas Guarantees of Origin (RGGOs) or Biomethane Certificates (BMCs).
This year the Group is reporting its material Scope 3 emissions, these are the emissions from indirect activities; to include
category 1 purchased goods and services (obtained from spend data and will be improved over time as carbon data
becomes available from suppliers); category 11, homes in use (obtained from SAP information), and employee commuting
(obtained from employee data).
Greenhouse gas emissions
per home sold
1.82 tonnes
CO
2
e
2020: 2.02 tonnes CO
2
e
The average Standard
Assessment Procedure (SAP)
rating of our new homes
87
equating to a ‘B’ EPC rating
The Group has reported on greenhouse gas emissions in line with the UK Government’s
‘Environmental Reporting Guidelines: including streamlined energy and carbon reporting
guidance’ (dated March 2019). The GHG Protocol Corporate Accounting and Reporting
Standard (Revised Edition) has been used as the methodology to quantify and report
greenhouse gas emissions. The Group operates in England, Wales & Scotland, and
emissions are reported in line with the financial control of the Group.
Strategic report Governance Financial statements Other information
43
Reducing our
operationalwaste
Within our site operations we aim to recycle
and reprocess waste where possible.
In 2021, 94% of waste was recycled or
reprocessed from our sites and off-site
manufacturing facilities (2020: 96%), with
8.6 tonnes of waste generated per home
sold (2020: 8.4 tonnes). The small reduction
in the Group’s recycling percentage is due,
in the main, to the increased production
within our Brickworks and Tileworks
manufacturing facilities. We will review our
waste management systems and processes
within these facilities to identify opportunities
to improve the amount of waste we recycle.
We have a number of processes on site to
monitor and control our waste management
in our operating businesses. We continue to
recycle brick and block waste on our sites.
These materials are typically crushed for
reuse in other areas on site such as piling
platforms and scaffold bases. This not only
reduces the amount of waste we send to
landfill, but also reduces our requirement for
third party aggregates.
Responsible sourcing
oftimber
We are committed to responsible sourcing
and look to use supply chain systems,
which minimise the environmental impact
associated with the production of key
commodities such as timber. All buyers,
surveyors, suppliers and subcontractors to
Persimmon via group deals are required
to purchase Forest Stewardship Council
(FSC) or Programme for the Endorsement of
Forest Certification (PEFC) certified timber
and timber derived materials for use in all of
our operations.
If FSC or PEFC certified timber and timber
derived materials cannot be purchased,
evidence must be provided that alternative
materials are sourced from reputable and
sustainable sources.
As a minimum, all buyers, surveyors,
suppliers and subcontractors must ensure
compliance to any applicable laws and
regulation in relation to the sourcing of
timber and timber derived materials.
Space4
‘Modern Methods of Construction’ (MMC)
is a wide term covering a range of off-site
manufacturing and on-site housebuilding
techniques. When compared to traditional
housebuilding, MMC can provide a range of
benefits that include operational efficiency
gains and a reduced environmental impact
of housebuilding.
We are highly committed to this method
of construction, we also plan to invest in
a new Space4 facility this year, updating
the technology and techniques to drive
enhanced quality and further efficiency
gains. In 2021, 33% of the homes we built
used timber frames. As part of our ongoing
commitment to MMC we have committed
to build 50% of our homes using Space4
by 2025.
From one of the UK’s largest off-site timber
frame factories, our Space4 business
produces a ‘fabric first’ solution to the
construction process to manufacture,
using PEFC certified timber, timber frames,
highly insulated wall panels and roof
cassettes based on our standard house
types. This MMC, using semi-automatic and
manual processes, supports increased site
production and efficiencies by reducing the
time to build the ‘superstructure’ of a new
home by almost two thirds whilst easing the
requirements and reliance on site for some
traditional skills.
The ‘fabric first’ solution delivers high levels
of thermal efficiency for the new homes built.
The benefits of this will support the Group in
the delivery of the Government’s proposed
Future Homes Standard which will require
new build homes to be future-proofed with
low carbon heating and world-leading levels
of energy efficiency.
Space4 employed 68 people as at
31 December 2021 at its factory in Castle
Bromwich near Birmingham and currently
has the capacity to supply up to c.9,500
units per year, consisting of c.7,750 timber
frames and c.1,750 ‘room in the roof’ systems.
During 2021 Space4 delivered 4,315 timber
frame house kits and insulated roof systems
to the Group’s housebuilding businesses,
contributing to the delivery of c.30% of the
new homes delivered in the year.
Our strategic objectives
Working safely, responsibly and efficiently continued
Working efficiently
Off-site manufacturing
Having been through a year where
security of supply of key products and
materials has been constrained, access
to our off-site manufacturing facilities,
consisting of Space4, a timber frame
manufacturing facility, and Brickworks
and Tileworks has allowed the business
to deliver the new homes the country
needs in the areas where people want
to live. We believe that this vertical
integration is a key differentiator for
the Group and we are committed
to continuing to invest in our off-site
manufacturing facilities.
Units delivered in 2021
4,315
Bricks delivered across 203 sites
c.45million
Suppliers
5,155
The Group works with over 5,155
suppliers and supports c.52,000*
jobs in its supply chain
“ The Group’s Space4
facility provides a ‘fabric
first’ solution to the
construction process
delivering sustainable
and thermally efficient
new homes.”
GARETH WICKS
Managing Director, Space4
Persimmon Plc | Annual Report | December 2021
44
Brickworks
The Group’s Brickwork factory, based
at Harworth near Doncaster, has the
capacity to produce c.80m bricks annually
(approximately two thirds of the Group’s
brick requirements). During the year, the
facility provided c.45m bricks to 203 sites
across the Group. We anticipate increasing
output this year at Brickworks by 25%.
Tileworks
The Group’s roof tile manufacturing plant,
also based at Harworth, has supplied
approximately 9m tiles to 227 sites across
the Group. We anticipate increasing output
this year by over 50%.
The Harworth facility is well situated for
both inbound raw materials and outbound
supplies, providing good access to the
motorway network supporting efficient
logistics for delivery of bricks and roof tiles to
sites across the Group.
Engaging with
our supplychain
To enable us to deliver on our core focus
areas we recognise the importance of
maintaining an effective and engaged
supply chain. We achieve this through
regular engagement with all our suppliers
and subcontractors with focus on their
wellbeing and operational matters.
The health, safety and mental wellbeing
of our subcontractors has always been
important to us and as noted on page
41, they take part in regular ‘Toolbox
Talks’ covering the health and safety
aspects of our sites. As with the prior
year, subcontractors have had to comply
with the Group’s strict Covid-secure
operating procedures.
As noted on page 37, the Group continues
to take its role in combatting modern slavery
and human trafficking seriously, and has
further developed its training provision,
ensuring greater awareness of the risks in
this area for staff in key functions that interact
with the supply chain.
Throughout 2021, the Group continued
to support its suppliers in a number of
ways. This includes our partnership with
RoofCERT, a scheme that encourages our
roof-tiling operatives to gain independent
accreditation and provide greater assurance
within the industry.
The Group is also a signatory to the Prompt
Payment Code (PPC). The Code sets
standards for payment practices and best
practice and is administered by the Office of
the Small Business Commissioner (OSBC)
on behalf of the Department for Business,
Energy and Industrial Strategy (BEIS).
The Group has a centralised procurement
department that has been strengthened
during the year with the appointment
of a new Group Commercial Director,
in late 2020, a Group Procurement
Director and the formation of a centralised
Group procurement team. This enlarged
department will continue to manage the
strong, long standing relationships we have
previously held with our main suppliers
and will seek to secure Group wide
deals covering all major elements of our
construction process. These relationships
and agreements will allow the Group to
establish consistent standards of quality,
security of cost and supply of materials
whilst providing our suppliers with certainty
over volumes, revenues and cash flows.
In addition, our operating businesses work
closely with a large number of regional
suppliers to secure locally sourced materials.
Such close working relationships will provide
these small suppliers with consistent order
volumes, helping to sustain their businesses
and support the local communities we work
within. The Group works with 5,155 suppliers
and is proud to support c.52,000* jobs
within its supply chain.
Our regional housebuilding operations
engage with a large number of local
subcontractors in the construction of
our homes. This ensures that the Group
secures good availability of the skilled
trades that we require locally and provides
our subcontractors with continuity and
consistency of work. The Group supports
over 40,000* jobs on its sites.
In total, the Group supports c.92,000*
jobs across its wider supply chain
(2020:c.86,000*). The 7% increase is in
line with the year on year increase in legal
completion levels achieved in the year.
* Estimated using an economic toolkit
Tiles supplied by Tileworks
c.9m
to 227 sites across the Group
Percentage of the homes we
built using timber frames
33%
Space4 contributing
to the delivery of
30%
of the new homes delivered
in the year
Strategic report Governance Financial statements Other information
45
Charitable Foundation donations
over £1.8m
Investment in local communities
c.£2.6bn
over the last 6 years
SUPPORT AND
CREATE SUSTAINABLE
COMMUNITIES
Our strategic objectives
“ Persimmon Homes’
donation is wonderful
news for the school and
pupils. The wooden pod
will be called the Rainbow
Retreat. We are aiming to
create a peaceful space
away from the hustle
and bustle of school,
providing a comfortable
place for the pupils to
express their concerns
and needs to enable us to
effectively support their
development.”
TERESA HORDEN
Holy Cross Primary Catholic
Voluntary Academy, Hucknall
Persimmon Plc | Annual Report | December 2021
46
Delivering on our five key priorities
4
SUSTAINABLE
COMMUNITIES
Read more on our Chief
Executive’s review on page 21
Living more sustainably
As a responsible business, we recognise
the importance of providing increasingly
energy efficient homes to our customers in
locations with excellent local amenities and
transport links.
Our homes are c.30% more energy efficient
than existing housing stock. The average
SAP rating of our home is 87 which is
equivalent to an EPC rating of a B. Almost all
of the homes that we build have an EPC
rating of A or B.
Engaging with
ourcommunities
We are a national business with
alocal presence.
Each of our 31 operating businesses have
regional teams with detailed knowledge of
the local communities in which they operate.
In addition to fulfilling the housing needs
of these communities through delivery of
new well-designed good quality homes,
our teams seek to support them further in a
variety of ways:
• Proactive engagement and consultation
throughout the planning and development
process for each of our developments
• Engaging local suppliers and
tradespeople and supporting the
local economy
• Charitable donations to support local
charities and community groups
• Engagement with local schools
• Delivering new amenities
• Improving local infrastructure
The Group’s land, planning and design
process is detailed and comprehensive,
supported by excellent control and review
processes. It integrates with the Group’s
construction departments at an early stage
in the planning process, ensuring that the
business can begin development efficiently
with the site design and environmental
mitigations effectively implemented on
each site.
Under the planning process, we invest
in local communities in many forms, such
as parks and open space; education
provision; community buildings and roads
and other infrastructure, either through
direct construction or through financial
contributions to local authorities. During 2021
we contributed over c.£127m to local
communities (2020: £72m) through planning
contributions to local authorities.
Support and create
sustainable communities
Social impact is one of our values – we
build homes for the future in sustainable
communities. We uphold the highest safety
standards and leave a legacy that delivers
economic, social and environmental value to
the communities we build.
We recognise the important part we play
in developing much needed homes and
communities across the UK, creating
social value for our local areas. Whilst we
are a national business, operating from
31 businesses across the UK, we are
proud of the contribution we make to our
local communities.
We are also proud to provide a range of
house types at attractive prices in areas
where people love to live and work, offering
the dream of home ownership to customers
who otherwise may not have been able to
afford it. Our average private selling price of
£259,231 is over 20%
1
below the UK national
average and approximately 50% of our
homes sold into the owner occupier market
were to first time buyers.
Throughout the development process of our
sites, we engage with our local communities
and Local Planning Authorities to ensure that
our sites are planned and designed so as to
provide the right range of house types, from
apartments to four bedroom homes, to meet
local needs and to provide open spaces
and attractive communities, improving our
customers’ well-being. Our developments
provide much needed homes to both private
owner occupiers and to our local housing
association partners.
Through the planning process we aim to
enhance local facilities providing investment
in local infrastructure such as transport,
education, retail and recreation facilities.
All of our developments are designed to
promote social inclusion, incorporating
housing for families with a broad span
of incomes. In 2021, we provided 2,533
homes, or £334m of housing, to housing
associations and a further 226 homes, or
£29m of housing, to qualifying customers
using affordable Discounted Open Market
Value Housing. This is housing that is
sold at a discount of around 20-30% to
the local market value with the discount
remaining with the property in perpetuity.
These homes can only be purchased by
customers who meet eligibility criteria set by
local councils. Overall, we provided £363m
2
of affordable housing for lower income
families in 2021 (2020: £303m).
Supporting our
communities
The Persimmon Charitable Foundation,
has two established programmes which
contribute to the communities we serve.
The Community Champions and Building
Futures campaigns continued to support
local good causes throughout 2021,
donating over £1.8m to c.900 charities
and community groups.
Once again, the Foundation supported
two campaigns throughout 2021, both
of which were run at a regional level
across each of the Groups’ 31 operating
businesses donating to local, grass root
initiatives in the communities in which
we operate.
• Each month our 31 operating
businesses and our head office make
donations of c.£2,000 to local good
causes to match the charity’s own
fund-raising efforts. During 2021,
Community Champions donated
c.£745,000 to c.770 local groups.
• 2021 was the third year for the
Foundation’s ‘Building Futures’
campaign which, in conjunction
with Team GB, supports community
projects that benefit young people
across the UK in the areas of sports,
education and arts, and health.
• The campaign held a public vote to
select 96 finalists from thousands
of nominated charities. The finalists
received a total of £945,000 with the
top three winners in each category
receiving £100,000, £50,000 and
£20,000 donations respectively.
Beneficiaries included hospital
charities, local sports groups,
eco activity centres and refugee
sports groups.
• The remaining 87 finalists received a
donation of £5,000 each.
• During 2021, Building Futures donated
over £1m to local good causes.
Further information regarding the
Foundation’s campaigns can be found
athttps://www.persimmonhomes.com
1. National average selling price for newly built homes
sourced from the UKHouse Price Index as calculated
bythe Office for National Statistics from data provided
byHM Land Registry.
2. The value of homes delivered to housing associations,
thevalue of discounted open market housing, plus the
value ofplanning contributions we have made.
Strategic report Governance Financial statements Other information
47
“ Persimmon’s well-
established strategy
of well-judged capital
deployment through the
cycle and maintaining
financial flexibility has
provided a resilient
balance sheet and high
quality land holdings
from which we have
the expertise to deliver
sustainable returns for
allour stakeholders.”
DEAN FINCH
Group Chief Executive
Underlying new housing
operating margin
2
28.0%
Return on average
capital employed
1
35.8%
Our strategic objectives
MAINTAINING FINANCIAL
STRENGTH THROUGH THE
HOUSING CYCLE
Persimmon Plc | Annual Report | December 2021
48
Delivering on our five key priorities
5
INDUSTRY-LEADING
FINANCIAL
PERFORMANCE
Read more on our Chief
Executive’s review on page 21
• Improving our build programme
management through strong Group
wide controls, the use of the Group’s
core house type portfolio across our
developments and investing in technology
to fully integrate our operations
• Embedding sustainable practices in the
procurement and management of our
working capital
• Investing in technology and innovation
keeping us at the forefront of
industry standards, whilst maintaining
operational efficiency
Land investment
The Group’s high quality land holdings
are a key element in our long established
strategy which supports the delivery of
superior sustainable returns to the benefit
of all our stakeholders over the long term.
This strong platform assembled over many
years supports the Group’s ability to exercise
disciplined land replacement through the
housing cycle. Such a strong platform
enables the Group to continue to deliver the
new homes to communities across the UK,
helping to address the country’s housing
needs through the economic cycle.
Further information on the Group’s land
investment strategy and processes can
befound on page 38.
Our build programmes
The Group has an established range of
standard core house types that ensure
consistency of construction across the
Group and enable us to build more cost
effectively, without compromising on build
quality or customer service. The Group
continues to invest significantly in digital
technology, improving the consistency,
efficiency and productivity of our detailed
build programme processes and to align
our technology with the build and quality
assurance processes outlined in the
Persimmon Way, the Group’s consolidated
Group wide process of development and
new home construction. Our build and
direct costs are 60 basis points higher
than last year at 55.4% of housing revenue
(2020: 54.8% of housing revenue).
Minimising financial
risk and making well
judged assessments
through the cycle.
The Group’s strategy, which has been
implemented over a large number of years,
recognises the inherently cyclical nature
of the UK housing market. The Group’s
robust balance sheet and high liquidity land
holdings are key to delivering long-term
sustainable value for the benefit of all
our stakeholders.
We achieve this by:
• Maintaining high quality land holdings,
ensuring we can apply a disciplined
approach to our land replacement,
only investing when there is a clear
opportunity to deliver value. The Group’s
land replacement, acquisition and
management processes are key features
of our approach (see page 38)
• Placing customers at the heart of our
business by pursuing developments
that deliver properly integrated
neighbourhoods which provide access to
good quality new housing for the benefit
of all potential occupiers, including those
families on lower incomes
• Maintaining strong control over the
Group’s levels of work in progress across
all of our developments whilst supporting
our strategy of putting our customers
before volume
• Engaging with and managing our supply
chain and entering into robust tendering
processes to help manage our costs
(seepage 45)
• Vertical integration and the manufacture
of some key material elements (see
page44)
• Maintaining strict levels of governance
and financial discipline across all our
operational and financial processes
Strong liquidity
By applying strong operational controls
the Group effectively manages its
working capital levels and delivers strong
cash generation.
Senior management carefully monitor and
manage the levels of work in progress
investment on our sites comparing
investment needs against relevant demand,
the requirement to achieve high levels of
quality and customer service, together with
generating superior levels of returns.
By exercising this capital discipline, together
with maximising the cash efficiency of
operational activities, the Group will deliver
strong cash generation whilst minimising
financial risk through the cycle.
Tax strategy
The Group operates an overarching
principle of full compliance with current UK
tax legislation. We are open and transparent
in all our dealings with HMRC, adopting
a low risk approach to our tax affairs
recognising our wider corporate social
responsibilities and the Group pays all taxes
in full and on time in accordance with tax
law. The commercial activities of the Group
are planned to ensure that statutory reliefs
and allowances permitted by existing tax law
are claimed.
1. 12 month rolling average calculated on underlying operating profit and total capital employed (including land creditors).
Capital employed is the Group’s net assets less cash and cash equivalents plus land payables. After legacy buildings
provisionand goodwill impairmentthefiguresareasfollows: Return on average capital employed: 35.6% (2020: 26.7%;
2019: 36.7%; 2018: 41.0%;2017: 39.8%).
2. Stated before legacy buildings provision of £nil (2020: £75.0m) and goodwill impairment (2021: £6.2m, 2020: £4.3m).
After legacybuildings provision and goodwill impairment the figures are as follows: Housing operating margin:
27.8%(2020: 25.0%; 2019: 30.1%;2018: 30.5%;2017: 27.9%).
Strategic report Governance Financial statements Other information
49
Financial review
HOW WE PERFORMED IN 2021
Trading
Trading through the year was strong with
increased selling prices across our regions
and healthy levels of customer demand, the
Group’s average private sales rate per site
being c.9% ahead of 2020 and c.22% ahead
of 2019.
For 2021, the Group generated total
revenues of £3.61bn (2020: £3.33bn),
with new housing revenue of £3.45bn
(2020: £3.13bn). The Group delivered 14,551
new homes (2020: 13,575) at an average
selling price of £237,078 (2020: £230,534),
2.8% higher than the prior year.
The Group delivered 12,018 new homes
to private owner occupiers (2020: 11,363)
at an average selling price of £259,231
(2020: £250,897). This 3.3% year on year
increase largely reflecting improvements in
achieved selling prices and the mix of new
homes sold. The Group delivered a further
2,533 new homes to our housing association
partners (2020: 2,212) at an average selling
price of £131,976 (2020: £125,930).
The Group’s underlying gross profit
1
for
the year was £1,083.8m (2020: £969.4m)
generating a new housing gross margin
of 31.4%
2
(2020: 31.0%). The Group’s well
established land replacement strategy, the
improved selling prices achieved and good
management of the cost inflation we have
experienced during the year continues to
deliver industry-leading margins.
Underlying operating profit
3
for the Group
was £966.7m (2020: £862.8m), generating
an underlying new housing operating
margin
4
of 28.0% (2020: 27.6%) as the
second half benefitted from the particular
mix of legal completions achieved.
The Group generated a profit before tax of
£966.8m in the year (2020: £783.8m).
The Group entered 2021 in a resilient position with forward sales
at c.£1.69bn and work in progress including c.5,600 new homes
under construction.
Taxation
The Group has an overall tax charge of
£179.6m for the year (2020: £145.4m) and
an effective tax rate of 18.6% (2020: 18.6%),
marginally lower than the mainstream rate
of 19.0%. Factors that may affect the Group’s
taxation charge include changes in tax
legislation and the closure of certain open
matters in the ordinary course of business in
relation to prior year’s tax computations.
Balance sheet strength
Net assets of £3,625.2m at 31 December
2021 (2020: £3,518.4m), including retained
earnings of £3,055.1m (2020: £2,950.9m),
underpin the Group’s balance sheet
strength. After returning £749.6m of
surplus capital to shareholders during
the year, the Group’s reported net assets
per share was 1,135.7p, an increase of 3%
compared with the prior year (2020: 1,102.7p).
Underlying return on average capital
employed
5
as at 31 December 2021
was 35.8% (2020: 29.4%), further
demonstrating the resilience of the business.
Underlying basic earnings per share³ for the
year was 248.7p, a 12.7% increase on the
prior year (2020: 220.7p).
The Group’s defined benefit pension asset
has increased to £148.8m at 31 December
2021 (2020: £50.6m). The increase is
largely due to the recovery in markets and
good asset performance combined with
the actuarial benefit from the increase in
discount rates through the year.
Underlying operating profit
1
£966.7m +12%
2020: £862.8m
Underlying profit before tax
1
£973.0m +13%
2020: £863.1m
Profit before tax
£966.8m +23%
2020: £783.8m
Persimmon Plc | Annual Report | December 2021
50
In February 2021 we pledged to support
leaseholders in multi-storey developments
we built that required cladding removal and
in obtaining the EWS1 form they need to
sell their home. As part of this pledge we
created a £75.0m fund and have been in
contact with management companies and
building owners to ensure the required
progress is being made. During the year
works have been undertaken across a
number of affected developments resulting
in total spend of £2.3m. At 31 December
2021, the provision stands at £72.7m and is
management’s best estimate of the costs
of completing works to ensure fire safety
on the remaining affected buildings under
direct ownership and on those under third
party ownership we have developed.
The Group’s land holdings
At 31 December 2021, the carrying value
of the Group’s land asset was £1,798.2m
(2020: £1,722.1m), reflecting the Group’s
disciplined land replacement strategy and
the strong sales performance the Group
has experienced during the year. The high
quality of the Group’s land holdings are
reflected in the Group’s land cost recoveries
for the year of 13.2% of new housing revenue
(2020: 14.2%).
The Group increased its owned and under
control land holdings to 88,043 plots at
31 December 2021 (2020: 84,174 plots) to
facilitate future output growth and to support
the Group’s national outlet network. 67,089
plots are owned of which 39,079 have
detailed implementable planning consents.
A further 20,954 plots are under the Group’s
control, being plots where the Group has
exchanged contracts to acquire the site
but have yet to complete the contract
due to outstanding planning conditions
remaining unfulfilled.
During the year the Group’s experienced
land and planning teams successfully
progressed c.14,400 under control plots
through the planning system, transferring
them into the Group’s owned land holdings.
The Group’s owned land holding provides
excellent visibility of the near to medium
term with 4.6 years of forward supply at 2021
volumes, an overall pro-forma gross margin⁶
of c.33% and a cost to revenue ratio of 11.4%⁷
(2020: 11.9%).
The Group continued to pursue its
disciplined land replacement strategy of
identifying new land in areas where people
wish to live and work, providing new housing
in areas where there is the most need.
The Group brought over 20,750 plots into
its owned and under control land holdings
across 101 locations, with 10,220 of these
plots converted from our strategic land
portfolio. In line with our expectations, we
have incurred land spend of £460.0m in
the year, including £178.5m of payments in
satisfaction of deferred land commitments.
During 2021, the Group acquired interests
in a further 480 acres of strategic land,
securing a total of c.13,700 acres at
31 December 2021 (2020: c.15,500 acres).
This provides a long-term supply of forward
plots for future development by the Group.
Cash
£1,246.6m +1%
2020: £1,234.1m
Free cash generation
2
£766.6m +2%
2020: £748.1m
Cash generation
pre land investment
£1,209.8m +13%
2020: £1,066.8m
Strategic report Governance Financial statements Other information
51
Financial review
How we performed in 2021 continued
Net assets
£3,625.2m
2020: £3,518.4m
Underlying return on
average capital employed
1
35.8%
2020: 29.4%
Land creditors
£ 4 0 7. 6 m
2020: £329.3m
1. Stated before legacy buildings provision of £nil (2020: £75.0m).
2. Based on new housing revenues of £3,449.7m (2020: £3,129.5m) and underlying gross profits of £1,083.8m (2020: £969.4m)
(stated before legacy buildings provision of £nil (2020: £75.0m)).
3. Stated before legacy buildings provision of £nil (2020: £75.0m) and goodwill impairment (2021: £6.2m, 2020: £4.3m).
4. Based on new housing revenue (2021: £3,449.7m, 2020: £3,129.5m) and underlying operating profit (2021: £966.7m,
2020: £862.8m) (stated before legacy buildings provision of £nil (2020: £75.0m) and goodwill impairment (2021: £6.2m,
2020: £4.3m)).
5. 12 month rolling average calculated on underlying operating profit and total capital employed (including land creditors).
Underlying operating profit is stated before legacy buildings provision (2021: £nil, 2020: £75.0m) and goodwill impairment
(2021: £6.2m, 2020: £4.3m).
6. Estimated weighted average gross margin based on assumed revenues and costs at 31 December 2021 and normalised
output levels.
7. Land cost value for the plot divided by the anticipated future revenue of the new home sold.
Work in progress
Against the backdrop of a reduced number
of sales outlets, the delivery of increased
volume of new homes, material and labour
resource shortages we have successfully
maintained our build rates at pre-Covid
levels. This has resulted in our work in
progress investment at 31 December 2021
of £1,054.1m being only c.3% lower than
the level of investment we entered 2021
(2020: £1,091.6m). The Group’s level of work
in progress of c.4,100 equivalent units of
new homes construction at the end of 2021
provides a robust opening position that will
support the Group’s build programmes for
the first half of 2022 and deliver the new
homes the country needs.
We are focused on driving strong levels
of build throughout 2022, managing the
continuing operational challenges we
face and securing the availability of key
build components through our in-house
manufactured bricks, roof tiles, closed panel
timber frame kits and pre-manufactured roof
cassettes, whilst delivering high levels of
customer satisfaction and build quality.
Cash generation
and liquidity
The Group had a cash balance of £1,246.6m
at 31 December 2021 (2020: £1,234.1m).
During the year the Group generated
£1,209.8m (2020: £1,066.8m) of cash before
returning £749.6m of surplus capital to
shareholders and net land spend of £447.7m.
The Group’s deferred land commitments
have increased by £78.3m to £407.6m from
£329.3m at 31 December 2020 reflecting
the Group’s increased activity in the land
market throughout 2021. The Group’s
healthy liquidity position will provide further
opportunity to support the future growth
of the business. Cash generated from
operations was £972.8m (2020: £993.3m).
In addition, the Group has an undrawn
£300m Revolving Credit Facility which
extends out to 31 March 2026.
The Group’s shared equity loans have
generated £18.9m of cash in the year
(2020: £16.4m). The carrying value of these
outstanding shared equity loans, reported as
“Shared equity loan receivables”, is £45.6m
at 31 December 2021 (2020: £56.2m).
The Board has reviewed the carrying value
of these receivables and has concluded that
the value is appropriate.
Net finance income for the year was £6.3m
(2020: £0.3m) and includes £7.9m of gains
generated on the Group’s shared equity
loan receivables (2020: £4.0m) and £1.8m of
imputed interest payable on land creditors
(2020: £5.4m).
Persimmon Plc | Annual Report | December 2021
52
Shareholders’ equity,
treasury policy and
related risks
The Group’s strategy of minimising financial
risk and retaining flexibility reflects the
cyclical nature of the housing market.
The return of any capital that is deemed
surplus to the needs of the business through
the Group’s Capital Return Programme
remains a key element of this strategy.
The Programme is continually reviewed and
assessed by the Directors having regard
to the progress and trading position of the
business, existing economic and market
conditions, the Group’s current land holdings
and other investment opportunities.
The total value paid of the Capital Return
Programme to 2021 was £13.00 per share,
compared to the £6.20 per share initial
commitment made by the Board in 2012.
The business maintains a robust balance
sheet with an efficient capital structure
and stringent controls around its working
capital management. The Group’s
£300m Revolving Credit Facility provides
an important element in the Group’s
working capital resource and flexibility.
These facilities will only be used to support
short-term working capital needs of
the business.
The Group will continue to effectively
manage its liquidity and working capital
investment needs, whilst ensuring they
are aligned with the Group’s focus on
work in progress investment to support an
increase in the equivalent units of new home
construction that will support good levels of
stock availability and the high levels of build
quality and customer service we currently
deliver. The Group will continue to ensure
it maintains flexibility when considering the
generation of after tax earnings, and the
management of the Group’s equity, debt and
cash management facilities. This approach
will mitigate the financial risks the Group
faces and maintain the Group’s robust
balance sheet and strong liquidity levels,
securing a resilient position for the future.
New housing gross margin
1
31.4%
2020: 31.0%
Underlying new housing
operating margin
3
28.0%
2020: 27.6%
“ Persimmon will continue
to effectively manage
its liquidity and
working capital needs
mitigating the financial
risks the Group faces,
maintaining the Group’s
robust balance sheet
and securing a resilient
position for the future.”
DEAN FINCH
Group Chief Executive
Strategic report Governance Financial statements Other information
53
How we manage risk
PROTECTING LONG-TERM
VALUE CREATION
The robust management of risk is central to the Group’s strategy and
ability to create value over the long-term. The UK housing market is
cyclical in nature and subject to fluctuations in economic conditions
and changes in the political, regulatory and legislative environment.
To manage these specific challenges, the
Group has a well-established framework
in place for risk management, designed to
enable the effective and timely identification
and assessment of risks, and ensure
ongoing risk mitigation.
The Board has overall responsibility for the
assessment and effective management
of the Group’s risks. The Group’s risk
management framework supports the
Board in performing these duties and
ensuring an appropriate focus on principal,
strategic and emerging risk areas.
Comprehensive supporting processes are
in place to identify, monitor, mitigate and
control risks, through the work of the Audit
Committee, Risk Committee, Group Internal
Audit department and operational
management teams. This includes a
wide-ranging annual survey of Board
and senior management assessments
of key risk issues and emerging risks.
Collectively, these processes provide an
additional ‘bottom up’ approach, ensuring
the Board has visibility of the Group’s full
risk landscape, while remaining focused
onthemost significant threats and trends.
Risk management framework
Board ownership and oversight
Strategy and risk identification
The Board determines the Group
strategy and has overall responsibility
for identifying and effectively managing
the risks to the strategy. This focuses on
principal risks, including those that would
threaten the Group’s business model,
future performance, solvency or liquidity.
Monitoring of risks
The Board has well-established processes to monitor the Group’s risk landscape. In addition
to routine KPI reporting against principal risks, the Board reviews the Principal and Strategic
Risk Register in full on a regular basis. This provides the latest assessment of a range of
criteria for each of the Group’s key risks, including:
• Risk appetite.
• Gross risk impact and likelihood assessment.
• Net risk impact and likelihood (adjustment
of the gross assessment post the impact of
mitigating controls).
• Overall risk assessment.
• Commentary on action plans for further
mitigation, and links to the Group’s
operational Risk Registers.
The Board also routinely monitors feedback and assessments of changes in strategic
and emerging risks with the potential to develop into future principal risks. This includes
reviewing the results of a detailed annual risk survey.
• Monitors the integrity
of the Group’s financial
reporting processes.
• Approves the Group
Internal Audit Manager’s
annual audit plan
and monitors the
effectiveness of
internal audit.
• Monitors the external
audit and reviews
its effectiveness.
• Ensures appropriate
controls and procedures
are in place.
• Reviews operational
risk performance.
• Reviews the work of
the Group Internal
Audit department.
• Performs a full review
of all Group Risk
Registers annually.
• Delivers a risk-based
annual internal
audit plan.
• Performs testing on key
areas of compliance
and assurance.
• Produces KPI data
on the Group’s
principal risks.
• Maintains the Group’s
Risk Registers
and oversees the
update process.
• Supports the annual risk
survey of the Board and
senior management.
• Support steering
groups on key risk
areas including GDPR,
Information Security, and
Internal Controls over
Financial Reporting.
• Contribute to the
formulation of Group
policies, procedures and
control mechanisms.
• Monitor implementation
of Group risk
management
and internal
control processes.
• Have ownership of
individual operational
level Risk Registers for
each function.
• Monitors operational
performance and
identifies changes
in key risks affecting
the business.
• Continual interaction
with and reporting to
senior management and
the Board.
• Ensures the
implementation of
internal controls set
by the Board and
Group functions within
the business.
Audit Committee Risk Committee
Group Internal Audit
department
Group Functions Operational Management
Management oversight
Risk identification, mitigation and monitoring
Persimmon Plc | Annual Report | December 2021
54
Our principal risks
PRINCIPAL RISKS AND
MATERIAL ISSUES
Sustainable value for all stakeholders
Principal risks
In line with the UK Corporate Governance
Code, the Group defines its principal risks
as those considered to have a potentially
material impact on its strategy and business
model, including its future performance,
solvency, liquidity and reputation. The Group’s
strategy focuses on minimising financial risk
and deploying capital at the right time in the
housing market cycle, recognising the inherent
risks and cyclical nature of the housing market.
This, together with an agile, experienced and
responsive management team, and robust
risk management framework, has established
a highly resilient business able to address a
range of future economic scenarios.
Material issues
The Group recognises the value of
stakeholder engagement in ensuring the
creation and protection of long-term value.
A materiality assessment was performed in
2020 in order to identify important issues for
our stakeholders, which were likely to have an
impact on our business in the short to medium
term. This assessment links to the Group’s
risk management framework, and contributes
directly to the identification, management and
mitigation processes, as illustrated below:
which delivers
M
a
t
e
r
i
a
l
i
s
s
u
e
s
S
t
a
k
e
h
o
l
d
e
r
e
n
g
a
g
e
m
e
n
t
Principal
risks
Risk management framework
is protected by a
which is enhanced by
Our purpose, strategy and business model
Principal risks – heat map
Material issues Principal risk
1
Strategy
1
Pandemic risk
2
Social value/enhancing communities
2
Strategy
3
Health and safety
3
National and regional
economic conditions
4
Talent attraction, development,
diversity and engagement
4
Government policy
5
Helping customers live sustainably
5
Health, safety and
the environment
6
Climate change action
& resilience
6
Labour and resources: skilled
workforce, retention
and succession
7
Build quality and safety
7
Labour and resources: materials
and land purchasing
8
Governance
8
Climate change
9
Customer satisfaction
9
Reputation
10
Cyber security and protection
10
Regulatory compliance
11
Cyber and data risk
12
Mortgage availability
Residual (Mitigated) Risk Impact
5
8
12
9
6
11
3
1
4
7
2
10
Strategic report Governance Financial statements Other information
55
Residual (Mitigated) Risk Likelihood
Less likely More likely
Low Medium High
Current year Movement from year prior
1
Pandemic risk
Residual risk rating: High
Risk trend assessment
Overall: No change
Impact: No change
Likelihood: No change
Link to strategic objective
Risk description
The potential for increased rates of
transmission, further variants of Covid-19 or
a new pandemic occurring in the UK, could
have significant impacts across the Group’s
operations. These could include:
- Increased health and safety risk to our
workforce, our customers and the wider public.
- Disruption to build programmes and delays in
sales, due to staff absences and material and
labour supply issues.
- Economic downturn, with reduced consumer
confidence, demand and pricing for new
homes, thereby affecting revenues, margins,
profits and cash flows and impairment of
asset values.
Approach to risk mitigation
The Group maintains business continuity
plans and can draw upon extensive Board and
management experience from the response to
the initial Covid-19 outbreak.
Robust and comprehensive policies and
procedures have been developed under
the supervision of the Health, Safety and
Environment Department. These procedures
allow for safe continuity of operations under
various pandemic conditions.
Remote working capabilities are in place,
facilitated through enhanced use of
technology. This supports continuity of
operations in the event of ongoing or future
pandemic conditions. The risks associated with
increased use of remote working are mitigated
through a combination of IT controls and user
awareness training.
Potential disruption of supply is mitigated
through centralised procurement and
management of key materials. The vertical
integration afforded by use of our own
Brickworks, Space4 and Tileworks production
provides further mitigation for some
critical materials.
Developments in 2021
Whilst the industry continued to face ongoing
operational and economic challenges from
the pandemic, particularly as the Omicron
outbreak unfolded late in the year, the
Group continued to manage these ongoing
challenges effectively.
The comprehensive suite of measures
established at the start of the pandemic,
including our robust Covid-19 policies and
procedures, have been continually adapted to
reflect all government and industry guidance
and good practice, and have enabled a
strong degree of continuity in our operations.
We continue to maintain the two metre social
distancing protocols across our sites.
The Group’s strong balance sheet, high
liquidity and robust financial disciplines ensure
we are well placed to manage the ongoing
challenges of the pandemic.
2
Strategy
Residual risk rating: Low
Risk trend assessment
Overall: No change
Impact: No change
Likelihood: No change
Link to strategic objective
Risk description
The Group’s strategy has been developed by
the Board as the most appropriate approach
to successfully deliver the Group’s purpose
and ambition and generate optimal sustainable
value for all stakeholders.
As political, economic and other conditions
evolve, the strategy currently being
pursued may cease to be the most
appropriate approach.
If the Group’s strategy is not effectively
communicated to our workforce and /
or engagement and incentive measures
are inappropriate, operational activities
may not successfully deliver the Group’s
strategic objectives.
Approach to risk mitigation
The Group’s strategy is agreed by the Board
at an annual strategy meeting. The strategy
undergoes a continuous and iterative process
of review and adaptation at Board meetings
and in response to the evolution of conditions
in which the Group operates.
The Board engages with all stakeholders
to ensure the strategy is understood and
effectively communicated. For example, an
Employee Engagement Panel, Diversity &
Inclusion Council and employee engagement
surveys are in place to monitor the cultural
health of the organisation and ensure strategy
is understood and implemented.
Developments in 2021
Our well-established strategy continues
to reflect a firm understanding of the risks
associated with the economic cycle and
the housing market. Through minimising
associated financial risk and judging the
deployment of capital at the right time in the
cycle, the Group has safeguarded its strong
balance sheet and maintained its positioning
for continued future success.
Our principal risks
Our principal risks and material issues continued
Persimmon Plc | Annual Report | December 2021
56
3
National and regional
economic conditions
Residual risk rating: High
Risk trend assessment
Overall: No change
Impact: No change
Likelihood: No change
Link to strategic objective
Risk description
The housebuilding industry is sensitive
to changes in the economic environment,
including unemployment levels, interest rates
and consumer confidence.
Deterioration in economic conditions, resulting
from the ongoing Covid-19 pandemic or
continued impact of the UK’s withdrawal from
the EU for example, could affect demand and
pricing for new homes, with resultant effects on
our revenues, margins, profits and cash flows
and potential impairment of asset values.
Economic conditions in the land market may
adversely affect the availability of a sustainable
supply of land at appropriate levels of return.
Approach to risk mitigation
As noted above, the Group’s long-term
strategy is focused on the cyclical nature of the
housing market and minimising financial risk,
maintaining operational and financial flexibility
and judging the timing of capital deployment
through the cycle.
Lead indicators on the future direction of
the UK housing market are monitored to
enable informed management of exposure to
potential market disruption. Pricing structures
are regularly reviewed to reflect local market
conditions. The Group’s geographical spread
is continuously monitored to help mitigate the
effects of regional economic fluctuations.
In line with the Group’s strategy, levels of
build on site are closely monitored and
land investment decisions are subject to
comprehensive due diligence processes to
ensure effective deployment of capital.
See page 10
Developments in 2021
The Board and our operational management
teams have continued to monitor the economic
environment closely throughout the year, with
particular focus on the impact of the disruption
caused by the pandemic and the UK’s exit
from the EU. Despite these challenges, market
conditions remained positive, with strong
demand for housing and continued resilience
of selling prices.
4
Government policy
Residual risk rating: High
Risk trend assessment
Overall: No change
Impact: No change
Likelihood: Increase
Link to strategic objective
Risk description
Changes to government policy have the potential
to impact on several aspects of our strategy
and operational performance. For example, the
forthcoming withdrawal of the Help to Buy scheme
in 2023, amendments to planning regulations
and the recent government requirement to pay
a contribution to a fund to cover the cost of fire
safety remediation works, could have an adverse
effect on revenues, margins, tax charges and
asset values.
The Department for Levelling Up, Housing
and Communities (DLUHC) has demanded
that residential property developers take a
lead in the funding and rectification of unsafe
cladding and fire safety issues on buildings over
11 metres in height constructed in the last 30
years. The government want developers to pay
for all the necessary remediation on buildings
they constructed as well as make additional
contributions to an industry-wide scheme that
protects all leaseholders from paying towards
any works.
To reinforce this demand, the government has
introduced amendments into the Building Safety
Bill, which, if passed, will require membership of
a ‘Building Industry Scheme’. Membership of this
scheme will be determined by the government,
based on the developer’s commitments and
actions to rectify cladding and fire safety
related issues on buildings it has developed.
The government has indicated they would use
the powers conferred through the amendments to
block planning and building control permissions
for developers that are not members of
the scheme.
Approach to risk mitigation
Government policy in relation to the housing
market is monitored closely. Consistency of
policy formulation and application remains
supportive of the housebuilding industry as
a whole, encouraging continued substantial
investment in land, work in progress and skills
to support output growth. Our mission to build
homes with quality our customers can rely on
at a price they can afford and our strategic
objectives, are aligned with government
priorities to increase housing stock.
Land investment decisions and levels of work
in progress are tightly controlled in order to
mitigate exposure to external influences.
Persimmon is taking part in ongoing discussions
with government to identify an effective solution
to the funding and rectification of unsafe
cladding and fire safety issues on buildings over
11 metres and ensure leaseholders are protected.
Persimmon led the industry in committing
that leaseholders should not have to pay for
such works on any buildings we constructed.
Last year, a £75m legacy buildings provision
was created to fund necessary work on these
buildings. In light of DLUHCs request, we are
reviewing buildings we constructed over the last
30 years but do not believe that this will result
in a material increase to the 33 developments
already identified. In addition, Persimmon
will not claim from the Government’s Building
Safety Fund. We hope these actions will lead
to us becoming a member of the government’s
new Building Industry Scheme and continue to
engage in positive discussions with officials.
Developments in 2021
Our assessment has identified an overall
increase in risk likelihood, reflecting recent
government actions affecting the industry, such
as the introduction of the Residential Property
Developer Tax, the potential introduction of
the Building Industry Scheme, changes to
the stamp duty regime and the forthcoming
withdrawal of the Help to Buy Scheme in 2023.
Government continues to recognise the need for
increased construction of new homes, however,
providing a broadly supportive environment for
the industry.
Strategic report Governance Financial statements Other information
57
5
Health, safety and
the environment
Residual risk rating: High
Risk trend assessment
Overall: No change
Impact: No change
Likelihood: No change
Link to strategic objective
Risk description
In addition to the human impacts of any
accident, there is the potential for reputational
damage, construction delays and financial
penalties as a result of any health, safety or
environmental incident.
Approach to risk mitigation
The Board retains a very strong commitment
to health and safety and managing the risks
in this area effectively. This is implemented
by comprehensive management systems and
controls, managed by our highly experienced
Health, Safety and Environment Department,
which includes detailed training and inspection
programmes to minimise the likelihood and
impact of accidents on our sites. While all
reasonable steps are taken to reduce the
likelihood of an incident, the potential human,
reputational and financial impacts of any such
incident are considered high.
Developments in 2021
The effective management of health, safety
and environmental risks has remained a
critical area of focus for the Board and our
management teams throughout the year.
As noted above, our comprehensive suite of
Covid-19 mitigation measures, including our
robust policies and procedures, have been
continually adapted to reflect government
and industry guidance and good practice, and
have enabled a strong degree of continuity in
our operations.
Environmental management has been an
area of particular focus in the year, with senior
appointments made to support ongoing
development in this area.
See page 40
6
Skilled workforce,
retentionand succession
Residual risk rating: High
Risk trend assessment
Overall: Increase
Impact: No change
Likelihood: Increase
Link to strategic objective
7
Materials and
landpurchasing
Residual risk rating: High
Risk trend assessment
Overall: Increase
Impact: Increase
Likelihood: Increase
Link to strategic objective
Risk description
Shortages of skilled labour, driven in part
through the effects of the UK’s exit from the
EU and from increased UK housebuilding
activities, create risks of increased costs and
delays and disruption to build programmes.
Approach to risk mitigation
Access to an appropriately skilled workforce
and experienced management team
is essential in maintaining operational
performance and ensuring the successful
delivery of the Group’s strategy.
The Group operates a range of
apprenticeships and in-house training
programmes, under the supervision of the
Group Training department, in order to support
an adequate supply of skilled labour (see page
35). In addition, the Group is committed to
supporting industry initiatives to address the
skills gap. The Group’s Space4 manufacturing
facility, which produces timber frames, highly
insulated wall panels and roof cassettes,
improves build efficiency and requires less
on-site labour than a traditionally built home,
mitigating some labour shortage risk (see
page 44).
A range of measures have been deployed
to ensure high levels of retention across the
workforce. These include increased focus on
employee engagement, further development
of performance management frameworks,
career management, and financial incentives.
At the most senior level, the Nomination
Committee oversees these processes and
promotes effective succession planning.
Developments in 2021
The demand for labour within the construction
sector has remained high throughout the year,
driven by a number of factors. This is reflected
in an overall increase in our assessment of
this risk.
The Group has continued to invest in its
people and processes to mitigate this risk.
Notable developments within the year include
an expansion of the resource within our
Group Training department and the further
development of the ‘Persimmon Pathway’, a
structured training programme and career
pathway for key disciplines.
See page 32
Risk description
Materials availability
Ensuring access to the right quantity and
specification of materials is critical in delivering
high quality homes.
Heightened levels of demand for materials
may cause availability constraints and increase
cost pressures. Furthermore, build quality may
be compromised if unsuitable materials are
procured leading to damage to the Group’s
reputation and customer experience.
Land Purchasing
Land may be purchased at too high a price, in
the wrong location and at the wrong time in the
housing market cycle.
Approach to risk mitigation
Materials availability
Our build programmes and our supply
chain are closely monitored to allow us to
manage and react to any supply chain issues
and to help ensure consistent high quality
standards. We build strong relationships with
key suppliers over the long term to ensure
consistency of supply and cost efficiency.
Our Group Procurement team works with our
operating businesses to ensure the Group’s
suppliers provide materials to the expected
specification and quantities.
The Group’s off-site manufacturing hub
at Harworth, near Doncaster, provides a
significant proportion of the bricks and roof
tiles used across our sites, providing security
of supply. This complements our existing off-
site manufacturing facility at Space4, which
produces timber frames, highly insulated wall
panels and roof cassettes.
Land Purchasing
The Group maintains strong land holdings.
All land purchases undergo comprehensive
viability assessments and must meet specific
levels of projected returns, taking into account
anticipated market conditions and sales rates.
Our principal risks
Our principal risks and material issues continued
Persimmon Plc | Annual Report | December 2021
58
7
Materials and
landpurchasing
Residual risk rating: High
Risk trend assessment
Overall: Increase
Impact: Increase
Likelihood: Increase
Link to strategic objective
8
Climate change
Residual risk rating: Medium
Risk trend assessment
Overall: No change
Impact: No change
Likelihood: Increase
Link to strategic objective
Risk description
The effects of climate change and the UK’s
transition to a lower carbon economy could
lead to increasing levels of regulation and
legislation, as seen with the Future Homes
Standard. These may in turn result in planning
delays, increased costs and competition for
some materials.
Changes in weather patterns and the
frequency of extreme weather events,
particularly storms and flooding, may increase
the likelihood of disruption to the construction
process. The availability of mortgages and
property insurance may reduce in response to
financial institutions considering the possible
impacts relating to climate change.
Approach to risk mitigation
The Group takes a range of measures to
monitor and improve its operational efficiency
and direct environmental impact, including
measuring CO
2
emissions and the amount of
waste we generate for each home we sell.
The Group maintains a detailed climate
change risk register, which ensures that
the management and mitigation of the
risk is embedded within the Group’s risk
management process.
We systematically consider the potential
impacts of climate change throughout the land
acquisition, planning and build processes and
work closely with planning authorities and
other statutory bodies to manage and mitigate
these risks.
The government’s ‘Future Homes Standard’
will be introduced by 2025. To plan for and
manage the transition to low carbon homes, a
low carbon homes working group (consisting
of members from across the Group’s
various disciplines) has been established.
The Group engages proactively with the
housebuilding industry and the government to
develop industry wide solutions to meet the
requirements of the Future Homes Standard.
We continually seek to strengthen our supply
chain, for example, our off-site manufacturing
facilities provide us with greater assurance of
quality and supply, and use modern methods
of construction and technology to assist the
mitigation of climate change related risks.
The Group Procurement team maintain
strong links with our suppliers delivering
value through our supply chain by regular
engagement and robust tendering processes.
See page 62
Developments in 2021
The likelihood assessment of this risk
has increased compared to the prior year
as increasing awareness and desire for
action, in part following COP26, is likely to
result in a more urgent transition to a lower
carbon economy.
Within the year, the Group has set science
based carbon reduction targets, in line with the
Paris Agreement, which were fully accredited
by the Science Based Targets Initiative.
We have set ambitious ‘net zero’ targets,
aiming to deliver ‘net zero’ homes in use to our
customers by 2030 and become ‘net zero’ in
our operations by 2040.
The Group has already made good progress
on its carbon reduction roadmap with a
number of projects to research the most
effective method of delivering a ‘net zero’
home in use and engaging a third party expert
to measure the embodied carbon of our
homes. Our homes are already significantly
more energy efficient than existing housing
stock and our pathway to ‘net zero’ homes in
use by 2030 has clear interim milestones.
Operationally, the Group has introduced
electric vehicle options into its fleet, is now
purchasing 100% renewable energy for
its offices and manufacturing facilities and
continues to investigate methods of reducing
the Group’s red diesel consumption and
increasing the use of alternative fuels.
See page 42
Developments in 2021
Sustained growth in UK housebuilding
activities, and supply chain disruption caused
by a combination of the Covid-19 pandemic
and issues associated with the UK’s exit from
the EU, has increased pressure on the supply
chain. This has resulted in increased lead times
and inflationary pressures in some materials.
These pressures have been reflected in an
increased overall risk rating. However, the
Group continues to benefit from its vertical
integration through our Brickworks, Tileworks
and Space4 manufacturing facilities, and
the current positive sales pricing conditions
continue to mitigate effects of cost inflation.
In respect of land, we have maintained
our well-established disciplined approach
to replacement whilst continuing to take
advantage of exciting opportunities in the
market. During the year, our land replacement
has exceeded current consumption.
Strategic report Governance Financial statements Other information
59
Risk description
Damage to the Group’s reputation could
adversely affect its ability to deliver its
strategic objectives.
If governance, build quality, customer
experiences, operational performance,
management of health and safety or local
planning concerns fall short of our usual
high standards, this may result in damage
to customer, commercial and investor
relationships and have a detrimental impact on
financial performance.
Approach to risk mitigation
Management Supervision
The Group is committed to ensuring an
appropriate culture and maintaining the high
quality of its operations. This is subject to
oversight from the Board.
Build quality and re-enforcing trust in the brand
are key priorities for the Group (see page 21).
Significant investment has been made in these
areas, for example through the Persimmon
Way, including expanding the Group’s team
of IQCs and addressing the Group’s legacy
quality issues.
Senior appointments have been made
at Group level to promote and enforce
compliance with policies and procedures as
well as to provide the Board with assurance on
their effective implementation.
Stakeholder Relationships
We take actions to maintain positive
relationships with all of our stakeholders to
minimise the risks of reputational damage
and aim to comply with best practice in
corporate governance.
We actively support local communities
in addressing housing needs, in creating
attractive neighbourhoods and employing
local people, both on our sites and in the
supply chain. Significant contributions
are made to local infrastructure and good
causes within the communities in which the
Group operates.
Developments in 2021
Stakeholder relationships
The Persimmon Way, our end-to-end
consolidated construction process, is now in
operation across the business, and supporting
our desire to build right, first time, every time.
Persimmon formally commenced the
registration process for the New Homes
Quality Code (NHQC) on 14 January 2022,
one of the first housebuilders to do so.
We welcome the introduction of the NHQC,
which aims to drive up quality and customer
service across the industry together
with the appointment of a New Homes
Ombudsman Service.
The Group continues to invest in its
people and processes, driving operational
improvements. These enhancements reduce
the probability of operational issues and
the consequent reputational damage they
can cause.
10
Regulatory compliance
Residual risk rating: Medium
Risk trend assessment
Overall: No change
Impact: No change
Likelihood: Increase
Link to strategic objective
Risk description
The housebuilding industry is subject to
extensive and complex laws and regulations,
particularly in areas such as land acquisition,
planning, building regulations and the
environment. Ensuring compliance in these
areas can result in delays in securing the land
required for development and in construction.
Any failure to comply with regulations could
result in damage to the Group’s reputation and
potential imposition of financial penalties.
Approach to risk mitigation
Comprehensive management systems are
in place to ensure regulatory and legal
compliance, including a suite of policies and
procedures covering key areas of legislation
and regulation. Additional oversight is in
place through the Group-level functions and
cross-functional steering groups for key areas,
such as GDPR compliance. Where these
systems identify inconsistencies in adherence
to agreed processes, corrective actions are
swiftly taken.
We engage extensively with planning
authorities and other stakeholders to
reduce the likelihood and impact of any
delays or disruption. In respect of land,
the Group controls sufficient holdings to
provide security of supply for medium
term trading requirements. Our land needs
and potential acquisitions are subject to
extensive due diligence to manage planning
risks and uncertainties and maintain an
effective pipeline.
Developments in 2021
The assessment of the likelihood of this risk
has increased within the year. This reflects
the continuing increase in the volume and
complexity of regulatory requirements, and
the financial and reputation risks associated
with any failures to manage regulatory
compliance effectively.
Key regulatory areas of focus within the
year have included planning conditions,
with the Group, in common with the wider
industry, continuing to experience delays to
outlet openings due to the delays within the
planning system.
Persimmon formally commenced the
registration process for the NHQC on
14 January 2022. The aims of the Code and
its supporting process are consistent with the
Group’s own focus on further improving build
quality and customer service standards.
9
Reputation
Residual risk rating: Medium
Risk trend assessment
Overall: No change
Impact: Increase
Likelihood: No change
Link to strategic objective
Our principal risks
Our principal risks and material issues continued
Persimmon Plc | Annual Report | December 2021
60
11
Cyber and data risk
Residual risk rating: Medium
Risk trend assessment
Overall: No change
Impact: No change
Likelihood: No change
Link to strategic objective
Risk description
The Group relies on its IT systems being
consistently available and secure. Failure of
any of the Group’s core IT systems, particularly
those in relation to customer information and
customer service could result in significant
financial costs, reputational damage and
business disruption.
Approach to risk mitigation
The Group operates centrally maintained IT
systems with a fully tested disaster recovery
programme. All infrastructure is highly resilient,
with geographically diverse datacentres and a
series of backup arrangements.
The Group maintains dedicated cyber security
resource to manage and oversee security
controls, benchmarked to external sources
of good practice such as the NCSC’s ‘Ten
Steps to Cyber Security’. Periodic penetration
testing is carried out through external security
partners to test the security of our perimeter
network. In the event of an incident, the Group
has a defined Cyber Incident Response Plan.
Training and regular communications are
delivered to all users to increase awareness
of cyber-risks, with particular focus on risks
associated with remote and hybrid working.
Developments in 2021
Within the year, the assessment of the risk
impact and likelihood remain unchanged.
However, cyber and data risks continue to
be an area of growing focus for the Group,
reflecting the increase in the use of technology
in supporting the Group’s operations.
The Group has continued to strengthen its
mitigation measures in respect of cyber risk,
under the supervision of the Information
Security Steering Group (ISSG) and through
the work of the Group IT department.
To develop controls further, an externally led
review of the Group’s cyber security measures
has been commissioned. This will build on
an earlier assessment by the same external
partner in 2020, and will ensure the Group’s
approach to cyber risk remains appropriate
and reflects best practice.
12
Mortgage availability
Residual risk rating: High
Risk trend assessment
Overall: No change
Impact: Decrease
Likelihood: Increase
Link to strategic objective
Risk description
Reduced availability or affordability of
mortgages for customers could reduce
demand for new homes and affect sales prices,
revenues, profits, cash flows, and asset values.
Approach to risk mitigation
We monitor Bank of England commentary
on credit conditions including the monthly
approvals for house purchases, reports from
UK Finance, and lenders’ announcements
for trends in lending. We ensure that our
investment in land and work in progress is
appropriate for our level of sales and our
expectations of the current market conditions.
The government’s Help to Buy scheme, which
is scheduled to remain in place until 2023,
supports customers to gain access to the
housing market across the UK with competitive
mortgage rates.
Developments in 2021
The fundamentals of the UK housing market
remain strong, with robust consumer demand
and confidence. We continue to see good
levels of mortgage availability and continued
low interest rates, encouraging affordability for
new homes.
Strategic report Governance Financial statements Other information
61
Climate related financial disclosures
TASK FORCE ON CLIMATE RELATED
FINANCIAL DISCLOSURES (TCFD)
The Board recognises the global climate emergency and the risks
and opportunities posed by climate change to the Group’s business
model and strategy.
Climate change was introduced as a
principal risk for the Group in its 2018
Annual Report and Accounts and this
year the Group has reported climate-
related disclosures consistent with the
TCFD Recommendations and Supporting
Recommended Disclosures, and will
continue to mature its level of reporting
in accordance with the requirements.
The focus, this year, has been on refining the
understanding of impacts under different
climate change scenarios.
The Group has set ambitious climate
reduction targets to achieve net zero carbon
homes in use for 2030 and net zero carbon
in our operations by 2040. These are
supported by science based targets for
carbon emissions reductions which were
validated by the Science-Based Target
Initiative (SBTi) in August 2021.
Governance
Climate change is considered as a principal
risk for the Group and as such, it is governed
and managed in line with the Group’s risk
management framework. (See page 54
forfurther details).
The Board has overall responsibility for the
management of risks and opportunities
arising from climate change, and on an
annual basis undertakes a company
wide review which includes climate risk.
In particular the Board has taken an
active role in understanding the impacts
of future legislation with a focus this year
on readiness for changes to Part L of
the Building Regulations and the Future
Homes Standard.
The Sustainability Committee (SC)
supportsthe Board’s climate responsibility,
and oversees the Group’s climate change
strategy, to ensure climate issues are being
effectively considered and managed, and
reports its findings and recommendations
to the Board. During 2021, for example,
the Committee reviewed the Group’s fleet
of fork lift trucks and assessed efficiency
options and technology change to reduce
carbon emissions.
The Committee also led on the setting of
the Group’s science based targets, and
tracks performance. The Committee met 6
times and was comprised of the Group Chief
Executive Officer (Chair), Group Strategy and
Regulatory Director, Group Sustainability
Manager andCompany Secretary.
Under the remit of the Sustainability
Committee, three Steering Groups have
been established – comprising the Zero
Carbon Homes Steering Group, Supply
Chain Emissions Steering Group, and
Operational Emissions Steering Group – to
ensure climate related issues are effectively
considered and built into business plans.
The main area of focus this year has been
developing the Part L and Future Homes
Standard readiness and option roadmaps,
and work will continue next year engaging
the supply chain on embodied carbon,
and reducing the Group’s operational
carbon footprint.
The Group Sustainability Director and
Group Strategy and Regulatory Director
are responsible for updating the climate
risks within the Group risk register, and
consult with key Group functions to ensure
comprehensive coverage of potential
impacts and mitigation plans. The findings
are taken to the Sustainability Committee
and communicated to the Steering Groups
for action.
The Regional Managing Directors are
responsible for ensuring all environmental
surveys including flood risk assessments
are undertaken prior to acquisition, with final
approval going to the Land Committee who
oversee all acquisitions.
Persimmon Plc | Annual Report | December 2021
62
Strategy
Our strategy sets out our pathway to net zero carbon for our homes in use by 2030,
andfor operations to be net zero carbon, including our manufacturing facilities, by 2040.
In supporting delivery of these targets we have established science based emission
reduction targets of 46% for our Scope 1 & 2 absolute emissions and a target of 22%
reduction per m
2
completed floor area of Scope 3 emissions by 2030. The Science
Based Target Initiative (SBTi) approved our targets in August this year. These targets are
an ambitious step forwards in our approach to climate action and have been calculated
to ensure that we play our part in limiting global warming to 1.5 degrees above pre-
industrial levels.
We have defined four strategic focus areas to achieve our ambitions:
Create Low Carbon Homes
• Reduce energy demand: design homes to be more energy efficient
• Readiness plans are in place for Part L of the Buildings regulations and Future
Home Standards
• Understand performance and customer experience: gather 12 months real life
in-use data from our low carbon home at Germany Beck, York
• Innovation: continue to instigate technology trials to be at the forefront of innovation,
build strategic relationships with supply chain and continue to invest in our off-site
manufacturing facilities
Deliver Low Carbon Site Operations
• Reduce our use of diesel at sites through driver training, low carbon fuels
• Trial electric and hybrid plant when available
• Set standards and benchmarks for energy reduction and management on-site
Reduce Embodied Carbon
• Assess embodied carbon to identify high impact materials and services
• Evaluate the benefits from our vertical supply chain and maximise opportunities
through design
• Supply chain: communicate our strategy to our suppliers, and work with our supply
chain to reduce embodied carbon in materials
Ensure Climate Change Resilience
• Climate risk management: scenario plan our strategic land holdings, future
acquisitions for climate resilience and mitigation
• Design: design in climate risk measures to mitigate risks, such as window sizing,
orientations, modern methods of construction
• Nature based solutions: utilise blue and green infrastructure to mitigate against
extreme weather events such as flooding, droughts
Climate scenario analysis
In last year’s report we identified high
level climate change related risks and
opportunities over the short, medium and
long term that are considered to have a
potentially material financial impact on the
Group strategy and business model.
This year we have further developed
this understanding and commissioned
a specialist consultancy to develop
climate scenarios to provide a more
developed framework from which to
evaluate our business strategy and
embedclimate resilience.
In accordance with best practice and
TCFDrecommendations, contrasting
science based scenarios have been
developed to enable consideration of
exposure to both physical and transition
risks. These scenarios have been
considered over 3 different time horizons:
• short term (to 2025); medium term
(to2030) and long term 2040+.
These timescales have been chosen as the
most relevant to the business, reflecting
major future legislative change in 2025
with the introduction of the Future Homes
Standard, and aligning with the Group’s
net zero carbon and science based
target commitments.
Net zero carbon world 1.5°C
• Assumes climate policies and controls
are introduced early and become more
stringent over a relatively short timeframe
(2030). High transition risk in the short
term, and very aggressive mitigation
measures, but as a result physical
risks are less severe compared to the
2C scenario.
Paris consistent scenario ~2°C
• Relatively high transition risk in the
short term, associated with aggressive
mitigation actions to reduce emissions.
As a result physical risks are less severe
compared to the 4C scenario.
Hot house world ~4°C
• Low transition risk in the short and long
term as the world fails to transition to a low
carbon economy. Consequently, physical
risks become increasingly frequent
and severe in the long term, resulting in
serious impact on the global economy,
theenvironment and human wellbeing.
Strategic report Governance Financial statements Other information
63
Climate related financial disclosures
Task force on climate related disclosures (TCFD) continued
Summary Description
of Transition Risks
Potential
Impact Ranking
Time-frame
ofimpact
Business
Readiness
Policy & Legal Drivers
Pricing of
GHG emissions
Carbon pricing could manifest as a range of environmental, planning or
sectorwide taxes. Under the 1.5
o
C scenario, pricing of GHG emissions could
be $155-$454 per tonne by 2030, and $54-$97 per tonne under the 2
o
C.
Carbon pricing could be felt through the supply chain and material costs.
High Short Review in 2022
Increasing national
regulation relating
to more stringent
environmental
standards
Increasing stringency of building, planning regulations and design requirements
to enable UK Gov to meet its 2050 Net Zero Carbon Target; inc Part L Building
Regulations; Future Homes Standard, National Policy Planning Framework, and
National Model Design Code. Many local authorities have declared their own
climate emergencies, and the planning system will be a key vehicle for delivery.
This could impact our development and growth plans, and increase build costs.
High Short In plan
Climate Change
Litigation
Climate related litigation claims may be bought by investors, insurers,
shareholders and public interest organisations. Reasons could include
failuretoadapt to climate change causing harm, greenwashing.
Low Medium Include in
future plan
Enhanced Reporting
Obligations
Additional emissions related reporting requirements likely in the UK by 2030.
This could include needing a materials passport in order to increase the
circularity of building supply chains, and updates to the Streamlined Energy
andCarbon Reporting (SECR) regulations. Scope 3 emissions reporting
couldalso become mandatory.
Low Short –
Medium
Include in
future plan
Technology Shifts
EV Use
To achieve the UK Government's Net zero carbon commitment by 2050, there
will be an increasing number of electric vehicles. Sufficient charging points
andgrid capacity will be required, which will have an impact on build costs.
High Short In plan
Substitution
of technology
Risk of installing technologies at the beginning of a planning process that
then become obsolete or outdated. Could affect customer satisfaction and
sales. This is especially at the point of the implementation of the Future
Homes Standard.
Medium Short Under
evaluation
Market
Change in
Customer Demands
There is a risk, if energy prices increase, property buyers will want lower carbon
homes, and expect greater energy operational efficiency. Inefficient properties
could also fall in value which could impact the market.
High Short Under
continuous
monitoring
Supply chain resilience
and increasing cost of
rawmaterials
Sourcing and availability of materials could be impacted by both transition and
physical risks. There is a risk of increasing development costs, due to supply
and demand, and likely carbon pricing on key materials such as glass, cement
and insulation.
High Short –
Medium
Under
evaluation
Cost of Capital
As credit ratings begin to incorporate climate change considerations,
thereisarisk of downgrading and the cost of capital increasing.
Low Medium In plan
Low carbon
technology availability
Rapid uptake of low carbon technologies such as air source heat pumps
couldcause market shortages and delay delivery of homes.
High Short Under
evaluation
Skill shortage impacting
ability to install low
carbon technology
In order to reduce emissions to comply with planning requirements, access
to different skills such as renewable specialists and heat pump installers, will
be required. A shortage could lead to delayed delivery and an increase in
build costs.
High Short Under
evaluation
Reputation
Investment Risk
Risk to revenue and investment streams as clients and investors increasingly
expect high levels of sustainability performance.
Medium Medium In plan
Stakeholder Risk
Over the next decade social pressure regarding sustainability and increased
public awareness could create a reputational risk if there is failure to reduce
bothoperational and embodied carbon. The impact of this could be seen
through delays in the planning process as Local Authorities enact their own
climate action requirements.
Medium –
High
Short –
Medium
In plan
Employee Risk
As employees are becoming increasingly concerned with climate change
issues, negative publicity around failure to deliver targets could make it
difficultto attract and retain talent.
Medium Short –
Medium
Review in 2022
over which the impact would occur,
and against the Group’s current state of
preparedness. This approach enables
aprioritisation of actions and evaluations
going forwards.
The Group already has a number of
mitigation plans in place (see page 66), and
this process has enabled further climate
resilience activities to be identified, and
which will be included in mitigation plans
and opportunities.
In line with the recommendations of
TCFD,four typical categories of climate-
related driving forces that a business
shouldconsider were evaluated against
the3 defined scenarios;
• policy and legal drivers
• technology shifts,
• markets and reputation, and
• physical risks
The outputs from the climate scenario
analysis have been ranked (high, medium,
low) against each other for their potential
impact, against the most likely timescale
Output from the climate scenario
analysis for transition risk
The transition risks are anticipated to occur
in a relatively short timeframe compared
to physical risks, and this is already being
seen with increasing legislation on energy
efficiency in homes coming into force,
with the changes to Part L of the building
regulation and the Future Homes Standard
for example. This will drive changes in
technology, customer expectations and the
Group is already evaluating alternatives,
trialling innovative technologies and
engaging with suppliers.
Persimmon Plc | Annual Report | December 2021
64
Output from climate scenario analysis for physical risk
Whilst physical risks under the scenario modelling manifest over a longer time period, there is already an increasing occurrence being
observed of more extreme weather events that are attributed to current climate change. These are typically observed as such as more
excessive snow falls, rainfall, unusually high temperatures, and unseasonal weather patterns. The table below ranks the potential impacts,
timescale and readiness based on those that will manifest more significantly in the future. Whilst physical risk is seen as a long term risk,
anumber have been highlighted for a strategic review in 2022 as part of long term business planning.
Summary Description
of Physical Risks
Potential
Impact Ranking
Time-frame
ofimpact
Business
Readiness
Heat Stress
Hot summers are expected to become more common with more extreme
temperatures. Under the Hot House Scenario, heatwaves could last 20 days.
This will affect comfort for customers and therefore design criteria will need
to be applied to avoid overheating. Construction site conditions and working
practices will need to ensure worker health safety and wellbeing. Heat island
effects will also become more prevalent in urban and built up areas.
High Medium –
Long
Review in 2022
Drought stress
Summers will become drier, with the south of the UK predicted to experience
2.5 – 3.5 months of drought under the Hot House Scenario. Locally this will
impact water suppliers, and will become part of planning considerations
High Medium –
Long
Review in 2022
Precipitation
Greater chance of more rainfall in the winter and less in the summer.
Seasonal and regional differences. Impact on site construction activities,
customer gardens and supply chain.
High Medium –
Long
Review in 2022
Flood
High underlying flood risk in the present day. Under the Hot House scenario
there is a 21%-56% increase in river peak flow rates, and the probability of
flooding in a year could increase 3 to 10 times. Already a key requirement in the
planning process. Increased number of flood plains in the future may impact
build costs and / or land availability.
High Medium In plan
Windstorms
Classed as medium to high risk in all scenarios, but with greater severity under
the Hot House scenario. Predicted to decrease in the south but increase in the
Midlands, North, Wales and Scotland.
Medium Medium In plan
Sea Level Rise
Expected between 0.2 m – 0.6m under the Net Zero scenario and up to 1.1m in
the Hot House. This will have an impact on coastal locations.
Low Long Include in
future plan
Subsidence
Medium level risk of possible ground instability and building foundation issues.
Regions around London most exposed. In the Hot House scenario there is a
higher risk and greater area of impact in the south of England.
Medium Long Include in
future plan
Infrastructure
The stress on water and energy utilities together with road transportation will
increase. In the Hot House scenario there is the expectation of disruptions
to critical services. This could impact supply chains, and result in production
down times.
Medium Long Include in
future plan
Strategic report Governance Financial statements Other information
65
Climate related financial disclosures
Task force on climate related disclosures (TCFD) continued
Resilience of the Groups Business
Strategy & Business Model
The Group already has in place a number
of climate change mitigation strategies
and identified opportunities as part of its
business model:
Transition risk mitigations
andopportunities
• The Group has core house types
used across its national network of
development sites which helps ensure
that any new regulatory requirements can
be effectively and consistently applied
across the Group.
• The Group delivers more energy efficient
homes than the second hand property
market with homes that are increasingly
energy efficient, thereby attracting a
strong customer base.
• The Group has developed its strategy for
delivering to the new Part L regulations
coming into force in June 2022 requiring
new build homes to produce 31% less
carbon emissions compared to current
standards. Homes will have improved
insulation, improved ventilation, more
efficient boilers and some may have solar
panels to achieve this improved efficiency.
The Future Home Standard (FHS) in 2025
will require homes to produce 75%-80%
less carbon emissions and will remove
gas fired systems. This will require a
switch to alternative heating systems
such as air source heat pumps, higher
levels of insulation and air tightness,
and additional energy recovery or
generation technologies.
• The Group has a number of pilot projects
to assess the most effective method of
achieving the Future Homes Standard.
The pilot projects are being used to:
trial new technologies such as infra-red
heating; to assess the most effective
build methods of achieving the improved
efficiency required using a ‘fabric first’
approach; and, to gain feedback from
customers on the ‘liveability’ of the homes.
• The improved efficiency of new homes
is also a significant opportunity for the
Group as we develop homes which will
have a lower impact on the environment
and provide a competitive advantage to
the second hand housing market.
• In designing our developments particular
attention is paid to all issues that
surround the policy transition necessary
to achieve new more stringent climate
and environmental policy requirements.
In order to deal proactively with local and
site specific interpretation/application the
Group has developed Design and Access
Statement templates aligned with the
National Model Design Code.
• The Group’s business model includes
vertical integration – The Group owns
its own timber frame, wall panel and
roof cassette manufacturing facilities.
These modern methods of construction
are considered likely to assist in building
low carbon homes.
• The diverse and high quality land holdings
supports the Group’s strong network
of outlets and ensures the Group is
well positioned to invest in land at the
right time in the cycle. The strong gross
margins embedded in the Group’s
existing land holdings help to absorb
potential volatility caused by increasing
building costs.
• The Group’s significant ongoing
investment in training ensures that it
maintains an appropriate skills base to
manage changes to operations and
processes required by climate change
mitigation requirements.
Physical Risk response
The Group undertakes comprehensive
environmental and flood risk assessments
for each potential land acquisitions that
it makes. (See pages 39 and 62 for more
detail). Planning requirements principally
influence the requirements for any flood
mitigation, drainage requirements, and there
is increasing consideration for use of blue
and green infrastructure, which will also
provide additional sustainability benefits
such as enhancing biodiversity.
Priorities for 2022
The detailed climate scenario analysis
has identified key areas of focus for
2022 shown in the tables on pages 64
to 65, and the Group will undertake
the reviews, and embed the outcomes
into business strategy and delivery to
ensure continuing climate risk control
and opportunities are maximised.
The Group is mindful of the rapidly
changing sustainability agenda and
stakeholders growing interests in
climate risk, and will ensure that those
potential risks that have been identified
as already “in plan” in the business,
are on track and remain appropriate.
The Group will continue to mature its
level of reporting in accordance with
the TCFD Recommendations and
Supporting Recommended Disclosures,
and further analyse and consider the
potential financial impacts.
Persimmon Plc | Annual Report | December 2021
66
Risk management
As a principal risk for the Group, climate
risk is governed and managed in line with
the Group’s risk management framework
see page54. The framework requires
identification of the risk, evaluation of
the potential impact, the consequences,
allocation of the risk owner, probability
assessment, description of controls and
controls owner, and finally an evaluation of
any residual risks. The Group’s identification
and assessment of risks is managed by
the Risk Committee, with the Board taking
ultimate responsibility for Risk Management.
The climate risks, their potential
consequences and their current impact on
the Group’s business model, are identified
and reviewed by the Group’s executive
team, senior members of the Group Finance
team, Group Sustainability Director, and
Group Internal Audit Manager.
A wide range
of insights and resources are used to ensure
climate related impacts are effectively
tracked and considered to include; climate
insights & trends, emerging legislation
and government policies, consultations,
local authorities positions, and industry
body resources.
The climate risk register is reviewed and
updated, as required, on at least an annual
basis. It is arranged into transitional risks
and physical risks. As risks, are identified,
the Group considers whether the business’s
strategy and business model already
manages/mitigates the relevant risk.
If any gaps are identified, then in accordance
with the Risk Framework, the Group
establishes the appropriate response.
The climate scenario analysis has provided
detailed assessment of transition and
physical risks against three time horizons.
This has provided greater depth of
understanding, and enabled prioritisation of
climate related risks, and through 2022 the
Group will be embedding the findings into its
climate risk and opportunities management.
Metrics
The Group monitors emissions from its own
operations, which have been measured
in accordance with the GHG Protocol
Corporate Accounting and Reporting
Standard (Revised Addition). Detailed GHG
emissions information is located on page 43
in accordance with the requirements of the
Streamlines Energy and Carbon Reporting
requirements, and disclosures are for Scope
1, 2 and an emerging level of information for
Scope3 (supply chain products & services,
andhomes in use).
The Group is committed to playing its
part in the international effort to reduce
greenhouse gas emissions by reducing
its own emissions across the business’s
operations, and also the supply chain and
from the homes we sell.
As such, The Group has set an ambitious
target to be:
• Net zero carbon in our homes in use
by2030 and
• Net zero carbon in our own operations
by 2040.
This commitment is supported by interim
science based carbon reduction targets
to reduce our operational emissions
(Scope1&2) by an absolute of 46.2%
(vs2019 baseline) and our indirect emissions
(Scope 3) from our supply chain and homes
in use, by 22% per m
2
completed floor area
by 2030. These reductions will be achieved
through wider supply chain engagement,
product innovation as well as changes to
current operational processes.
In 2022, 5% of the Executive Annual Bonus
will be an environmental target focused
on steps taken to support achievement of
our Scope 1 and 2 science based targets
(see page 126). The Board believes in the
importance of ESG and cultural metrics
and this is reflected in the use of customer
care and quality in both the annual bonus
and PSP but at this time recognises that
further analysis of more robustly calibrated
meaningful metrics, linked to the Group’s
sustainability approach, is needed before
meaningful long-term targets can be set (see
page 111). The Remuneration Committee aims
to incorporate specific environmental targets
in the 2023 PSP award.
CLIMATE CHANGE RISK
AND OPPORTUNITIES
Time Period Target Metrics
Short Term
(2022 – 2025)
Continue to embed climate risk and opportunity analysis into the business strategy and operations Qualitative
Reduce our operational footprint (Scope 1 & 2) % reduction in diesel fuel use
% energy efficiency
Maintain 100% carbon neutral electricity purchased – green/REGO backed Zero CO
2
from Scope 2 sources
Undertake embodied carbon assessments, set reduction targets Tonne CO
2
/m
2
completed floor area
Supply chain engagement on embodied carbon Action plans in place to
reduce carbon content of top
CO
2
contributors
Medium Term
(to 2030)
Homes to be net zero carbon in use by 2030 SAP calculation
Reduce absolute Scope 1 & 2 GHG emissions by 46% by 2030 (2019 baseline) Transition pathway – tonnes/CO
2
against a 2019 baseline
Reduce Scope 3 Purchased goods and services, and use of sold products by 22% per m
2
completed floor area
Tonnes/CO
2
/m
2
completed floor
area against a 2019 baseline over
their lifetime
Longer term
(to 2040)
Net zero carbon emissions in our own operations (Scope 1 & 2) by 2040 % zero carbon
% carbon offsets
Strategic report Governance Financial statements Other information
67
Persimmon’s prospects
and viability
The long-term prospects and viability of
the business are a consistent focus of the
Board when determining and monitoring
theGroup’s strategy. The identification
and mitigation of the principalrisks facing
the business, which have been updated
toreflect current UK economic conditions and
uncertainties (including the ongoing impacts
of the Covid-19 pandemic and theUK’s exit
from the European Union), also form part
of the Board’sassessment of long-term
prospects and viability*.
Assessing Persimmon’s
long-termprospects
Persimmon has built a strong position in the
UK’s house building market over many years,
recognising the potential for long-term growth
across regional housing markets. The Board
recognises that the long-term demographic
fundamentals of continued positive
population growth and new household
formation, together with the requirement
to replace and improve the quality of the
country’s housing stock, provide a long-
term supportive backdrop for the industry.
However, the Board and the Group’s strategy
recognises the inherent cyclical nature of the
UK housing market. The Group has therefore
been able to maintain a position of strength
with good liquidity, high quality land holdings
and a strong balance sheet throughout
the disruption of the Covid-19 pandemic.
The future impacts of the pandemic, and
other factors creating uncertainty within the
UK economy and the Group’s sales and
construction programmes, remain uncertain.
The Board has considered thesepotential
impacts in depth when assessing the long-
term prospects of the Group.
Whilst this uncertainty remains, Persimmon
possesses the soundfundamentals required
to realise the Group’s purpose andambitions
and deliver sustainable success:
• talented teams focused on consistently
delivering good quality homes for
our customers,
• high quality land holdings that allow us to
create attractive placesin areas where
people wish to live and work,
• strong customer and local
community relationships,
• continued investment in the training and
development of our teams,
• market knowledge, expertise and industry
know-how; and,
• long-term healthy supplier engagement.
By continuing to build on these solid
foundations through, for example,
the Persimmon Way and our ongoing
investments in the customer experience, the
Group aims to help create sustainable and
inclusive communities through continued
investment in its people, its land, and its
development sites and in its supply chain,
creating enduring value for the communities
we serve. The Group’s materiality assessment
(see page 55), ensures that athorough review
of stakeholder interests are incorporated
within the assessment of the Group’s long-
term prospects.
The Group adopts a disciplined annual
business planning regime, which is
consistently applied and involves the
management teams of the Group’s 31 house
building businesses and senior management,
with input and oversight by the Board.
The Group combines detailed five-year
business plans generated by each house
building business from the “bottom up”, with
ten year projections constructed from the
“top down” to properly inform the Group’s
business planning over these longer term
horizons. Zero-based annual budgets are
established for each business twice a year.
This planning process provides a valuable
platform, which facilitates the Board’s
assessment of the Group’s short and long-
term prospects. Consideration of the Group’s
purpose, current market position, its strategic
objectives and business model, andthe risks
that may challenge them are all included in
the Board’s assessment of the prospects of
the Group.
Key Factors in assessing the long-
term prospects ofthe Group:
1. The Group’s current market positioning
• Strong sales network from active
developments across the UK
providing geographic diversification
ofrevenue generation
• Three distinct brands providing diversified
products and pricing deliver further
diversification of sales
Viability statement
• Imaginative and comprehensive master
planning of developmentschemes with
high amenity value to support sustainable,
inclusive neighbourhoods which generate
long-termvalue to the community
• Disciplined land replacement reflecting
the extent and location ofhousing needs
across the UK provides a high quality land
bank in the most sustainable locations
supporting future operations
• Long-term supplier and subcontractor
relationships providing healthy and
sustainable supply chains
• Sustained investment to support higher
levels of construction quality and customer
service through the implementation of
initiatives such as the Persimmon Way
• Strong financial position with considerable
cash reserves andwithadditional
substantial working capital credit facilities
maturing March 2026
2. Strategy and business model
• Strategy focuses on the risks associated
with the housing cycle and on
minimising financial risk and maintaining
financial flexibility
• Focusing on constructing new homes for
our customers to the high quality standards
that they expect and helping to create
attractive neighbourhoods
• Strategy recognises the Group’s ability
to generate surplus capital beyond the
reinvestment needs of the business
• Substantial investment in staff
engagement, training and support to
sustain operations over the long-term
• Approach to land investment and
development activity provides the
opportunity to successfully deliver much
needed new housing supply and create
value over the long-term
• Differentiation through vertical integration,
achieving security of supply of key
materials and complementary modern
methods of construction to support
sustainable growth
• Simple capital structure maintained with no
structural gearing
3. Principal risks associated with the Group’s
strategy andbusinessmodel include
• Disruption to the UK economy, including
the impacts arising from the Covid-19
pandemic and the UK’s exit from the EU,
adversely impacting demand for new
homes and construction programmes,
orcontributing to inflationary pressures
PERSIMMON’S PROSPECTS
AND VIABILITY
* The Directors have assessed the longer-term prospects of the Group in accordance with
Provision 31 of the UK Corporate Governance Code 2018.
Persimmon Plc | Annual Report | December 2021
68
• Changes in government policy affecting
the housebuilding sector, such as
withdrawal of the Help to Buy scheme,
and the recent government requirement
to pay a contribution to a fund to cover the
cost of fire safety remediation works
• Market impacts related to reduced
consumer confidence due toregional
economic uncertainties
• Reduction in mortgage funding availability
and/or affordability dueto reduced lender
risk appetite and/or regulatory change
• Response required to mitigate the impact
of climate change
• Team, skills and talent related risks
regarding retention and
change management
See pages 55 to 61 for the full list of principal
risks together with detailed descriptions.
Disciplined strategic
planning process
The prospects for the Group are principally
assessed through the annual strategic
planning review process conducted towards
the end of each year. The management team
from each of the Group’s house building
businesses produce a five-year business
plan with specific objectives and actions in
line with the Group’s strategy and business
model. These detailed plans reflect the
development skill base of the local teams,
the region’s housing market, strategic and
on market land holdings and investments
required to support their objectives.
Special attention is paid to construction
programmes and capital management
through the period to ensure the appropriate
level of investment is made at the appropriate
time to support delivery of the plan.
Emerging risks and opportunities in their
markets are also assessed at this local level.
Senior Group management review
these plans and balance the competing
requirements of each of the Group’s
businesses, allocating capital with the
aim of achieving the long-term strategic
objectives of the Group. The five-year plans
provide the context for setting the annual
budgets for each business for the start of
the new financial year in January, which are
consolidated to provide the Group’s detailed
budgets. These budgets are updated after
six months, for the following twelve months,
which are then replaced by the new strategic
planning and budget setting cycle. The Board
review and agree both the long-term plans
and the shorter-term budgets for the Group.
The outputs from the business planning
process are used to support development
construction planning, impairment reviews,
for funding projections, for reviews of the
Group’s liquidity and capital structure, and
identification of surplus capital available for
return to shareholders via the Group’s Capital
Return Programme, resulting in the payment
of dividends to shareholders.
Assessing Persimmon’s viability
The Directors have assessed the viability of
the Group over a five-year period, taking into
account the Group’s current position and the
potential impact of the principal risks facing
the Group.
The use of a five-year period for the purpose
of assessing the viability of the Group is
considered the most appropriate time
horizon, as it reflects the business model
of the Group, with new land investments
generally taking at least five years to build
and sell through, and for the development
infrastructure to be adopted by local
authorities. This is already in alignment with
anticipated evolutions in corporate reporting
from the BEIS consultation on ‘restoring trust
in audit and corporate governance’, such as
the resilience statement requirement.
A key feature of the Group’s strategy
documented in the Strategic Report is the
Group’s commitment to maintain capital
discipline over the long term through the
housing cycle. This commitment is reinforced
by the Group’s Capital Return Programme
(“CRP”). The CRP initially committed to return
£1.9bn of surplus capital over the following
ten financial years to 2021, or £6.20 per
share. The Group has exceeded this initial
commitment and has paid £13.00 per share,
or £4.1bn back to shareholders over this
period. On 2 March 2022, the Directors
announced the scheduled Capital Return
Programme payments in respect of the
financial year ended 31 December 2021, to
be paid in 2022. Further details can be found
on page 7.
On an annual basis, the Directors review
financial forecasts used for this Viability
Statement as explained in the disciplined
strategic planning processes outlined earlier.
These forecasts incorporate assumptions on
issues such as the timing of legal completions
of new homes sold, average selling prices
achieved, profitability, working capital
requirements and cash flows. They also
include the CRP. The Directors have made
the assumption that the Group’s revolving
credit facility is renewed during the period
having again extended the maturity of the
facility out to 31 March 2026.
The Directors have also carried out a robust
assessment of the principal and emerging
risks facing the Group (as set out on pages
54 to 61), and how the Group manages
those risks, including those risks that would
threaten its strategy, business model, future
operational and financial performance,
solvency and liquidity. This risk assessment
was also informed by the performance of the
Group’s materiality assessment, incorporating
views from the Group’s key stakeholders (see
further details on page 55).
The Directors have considered the impact of
these risks on the viability of the business by
performing a range of sensitivity analyses to
a Base Case, including severe but plausible
scenarios materialising together with the likely
effectiveness of mitigating actions that would
be executed by the Directors.
The scenarios emphasise the potential
impact of severe market disruption including,
for example, the ongoing effect of economic
disruption from the Covid-19 pandemic on
the short to medium term demand for new
homes. The scenarios’ emphasis on the
impact on the cash inflows of the Group
through reduced new home sales is designed
to allow the examination of the extreme cash
flow consequences of such circumstances
occurring. The Group’s cash flows are less
sensitive to supply side disruption given the
Group’s sustainable business model, flexible
operations, agile management team and off-
site manufacturing facilities.
In the first scenario modelled, the combined
impact is assumed to cause a 44% reduction
in volumes and a c.14% reduction in average
selling prices through to 2023. As a result of
these factors, the Group’s housing revenues
were assumed to fall by c.51% during this
period. The assumptions used in this scenario
reflect the experience management gained
during the Global Financial Crisis (‘GFC’) from
2007 to 2010, it being the worst recession
seen in the housing market since World War
Two. The scenario assumes a subsequent
recovery occurs over a similar extended
period as in the GFC.
A second, even more extreme, scenario
assumes a significant and enduring
depression of the UK economy and housing
market over the next five years causing
a reduction of c.45% in new home sales
volumes and a c.40% fall in average selling
prices through to 2023. As a result of these
factors, the Group’s housing revenues were
assumed to fall by c.67% during this period.
It assumes that neither volumes nor average
selling prices recover from this point through
to 2026.
In each of these scenarios, cash flows were
assumed to be managed consistently,
ensuring all relevant land, work in progress
and operational investments were made in
the business at the appropriate time to deliver
the projected new home legal completions.
The Directors assumed they would continue
to make well-judged decisions in respect of
capital return payments, ensuring that they
maintained financial flexibility throughout.
Based on this assessment, the Directors
confirm that they have reasonable
expectation that the Group will be able to
continue in operation and meet its liabilities
as they fall due over the period to the end of
31 December 2026.
Strategic report Governance Financial statements Other information
69
Section 172 statement
CULTURE AND ENGAGING
WITH OUR STAKEHOLDERS
The following disclosure describes how the directors have had regard to the
matters set out inSection172 (1) (a) to (f) oftheCompanies Act 2006 (“the Act”)
and forms the Directors’ statement required under Section 414CZA ofthe Act.
Stakeholder Why we engage? How do we engage? What did they tell us? How did the Board respond?
Customers
Relevant material issues:
• Build quality and safety
• Customer satisfaction
• Helping customers live
sustainably
• Social value/enhancing
communities
Engaging with our customers helps us to identify their
changing needs, set our strategy accordingly and
ensure that we continue to improve the delivery of
consistently good quality, sustainable homes and excellent
customer service.
Engaging with our housing association partners ensures
that we provide the appropriate range ofaffordable homes
tomeet the needs of localcommunities.
Maintaining positive relationships with our customers
minimises reputational risk for the Group and drives long
termdemand for our homes.
• We communicate with our customers in a number ofways:
through our sales teams, who are in regular contact with our
customers from the point of reserving their newhome to
moving in day, through our site staff who attend key release
meetings with our customers and through our customer
care teams, who support our customers oncethey have
moved into theirnew home.
• We have a comprehensive communication approachfor
each customer including: new home demonstrations,
courtesy calls, a seven day inspectionand a one month
home inspection.
• Participation in a national new homes survey runbythe
Home Builders Federation to obtain feedbackfrom our
customers.
• We engage with our housing association partners through
regular contact and meetings.
• Further detail on how we engage can be found onpages
26 to31
• We need to have consistency of construction quality and assurance.
• If there are any issues, customers want them to be resolved promptly.
• Customers want regular communication with us, particularlyregarding
the timing of their ‘move in’ date.
• The customer care service they receive needs to be efficientand
effective. Where a home appointment isnecessary,theseshould beat
times convenient for the customer.
• Customer service needs to continue after moving in dayandany
snagging works have been completed.
• Customers want to be connected to the internet as soon as possible
following their move in date.
• One of our key priorities is to ‘build right, first time, every time’ improving
customer satisfaction and mitigating the need for customer care visits.
If problems do occur, we aim to rectify them as quickly and efficiently as
possible.
• Continued to invest in and progress the Persimmon Way, our Groupwide
consolidated approach to new home construction whichis considered to
be a key driver to deliver consistent qualityacross our business.
• Continue to invest in our customer care resource, in digital technology
andin training.
• Increased resource for our Customer Experience function.
• The Board monitors FibreNest’s achievement of timely connections.
• For further details see pages 26 to 31.
Employees
Relevant material issues:
• Climate change action
and resilience
• Health and safety
• Talent, attraction,
development, diversity
and engagement
The Board aims to attract and retain a diverse and talented
workforce, believing this to be fundamental tothe long term
success of the business.
Rising UK house building activity in recent years has
increased demand for skilled labour. Retaining and investing
in skilled staff is therefore a key priority fortheGroup.
Engaging with our employees helps ensure they understand
and align with the Group’s strategy and desired culture.
• Through our Employee Engagement Panel, which meets
regularly throughout the year. Meetings are attended by the
Group’s designated Workforce Non-Executive Director.
• With the increase in home working, colleagues have been
encouraged to ‘keep in touch’ through training, online
meetings and calls.
• Through annual employee engagement surveys.
• Through our Health, Safety and Environment Department
and increased on line training procedures(see pages 36
and 41 for more detail).
• Further detail on how we engage can be found onpages
32and 37.
• Our 2021 engagement survey had a 78% employee engagement score.
• Recognition is important and employees want to feel valued and appreciated.
• Change communications could be clearer.
• The majority of our colleagues consider that we have handled the
pandemic well, but they would like further focus on employee well-being.
• Continued focus on training and development.
• Introduced the Construction Excellence Awards and expanded our Achiever
Awards to publicly recognise more people.
• Improved our internal communications strategy, increased group-wide
communications and increased the frequency of our online newsletter.
• Arranged Mental Health training for managers, recommunicated our
Employee Assistance Programme and increased the number of Mental
Health First Aiders.
• Appointed the Group’s first Director of Talent & Diversity to provide strategic
resource to the Group’s talent and succession planning activities.
• Continued to invest in the training and development of our workforce, including
expanded Persimmon Pathways, a graduate development programme and
a leadership development programme for Managing Directors.
Communities
Relevant material issues:
• Social value/enhancing
communities
Engaging with our local communities, throughout allphases
of a development, more accurately identifiestheir needs and
helps to address any issues they mayhave.
During this collaboration, we aim to address and minimise
the impact of our activities during the construction phase of
our developments through our‘Planning and Environmental
Risk Assessments’.
• Consultation throughout the planning and
developmentprocess to more accurately identifytheneeds
of local communities.
• Feedback from our local pre-launch marketingcampaigns.
• Regular engagement with local government.
• Being actively involved in the communities in which we
operate, through employing local people and supporting
local charities and community groups through the
Persimmon Charitable Foundation.
• Further detail on how we engage can be found onpages
46 and 47.
• Demand for homes in communities with high amenity value is strong.
• Local infrastructure investment is important in improving
communityenvironments.
• Be an active part of the community through supporting localcharities
andcommunity groups.
• Be positive and responsive to the views of local people.
• Leaseholders have been concerned with fire safety issues.
• Continued investment in skilled land, planning and designteamstoprovide
communities with the range of well-designed affordable homes that best suit
the needs of their local communities(see page 38).
• Signed the Covid-19 business pledge supporting colleagues,customers and
communities through the pandemic.
• The Group made a commitment to protect leaseholders from having to pay
towards cladding removal or fire related safety issues on buildings the Group
constructed.
• Continued to support the Persimmon Charitable Foundation’s Community
Champions and BuildingFuturesCampaigns (see page 46).
Persimmon Plc | Annual Report | December 2021
70
Stakeholder Why we engage? How do we engage? What did they tell us? How did the Board respond?
Customers
Relevant material issues:
• Build quality and safety
• Customer satisfaction
• Helping customers live
sustainably
• Social value/enhancing
communities
Engaging with our customers helps us to identify their
changing needs, set our strategy accordingly and
ensure that we continue to improve the delivery of
consistently good quality, sustainable homes and excellent
customer service.
Engaging with our housing association partners ensures
that we provide the appropriate range ofaffordable homes
tomeet the needs of localcommunities.
Maintaining positive relationships with our customers
minimises reputational risk for the Group and drives long
termdemand for our homes.
• We communicate with our customers in a number ofways:
through our sales teams, who are in regular contact with our
customers from the point of reserving their newhome to
moving in day, through our site staff who attend key release
meetings with our customers and through our customer
care teams, who support our customers oncethey have
moved into theirnew home.
• We have a comprehensive communication approachfor
each customer including: new home demonstrations,
courtesy calls, a seven day inspectionand a one month
home inspection.
• Participation in a national new homes survey runbythe
Home Builders Federation to obtain feedbackfrom our
customers.
• We engage with our housing association partners through
regular contact and meetings.
• Further detail on how we engage can be found onpages
26 to31
• We need to have consistency of construction quality and assurance.
• If there are any issues, customers want them to be resolved promptly.
• Customers want regular communication with us, particularlyregarding
the timing of their ‘move in’ date.
• The customer care service they receive needs to be efficientand
effective. Where a home appointment isnecessary,theseshould beat
times convenient for the customer.
• Customer service needs to continue after moving in dayandany
snagging works have been completed.
• Customers want to be connected to the internet as soon as possible
following their move in date.
• One of our key priorities is to ‘build right, first time, every time’ improving
customer satisfaction and mitigating the need for customer care visits.
If problems do occur, we aim to rectify them as quickly and efficiently as
possible.
• Continued to invest in and progress the Persimmon Way, our Groupwide
consolidated approach to new home construction whichis considered to
be a key driver to deliver consistent qualityacross our business.
• Continue to invest in our customer care resource, in digital technology
andin training.
• Increased resource for our Customer Experience function.
• The Board monitors FibreNest’s achievement of timely connections.
• For further details see pages 26 to 31.
Employees
Relevant material issues:
• Climate change action
and resilience
• Health and safety
• Talent, attraction,
development, diversity
and engagement
The Board aims to attract and retain a diverse and talented
workforce, believing this to be fundamental tothe long term
success of the business.
Rising UK house building activity in recent years has
increased demand for skilled labour. Retaining and investing
in skilled staff is therefore a key priority fortheGroup.
Engaging with our employees helps ensure they understand
and align with the Group’s strategy and desired culture.
• Through our Employee Engagement Panel, which meets
regularly throughout the year. Meetings are attended by the
Group’s designated Workforce Non-Executive Director.
• With the increase in home working, colleagues have been
encouraged to ‘keep in touch’ through training, online
meetings and calls.
• Through annual employee engagement surveys.
• Through our Health, Safety and Environment Department
and increased on line training procedures(see pages 36
and 41 for more detail).
• Further detail on how we engage can be found onpages
32and 37.
• Our 2021 engagement survey had a 78% employee engagement score.
• Recognition is important and employees want to feel valued and appreciated.
• Change communications could be clearer.
• The majority of our colleagues consider that we have handled the
pandemic well, but they would like further focus on employee well-being.
• Continued focus on training and development.
• Introduced the Construction Excellence Awards and expanded our Achiever
Awards to publicly recognise more people.
• Improved our internal communications strategy, increased group-wide
communications and increased the frequency of our online newsletter.
• Arranged Mental Health training for managers, recommunicated our
Employee Assistance Programme and increased the number of Mental
Health First Aiders.
• Appointed the Group’s first Director of Talent & Diversity to provide strategic
resource to the Group’s talent and succession planning activities.
• Continued to invest in the training and development of our workforce, including
expanded Persimmon Pathways, a graduate development programme and
a leadership development programme for Managing Directors.
Communities
Relevant material issues:
• Social value/enhancing
communities
Engaging with our local communities, throughout allphases
of a development, more accurately identifiestheir needs and
helps to address any issues they mayhave.
During this collaboration, we aim to address and minimise
the impact of our activities during the construction phase of
our developments through our‘Planning and Environmental
Risk Assessments’.
• Consultation throughout the planning and
developmentprocess to more accurately identifytheneeds
of local communities.
• Feedback from our local pre-launch marketingcampaigns.
• Regular engagement with local government.
• Being actively involved in the communities in which we
operate, through employing local people and supporting
local charities and community groups through the
Persimmon Charitable Foundation.
• Further detail on how we engage can be found onpages
46 and 47.
• Demand for homes in communities with high amenity value is strong.
• Local infrastructure investment is important in improving
communityenvironments.
• Be an active part of the community through supporting localcharities
andcommunity groups.
• Be positive and responsive to the views of local people.
• Leaseholders have been concerned with fire safety issues.
• Continued investment in skilled land, planning and designteamstoprovide
communities with the range of well-designed affordable homes that best suit
the needs of their local communities(see page 38).
• Signed the Covid-19 business pledge supporting colleagues,customers and
communities through the pandemic.
• The Group made a commitment to protect leaseholders from having to pay
towards cladding removal or fire related safety issues on buildings the Group
constructed.
• Continued to support the Persimmon Charitable Foundation’s Community
Champions and BuildingFuturesCampaigns (see page 46).
Strategic report Governance Financial statements Other information
71
Section 172 statement
Culture and engaging with our stakeholders continued
Stakeholder Why we engage? How do we engage? What did they tell us? How did the Board respond?
Suppliers and
subcontractors
Relevant material issues:
• Climate change action
and resilience
• Health and safety
• Social value/enhancing
communities
The Group benefits from robust and long
standingrelationships with many of its suppliers
andsubcontractors. This assists in securing the
qualityand supply of materials to deliver the Group’sbuild
programmes effectively.
We engage with them to ensure adherence to our stringent
health and safety standards and required standards of
ethical behaviour and integrity supported by the introduction
of Framework Agreements inclusive of Group Policies
Engagement with our suppliers assists us incontinuingto
improve the long-term sustainabilityofoursupply chain.
• Quarterly business reviews, regular, informal discussions
with our key suppliersthrough our Group Procurement
team,whoareresponsible for arranging andnegotiating
Group Framework Agreements and Service Level
Agreements to ensure all suppliers are compliant to
standard terms.
• Our local operating businesses’ buying and technicalteams
regularly engage with local suppliersand subcontractors.
• Our ‘Toolbox Talks’ ensure our subcontractors understand
and adhere to the health and safety standards required on
our sites.
• All Group suppliers sign up to the Group’s supplier
principles, equivalent Group Policies and key performance
indicators, which describe our requirements and
expectations.
• A member of Supply Chain Sustainability School which
encourages engagement across the supply chain
• Further detail on how we engage can be found onpage45.
• The Group works in partnership with its suppliers, to provide
material requirement forecasts to ensure continuity of supply
providingcontinuityand visibility of future work flows.
• Timely payment of invoices is important to them.
• They continue to monitor the impact of global supply chain and price
sensitive impacts to enable continued service delivery.
• They continue to monitor the impact of the UK’s
exitfromtheEUonsupply chains.
• Strengthened the Group procurement department with the appointment
of a Group Procurement Director and formation of a centralised Group
procurement team.
• Maintain a set of Supplier Principles and equivalent Group Policies which all
suppliers mustsignupto.
• We are a signatory to The Prompt Payment Code (PPC)
(see page45).
• Joined the Gangmasters and Labour Abuse Authority’s
ConstructionProtocol (see page 37).
• Partnership with Roof CERT.
• A review of specification to ensure we build right, first time, every time.
Shareholders
Relevant material issues:
• Climate change action
and resilience
• Health and safety
• Social value/enhancing
communities
• Talent, attraction,
development, diversity
and engagement
Access to capital is important to the long-term success
ofthe business.
Through our engagement we aim to create investor
buy-in of our core focus areas and how we executethem.
We create value for our investors by generating
surpluscapital beyond the reinvestment needs
ofthebusiness as the market cycle develops.
• Regular discussion with analysts and investors aspartofthe
Group’s reporting cycle.
• We hold institutional shareholder meetings and specific
consultations.
• Through shareholder roadshows.
• Obtain feedback from the Company’s brokers andmarket
analysts.
• Obtain feedback from shareholder groups.
• Enable shareholder participation in the Company’s Annual
General Meeting.
• Preference for a sustainable dividend.
• Fair pay for the whole workforce.
• Increased need to demonstrate ESG credentials.
• Require a diverse Board and pipeline of talent for succession
to executive positions.
• Remuneration must be appropriate, performance
relatedandlinkedtostrategy.
• Approved the Capital Return Programme for the year ended 31 December
2021 (see page 7).
• The Group became an accredited Living Wageemployer during 2021 (see
page 35).
• Maintained a rigorous process for each Board appointment led bythe
Nomination Committee (see pages 90 to 93).
• Renewed focus on the Group’s ESG credentials – set science based
carbon reduction targets, in line with the Paris Agreement, which were fully
accredited by the Science Based Targets Initiative.
• Set gender diversity targets for our employees and management teams.
• Due to the pandemic, the Group held a Virtual Shareholder Engagement
Event prior to the 2021 AGM.
Government,
regulators and
industry bodies
Relevant material issues:
• Climate change action
and resilience
• Health and safety
• Social value/enhancing
communities
We engage with Government regarding Governmentpolicy
thataffects the Group.
We meet with local authority planning
departmentstoensure weare able to provide sustainable
communities with high amenityvalue inplaces
wherepeople wish tolive and work.
We engage with the Health and Safety Executive inrelation
toindustry-wide initiatives to reduce healthand safety risks
tobothour workforce andlocal communities.
• Participating in industry meetings with Ministers.
• Engaging with Government departments directly,
andworking with the Home Builders Federation, toexplain
industry opportunities and challenges.
• Member of Homes for Scotland.
• Engaged with Home Building Skills Partnership.
• Regular dialogue with the Health and Safety Executive.
• Engaging with local planning authorities.
• Engaging with Government regarding the Future Homes
Standard.
• Engaging with Homes England.
• Engaged with the Competition and Market Authority on their
leasehold enquiry
• Dean Finch, Group Chief Executive, is a member of the
government’s Net Zero Buildings Council.
• Government policy is supportive of the UK housing market and has
introduced a number of measures to support the industry.
• As part of the UK achieving its target of net zero by 2050,theGovernment
is consulting on the Future HomesStandardwhichaims to significantly
reduce the carbonemissions of ahomebuilt tocurrent regulations.
• Essential to maintain a skilled and adequately resourced Healthand
Safety Department and Covid-secure sites, officesandmanufacturing
facilities.
• The Board receives updates from the Chair and Group Chief
Executiveregarding direct engagement with Government, HomesEngland
and the Home Builders Federation.
• See page 41 for information on our Covid-secure sites, salesofficesand
manufacturing facilities.
• Agreed a number of voluntary undertakings with the CMA on leaseholders
purchasing their freeholders.
Persimmon Plc | Annual Report | December 2021
72
Stakeholder Why we engage? How do we engage? What did they tell us? How did the Board respond?
Suppliers and
subcontractors
Relevant material issues:
• Climate change action
and resilience
• Health and safety
• Social value/enhancing
communities
The Group benefits from robust and long
standingrelationships with many of its suppliers
andsubcontractors. This assists in securing the
qualityand supply of materials to deliver the Group’sbuild
programmes effectively.
We engage with them to ensure adherence to our stringent
health and safety standards and required standards of
ethical behaviour and integrity supported by the introduction
of Framework Agreements inclusive of Group Policies
Engagement with our suppliers assists us incontinuingto
improve the long-term sustainabilityofoursupply chain.
• Quarterly business reviews, regular, informal discussions
with our key suppliersthrough our Group Procurement
team,whoareresponsible for arranging andnegotiating
Group Framework Agreements and Service Level
Agreements to ensure all suppliers are compliant to
standard terms.
• Our local operating businesses’ buying and technicalteams
regularly engage with local suppliersand subcontractors.
• Our ‘Toolbox Talks’ ensure our subcontractors understand
and adhere to the health and safety standards required on
our sites.
• All Group suppliers sign up to the Group’s supplier
principles, equivalent Group Policies and key performance
indicators, which describe our requirements and
expectations.
• A member of Supply Chain Sustainability School which
encourages engagement across the supply chain
• Further detail on how we engage can be found onpage45.
• The Group works in partnership with its suppliers, to provide
material requirement forecasts to ensure continuity of supply
providingcontinuityand visibility of future work flows.
• Timely payment of invoices is important to them.
• They continue to monitor the impact of global supply chain and price
sensitive impacts to enable continued service delivery.
• They continue to monitor the impact of the UK’s
exitfromtheEUonsupply chains.
• Strengthened the Group procurement department with the appointment
of a Group Procurement Director and formation of a centralised Group
procurement team.
• Maintain a set of Supplier Principles and equivalent Group Policies which all
suppliers mustsignupto.
• We are a signatory to The Prompt Payment Code (PPC)
(see page45).
• Joined the Gangmasters and Labour Abuse Authority’s
ConstructionProtocol (see page 37).
• Partnership with Roof CERT.
• A review of specification to ensure we build right, first time, every time.
Shareholders
Relevant material issues:
• Climate change action
and resilience
• Health and safety
• Social value/enhancing
communities
• Talent, attraction,
development, diversity
and engagement
Access to capital is important to the long-term success
ofthe business.
Through our engagement we aim to create investor
buy-in of our core focus areas and how we executethem.
We create value for our investors by generating
surpluscapital beyond the reinvestment needs
ofthebusiness as the market cycle develops.
• Regular discussion with analysts and investors aspartofthe
Group’s reporting cycle.
• We hold institutional shareholder meetings and specific
consultations.
• Through shareholder roadshows.
• Obtain feedback from the Company’s brokers andmarket
analysts.
• Obtain feedback from shareholder groups.
• Enable shareholder participation in the Company’s Annual
General Meeting.
• Preference for a sustainable dividend.
• Fair pay for the whole workforce.
• Increased need to demonstrate ESG credentials.
• Require a diverse Board and pipeline of talent for succession
to executive positions.
• Remuneration must be appropriate, performance
relatedandlinkedtostrategy.
• Approved the Capital Return Programme for the year ended 31 December
2021 (see page 7).
• The Group became an accredited Living Wageemployer during 2021 (see
page 35).
• Maintained a rigorous process for each Board appointment led bythe
Nomination Committee (see pages 90 to 93).
• Renewed focus on the Group’s ESG credentials – set science based
carbon reduction targets, in line with the Paris Agreement, which were fully
accredited by the Science Based Targets Initiative.
• Set gender diversity targets for our employees and management teams.
• Due to the pandemic, the Group held a Virtual Shareholder Engagement
Event prior to the 2021 AGM.
Government,
regulators and
industry bodies
Relevant material issues:
• Climate change action
and resilience
• Health and safety
• Social value/enhancing
communities
We engage with Government regarding Governmentpolicy
thataffects the Group.
We meet with local authority planning
departmentstoensure weare able to provide sustainable
communities with high amenityvalue inplaces
wherepeople wish tolive and work.
We engage with the Health and Safety Executive inrelation
toindustry-wide initiatives to reduce healthand safety risks
tobothour workforce andlocal communities.
• Participating in industry meetings with Ministers.
• Engaging with Government departments directly,
andworking with the Home Builders Federation, toexplain
industry opportunities and challenges.
• Member of Homes for Scotland.
• Engaged with Home Building Skills Partnership.
• Regular dialogue with the Health and Safety Executive.
• Engaging with local planning authorities.
• Engaging with Government regarding the Future Homes
Standard.
• Engaging with Homes England.
• Engaged with the Competition and Market Authority on their
leasehold enquiry
• Dean Finch, Group Chief Executive, is a member of the
government’s Net Zero Buildings Council.
• Government policy is supportive of the UK housing market and has
introduced a number of measures to support the industry.
• As part of the UK achieving its target of net zero by 2050,theGovernment
is consulting on the Future HomesStandardwhichaims to significantly
reduce the carbonemissions of ahomebuilt tocurrent regulations.
• Essential to maintain a skilled and adequately resourced Healthand
Safety Department and Covid-secure sites, officesandmanufacturing
facilities.
• The Board receives updates from the Chair and Group Chief
Executiveregarding direct engagement with Government, HomesEngland
and the Home Builders Federation.
• See page 41 for information on our Covid-secure sites, salesofficesand
manufacturing facilities.
• Agreed a number of voluntary undertakings with the CMA on leaseholders
purchasing their freeholders.
Strategic report Governance Financial statements Other information
73
PRINCIPAL DECISIONS
We define Principal Decisions as both
those that are material to the Group but
also those that are significant to any of
our key stakeholder groups. In making
the following Principal Decisions the
Board considered the outcome from its
stakeholder engagement (pages 70 to 73)
as well as the need to maintain a reputation
for high standards of business conduct and
the need to act fairly between members of
the Company.
During the year, the Board made a number
of “Principal Decisions”. A description of
those Principal Decisions is provided below.
Payment of dividends in 2021
The Board announced a return of capital
of 235p per share in 2021, in line with the
existing Capital Return Programme. It has
also announced its intention to return a
further 235p per share subject to continuous
review, in respect of the year ended
31 December 2021, in 2022 – see page 7.
In determining the capital returns, the Board
considered the ongoing performance of the
business and prevailing market conditions.
As detailed on pages 68 to 69, the Board
reviewed detailed forecasts incorporating
assumptions about the timing of legal
completions of new homes sold, average
selling prices achieved, profitability, working
capital requirements, and cash flows.
These assumptions include the Capital
Return Programme.
The Board recognises the importance
of dividend receipts to its shareholders.
The Board balances returns to shareholders
with the needs of the Group’s other key
stakeholders in order to deliver a level
and nature of return that is considered
sustainable in the long term.
Agreement of Voluntary
Undertakings with the Competition
and Markets Authority (CMA)
In June 2021, the Company announced
that it had agreed a number of voluntary
undertakings with the CMA in their
leasehold enquiry, including extending
the Group’s existing Right to Buy scheme
for customers to purchase their freehold
interest. We were pleased to have reached
this agreement and provide certainty to
leasehold customers, which brought to an
end the Group’s involvement in the CMA
leasehold investigation.
The Group has not historically sold leasehold
houses in high volumes and introduced a
Right to Buy scheme for leaseholders in
2017. However, the Board is committed to
putting our customers first and voluntarily
agreed to extend this existing support to
provide further certainty and reassurance to
our customers.
The Board considers this action to be in the
best long term interests of all stakeholders.
Investment in off-site
manufacturing plant
The Group has operated its Space4 off-
site timber frame manufacturing facility
since 2006, one of the largest off-site
manufacturing timber frame factories in
the UK. The Board considers that off-site
manufacturing will be particularly beneficial
to the Group to achieve its strategy, as
panelised construction methods will assist
with speed and volume of build. It will also
assist with the improvement of our carbon
footprint. The Board has therefore agreed that
the Group should invest in an additional new
facility, using the most up to date technology.
See pages 24 and 44 for further details. The
Board considers this action to be in the best
long term interests of all stakeholders.
Appointment of new
Chief Financial Officer
After an extensive recruitment process,
Jason Windsor was announced as the
Group’s new Chief Financial Officer in
January 2022. Jason is expected to take up
his post in the summer of 2022.
Jason is an experienced finance executive,
who has established a strong track record
in a variety of senior financial roles over the
last 26 years. He has been Group Chief
Financial Officer of Aviva PLC since 2019,
having previously been Chief Financial
Officer of both its UK Insurance and UK
Life businesses, after originally joining the
business in 2010. The Board considers that
Jason will complement the Group’s strong
management team.
Section 172 statement
Persimmon Plc | Annual Report | December 2021
74
Reporting
requirement
Where to read more in this report to
understandtheimpact on the business
Relevant
policies
Environmental Matters
See pages 17,
42 and 62
Climate Change Position Statement
Environment Policy
Sustainability Policy
Waste and Resource Management Policy
Employees
See page 32
Health & Safety Policy
Equality, Diversity and Inclusion Policy
Social Matters
See page 46
Sustainability Policy
Anti-Bribery Policy
Code of Ethics
Prevention of Criminal Facilitation
ofTaxEvasion Policy
Human Rights
See page 37
Human Rights Policy
Modern Slavery Statement
Suppliers
See page 45
Supplier Principles
Business Model
See page 10
Principal Risks
See page 55
Non-financial KPIs
See page 16
Information regarding non-financial matters is included throughout our Strategic Report
andthefollowingtable summarises where this information can be found. A description
ofthekeyoutcomes of these policies is also included throughout the Report.
Our policies are available on our website
www.persimmonhomes.com/corporate/sustainability/policies-and-statements
This strategic report has been
approved by the Board:
Tracy Davison
Company Secretary
1 March 2022
NON-FINANCIAL
INFORMATION STATEMENT
75
Strategic report Governance Financial statements Other information
Directors’ report
CHAIRMAN’S
INTRODUCTION TO
CORPORATE GOVERNANCE
The Group made good progress in 2021, with not only a strong
financial performance but with improvements in customer care,
build quality and becoming a Living Wage employer.
Persimmon has continued its cultural and
operational change, which has accelerated
since the appointment of Dean Finch as
Group Chief Executive in September 2020.
It is pleasing to see the improvements that
have taken place since Dean’s appointment,
especially in terms of customer service and
build quality, which has been done whilst
maintaining focus on our industry-leading
financial performance. There is further
progress to be made and this will remain a
clear focus of the Board.
Good corporate governance is an essential
ingredient to the cultural and operational
change that has, and continues, to take
place within the Group. The Board continues
to set the strategic direction and standards
of the Group and exercises diligent oversight
of the Group’s activities.
Covid-19
The pandemic continued to pose a
challenge to the Group and society during
the year. During this period, the Group’s
overarching principle continued to be the
wellbeing of its customers, workforce and
local communities. Despite the challenges,
the Group’s operations continued
in accordance with its Covid-secure
protocols, without recourse to government
financial assistance.
Legacy buildings provision
Acting as a responsible developer, in
February 2021 we announced our industry-
leading commitment to protect leaseholders
from having to pay towards cladding removal
or fire related safety issues on any building
the Group constructed and set aside £75m
to fund this. Whilst accounting for less
than one percent of high rise buildings
constructed, we wanted to protect our
customers and remove uncertainty for them.
Further details can be found on pages 6
and 23.
Annual General Meeting
Due to the on-going Covid-19 pandemic,
the 2021 AGM was held with the minimum
required attendees and was broadcast to
shareholders via a live webcast. To ensure
shareholder engagement, prior to the
AGM the Board held an on-line Virtual
Shareholder Engagement Event, where
shareholders were able to submit questions
to the Board in real-time and receive
answers to those questions.
As we look forward to the 2022 AGM, I
am pleased to report that for the first time
since the beginning of the pandemic, we
plan to hold our AGM as a physical meeting
which shareholders will be welcome to
attend in person. This of course remains
subject to the trajectory of the pandemic,
legal requirements and government
Covid-19 guidelines, which could change at
short notice.
Board changes
During the year the Group announced that
Mike Killoran, Group Finance Director, would
retire from the Board after 25 years’ service
with the Group. Mike retired on 14 January
2022, having played a pivotal role in
the development of the Group, helping
establish the business as one of the leading
housebuilders in the UK and delivering
outstanding returns for shareholders.
On behalf of the Board, I reiterate our
thanks to Mike for his significant contribution
to the success of the Group over this
extended period and we wish him well in
his retirement.
Culture – new Mission,
Vision and Values
I am very pleased to see the cultural change
taking place within the Group. During the
year the Board agreed the Group’s new
Mission, Vision and Values, which were
launched in January 2022 (see pages 4 and
5). In combination, our Mission, Vision and
Values build on Persimmon’s strengths and
further embed our five key priorities as a
business. The Group has set its ambitions
deliberately high, and our new Mission,
Vision and Values will reinforce our cultural
change and guide the Group as it continues
to evolve and improve.
Engagement
Effective stakeholder engagement is
essential to the long-term success of the
Group, and maintaining good relationships
with all of our stakeholders is important to
the Board.
Employee engagement was strengthened
during the year, with Jo Place being
designated as the Board’s Workforce
Independent Non-Executive Director.
In addition, the Group’s Employee
Engagement Panel (“the Panel”) increased
its number of scheduled meetings from two
to four per year. Two-way communication
between the Board and the Panel is valued.
Jo Place attends Panel meetings and during
the year, both I and Annemarie Durbin,
Remuneration Committee Chair, attended
one Panel meeting each. Annemarie used
her attendance as an opportunity to engage
with the workforce on corporate governance
and how Executive Remuneration aligns with
wider Group pay policy.
Further information on engagement
between the Group and its many
stakeholders can be located in the Section
172 Statement of this report (see pages 70
to 73).
Persimmon Plc | Annual Report | December 2021
76
Over recent years, the Board and
Nomination Committee have been mindful
of both the Hampton Alexander Review
(which was succeeded by the FTSE Women
Leaders Review during the year) and the
Parker Review, and their respective diversity
targets. I am therefore pleased to report
that, in conformity with both reviews, as at
31 December 2021 the Board was 33.3%
female and had one director of colour.
However, there is more to do, at Board
and senior management level, and within
the Group’s workforce. The Board and
Nomination Committee will continue its work
to ensure the Group develops and maintains
a diverse pipeline of talent for succession to
senior management and executive positions.
Audit Committee
During the year, the Audit Committee
maintained its focus on oversight of the
integrity and quality of financial reporting,
ensuring a high quality external audit,
reviewing the work and independence of
the Group Internal Audit department, and
ensuring the effectiveness of the Group’s
risk management processes and internal
control environment. The ongoing impacts
of the Covid-19 pandemic have continued
to be a significant consideration in each of
these areas, with the Committee paying
particular attention to accounting estimates
and judgements affected by the heightened
economic uncertainty, and the internal
control considerations arising from increased
home and hybrid working arrangements
Remuneration Committee
The Committee has continued to follow
remuneration best practice, in line with
the Group’s shareholder-approved
Remuneration Policy. During the year,
Mike Killoran’s leaving remuneration
was agreed, as was the remuneration
for Mike’s successor, Jason Windsor.
When setting Jason’s remuneration the
Committee applied the principle that the
overall remuneration package should be
competitive but not excessive. While Jason’s
remuneration will exceed that of his
predecessor, the Committee believes it is
appropriate, being at a level to match, but
not exceed, his current remuneration at
Aviva PLC. Full details are set out on pages
109 to 110 and 128.
Having regard to Mike’s long service and
retirement, the Committee exercised its
discretion to grant “Good Leaver” status for the
purpose of Mike’s outstanding Performance
Share Plan (PSP) awards. The awards remain
subject to the rules of the PSP and the
applicable performance conditions and
have been reduced pro-rata to reflect the
proportion of the performance period which
had elapsed at Mike’s leaving date.
The Nomination Committee led a thorough
and rigorous process to identify Mike’s
successor. On 13 January 2022 the Board
was pleased to announce that Jason
Windsor would be appointed as the Group’s
new Chief Financial Officer. Jason, who is
currently the Group Chief Financial Officer of
Aviva PLC, is a well-respected and proven
FTSE 100 CFO and we are delighted to
have recruited someone of his calibre and
experience to complement the Group’s
strong management team. In his current
role, Jason has demonstrated an ability to
deliver sustained financial and strategic
progress while working in a large consumer
facing business. These skills will be highly
relevant and transferable to the Group as we
continue our drive to become the leading
builder of good value, quality family homes
in the UK. We look forward to Jason joining
the Group in the summer of 2022.
During the year we also we welcomed
Shirine Khoury-Haq to the Board as an
Independent Non-Executive Director.
Shirine, who is the Chief Financial Officer for
The Co-operative Group, brings a wealth
of experience to the Board in the fields
of finance, technology and real estate.
Shortly after joining the Board on 1 July 2021,
Shirine was also appointed Chair of the Audit
Committee to succeed Rachel Kentleton,
who left the Board on 31 August 2021.
On behalf of the Board, I thank Rachel for her
valuable service.
Nomination Committee –
Diversity & Inclusion
Increasing the diversity of the Board, and
the Group’s workforce and management
teams is an important focus for the Board,
the Group and its stakeholders. Given the
significance of this issue, and to set the
strategic direction of the Group, during
the year the Board set stretching gender
diversity targets for the Group covering the
Group’s workforce, senior management
team and managerial positions (see pages
33, 88 and 94). In addition, the Nomination
Committee and the Board had oversight
of the significant Diversity & Inclusion
activities undertaken by the Group during
the year. These activities, which are set out
on pages 33 to 34 and 94 to 95, included
the appointment of the Group’s first Director
of Talent & Diversity and the establishment
of a comprehensive Diversity and
Inclusion Review.
Subject to the satisfaction of the
performance conditions, the awards will
vest at the usual time and remain subject to
a two-year holding period after the end of
the performance period. Full details are set
out on pages 109 and 121.
To reflect the importance of environmental
matters to the Group and its stakeholders,
during the year the Committee has set an
environmental metric for the 2022 bonus
to support the achievement of our long-
term sustainability targets. Further work will
be undertaken by the Committee in 2022
with the aim that meaningful environmental
metrics can be incorporated into PSP awards
made in 2023.
Sustainability
Having previously set ambitious targets to
be net zero in our homes in use by 2030
and net zero carbon in our operations by
2040, the Board has continued to exercise
oversight of the Group’s sustainability
activities. The Group’s carbon reduction
targets were accredited by the blue ribbon
Science Based Target initiative during the
year and, for the first time, the Group is
reporting its Scope 3 emissions, covering
emissions from our supply chain and the
homes we build (see pages 42 to 43).
Sustainability is an important issue for
the Board and was discussed at length
at the Board’s Strategy Day in October
2021, where presentations were received
covering energy efficiency, the Future
Homes Standard and the Group’s on-
going sustainability projects, including a
low carbon home at Germany Beck, York.
For further details regarding the Group’s
sustainability activities, see pages 42 to 44.
Board evaluation
The Board undertook an externally
facilitated annual evaluation of its
performance and that of its Committees
during the year. The evaluation, which was
facilitated by Grant Thornton UK LLP was
formal and rigorous, with valuable feedback
being received (see pages 89 and 97).
Following the evaluation I am satisfied that
all Directors continue to perform well in their
roles and contribute effectively to board
discussions and decision-making.
The UK Corporate Governance Code 2018
was applicable to the financial year ending
31 December 2021. I am pleased to report
that the Company has complied with the UK
Corporate Governance Code 2018.
Roger Devlin
Chairman
1 March 2022
Strategic report Governance Financial statements Other information
77
1 2 3 4 5
Directors’ report
Board leadership
BOARD OF DIRECTORS
1. Roger Devlin
N CF
Chairman
(age 64)
Date of appointment: 1 June 2018
Experience and external appointments: Roger Devlin was
independent on appointment and has extensive business,
leadership and governance experience, having held executive
and non-executive roles in a variety of sectors such as
corporate finance, gaming, leisure, pubs & brewing, sport
and transport.
Roger is an experienced Chairman and was, until April 2021,
the Chairman of William Hill PLC. Roger’s other previous
appointments include Chairman of Marston’s PLC and Senior
Independent Director at the Football Association.
Skills and contribution: Roger’s wealth of experience gives him
a strong understanding of corporate governance, shareholder
and stakeholder views, banking and finance, customer
propositions and leadership.
Roger’s expertise and personal qualities enable him to
effectively lead the Board and drive change within the
business. Roger makes a valuable contribution towards the
development and execution of the Group’s strategy and
ensures that the Board functions effectively by facilitating open
and productive debate, providing constructive challenge and
by demonstrating objective judgement.
The Board consists of our Chairman, Roger Devlin; currently one Executive
Director, Dean Finch; and six independent Non-Executive Directors, Nigel
Mills, who is the Senior Independent Director, Simon Litherland, Joanna
Place, Annemarie Durbin, Andrew Wyllie and Shirine Khoury-Haq. A further
Executive Director, Jason Windsor, will join the Board in summer 2022.
2. Dean Finch
Ri S CF
Group Chief Executive
(age 55)
Date of appointment: 28 September 2020
Experience and external appointments: Dean is a widely
experienced senior executive with a strong commercial,
financial and operational track record spanning a 30 year
career in Europe and North America. Dean is also a qualified
chartered accountant.
Dean was the Chief Executive Officer of National Express
Group plc from 2010 to 2020, and during his tenure built
the business into Britain’s leading transport group. Prior to
that Dean was Group Chief Executive of Tube Lines and
Group Finance Director and Group Chief Operating Officer
at FirstGroup plc, where he also held a number of other
senior roles.
In May 2021 Dean was appointed as a Non-Executive Director
of Diploma Plc.
Skills and contribution: Dean is a seasoned, well-respected
and proven Chief Executive with an exceptional record.
Whilst at National Express Dean delivered substantial strategic
and operational progress over a sustained period, delivering
value for all stakeholders while developing a distinct and
cohesive culture, focused on customer care and service.
Dean leads the Group’s programme of change in its drive
to become Britain’s best housebuilder; delivering for all
stakeholders in the business whilst continuing to deliver strong
financial returns to investors.
4. Simon Litherland
A N
Independent Non-Executive Director
(age57)
Date of appointment: 3 April 2017
Experience and external appointments: Simon Litherland is
the Chief Executive of Britvic plc. He qualified as a chartered
accountant with Deloitte and has over 25 years’ experience in
finance and leadership roles within the drinks manufacturing
and distribution sector. Prior to joining Britvic in 2011 Simon
worked for global drinks manufacturer Diageo plc, spending
20 years managing several of the company’s international
business units, ultimately becoming Managing Director of
Diageo Great Britain.
Skills and contribution: Simon is an accomplished Executive
with proven finance, leadership and business skills in a
consumer facing industry.
As a sitting Chief Executive of a FTSE 250 company Simon
is well versed in the investment, stakeholder and ESG
environment in which large companies operate. Given his
extensive experience in a consumer facing sector, Simon has
a strong customer-focus, with expertise in brand building,
marketing and strategy. As the leader of a large organisation
Simon also brings to the Board a strong practical understanding
of organisational purpose, culture and employee engagement.
Overall, Simon’s background and skills enable him to make a
valuable contribution to the Board’s decision making and the
development of the Group’s customer-focused strategy.
3. Nigel Mills
N R
Senior Independent Director
(age 66)
Date of appointment: 4 April 2016
Experience and external appointments: Nigel Mills is the
Senior Independent Director at John Wood Group Plc and
was previously a Senior Advisor at Citigroup Global Markets.
Nigel was Chairman of Corporate Broking at Citi between 2005
and 2015, and Chief Executive at Hoare Govett between 1995
and 2005. Nigel has extensive experience in advising some
of the UK’s largest companies. Nigel is also a Director of The
Queen’s Club.
Skills and contribution: Nigel has strong commercial judgement
drawing on a 30 year career advising quoted companies.
He has broad experience of financial markets, strategy, risk,
shareholder attitudes and corporate governance, which enable
him to provide sound advice to the Board. Between February
2018 and May 2018 Nigel served as Acting Chairman and led
the process which resulted in the appointment of the current
Chairman, Roger Devlin.
5. Joanna Place
A N R CF
Independent Non-Executive Director
(age 59)
Date of appointment: 1 April 2020
Experience and external appointments: From 2017 to
December 2021 Joanna Place was the Chief Operating Officer
of the Bank of England with responsibility for the day-to-day
management of the Bank including finance, technology,
information and physical security, human resources, property,
and procurement. Before her appointment as COO Jo was the
Bank’s HR Director for three years.
Skills and contribution: Jo had a 35-year career with the
Bank of England, which included leading teams in banking,
statistics and regulation. Jo’s broad management experience
and external perspective is a valuable addition to the
Board. Jo adds to the diversity of skills and views on the
Board and provides valuable insight into human resources
matters, diversity, organisational culture, sustainability and
stakeholder views.
Jo is the Board’s designated Workforce Non-Executive
Director. Jo attends the Group’s Employee Engagement Panel,
which meets four times per year, and facilitates effective two-
way communication and engagement between the Board, the
Panel and the Group’s employees.
6. Annemarie Durbin
R
N
Independent Non-Executive Director
(age 58)
Date of appointment: 1 July 2020
Experience and external appointments: Annemarie has
30 years’ broad-based retail, commercial, corporate and
institutional banking experience across Asia, Africa & the
Middle East and is an experienced executive coach and
mentor. Annemarie is currently Chair of Cater Allen Limited,
Remuneration Committee Chair of Petershill Partners plc
and Senior Ringfence Director and Remuneration Chair of
Santander UK plc. She spent the bulk of her executive career at
Standard Chartered, a FTSE 100 international bank. She held a
variety of global business and functional roles including being
CEO of a FTSE250 equivalent listed company in Thailand,
culminating in membership of the Group Executive Committee.
Annemarie was board Chair of Merryck & Co. Ltd, a leading
mentoring group until July 2021, and was Remuneration
Committee Chair of WH Smith PLC until January 2022.
Skills and contribution: Annemarie is a highly experienced
international business executive, with a strong background
in banking, diversity & inclusion, transformation, corporate
governance and human resources. She is a qualified lawyer,
coach and conflict mediator. Annemarie’s experience
and knowledge are valuable additions to the Board as
the Group continues to implement its programme of
business improvement.
W
Persimmon Plc | Annual Report | December 2021
78
6 7
9. Jason Windsor
Chief Financial Officer
(age 49)
Anticipated start date: Summer 2022
Experience and external appointments: Jason is an
experienced finance executive who has established a strong
track record in a variety of senior financial roles over the last 26
years. He has been Group Chief Financial Officer of Aviva PLC
since 2019, having previously been Chief Financial Officer of
both its UK Insurance and UK Life businesses, after originally
joining the business in 2010. Prior to that he spent 15 years
at Morgan Stanley, latterly as a Managing Director within its
Investment Banking Division.
Skills and contribution: Jason is a well-respected and proven
FTSE 100 CFO and we are delighted to have recruited
someone of his calibre and experience as Chief Financial
Officer to complement our strong management team. In his
current role Jason has demonstrated an ability to deliver
sustained financial and strategic progress while working in
a large consumer-facing business. These skills will be highly
relevant and transferable to Persimmon as we continue our
drive to become the leading builder of good value, quality
family homes in the UK. We look forward to welcoming Jason
tothe Group in the summer.
7. Andrew Wyllie CBE
A N
Independent Non-Executive Director
(age 59)
Date of appointment: 4 January 2021
Experience and external appointments: Andrew is an
experienced construction sector executive and was Chief
Executive of Costain Group PLC for 14 years, until his retirement
in 2019. Previously, Andrew was Managing Director of Taylor
Woodrow Construction and a member of the Group Executive
Committee at Taylor Woodrow Plc. During his career Andrew
has worked on a variety of major contracts and projects
in Saudi Arabia, Ghana, the Falklands, Malaysia and the
United Kingdom.
Andrew currently serves as a Non-Executive Director on
the Boards of Yorkshire Water and BMT Group Ltd. He was
previously a Non-Executive Director of Scottish Water and
President of the Institution of Civil Engineers.
Andrew has an MBA from London Business School and is a
Fellow of the Royal Academy of Engineering. For his services to
Engineering and Construction, Andrew was awarded a CBE.
Skills and contribution: Andrew has a long and successful
track record within the construction industry and brings highly
relevant sector experience to the Board. Andrew’s industry
knowledge, expertise and perspective will be a valuable
addition to the Board as the Group continues to build a
sustainable business.
8. Shirine Khoury-Haq
A
Ri N
Independent Non-Executive Director
(age 50)
Date of appointment: 1 July 2021
Experience and external appointments: Shirine is the Chief
Financial Officer of The Co-operative Group, where she
is responsible for finance, technology, transformation and
corporate development. Shirine also serves as the Chief
Executive Officer of The Co-operative Group’s Life Services
sector, which includes the Insurance, Legal Services and
Funeral businesses.
Prior to joining The Co-operative Group, Shirine was Chief
Operating Officer of Lloyd’s of London, the insurance market,
and had previously held senior positions at Catlin, IBM
and McDonald’s. Shirine is a qualified accountant and was
previously a Non-Executive Director of the Post Office.
Skills and contribution: Shirine has a wealth of experience in
finance, technology and real estate in businesses operating
across a range of sectors. Shirine’s appointment adds to the
balance of skills and expertise on the Board, which will be of
great benefit as the Group continues to build a sustainable
business in every sense.
Board meeting
attendance 2021
Member
Meetings
attended
Percentage
of meetings
attended
Roger Devlin 7/7 100%
Dean Finch 7/7 100%
Nigel Mills 7/7 100%
Simon Litherland 7/7 100%
Joanna Place 7/7 100%
Annemarie Durbin 7/7 100%
Andrew Wyllie 7/7 100%
Shirine Khoury-Haq 2/3* 66.6%
Rachel Kentleton** 7/7 100%
Mike Killoran*** 7/7 100%
* For further details see page 80.
** Resigned 31 August 2021.
*** Retired 14 January 2022.
Executive Directors
Non-Executive Directors
8
C
Committee Chair
A
Audit Committee
CF
Trustee of the Persimmon Charitable Foundation
N
Nomination Committee
R
Remuneration Committee
Ri
Risk Committee
S
Sustainability Committee
W
Workforce Non-Executive Director
Board independence
(excluding Chairman)
as at 31 December 2021
25%
75%
Strategic report Governance Financial statements Other information
79
UK Corporate Governance
Code2018
This Corporate Governance Statement,
together with the Audit Committee Report
on pages 98 to 104, the Nomination
Committee Report on pages 90 to 97 and
the Directors’ Remuneration Report on
pages 108 to 128, provides a description
of how the Principles of the UK Corporate
Governance Code 2018 have been applied
within the Group during 2021.
During the year the Board has fully complied
with the UK Corporate Governance Code
2018. The Board continues to review
its governance procedures to maintain
proper control and accountability. The UK
Corporate Governance Code 2018 is
available from the Financial Reporting
Council, atwww.frc.org.uk.
The Board consists of our Chair, Roger
Devlin, currently one Executive Director and
six Independent Non-Executive Directors.
We have announced that Jason Windsor
will join the Board in the summer of 2022
as Chief Financial Officer. In line with the
2018 UK Corporate Governance Code, the
Board leads and directs the Group. It sets
the Group’s purpose/mission, defines
the Group’s values, sets the strategy and
monitors and assesses the Group’s culture,
with the aim of securing the long-term
sustainability of the business for the benefit
of all stakeholders.
The Board has a formal schedule of
matters reserved for its consideration
and decision, which is reviewed annually,
having last been reviewed in December
2021. The schedule includes the approval
of the Group’s strategy; structure and
capital; financial reporting and controls,
which includes annual and half year results,
trading updates and the dividend and cash
return programme; internal controls, which
includes monitoring the Group’s principal
risks and material issues; major capital
projects; resolutions and corresponding
documentation to shareholders at general
meetings; Board membership; remuneration
of the Board; delegation of authority;
corporate governance matters and policies.
During 2021 the Board held seven
scheduled meetings, plus a strategy
meeting. Additional Board calls were held
as necessary. Board meetings may be
preceded by informal dinners, which involve
the presence of invitees such as senior
executives or external representatives to
give presentations. In addition, there are at
least two meetings a year attended solely
by Non-Executive Directors. All Directors
attended the relevant Board and Committee
meetings during the year, except for Shirine
Khoury-Haq, who was unable to attend the
October meeting due to an engagement
arranged prior to her appointment to
the Board, which she was unable to
rearrange. The Nomination Committee
was aware of the engagement prior to their
recommendation to the Board to appoint
Shirine as a Non-Executive Director.
On balance, the Committee considered it
was in the long-term interests of the Group
for Shirine to be appointed to the Board from
1 July 2021, even though she would not be
able to make this meeting.
Covid-19 pandemic
response
The industry has continued to face ongoing
operational and economic challenges as a
consequence of the pandemic, particularly
as the Omicron outbreak unfolded in late
2021. The Group has continued to manage
these ongoing challenges comprehensively,
with a strong, agile and responsive
management team, ensuring that the
business has remained well set to continue
to generate superior and sustainable returns
for the benefit of all its stakeholders.
The health, safety and wellbeing of
the Group’s workforce, customers and
the public have remained paramount
throughout this period and as such, the
Group’s Covid-secure operating protocols
have been maintained and adapted to the
government’s guidance. Flexible working
has been retained for our office based
staff, and following engagement with
employees, a Hybrid Working Policy has
been adapted, enabling employees to work
from home where possible. Recognising the
importance of our employees’ mental health
and wellbeing and the severe impact that
the pandemic has had on this, the Group’s
senior management team completed mental
health awareness training during the year.
In addition, as at 31 December 2021 we had
approximately 128 trained mental health first
aiders across the business.
Due to the pandemic, and the limitations
on gatherings and travel which resulted,
physical meetings between the Board
themselves, as well as stakeholders,
became more difficult. Video conferencing
was utilised, which enabled meetings to
take place in a Covid-secure environment.
This remote engagement proved useful
to cope with the difficulties caused by the
pandemic, and continue to be used when
necessary, although face to face meetings
remain the Board’s preferred approach.
Strategy
The Board held their annual strategy
meeting during October 2021, where senior
management from various sectors across
the Group presented on various matters,
including:
• Customer experience;
• Land strategy;
• Building for tomorrow;
• Investing in our people;
• Financial projections; and
• Risk.
External parties also presented at the
meeting on topics including:
• Future Homes Issues;
• The Global and UK economy and its
impact on the UK housing market; and
• Equity Market Feedback.
Our strategic objectives are to:
• Place customers at the heart of our
business with a compelling brand;
• Have a diverse and talented workforce;
• Invest in high quality land;
• Working safely, responsibly and efficiently;
• Support and create sustainable
communities; and
• Maintaining financial strength through the
housing cycle.
Further information on our strategic
objectives can be found on pages 12 to 13.
Director’s report
BOARD LEADERSHIP
AND COMPANY PURPOSE
Persimmon Plc | Annual Report | December 2021
80
AGM
Due to restrictions caused by the Covid-19
pandemic, the Group’s 2021 Annual General
Meeting was held on 28 April 2021 with
the minimum number of shareholders
required to form a quorum under the
Company’s articles of association, each
of whom was a Board Director. In order to
provide shareholders with an opportunity
to present questions to the Board and to
hear their answers before casting their
votes, a separate inter-active Virtual
Shareholder Engagement Event took place
on 23 April 2021 in which shareholders were
invited to participate remotely. During the
Virtual Shareholder Engagement Event
shareholders were able to participate and
interact with the Board, and could ask
live questions.
Board activities
During the year the Board and its
Committees focused on various matters
concerning the long-term sustainable
success of the Group. Examples of such
matters are included in the opposite table.
Company purpose, values,
strategyandculture
During the year the Board agreed a
new Mission, Vision and Values, further
embedding the five key priorities into how
we operate as a business and aimed at
sustaining strong shareholder returns.
The Group has set its ambitions deliberately
high, and our new Mission, Vision and
Values will reinforce our cultural change and
guide the Group as it continues to evolve.
Area of focus and action taken by Board Further information
Living Wage Foundation accredited employer
Agreed that the Group should be a Living Wage Employer, Living Wage
Foundation accreditationwas achieved in November 2021.
See page 35
Customer care and build quality
Driven standards to ensure that the HBF 8 week customer satisfaction
score continued to improve and that warranty provider Reportable
Items reduced.
Received a presentation on customer experience. The Board agreed
changes to the Group’s processes and additional resource to achieve
the Board’s strategic objectives to place customers at the heart of our
business with a compelling brand.
See pages 26 to 31
Board composition
Agreed the Nomination Committee recommendation for the
appointment of Jason Windsor as the new Chief Financial Officer,
whose appointment was announced on 13 January 2022. Agreed the
Nomination Committee recommendation for the appointment of Shirine
Khoury-Haq as an Independent Non-Executive Director, to improve the
diversity, skills and industry knowledge of the Board.
See pages 92
and 93
Agreement of voluntary undertakings with the CMA and closure
ofleasehold investigation
In June 2021 the Board agreed a number of voluntary undertakings with
the CMA in their leasehold enquiry, including extending our existing
Right to Buy scheme for customers to purchase their freehold interest.
See page 74
Capital Return Programme
Reviewed the performance of the Group and agreed the payments to
be made.
See pages 7
and 74
Employee Reporting
Agreed that Joanna Place would be appointed as the Group’s
designated Workforce Independent Non-Executive Director, including
attending Employee Engagement Panel meetings.
See pages 76
and 84
Culture
Agreed a new Mission, Vision and Values, to embed a culture that
will reinforce trust in the brand. Reviewed Group policies including
the Whistleblowing Policy. Engaged with various stakeholder groups.
Reviewed the results of the Group’s employee engagement survey.
Noted feedback from various stakeholder groups, further information
inrelation to which can be located on pages 70 to 73.
See pages 4 to 5
and 32 to 37
Governance
At each Board meeting the Board received updates from Executive
Committee members covering the Health, Safety & Environment
department, HR, IT, FibreNest and the Persimmon Way.
See page 82
Strategic report Governance Financial statements Other information
81
Purpose/Mission,
Vision andValues
The Group’s purpose and mission is to build
homes with quality our customers can rely
on at a price they can afford.
Our Vision is to be Britain’s leading
homebuilder, with quality and customer
service at its heart, building the best value
homes on the market in sustainable and
inclusive communities. We will invest in
innovation and technology to extend our
low cost strengths and enhance our five-
star capabilities to enable as many people
as possible to buy the homes we build.
For further details see pages 4 to 5 of the
Strategic Report.
In instilling our Values, the Board aims
to embed a culture which ensures that
customers are our priority and we aim
to build consistently high quality homes
in communities where people love to
live. We will earn our customers’ trust
by treating them fairly and with integrity.
We will deliver the best value, high quality
homes to our customers by encouraging
entrepreneurship, innovation and cost-
efficiency to drive industry-leading
performance and competitive and
sustainable returns for shareholders.
We are one team, working in an open
and collaborative manner to deliver for
customers and communities. We embrace
diversity and new ideas and develop the
careers and reward the talents of our
colleagues. We build homes for the future
in sustainable communities. We uphold
the highest safety standards and leave a
legacy that delivers economic, social and
environmental value to the communities
we build. We strive to be excellent in
all that we do. We focus relentlessly on
providing the dream of homeownership to
thousands of families by building the best
value, high quality homes in the most cost-
efficient manner, delivering for customers,
communities and stakeholders alike.
Build right, first time, every time remains
one of our CEO’s priorities. During the year
we have implemented more exacting build
tolerances – going further than existing
industry standards; invested in Independent
Quality Controllers – now employing the
industry’s largest team; invested in training
– including a pioneering NVQ assessment
centre; and introduced digital support
for site management quality inspection.
For further details, see pages 26 to 28 of
theStrategic Report.
Strategy
The Group’s strategy has a clear focus and
direction on putting customers first through
the application of enhanced Group controls
and procedures. The Group’s strategic
objectives (detailed on pages 12 and 13)
support the delivery of this strategy.
The Group’s strategy is agreed by the Board
at an annual strategy meeting and thereafter
regularly reviewed at Board meetings.
Once set by the Board, the strategy is
communicated to the Group through its
management structure, filtering down from
the Executive Directors to the Executive
Committee, Regional Chairs, management
and employees. Improved internal
communication is helping to ensure all
our employees know and understand the
Group’s strategy and its potential benefits
and risks.
The Executive Committee meets bi monthly
and considers operational, customer care,
sales, HR, IT, FibreNest and regulatory
issues. The Executive Committee is
made up of senior operational and Group
management, who are responsible for
implementing the Group’s strategy and
for communicating it to the operating
businesses, with the support of the
Managing Directors and leadership teams.
Culture
The Board has overall responsibility for
framing, embedding, monitoring and
measuring the Group’s culture, setting the
tone from the top. Since the appointment
of the Group Chief Executive in 2020, the
Board has taken active steps to ensure
that the Group achieves a more customer
focused culture. During the year the Board
agreed our Mission, Vision and Values,
which were launched in January 2022.
They build on Persimmon’s many strengths
and our recent progress to strive even
higher, to be Britain’s leading homebuilder,
with core values that demonstrate how we
will achieve it. The new Mission, Vision and
Values further embed our five key priorities
as a business.
The Board monitors and measures the
Group’s culture through the receipt of regular
data updates from the senior management
team, including the Chief Customer
Experience Officer, Group Construction
Director, Group Health, Safety &
Environment Director, the Head of FibreNest
and the HR Director. The Board uses this
data to monitor behaviours across the
Group and how they align with the desired
culture. Data reviewed includes the Group’s
HBF scores, Persimmon Way internal IQC
scores, external warranty provider scores,
feedback from the employee engagement
survey, labour turnover reports, Health &
Safety data, plus media coverage received
by the Group.
We now operate an annual employee
engagement survey, administered by an
independent company, to obtain feedback
from employees and monitor understanding
of the Company’s values, strategy and
desired culture. The results of the 2021
employee engagement survey were
considered by the Board. Feedback on how
the Group has responded to the survey
results was circulated to employees in
September 2021, through ourGroup
employee magazine.
Directors’ report
Corporate governance statement continued
Persimmon Plc | Annual Report | December 2021
82
In ensuring that the Group’s values and
behaviours are captured at every level of
the organisation, the recently appointed
Group Head of Reward has been tasked
with assessing the rewards available to
employees and making sure that they mirror
the culture of the Group. Whilst non-financial
cultural metrics are already in place for our
Executive management team, similar metrics
and goals will be cascaded down to the
wider employee base. Acknowledging that
increased diversity in our workforce could
enrich our culture and grow our talent and
skill base, the Group Head of Reward will
ensure that Group rewards are attractive
to candidates, enabling a diverse pipeline
of succession.
To reinforce the Board’s aim for a culture
focused on our customers, our senior
management bonus scheme was
restructured last year to incorporate build
quality and customer service targets.
In the current year, this approach is being
extended across the organisation, including
to our site management teams.
The customer focused culture has been
further enforced by the appointment in the
year of our Chief Customer Experience
Officer, who leads a team focused on
enhancing our end-to-end relationship
with our customers. This appointment has
already made a significant impact on the
business and the work being undertaken
will continue to drive improvements in her
new role as we move forward with our vision
to become known for outstanding service
and value, consistently delivering five-star
homes. We aim for our workforce to be truly
representative of all sections of society and
our customers.
We appointed a Director of Talent & Diversity
during the year. One of the first projects
was to launch an externally facilitated
Diversity & Inclusion Review, to provide
a starting point for future measurement
of progress, assist with a diversity and
inclusion strategy and pinpointing areas
for immediate improvement and impact.
Further information on the Inclusion
Review can be found on pages 33, 89 and
95.To reinforce a culture of recognition, we
will shortly announce the first national winner
of our Construction Excellence Awards, with
31 local and five divisional winners already
recognised for their build quality standards.
Resources to
meet objectives,
internal controls
andriskmanagement
The Board is mindful that the Group must be
provided with suitable resources to achieve
its strategic objectives. During the year a
continued focus has been on training, quality
assurance and digitalisation.
Maintaining Covid-secure environments
remained key for our employees, customers
and subcontractors. The Health, Safety
& Environment department continued to
ensure that our sites and offices remain safe,
updating internal policies in light of updated
government guidance. The Group IT
department continued to provide resources
to assist employees who were working
from home.
In the last year, we have more than doubled
our team of Independent Quality Inspectors
from 29 to 60. The Independent Quality
Inspectors undertake quality assurance
inspections on our developments and
enables the performance of on-site
coaching where required. The enhanced
assurance process improves customer
satisfaction in line with our Mission, Vision
and Values.
The introduction of remote training has
enabled the Group Training Department to
expand their offer across all departments,
increasing the amount of Group training
delivered. As restrictions were reduced
during 2021, face to face training was
gradually re-introduced, but with restrictions
on delegate numbers to ensure Covid-safe
environments could be maintained. This has
been important especially for our site
management courses, where practical site
visits are an integral part of the programme.
Where possible, we have introduced
hybrid home/office working for a number
of employees. The Group training team
will introduce a more blended approach to
training delivery to meet the needs of the
business most effectively. This approach
will utilise e-learning for short compliance
training, remote learning for short trainer-led
sessions around key subjects, and longer
face to face sessions for programmes
requiring higher levels of interaction with,
and between candidates. All training
activity during the year was delivered
strictly in accordance with government
guidelines and the company’s Covid-safe
operating procedures.
During the year the Group became the first
housebuilder to announce a partnership
with the Association of Professional
Sales, a national chartered body that
represents careers in the sales sector.
Following the partnership, a group of
colleagues completed the course, which
sets new, industry-leading standards and
qualifications. Training and development
opportunities are available to colleagues
throughout their careers with the Group.
During the year mandatory training was
issued to colleagues on the Quality
Homes Board.
Persimmon is an accredited National
Vocational Qualification assessment centre,
a first for a UK housebuilder.
As at 31 December 2021 c.90% of our site
management team held a relevant NVQ, an
increase from 21% at the start of the year.
Investing in colleagues promotes build
quality excellence and pride in the job,
standing to make our workforce the very
best prepared in the business.
During the year the Board approved
additional resource for the Group HR
department to assist the Group in achieving
its strategic objectives as well as increasing
the diversity of our workforce and
management teams. Further investment
was also made into Group Internal
Communications, partly in response to
the 2020 employee engagement survey
feedback from employees for better and
more frequent communications.
The Group’s risk management framework,
which was established by the Board,
identifies, assesses, manages and mitigates
risks in a robust and timely manner enabling
it to respond to changes in its environment
effectively. Details of the Group’s risk
management framework, Principal Risks and
material issues are set out on pages 54 to 61.
The Audit Committee report can be found
on pages 98 to 104.
Strategic report Governance Financial statements Other information
83
During the year, the Group Chief
Executive and Group Finance Director had
responsibility for maintaining appropriate
communications with institutional investors
and analysts, advised by the Group’s
brokers and the Group’s financial PR
consultants. Following Mike Killoran’s
retirement Dean Finch will be supported by
the Group Financial Controllers for Reporting
and Operations, until Jason Windsor joins
the Board. Persimmon issues regular trading
updates to the London Stock Exchange, as
well as publishing half yearly and annual
financial results. At the time of the half year
and annual financial results announcements,
the Company provides shareholders with
operational and financial performance
information during its analyst presentations
and calls and meetings are regularly held
with major shareholders and analysts.
The presentations and recordings
of the calls held are available on
the Group’s corporate website at
www.persimmonhomes.com/corporate.
Employees
The Board continues to effectively engage
with Group employees, believing this to
be a valuable source of feedback for the
Board, an aid to good decision making and a
method of monitoring Group culture.
The Board engages with the Group’s
workforce in a variety of ways. Dean Finch
visited many of the Group’s construction
sites during 2021, providing him with the
opportunity to meet and listen to many of
the Group’s employees, customers and
suppliers. All visits which were conducted
during Covid-19 restrictions were held in
accordance with government requirements.
The Group’s Employee Engagement Panel,
chaired by the Group HR Director, consists
of c.12 voluntary members who provide
a broad representation of the Group’s
employees, including site and office based
colleagues, and both junior and senior
members of our team. It was agreed that
it would be beneficial for Joanna Place
to attend all of the Panel’s meetings as
the designated Workforce Independent
Non-Executive Director, with other Board
members also attending from time to time.
Jo’s role within the Panel is to update
members on recent Board activities and
initiatives, receive feedback and act as a
direct link between the Panel and the Board.
Jo’s position adds value to the Group by
enabling meaningful dialogue between
the workforce and the Board. During the
September 2021 meeting, the Panel was
joined by Annemarie Durbin, Chair of the
Remuneration Committee. Annemarie gave
a presentation on Corporate Governance,
the role of the Board and workforce
engagement on executive remuneration.
Roger Devlin, Board Chairman also attended
the November 2021 Employee Engagement
Panel meeting.
Effective engagement
The Board recognises the importance of
effective engagement with the Group’s
stakeholders. The Board and the Group’s
senior managers regularly undertake
engagement activities, details of which
are set out in the Section 172 Statement
contained on pages 70 to 73, and in the
Strategic Report.
Shareholders
The Board is committed to establishing
and maintaining good relations with the
Company’s shareholders. The Board values
shareholder engagement and members
of the Board, including the Chairman,
meet regularly with major shareholders.
Normally members of the Board attend the
Company’s Annual General Meeting (‘AGM’)
and are available to answer questions from
all shareholders. Due to Covid-19 restrictions
and social distancing measures, the 2021
AGM was a closed meeting where only
the Chairman, Group Chief Executive and
Group Finance Director attended in person,
however all remaining Board Directors
attended via video link and proceedings
were broadcast live to shareholders via
a webcast.
As shareholders were unable to attend the
2021 AGM, we held a Virtual Shareholder
Engagement Event, which was designed
to enable shareholders to participate and
interact with the Board remotely and where
they wished to do so, to ask live questions
before casting their proxy votes for the AGM.
During the year the Chair of the
Remuneration Committee, Annemarie
Durbin, wrote to major shareholders and
proxy advisors to provide a summary of
decisions taken by the Committee in relation
to Executive Directors’ remuneration.
We wrote to major shareholders again in
February 2022, to provide information on
the remuneration for our newly appointed
Chief Financial Officer, Jason Windsor.
Panel members also liaise with members
of the Executive Committee and
senior management team on points
which are raised at the meetings.
Employee Engagement Panel meetings
are an important tool in the Group’s
engagement with its employees, providing
a forum for open discussion, feedback
and debate. During the year, it was agreed
that it would be beneficial to increase the
frequency of Panel meetings to a minimum
for four per year. During 2021 the Panel held
four scheduled meetings, using video-
conferencing facilities where necessary
to maintain the Group’s Covid-secure
operating protocols. Matters discussed
included flexible working arrangements
for employees, employee welfare during
the Covid-19 pandemic, and employee
communications regarding Board changes.
In response to requests from the Employee
Engagement Panel, a number of changes
have been made across the business,
throughout the year. A Communications
App has been developed and rolled out,
which enables communications to take
place on one platform and includes details
of internal vacancies. The Group’s Employee
Assistance Programme has been advertised
via the Access HR portal and with posters in
all office locations, as well as on construction
sites. A Hybrid Working Policy was
introduced as a result of the suggestions
from the Employee Engagement Panel
and following feedback from the employee
engagement survey and more recently, the
holiday entitlement for our monthly paid
employees was increased.
The importance of good internal
communications was highlighted during
the pandemic, with a heightened need for
employees and the broader workforce to
feel connected to the business.
The Group’s third employee engagement
survey was launched in February 2022.
For information on the activities of the
Group’s Diversity & Inclusion Council, please
see pages 34, 88 and 95 of this report.
For information on our engagement with
stakeholders and how these have impacted
our Principal Decisions see pages 70 to 74.
Directors’ report
Corporate governance statement continued
Persimmon Plc | Annual Report | December 2021
84
Customers, suppliers,
the communities in
which we build,
government, regulators
and industry bodies
The Board is committed to engaging with
and maintaining strong relationships with
the Group’s key stakeholders to ensure
the long-term sustainability of the Group.
Engagement occurs throughout the
Group, from our construction teams to
our Board directors. During the year, we
have piloted a more detailed and targeted
engagement programme for local and
national government. Examples of the
Group’s customer, community, supplier
and government activities during the
year include:
• Working with the Living Wage Foundation
to become an accredited employer.
Adopting the principles of the Living Wage
for our direct employees, seeking similar
commitments from our supply chain
and achieving Living Wage Foundation
accreditation during November 2021.
• We are seeking to become one of the
first Building a Safer Future Champions,
recognising our renewed level of ambition
for build quality and safety.
• The Group is now purchasing 100%
renewable energy for its offices and
manufacturing facilities.
• The Charitable Foundation donated
c.£1.8m to local charities and good causes
to support their work in the communities
in which we are building new homes.
• Participating in with the Workforce
Disclosure Incentive to report our
workforce activities throughout the
year and discuss how to improve for
future years.
• Engaging with government and the
wider housebuilding industry on matters
relevant to the sector including the Help to
Buy Scheme and how best to achieve the
transition to low carbon homes.
• Working with the Science Based Target
Initiative to have our carbon reduction
targets accredited.
• Dean Finch is a member of the Net
Zero Buildings Council, a partnership
between government, industry and third
sector which focuses on the delivery and
implementation of key objectives within
the government’s Heat and Buildings and
Net Zero Strategies.
• Regular contact between operating
businesses and customers throughout
the home buying and after-sales process,
via emails, telephone calls and face-to-
face consultations.
• Consultation between operating
businesses and local communities as part
of the planning process.
• Calls and meetings between the Group
Procurement department, operating
business buyers and suppliers
and subcontractors.
Details of how the Group engages with its
stakeholders can be found in our Section
172 Statement and Principal Decisions on
pages 70 to 74 of this report.
Workforce policies
and practices
The Group has a range of workforce policies
in place covering matters such as Health
& Safety, Human Rights, Anti-Bribery and
Corruption, Modern Slavery, Equality,
Diversity and Inclusion, and both Flexible
and Hybrid Working. The Board works to
ensure that the Group’s workforce policies
and practices remain consistent with the
Group’s values and support the Group’s
long-term sustainable success. Furthermore,
the Board receives regular reports from
the Group HR Director. Details of how the
Group implemented its workforce policies
during 2021 can be found on pages 32 to
37 of this report. Workforce policies are
available to all staff through the Access HR
platform, with supplementary policies also
available via the Group’s corporate website
at www.persimmonhomes.com/corporate.
The Board understands the importance
of maintaining a culture where employees
feel able to freely raise any concerns
they may have, either through their line
management or confidentially through
the Group’s whistleblowing provision.
The whistleblowing provision, which allows
reports to be raised through either web-
based forms, phone or email, is actively
promoted through posters displayed in
all Group offices, construction sites and
manufacturing facilities. The Group Internal
Audit department is responsible for the
confidential review and investigation of all
concerns raised through the whistleblowing
provision, respecting anonymity where
required, and provision of a summary report
to the Board through the meetings of the
Audit and Risk Committees. During 2021,
the Board has reviewed the Group’s
whistleblowing provision and agreed that
it remained appropriate and effective.
We have also decided to enter a partnership
with Protect, the whistleblowing charity,
for 2022, which will allow the Group to
draw on Protect’s expertise in this area,
and ensure the Group’s whistleblowing
provision remains in line with accepted good
practice. For further details of the Group’s
whistleblowing facilities see pages 37 and
103 of this report.
In addition to the Group’s whistleblowing
provision, the Group has a Safety and
Environment Concerns reporting telephone
line and email address, details of which
are displayed in all Group offices and at
all Group construction sites. Employees,
subcontractors and members of the public
can use this facility to raise any safety or
environmental concerns they may have.
The Group Health, Safety & Environment
department reviews and investigates any
concerns raised through this channel, with
matters reported to the appropriate level
of the Group’s management structure
according to the situation.
The Group has a Conflicts of Interest
Policy to govern the process of identifying,
recording and managing any potential
conflicts of interest of Board members, the
Group’s senior management teams and
wider workforce. To support the aims of the
Conflicts of Interest Policy, the Group Internal
Audit department oversees a process of
obtaining annual declarations from senior
staff through letters of representation, with
detailed reporting on potential conflicts of
interest, and mitigated actions and controls,
provided to the Audit and Risk Committees
on an annual basis.
Strategic report Governance Financial statements Other information
85
Terms of reference for the Board
Committees are available on the Company’s
website www.persimmonhomes.com/
corporate/ or from the Company Secretary
at the Company’s registered office.
The Chairman
On appointment Roger Devlin, Chairman,
satisfied the criteria for independence
specified in the UK Corporate Governance
Code 2018. The Chairman, supported by
the Company Secretary, sets the agenda
for Board meetings and ensures that Board
members are provided with accurate, timely
and clear information. The Chairman ensures
that Board meetings are a forum for open
and constructive debate and that the views
of all Directors are valued and considered.
Board composition
More than half of Board members (excluding
the Chairman) are Independent Non-
Executive Directors and no one individual
or group of individuals has the ability to
dominate the Board’s decision making.
The Board considers all the Non-Executive
Directors to be independent.
Non-Executive Directors
The Non-Executive Directors have expertise
which complements that of the Executive
Directors. Between them, the Non-
Executives have experience in fields such
as construction and engineering, marketing,
various consumer facing industries, HR,
executive leadership coaching, banking
and finance. The collective experience of
the Non-Executives allows them to make
valuable contributions to Board discussions,
providing insight, strategic guidance, a
diversity of views and constructive challenge
to the Executive Directors. For further
information on the skills and contribution of
each Director see pages 78 and 79.
Only Non-Executive Directors are members
of the Board’s Audit, Remuneration and
Nomination Committees. The Chairman
regularly holds meetings with the Non-
Executive Directors without the Executive
Directors being present.
All Directors are required to allocate
sufficient time to the Group to discharge their
duties. Prior to the appointment process the
Nomination Committee considers the other
demands on a Director’s time and provides
the Director with an assessment of the time
commitment required of their role on the
Company’s Board.
Nigel Mills, the Company’s Senior
Independent Director was a Senior Advisor
at Citigroup Global Markets until April 2020.
Although Citigroup was one of Persimmon’s
two brokers until March 2020, they were
not a financial advisor to the Company.
Citigroup have received no remuneration
from the Company for more than thirteen
years, having only received share dealing
commission in the two years prior to that.
Whilst employed by Citigroup Nigel had not
worked on the Company’s business over
the three years prior to his appointment to
the Board in 2016, this itself being preceded
by Citigroup’s decision to put in place
strict procedures to further ensure Nigel’s
independence. Accordingly, the Board
reiterates its belief in Nigel’s independence,
which has been clearly demonstrated
in debate in both Board and Committee
meetings since his appointment.
DIVISION OF RESPONSIBILITIES
There is a clear, written division of responsibilities between the Chairman and the
Group Chief Executive, which is approved by the Board. The responsibilities of the
Senior Independent Director are set out in a letter of appointment.
Directors’ report
Corporate governance statement continued
Governance structure
PURPOSE
CULTURE
VALUES
UK Managing Director and Regional Chairs
Leaders of Group Functions
Operating Businesses
Executive Committee
Risk
Committee
Audit
Committee
Nomination
Committee
Remuneration
Committee
Sustainability
Committee
Board of Directors
Persimmon Plc | Annual Report | December 2021
86
Resources for the Board
The Board is supported by the Company
Secretary and has the necessary policies,
processes, information and resources in
place to ensure that the Board can function
effectively and efficiently. All Directors
have access to the advice of the Company
Secretary and may seek external professional
advice at the expense of the Company in
regard to their role with the Group.
Audit Committee
The members of the Audit Committee are
listed in the table on page 98. All members
of the Committee are considered by the
Board to be independent. The Board is
satisfied that Shirine Khoury-Haq (the
Committee Chair), has recent and relevant
financial experience and that the Committee
as a whole has competence relevant to
the sector in which the Company operates.
Shirine was appointed to the Committee
on 1 July 2021, and appointed as Chair on
31 August 2021.
The purpose of the Committee is to
safeguard the interests of all stakeholders
by undertaking duties such as: monitoring
the integrity of the Group and Parent
Company’s financial statements and
reviewing significant financial reporting
judgements contained within them,
reviewing the Group’s internal financial
controls and the Group’s internal control
and risk management system, reviewing
the effectiveness of the Group’s internal
audit function and monitoring the external
auditor’s independence and objectivity and
the effectiveness of the audit process.
Further information on the role and activities
of the Audit Committee can be found in the
Audit Committee report on pages 98 to 104.
Remuneration Committee
The members of the Remuneration
Committee are listed in the table on
page 108. All Committee members are
considered by the Board to be independent.
The Board remains satisfied that
Annemarie Durbin (the Committee Chair)
has the requisite experience to chair the
Company’s Remuneration Committee,
she is the Remuneration Committee Chair
of Santander UK plc and was previously
the Remuneration Committee Chair of
WHSmith Plc.
The purpose of the Committee is to develop
a policy on executive remuneration in
consultation with shareholders which
supports the Group’s strategy and
promotes its long-term sustainable
success. The Committee determines the
remuneration packages of the Chairman,
Executive Directors and the Senior
Executive Group, which comprises the
Group’s Managing Director, the Regional
Chairs, Chief Commercial Officer, Chief
Customer Experience Officer, Group
Strategy Director, Group Transformation and
Land Strategy Director and the Company
Secretary. The Committee also reviews
the remuneration and related policies
of the wider Group workforce and the
alignment of incentives and rewards with the
Group’s culture, taking these into account
when setting the policy for Executive
Director remuneration.
During the year the Committee sought
advice from Deloitte LLP, who act as
the Group’s independent remuneration
consultants. The work of the Committee
during the year is set out in the
Remuneration Report on pages 108 to 128.
Nomination Committee
The Board’s Nomination Committee leads
the process of Board appointments, ensures
plans are in place for orderly succession
to the Board and senior management
positions and oversees the development
of a diverse pipeline for succession.
Shirine Khoury-Haq was appointed to the
Committee on 1 July 2021.
When considering the appointment of
new Directors, the Nomination Committee
determines the skills and experience which
would be of benefit to the composition of
the Board, then evaluates candidates’ skills,
knowledge and experience to determine
which candidate would be most suitable.
All nominations by the Committee are made
on the basis of merit and overall suitability,
taking into consideration the diversity of
the Board.
The work of the Committee during the year
is set out in the Nomination Committee
report on pages 90 to 97.
Sustainability Committee
The Group’s Sustainability Committee
has developed the Group’s sustainability
approach after performing a materiality
assessment to identify issues material to
the Group’s stakeholders, taking account
of the Group’s key focus areas, operational
strategy and business model.
Reporting directly to the Board, the
Committee is chaired by the Group Chief
Executive, Dean Finch and includes the
Group Strategy and Regulatory Director,
the Company Secretary, and the Group
Sustainability Director. Colleagues from
across the Group are invited to meetings
todiscuss and present on specific issues.
The Committee fulfils an important
governance role by setting the Group’s
‘sustainability approach’ and setting
challenging targets, including ‘building
for tomorrow’, ‘safe and inclusive’ and
‘transforming communities’. In doing this,
the Committee oversees the Group’s
climate change strategy and reports its
findings and recommendations to the Board.
Working with organisations including the
Carbon Trust and the Science Based Target
initiative during the year, one area of focus
of the Sustainability Committee has been
ensuring the feasibility of the science based
targets previously set.
The Committee received updates during
the year from the Group Health & Safety
Director, regarding matters including
the Group’s injury incidence rate and
programme to prevent modern slavery,
from the Group Construction Director,
regarding matters including Building Safer
Futures, external audit and digitalisation,
and from the Group Internal Audit Manager,
regarding matters including the internal audit
of environmental and sustainability issues.
The Committee continues to monitor and
devise the Group’s ‘sustainability approach’
in relation to key environment and social
issues, embedding this into day-to-day
operations through monitoring several key
workstreams. Each workstream is led by
relevant senior operational management
and includes the Group Sustainability
Manager. For example, the Zero Carbon
Home Steering Group, chaired by the
Group Technical Director, is assessing the
most effective pathway to develop net
zero carbon homes at scale and to assist
in calculating the Group’s science based
target calculations.
Further information can be found in
the Group’s Climate-Related Financial
Disclosures (‘TCFD’) report on pages 62 to
66 and in the Group’s Sustainability Report.
Strategic report Governance Financial statements Other information
87
Composition
The Nomination Committee continues to
review the composition of the Board and
the skills and diversity of the Directors, and
will make further appointments where it
considers them necessary, having particular
regard to diversity. The Committee members
endeavour to create a diverse pipeline for
succession within the Group, including the
Board and senior management positions.
Further details of the Nomination
Committee’s work during 2021 can be found
in the Nomination Committee report on
pages 90 to 97.
Board changes
In July 2021 we announced that Mike
Killoran would be retiring from the Board
in early 2022. Mike played a pivotal role
in the development of Persimmon over
more than a quarter of a century, helping
establish the business as one of the leading
housebuilders in the UK and delivering
outstanding returns for shareholders.
He stepped down from the Board on
14 January 2022.
The Nomination Committee, assisted
by Heidrick and Struggles, conducted a
thorough search for a new Group Finance
Director, both within the sector and more
widely. The search led to the appointment
of Jason Windsor, whose appointment was
announced on 13 January 2022. Jason is
expected to join in the summer of 2022.
Further details on the appointment of Jason
can be found on pages 92 to 93.
During 2021, the Nomination Committee
also conducted work on the appointment of
a new Non-Executive Director. Assisted by
Korn Ferry and following a thorough search,
the Board was pleased to appoint Shirine
Khoury-Haq as Independent Non-Executive
Director on 1 July 2021. Shirine is the Chief
Financial Officer of The Co-operative
Group, where she is responsible for finance,
technology, transformation and corporate
development. Shirine has a wealth of
experience in finance, technology and real
estate in businesses operating across a
range of sectors. Shirine’s appointment adds
to the balance of skills and experience on
the Board, which will be of great benefit as
the Group continues to build a sustainable
business in every sense.
Increasing the diversity of our workforce
is a key objective and in pursuit of this we
have set new diversity targets to improve
the Group’s gender diversity with the aim
of having females composing 40% of our
employees, 35% of our senior management
team and 45% of employees in management
roles by the end of 2025. The Board also
notes the targets recently set by the FTSE
Women Leaders Review to further increase
gender diversity of boards and senior
management teams by 2025. Our Director
of Talent & Diversity joined the Group in
May 2021, and has added strategic resource
to the Group’s diversity and succession
planning activities. Two key strategic
initiatives to deliver change are the formation
of a new Diversity and Inclusion Council, to
provide the required profile and leadership,
and the commissioning of a wide-ranging
and holistic external inclusion review, which
also looked at inclusion from the perspective
of current employees, prospective future
employees and also customers and
suppliers. For further information on how the
diversity policy is implemented see pages
33, 34 and 94.
Diversity and
InclusionCouncil
In August 2021 a new Diversity and Inclusion
Council was set up, chaired by the Director
of Talent & Diversity, to build on the work
of the previous Gender Diversity Panel –
which it has superseded – with a broader
remit which encompasses all aspects of
diversity. The membership of the Council
includes a range of senior leaders from
across the business, who are responsible
for developing our strategy, overseeing
its implementation through tangible and
practical action plans, driving accountability
and monitoring progress. The Council will
meet a minimum of quarterly, and more
frequently in its first year while specific
actions are being agreed. Updates on
the Council’s work are provided to the
Nomination Committees report see on
page 95.
During May 2021 Dean Finch was appointed
as a Non-Executive Director of Diploma Plc,
having sought the consent of the Chairman.
The appointment does not interfere, conflict
or compete with the interests of the Group.
Succession
Succession planning for the Board, Senior
Management and the Group’s Operating
Businesses is a key area of focus for the
Nomination Committee, further details can be
found in the Nomination Committee Report
found on pages 95 to 97.
During the year the Nomination Committee
reviewed succession plans for the Board,
Senior Management and the Group’s
Operating Businesses. The Committee noted
the development programme for the Group’s
Managing Directors which was launched
during the year. The exercise is defining
individual competencies and development
needs, has introduced peer mentoring,
which is assisted by the HR department,
and has led to additional training to meet
the development needs. This process
has identified potential successors to the
Group’s Regional Chairs and underlines the
Group’s intention to invest in employees.
Further details on succession can be found
on pages 36 and 95 to 97.
Diversity
The benefits of diversity and inclusion
are well documented, and the Board is
committed to increasing the diversity of
the Group’s workforce and of the Board
itself. The gender diversity split of the
Board at 31 December 2021 was 33.3%
female and 66.6% male. Females make up
28% of our senior executive management
team and direct reports, with 20 females
and 51 males. The Board is mindful of the
recommendations of the Parker Review and
its target that each FTSE 100 board should
have at least one director of colour by 2021.
The Board is pleased to have achieved
this target and first step towards a more
ethnically diverse board.
COMPOSITION, SUCCESSION
AND EVALUATION
Directors’ report
Corporate governance statement continued
Persimmon Plc | Annual Report | December 2021
88
Inclusion Review
In order to establish a clear and objective
baseline position for our diversity and
inclusion strategy we have commissioned
a comprehensive external inclusion review,
undertaken by a specialist provider.
The review process involves analysing a
range of information, including data, policies
and processes, interviewing a cross-section
of individuals from across the business,
from the Chief Executive and senior team to
site-based employees, and conducting site
visits. The findings and recommendations
from the review will enable us to develop
a 12-month, three year and five year
diversity and inclusion strategy and pinpoint
areas for immediate improvement and
impact. This process will also enable us to
benchmark ourselves against organisations
of a similar size, scale and sector; identifying
where we are on our inclusion journey
and providing a starting point for future
measurement of progress.
Board skills, experience
and knowledge
Pooled expertise from different industry
sectors, as well as robust scrutiny forms
the basis of each strategic decision made
by the Board. The Nomination Committee
continues to review the Board composition,
skills and diversity to enable exceptional
corporate governance and secure diverse
talent. The Nomination Committee will make
further appointments where it considers
them necessary, having particular regard
to diversity. Further details on the skills,
experience and knowledge of the Board can
be found on pages 78 to 79 and 95 to 97.
Annual evaluation
The Board’s policy is to undertake an
annual evaluation of its performance
and that of its Committees and Directors,
with an externally facilitated evaluation
at least every three years. During 2021
the Board undertook a formal, rigorous
externally facilitated evaluation, led by Grant
Thornton UK LLP’s governance advisory
practice, which is a highly experienced and
independent provider of board evaluations.
Grant Thornton UK LLP have not previously
conducted a Board evaluation on behalf of,
and have no other connection to the Group
or its Directors.
The 2021 evaluation comprised completion
of a survey by all Board and Committee
members and the Group’s most senior
operational directors, interviews with all
of the Board members and the Company
Secretary, observation of the December
2021 Board and Committee meetings
and a review of Board and Committee
meeting papers. A presentation on the
evaluation report was made to the Board
at their February 2022 Board meeting, the
recommendations are being considered by
the Board. An action plan will be produced
and agreed, which will include a more formal
approach to training and development.
Further details on the 2021 evaluation can
be found on page 97.
The evaluation of the Chairman’s
performance was covered by the externally
facilitated Board evaluation. Following the
evaluation, it is considered that the Chairman
continues to perform well in his role.
The evaluation will be supplemented
by Nigel Mills, the Company’s Senior
Independent Director, holding private
discussions with the Board’s members,
excluding the Chairman.
Re-election
Roger Devlin, Dean Finch, Nigel Mills, Simon
Litherland, Joanna Place, Annemarie Durbin
and Andrew Wyllie will stand for re-election
by shareholders at the forthcoming AGM,
tobe held on 27 April 2022. Shirine Khoury-
Haq has been appointed since the 2021
AGM, and will stand for election by
shareholders. Jason Windsor is expected
to join in the summer of 2022 as Chief
Financial Officer and will stand for election
by shareholders at the 2023 AGM.
Each appointment has been recommended
by the Nomination Committee and approved
by the Board. Furthermore, the Board
supports the election and re-election of all
of the Directors. It considers that the Board
work well together, with the tone set by the
Chair. The Board considers Dean Finch
and Jason Windsor together have the skills
and experience necessary to manage the
business and deliver the Group’s strategy
and the Non-Executive Directors have the
skills to support and challenge the Executive
Directors. Each of the Non-Executives
being elected or re-elected has individually
shown a high level of independence and
commitment to their roles and is considered
by the Board to be independent.
Shirine Khoury-Haq was appointed to the
Board on 1 July 2021 and as an Independent
Non-Executive Director. Shirine has a wealth
of experience in finance, technology and
real estate in businesses operating across a
range of sectors. Shirine’s appointment adds
to the balance of skills and experience on
the Board, which will be of great benefit as
the Group continues to build a sustainable
business in every sense. Shirine is the
Chief Financial Officer of The Co-operative
Group, where she is responsible for finance,
technology, transformation and corporate
development. Shirine also serves as the
Chief Executive Officer of The Co-operative
Group’s Life Services sector which
includes the Insurance, Legal Services and
Funeral businesses.
The Directors’ biographies,
acknowledging their experience, skills
and contributions can be found on pages
78 and 79 or on the corporate website at
www.persimmonhomes.com/corporate/
about-us/board-of-directors/.
Use of external
searchconsultants
As mentioned elsewhere, the Board or its
Committees have during the year engaged
two executive search firms, being Korn
Ferry and Heidrick and Struggles, to provide
assistance in relation to specific candidate
searches and/or to assist with succession
planning. These firms do not have any
supplementary connections to the Company
or any Director.
Strategic report Governance Financial statements Other information
89
“ We are delighted to have recruited someone
of Jason Windsor’s calibre and experience
to complement the Group’s strong
management team.”
ROGER DEVLIN
Chairman of the Nomination Committee
NOMINATION COMMITTEE
CHAIR’S STATEMENT
“ Increasing the diversity
of the Board and the
Group’s workforce and
management teams is an
important area of focus
for the Committee.”
ROGER DEVLIN
Chairman of the
Nomination Committee
Nomination Committee
meeting attendance 2021
Meetings
attended
Percentage
ofmeetings
attended
Roger Devlin (Chair) 3/3 100%
Nigel Mills 3/3 100%
Simon Litherland 3/3 100%
Joanna Place 3/3 100%
Annemarie Durbin 3/3 100%
Andrew Wyllie 3/3 100%
Shirine Khoury-Haq
1
1/1 100%
Rachel Kentleton
2
2/2 100%
1. Joined the Committee on 1 July 2021.
2. Retired from the Committee on 31 August 2021.
Directors’ report
On behalf of the Board, I am pleased to
present the Nomination Committee report
for the year ended 31 December 2021.
Appointments
Making recommendations for Board
appointments is a key responsibility for
the Committee and, during the year, the
Committee discharged this responsibility
by leading the process to select the
Group’s new Chief Financial Officer and by
recommending the appointment of a new
Independent Non-Executive Director.
On 26 July 2021 the Group announced that
Mike Killoran, Group Finance Director, would
retire from the Board after 25 years’ service
with the Group. Mike retired on 14 January
2022, having played a pivotal role in
the development of the Group, helping
establish the business as one of the leading
housebuilders in the UK and delivering
outstanding returns for shareholders.
The Committee and Board thank Mike for
hissignificant contribution to the success
ofthe Group over this extended period
andwish him well in his retirement.
After a thorough and rigorous selection
process, on 13 January 2022 the Committee
was pleased to recommend to the Board
that Jason Windsor be appointed as the
Group’s new Chief Financial Officer. Jason,
who is currently the Group Chief Financial
Officer of Aviva PLC, is a well-respected
and proven FTSE 100 CFO and we are
delighted to have recruited someone of his
calibre and experience to complement the
Group’sstrong management team.
In his current role, Jason has demonstrated
an ability to deliver sustained financial and
strategic progress while working in a large
consumer-facing business. These skills will
be highly relevant and transferable to the
Group as we continue our drive to become
the leading builder of good value, quality
family homes in the UK. We look forward
to Jason joining the Group in the summer
of 2022.
During the year, the Committee also
recommended the appointment of
ShirineKhoury-Haq as an Independent
Non-Executive Director. Shirine, who
hasbeen Chief Financial Officer for The
Co-operative Group since August 2019,
brings a wealth of experience to the Board
in the fields of finance, technology and real
estate. Shortly after joining the Board on
1 July 2021, Shirine was also appointed Chair
of the Audit Committee to succeed Rachel
Kentleton, who retired from the Board on
31 August 2021. Rachel was a capable Audit
Committee Chair; the Committee and Board
thank Rachel for her valuable service.
Persimmon Plc | Annual Report | December 2021
90
Diversity and inclusion
Increasing the diversity of the Board and
the Group’s workforce and management
teams is an important area of focus for
the Committee. As at 31 December 2021
the Board was 33.3% female and had
one director of colour, and was therefore
compliant with both the Hampton Alexander
and Parker reviews. However there is more
to do and, during the year the Committee
recommended that the Board adopt gender
diversity targets covering the Group’s
workforce, senior management team and
managerial positions. This recommendation
was accepted and stretching targets were
announced in March 2021 (see pages 94 and
95 for further details).
During the year the Committee also
exercised oversight of the Group’s diversity
and inclusion activities. A number of
significant steps were taken in 2021, which
are set out on pages 94 and 95 and include
the appointment of the Group’s first Director
of Talent & Diversity. The Committee will
continue its work in this area to ensure the
Group develops and maintains a diverse
pipeline of talent for succession to senior
management and executive positions.
Succession planning
Succession planning for the Board
and senior management positions was
also high on the Committee’s agenda.
The Committee reviewed the Board’s
skills matrix and agreed to update this.
The Committee has also had oversight of
the Group’s Talent Review, which is currently
ongoing. It is anticipated that the review
will significantly enhance the robustness
of the Group’s succession plans for senior
management positions.
The Group has a strong record of nurturing
talent and promoting internal candidates
andthis was again demonstrated in
February 2022 with a number of senior
promotions being made at Executive
Committee level, most notably the
promotion of a Regional Chair to the
newlycreated role of UK Managing Director
(see pages 96 and 97 for further details).
Further details regarding the activities of
theCommittee during the year are set out
on pages 92 to 97.
Roger Devlin
Chair of the Nomination Committee
1 March 2022
White
Arabic
Board ethnic diversity
at 31 December 2021
1
8
Board gender diversity
at 31 December 2021
33.3%
66.6%
0-3 years
3-6 years
Over 9 years
Board tenure
at 31 December 2021
11.1%
55.6%
33.3%
Male
Female
Strategic report Governance Financial statements Other information
91
NOMINATION
COMMITTEE REPORT
Directors’ report
Summary of the Committee’s work during the year
Further information is set out in this Nomination Committee report.
Matters considered Outcome
Appointment of a new Chief Financial Officer
Appointing a candidate with experience and a strong trackrecord of
achieving positive results.
In January 2022, recommended to the Board that JasonWindsor be
appointed. This recommendation wasaccepted and it is anticipated that
Jason will join theGroup in the summer of 2022.
Appointment of a new Non-Executive Director
Non-Executive Director with specific knowledge ofkeyareasincluding
finance and technology.
Recommended to the Board that Shirine Khoury-Haq beappointed.
Shirine subsequently joined the Group on1 July 2021.
Equality, diversity and inclusion
Considered the diversity of the Board and the Group’s senior management
team and workforce. Received and considered reports from the Group
HR Director and Director of Talent & Diversity on the Group’s diversity and
inclusion activities.
Recommended to the Board that stretching gender diversitytargets be
set. This recommendation was acceptedand targets were announced in
March 2021.
Review of Board skills
Considered the balance of skills and experience on the Boardand its
Committees. Reviewed the Board skills matrix.
Agreed that the composition of the Board and its Committeesremained
appropriate. Agreed to update theBoard skills matrix.
Succession planning
Considered succession for the Board and its Committees. Received and
considered reports from the GroupHR Director and Director of Talent &
Diversity regarding seniormanagement succession.
Agreed to keep Board and senior management successionunder review,
mindful of the need to developandmaintain a diverse pipeline of talent.
Nomination Committee
key duties
The key duties of the Nomination
Committee are to:
• Lead the process for appointments
tothe Board;
• Ensure that plans are in place for
orderly succession to both the Board
and senior management; and
• Oversee the development of a
diversepipeline for succession.
On 26 July 2021 Mike Killoran informed
the Board that, after 25 years with the
Group, he intended to retire in early
2022. Following the announcement, the
Committee led the process to find Mike’s
successor. The Committee developed
a detailed and objective candidate
specification, covering the experience,
skillsand qualities required to undertake
therole, which included:
• Strong previous financial and investor
relations experience;
• A track record of delivering value
forall stakeholders;
• Experience of leadership within a
largeconsumer facing business; and
• Commitment to supporting the Group
Chief Executive and management team
to deliver the Group’s programme of
improvement and change.
Very capable internal candidates were
considered by the Committee for succession;
they will continue to be developed and
remain part of the succession plan for the
Chief Financial Officer role.
Board appointments
During the year, the Committee
recommended to the Board that Shirine
Khoury-Haq be appointed as an Independent
Non-Executive Director. Additionally, in
January 2022 the Committee recommended
the appointment of Jason Windsor as Chief
Financial Officer.
Jason Windsor –
ChiefFinancialOfficer
As part of its succession planning activities,
the Committee reviewed the tenure of
the Board’s directors during the year.
The Committee noted the long tenure of
Mike Killoran, Group Finance Director, who
had been appointed to the Board in 1999.
Building on work done in previous years,
which included the externally facilitated
assessment of potential internal candidates
for succession, the Committee reviewed
and considered the succession plan for
the Group Finance Director, across short,
medium and long-term time horizons.
Persimmon Plc | Annual Report | December 2021
92
To assist the Committee with identifying
suitable external candidates, the
Committeeagreed to appoint Heidrick
&Struggles, an executive search firm.
Heidrick & Struggles has no other
connection to the Company or its directors,
other than the provision of recruitment
services. Heidrick & Struggles is a signatory
to the Enhanced Voluntary Code of
Conduct for Executive Search Firms, which
aims to increase board diversity, and was
considered an appropriate choice for the
assignment due to the firm’s experience
and expertise.
Process
Heidrick & Struggles was briefed on
theCommittee’s candidate specification,
following which a wide and thorough search
for best in class candidates was undertaken
across a range of sectors, focusing on large
companies in the UK and Europe.
A long list of 23 candidates was interviewed
by Heidrick & Struggles (of whom six were
female). A shortlist of 13 (of whom two were
female) was interviewed by the Chairman
on behalf of the Committee. The leading
candidates then held meetings with all
Committee members.
Following the interview process, the
Committee made a recommendation to
theBoard and on 13 January 2022 the
Boardannounced that Jason Windsor
wouldbe appointed as the Group’s new
Chief Financial Officer, with an anticipated
start date in summer 2022.
Jason is an experienced finance executive
who has established a strong track record
in a variety of senior financial roles over
the last 26 years. He has been Group
Chief Financial Officer of Aviva PLC since
2019, having previously been Chief
Financial Officer of both its UK Insurance
and UK Life businesses, after originally
joining thebusiness in 2010. Prior to that
Jason spent 15 years at Morgan Stanley,
latterly asa Managing Director within
itsInvestmentBanking Division.
Jason is a well-respected and proven
FTSE 100 CFO and we are delighted to
have recruited someone of his calibre
and experience as Chief Financial
Officer to complement the Group’s
strong management team. As CFO
ofAviva PLC Jason has demonstrated
an ability to deliversustained financial
and strategicprogress while working
inalargeconsumer-facing business.
These skills will be highly relevant and
transferable to the Group as we continue
ourdrive to become the leading builder of
good value, quality family homes in the UK.
On appointment, Jason will receive a
comprehensive induction, covering
the Group’s strategy, operations and
stakeholders. This will include meetings
with Board members, the Company
Secretary, members of the Executive
Committee and senior managers covering
areas such as the Group’s housebuilding
operations, off-site manufacturing, strategy
& regulation, finance, tax, internal audit &
risk, IT, FibreNest, land & planning, customer
experience, health & safety and HR. Visits to
the Group’s operating businesses and
construction sites will also be undertaken.
Jason will also meet with a number of the
Group’s largest shareholders and other
key stakeholders.
Shirine Khoury-Haq – Independent
Non-Executive Director
As part of its succession planning activities,
during the year the Committee also focused
on the appointment of a Non-Executive
Director to succeed Rachel Kentleton as
Audit Committee Chair.
The Committee considered the balance
ofskills and experience on the Board,
as wellas the qualities and experience
required to fulfil the Audit Committee
Chair’s role, being financial and risk
management expertise. The Committee
also considered the diversity of the Board
and the benefits that diversity can being
to board effectiveness and corporate
culture. The Committee agreed to appoint
two executive search firms, Korn Ferry and
Nurole, to assist the Committee’s search.
Korn Ferry and Nurole have no other
connection to the Company or its directors,
other than the provision of recruitment
services. Korn Ferry is a signatory to the
Enhanced Voluntary Code of Conduct
for Executive Search Firms and Nurole
uses its expertise and reach toidentify
diverse candidates.
A long list of candidates was produced
and considered by the Committee.
Shortlisted candidates were interviewed
by the Chairman and leading candidates
held meetings with all Committee members.
Following the interview process, the
Committee made a recommendation to
the Board and on 25 June 2021 the Board
announced that Shirine Khoury-Haq would
be appointed to the Board as an Independent
Non-Executive Director with effect from 1 July
2021, joining the Audit, Risk and Nomination
Committees on the same date.
Shirine has been Chief Financial Officer
for The Co-operative Group since August
2019, where she is responsible for finance,
technology, transformation and corporate
development. She also serves as the CEO
of The Co-operative Group’s Life Services
sector which includes the Insurance, Legal
Services and Funeral businesses. Prior to
joining The Co-operative Group, Shirine was
Chief Operating Officer of Lloyd’s of London,
the insurance market, and had previously
held senior positions at Catlin, IBM and
McDonald’s. Shirine is a qualified accountant
and was also previously a Non-Executive
Director of the Post Office.
Shirine has a wealth of experience in
finance, technology and real estate in
businesses operating across a range of
sectors. Her appointment adds to the
balance of skills and experience on the
Board and will be of great benefit as the
Group continues to build a sustainable
business in every sense.
Following her appointment, Shirine received
a comprehensive induction, covering
the Group’s strategy and operations.
This included meetings with Board
members, the Company Secretary and
members of the Executive Committee and
senior managers covering major Group
functions. Shirine also visited one of the
Group’s construction sites.
Shortly after Shirine’s appointment, Rachel
Kentleton indicated that she wished to
retire from the Board to enable her to focus
on her imminent appointment as Chief
Financial Officer of St. Modwen Properties
PLC. Accordingly, Rachel retired from the
Board on 31 August 2021 and Shirine was
appointed Chair of the Audit Committee
onthe same date.
Strategic report Governance Financial statements Other information
93
Directors’ report
Nomination committee report
Equality, diversity
andinclusion
The Board supports diversity and inclusion
for the Board itself, the senior management
team and throughout the Group’s workforce.
It believes that a wide range of experience,
age, background, skills, knowledge, and
personal strengths combine to contribute
towards an effective Board and a high-
performing organisation.
Linkage to strategy
Investing in our colleagues is a key area
of focus within our strategy (see pages 32
to 37). By developing a diverse and inclusive
workforce, we will enhance our corporate
culture and grow our talent and skill base.
The Group recognises the importance
that existing and prospective employees
place on diversity and inclusion in the
workplace. To attract and retain the best
talent the Group continues to invest in its
workforce, its HR and training capabilities
and is committed to improving its diversity
and inclusion; a commitment which has been
demonstrated by actions taken during the
year, including the Group’s Inclusion Review
(see pages 33, 89 and 95).
Policy
The Group has an Equality, Diversity and
Inclusion Policy, which applies to the Group’s
employees and the Board. The purpose
of the policy is to provide equality, fairness
and respect for all in our employment,
whether temporary, part-time or full-time;
to not unlawfully discriminate because of
a protected characteristic (race, religion or
belief, disability, sex, gender reassignment,
age, sexual orientation, pregnancy and
maternity, marital or civil partnership
status) and to oppose and avoid all forms
of unlawful discrimination. The policy
covers areas including recruitment
and selection, training and promotion,
and disabilities. The policy is available
from the Group’s corporate website
www.persimmonhomes.com/corporate/
sustainability/policies-and-statements/.
Targets
In early 2021 the Committee received
an update from the Group HR Director
regarding the diversity of the Group and,
to improve the diversity of the Group’s
workforce and management teams, the
Committee agreed to recommend to the
Board that stretching gender diversity
targets be set. The Board accepted this
recommendation and, in March 2021, the
Board announced the following gender
diversity targets:
By the end of 2025 we aim for females
to compose:
• 40% of our employees;
• 35% of our senior management team; and
• 45% of employees in management roles.
These are challenging targets and, in the
nine months since their announcement,
progress was made in relation to the
proportion of females who make up the
Group’s senior management team.
Females
As at
31/12/2021
As at
31/12/2020
Employees 27% 28%
Senior
management team* 28% 26%
Employees in
management roles c.31%
Not previously
reported
* Executive Committee and Direct Reports
The Group will continue to work towards
these targets and further details of the
significant diversity and inclusion activities
undertaken by the Group during the year
can be found on pages 33 and 95.
Gender Pay Gap
The Group’s Gender Pay Gap Reports
are available on our corporate website at
www.persimmonhomes.com/corporate.
The 2021 Report will be published in April
2022, with the 2020 report having been
published in April 2021. The median Gender
Pay Gap for the Group was 18.1% in 2021
(2020: 12.7%), compared to the Office of
National Statistics figure for 2021 of 15.4%
(2020: 14.9%). As at 31 December 2021,
the gender balance of the Group was
27.4% female and 72.6% male. The gender
diversity of the Board as at 31 December
2021 was 33.3% female. The Group’s
Gender Pay Gap is driven by the shape
of our workforce with a high proportion
of men in skilled construction roles, such
as site management, where the market
is competitive and currently has limited
female participation. Despite this, we
realise it is essential that women are given
opportunities to reach their full earning
potential and during the year the Group took
a number of important actions in relation to
diversity and inclusion, details of which are
set out on pages 33 and 95.
Further information regarding the Group’s
approach to diversity and inclusion can be
found on pages 33 and 88 to 89.
Gender balance
The Hampton Alexander Review, which
set a target of 33% representation of
women on Boards and 33% women in the
combined Executive Committee and Direct
Reports by the end of 2020 has been at
the forefront of the minds of Committee
members in recent years. The Committee
notes the review’s successor, the FTSE
Women Leaders Review, and its targets,
which were published on 22 February 2022,
which will be considered during 2022. As at
31 December 2021 the Board comprised six
males (66.6%) and three females (33.3%).
As at the same date the Group’s Executive
Committee and Direct Reports comprised
51 males (72%) and 20 females (28%)
(2020: 55 males (74%), 19females (26%)).
During 2021 the Group participated in the
Hampton Alexander Review/FTSE Women
Leaders Review Survey.
Ethnic diversity
The Committee was mindful of the Parker
Review, and its target that each FTSE 100
board should have at least one director
of colour by 2021, whilst conducting its
candidate searches during the year.
The Committee is therefore pleased to
report that with the appointment of Shirine
Khoury-Haq, whose ethnicity is Arabic,
on 1 July 2021, the Board reached the
Parker Review’s target. Going forward,
the Committee will remain mindful of the
benefits that diversity can bring to Board
decision making and performance when
undertaking future candidate searches.
The Group is also mindful of the need to
increase the ethnic diversity of its workforce.
It is anticipated that the findings of the
Group’s Inclusion Review (see page 95) will
help the Group to develop action plans and
implement changes which will make the
organisation more attractive to prospective
employees who are from an ethnic
minority group.
During 2021 we participated in the Parker
Review Survey.
Diversity & Inclusion (D&I)
activities during the year
The Board has set the strategic direction
of the Group to increase its diversity and
the Committee receives and considers a
diversity update from the Group HR Director
at each of its meetings. The Committee is
pleased to report that during the year the
Group took a number of significant actions
that were designed, in whole or in part, to
improve diversity and inclusion within the
Group. These actions, which are set out in
the table opposite, also add to the Group’s
efforts to develop and maintain a diverse
pipeline of talent for succession to senior
management and executive positions.
Persimmon Plc | Annual Report | December 2021
94
D&I activity Detail
Gender
diversity targets
As explained in this Nomination Committee report, the Board set stretching
diversity targets for the Group which provide strategic focus to the Group’s
efforts to increase the number of female employees and female leaders.
Director of Talent
&Diversity
The Group’s first Director of Talent & Diversity commenced with the Group
in May 2021. The appointment is a clear signal of the Board’s strategic
intent and commitment towards improving the Group’s diversity and
inclusion. The appointment adds strategic resource to the Group’s drive
for diversity and has been welcomed by the Group’s employees and
management teams.
Diversity &
Inclusion Council
A new Diversity & Inclusion Council (“the Council”) has been established
to replace and build upon the work done by the Group’s Gender Diversity
Panel, with a broader remit encompassing all aspects of diversity.
The Council is chaired by the Director of Talent & Diversity and its
membership includes one of the Group’s Regional Chairs and a range
of senior leaders, who are collectively responsible for developing our
D&I strategy, overseeing its implementation, driving accountability and
monitoring progress throughout the Group.
The Council meets at least quarterly and its initial priority has been to
establish the Group’s current diversity position and develop the Group’s
diversity strategy across short, medium and long term time horizons.
To support the Council an external diversity & inclusion specialist has
been commissioned to conduct an in-depth review examining diversity
and inclusion within the Group from the perspective of current employees,
prospective future employees, customers and suppliers.
To feed directly into the work of the Council, and to represent the views of a
diverse cross-section of employees, a new Diversity and Inclusion Employee
Panel will be established in 2022. The new Panel will act as a sounding
board and a key source of feedback and input for the work of the Council.
Inclusion Review
The Group embarked upon an Inclusion Review during the year. As part
of the review process, an external diversity & inclusion specialist analysed
the Group’s relevant data, policies and processes and interviewed a broad
cross-section of individuals from across the business, including the Group
Chief Executive, senior management team members and office & site-based
employees. They also conducted office and site visits, including to our
Brickworks and Space4 factory.
The findings and recommendations from the review will help the Group
develop a clear strategy and practical action plans which will focus on areas
for immediate improvement and impact.
The Board received a presentation on the results of the Inclusion Review.
The review’s findings will subsequently be considered by the Group’s
Executive Committee and the Diversity & Inclusion Council.
Hybrid
Working Policy
The Covid-19 pandemic has challenged ways of working and has presented
the Group with the opportunity to work differently. Employee Engagement
has also indicated that employees wish to work more flexibly than in
the past.
Listening to employees, during the year the Group HR department
introduced a new Hybrid Working Policy, which allows employees with
suitable job roles to work from home up to three days per week.
It is anticipated that this policy, along with the Group’s existing Flexible
Working Policy, will support our colleagues, especially those with caring
responsibilities, to achieve their career aspirations.
Head of Reward
The Committee notes the potential impact that pay and flexible benefits
packages can have in relation to diversity. The Committee is therefore
pleased to report that the Group appointed its first Head of Reward during
the year.
The appointee will support the work of the Remuneration Committee and
review pay and benefits arrangements across the Group, with a view to
supporting the Group’s diversity and inclusion strategy.
Graduate
Management Training
Programme
The programme was established during the year with the objective of
securing a broad talent base from which we anticipate that members of our
senior management teams of the future will be selected. Working with an
experienced recruitment partner, we are able to ensure that the programme
actively encourages applications from underrepresented groups. In 2021 the
Group recruited eight graduates (five male and three female) to participate in
the programme and we are currently recruiting our 2022 cohort.
Training
Programmes
The Group’s training programmes were reviewed during the year to ensure
that they facilitated the embedding of diversity and inclusion throughout
the Group.
Succession planning
The Group acknowledges the importance
of succession planning in achieving
the Group’s strategic objectives and in
developing a diverse pipeline of talent.
Succession planning for the Board and
senior management across the Group
is therefore kept under review by the
Committee. As set out in our Equality,
Diversity and Inclusion Policy, the Group’s
succession plans are based on merit and
objective criteria, and within this context
promote diversity of gender, social
and ethnic backgrounds, cognitive and
personal strengths.
Board composition
The Board currently includes six
Independent Non-Executive Directors, who
together bring a balance of skills, experience
and perspectives to the Board, in addition to
a diversity of views. The full biographies of
the Non-Executive Directors can be found
on pages 78 and 79.
Nigel Mills was appointed to the Board
in 2016 and holds the role of Senior
Independent Director. His 30-year career
has equipped him with broad experience of
financial markets, strategy, risk, shareholder
attitudes and corporate governance, which
enable him to provide sound advice to
the Board.
Simon Litherland was appointed to the
Board in 2017 and has extensive experience
in a consumer facing sector, with expertise
in brand building, marketing and strategy.
He brings a strong practical understanding
of organisational purpose, culture and
employee engagement.
Joanna Place was appointed to the Board in
April 2020 and has a breadth of leadership
experience, gained during the course of
her 35-year executive career at the Bank of
England. Her knowledge and insights in the
fields of economics, public policy and human
resources are a valuable addition to the
business as we continue to implement our
programme of progressive change.
Annemarie Durbin was appointed to the
Board in July 2020 and is the Chair of the
Remuneration Committee. Annemarie is a
highly experienced international business
executive, with a strong background in
corporate governance, human resources
and executive remuneration.
Andrew Wyllie was appointed to the Board
in January 2021. Andrew brings relevant
sector experience to the Board and has a
long and successful track record within the
construction industry, having previously
been Chief Executive of Costain Group
PLC. His industry knowledge, expertise
and perspective is a valuable addition to
the Board.
Strategic report Governance Financial statements Other information
95
Directors’ report
Nomination committee report continued
Shirine Khoury-Haq was appointed to the
Board in July 2021 and is the Chair of the
Audit Committee. Shirine, who is the Chief
Financial Officer of The Co-operative Group,
brings a wealth of corporate and leadership
experience to the Board, particularly in
relation to finance, technology and real estate,
having previously worked in businesses
operating across a range of sectors.
During the year Rachel Kentleton, Non-
Executive Director and Chair of the Audit
Committee retired from the Board, leaving
on 31 August 2021. Rachel brought significant
knowledge and experience to the Committee
and the Board; she is thanked for her service.
Also during the year, the Group announced
that Mike Killoran, Group Finance Director,
would retire from the Board after 25 years’
service with the Group. Mike left the
Group on 14 January 2022, having played
a pivotal role in the development of the
Group, helping establish the business as
one of the leading housebuilders in the
UK and delivering outstanding returns for
shareholders. The Committee and Board
thank Mike for his significant contribution to
the success of the Group over this extended
period and wish him well in his retirement.
Board succession
During the year the Committee reviewed the
tenure of all Board Directors. The Committee
also reviewed, and agreed to update, the
Board’s skills matrix.
To update the skills matrix all Board members
were asked to complete a self-assessed
questionnaire regarding their skills and
knowledge, set against a framework
comprising 16 core skills which were grouped
into three broad categories: leadership
and governance, sector experience and
expertise, and broader experience and
expertise. The results of the self-assessment
were presented to, and reviewed by, the
Committee. The exercise identified the
many strengths and diverse experience of
Board skills, knowledge and experience
Strengths Areas for enhancement
CEO experience
Housebuilding sector experience
Sustainability and Health & Safety
Construction experience
UK Plc experience
Knowledge and experience of risk and strategy
Corporate governance
Finance and capital markets
Customer facing industries
People, transformation and remuneration
Regulation and governance
Marketing and business development
Digital/technology
the Board and also the areas where Board
members considered enhancements could
be made (see table below).
The Committee is broadly satisfied that
the combination of skills, experience and
knowledge on the Board and its Committees
is appropriate, being broad, deep and
relevant to the Group, its strategy, operations
and marketplace. The Committee notes
that the Board’s housebuilding experience
could be increased and the matrix will be
considered by the Committee as part of its
future succession planning and appointment
activities. Additionally, to enhance Board
debate and discussion, it has been agreed
that from April 2022, one of the Group’s
most senior housebuilding executives will
attend full Board meetings on a rotational
basis. These are the UK Managing Director,
the Deputy UK Managing Director, the
Chief Commercial Officer and a Regional
Chair. This is in addition to the Executive
Committee members who present at the
Board’s annual Strategy Day. It is anticipated
that the additional attendee per meeting will
provide a valuable perspective to the Board
based on their many years of housebuilding
and operational experience. Attendance at
Board meetings will also contribute towards
the professional development of these
senior executives and enhance the
robustness of the Group’ssuccession plans.
Senior management succession
During the year the Committee received
reports from the Group HR Director
and hadoversight of the Group’s senior
management succession planning activities,
which included the external assessment
of the Managing Directors who lead each
of the Group’s operating businesses.
The exercise identified the strengths
and training needs of each individual.
Following the exercise each participant
received a formal training plan that included
a range of learning and development
activities that were tailored to their needs,
with a strong focus on leadership, delivered
by the Group Training department and an
external training provider.
Additionally, the Group commenced a
TalentReview during the year, being a
thorough assessment of the talent base
across the whole of the Group’s operations.
The review will cover middle-management
positions upwards and will lead to robust
and detailed succession plans, identifying
immediate to long-term successors.
To support these plans, the Group will
undertake development activities to ensure
that the identified successors and high-
potential colleagues are developed within
the business and have the knowledge and
skills to support their progression and career
within the Group. Such development activity
may include mentoring, secondments,
projects and gaining exposure to the
Group’s senior leaders. It isanticipated that
the review will significantly enhance the
effectiveness of the Group’s succession
plans. This, in combination with the Group’s
significant focus on diversity & inclusion,
will help the Group develop and maintain a
diverse pipeline of talent for succession to
senior management positions.
Despite the improvements which can and
will be made to the Group’s succession
planning processes following the Talent
Review, the Group has a strong record
of nurturing talent and promoting
internal candidates. This has again been
demonstrated in a number of senior
management promotions which occurred
inFebruary 2022, again reflecting
the strength and depth of talent and
experiencewithin the Group.
Persimmon Plc | Annual Report | December 2021
96
Actions taken during the year in response to the 2020BoardEvaluation
Following feedback received from the 2020 Board Evaluation, the following actions were taken during the year:
Feedback from 2020 evaluation Action taken during the year
Improve forward Board agenda planning
Forward agenda planning is now a standing item on all Board and Committee
meeting agendas.
Hold additional Non-Executive Director only meetings
An additional meeting has been added to the annual schedule. During the meetings the
performance of the Executive Directors was discussed, as was business performance,
strategy and the wider economic environment.
Improve reporting on stakeholder engagement
The Board now receives more stakeholder specific presentations and reports from
Executive Committee members at its meetings.
Conduct further work on purpose, values and culture
This was a significant area of focus for the Group’s leadership team and the Board during
the year. Proposals were discussed in detail during the Board’s Annual Strategy Day.
Following this, in January 2022 the Group launched its new Mission, Vision and Values
(see pages 4 and 5), which are a statement of the Group’s priorities as a business and how
theGroup seeks to achieve them.
The promotions included a number of
Managing Directors becoming Regional
Managing Directors, the appointment of a
new Regional Chair and three Regional Chairs
being promoted into newly established roles:
• The Regional Chair (Central Division)
was promoted to UK Managing Director,
reporting directly to Dean Finch, Group
Chief Executive. The UK Managing
Director will lead all operational aspects
of our business, reflecting his significant
experience and strong industry-wide
reputation. The UK Managing Director is
at the forefront of our ambition to grow
by building more homes at consistently
outstanding levels of quality and
service. As Chair of Space4 he will also
drive forward our approach to Modern
Methodsof Construction.
• The Regional Chair (South Division) was
promoted to Chief Commercial Officer,
reporting directly to Dean Finch, Group
Chief Executive. The Chief Commercial
Officer will lead on all commercial
aspects,including new business
development and enhancing our
relationships with key external partners.
Group Commercial, Group Technical,
Group Land, Group Planning, Group
Legal, Partnerships and Affordable
Homes and FibreNest will report to the
Chief Commercial Officer. His significant
experience and breadth of skill helps
bring together these crucial functions to
ensure we maintain our key leadership
strengths whilst driving further innovation
and valuecreation opportunities.
• The Regional Chair (North Division)
was promoted to Deputy UK Managing
Director, with responsibility for the
North Division, Brickworks, Tileworks
and, from 1 April 2022, the Scotland
Division. This promotion reflects the
breadth of the Deputy UK Managing
Director’s responsibilities, the depth of
his experience and the significance of
the contribution he has already made
tothe Group.
In addition to the above, the Group
Construction Director will continue to lead
on the Group’s vital priority area of build
quality. The Group Construction Director has
made significant progress in embedding the
Persimmon Way across the Group, driving
our quality agenda. Working closely with the
UK Managing Director, the Chief Commercial
Officer and the wider senior team – as well
as our operating businesses – the Group
Construction Director will be at the forefront
of the Group’s determination to achieve both
our growth and consistency of quality and
service objectives.
Board evaluation
During the year the Board undertook a
formal and rigorous annual evaluation of its
performance and that of its Committees.
The evaluation was externally facilitated by
Grant Thornton UK LLP, which has no other
connection to the Company or its directors.
The external evaluation process was
agreedwith the Chairman.
The evaluation involved the completion by
Board members of a detailed questionnaire
and written feedback on particular areas
they consider the Board and its Committees
perform well and where improvements
can be made. Following this, the external
facilitator held meetings with the Chairman
and individual structured interviews with
all Board Directors and the Company
Secretary. Board papers were reviewed,
as were minutes of meetings. The external
facilitator observed the Board and Committee
meetings held in December 2021 and
delivered a presentation on the evaluation
report to the Board.
In terms of feedback fromthe 2021
evaluation, the Board was considered by
Grant Thornton to be between progressive
and strategic in its approach, being
competent, high performing and forward
looking. Additionally, they considered the
Board is well run and evolving in its maturity.
Board members indicated that they would
benefit from spending more time together
in-person following the limited number of
face to face meetings during the pandemic.
The evaluation noted the importance of
providing the incoming Chief Financial
Officer with a thorough induction and that
the Board may benefit from increased
housebuilding experience. It was also noted
that Board composition and succession
planning processes (and executive talent
processes) could be optimised, and that
action was already being taken regarding
this. The Board will further consider the
recommendations of the evaluation
during 2022.
The evaluation of the Chairman’s
performance was covered by the externally
facilitated Board evaluation. Following the
evaluation, it is considered that the Chairman
continues to perform well in his role.
The evaluation will be supplemented
by Nigel Mills, the Company’s Senior
Independent Director, holding private
discussions with the Board’s members,
excluding the Chairman.
Additional to the Board and Committee
evaluations, the Chairman undertook a verbal
performance evaluation of the Executive
Directors’ performance and an evaluation of
the Non-Executive Directors. The Chairman
also met with the Non-Executive Directors
without the Executive Directors being present
twice during the year.
The Chairman is satisfied that all Directors
continue to perform well in their roles and
contribute effectively.
Strategic report Governance Financial statements Other information
97
Areas of Focus 2021
Business environment
and uncertainty
The UK economy continues to be subject
to a range of uncertainties arising from a
combination of the Covid-19 pandemic,
the UK’s exit from the European Union,
and resulting supply chain and inflationary
pressures. The legislative and regulatory
environment, including measures to
combat climate change, has also continued
to evolve at pace. The Committee has
continued to monitor the ongoing impact of
these changes and uncertainties through
the year. In particular, this has focused on
key areas of accounting judgement and
estimates that could be influenced by the
heightened economic uncertainty, such
as asset carrying values, Group liquidity,
going concern assessments, and the
Group’s viability statement. In each case,
these considerations have been subject
to extensive management review and
further detailed scrutiny through the work
of the external auditors. The Committee
has worked to continually challenge
these assessments and ensure their
appropriateness. The pandemic specifically
has also affected how our teams work,
with an increase in remote and hybrid
working arrangements. The Committee has
assessed the internal control considerations
associated with these changes, obtaining
additional reports on the Group’s Covid-19
Safe Operating Procedures (SOPs) and
cyber and information security controls,
for example, in addition to working with
the Group Internal Audit Manager to
obtain positive assurance on the effective
implementation of controls.
In performing its duties, the Committee has
complied with the requirements of the UK
Corporate Governance Code and adhered
to relevant best practice guidance as
published by the FRC.
The composition of the Committee has
been subject to change within the year.
Rachel Kentleton stepped down from the
Board and her role as Chairman of the Audit
Committee on 31 August 2021; I would like
to thank Rachel for her service during her
time with Persimmon. I would also like to
welcome Andrew Wyllie, who joined the
Committee on 4 January 2021, and whose
extensive construction industry experience
will complement the skills of the existing
Committee members.
The specific priorities and key duties of the
Audit Committee have remained unchanged
within the year. The Committee has
maintained its particular focus on oversight
of the integrity and quality of financial
reporting, ensuring a high quality external
audit, reviewing the work and independence
of the Group Internal Audit department, and
ensuring the effectiveness of the Group’s
risk management processes and internal
control environment. The ongoing impacts
of the Covid-19 pandemic have continued
to be a significant consideration in each of
these areas, with the Committee paying
particular attention to accounting estimates
and judgements affected by the heightened
economic uncertainty, and the internal
control considerations arising from increased
home and hybrid working arrangements.
Directors’ report
AUDIT COMMITTEE
CHAIR’S STATEMENT
“ In what has continued to be a challenging
business environment, the Committee has retained
a strong focus on ensuring robust controls,
accuracy in financial reporting, and high quality
internal and external audit provision. On behalf of
the Committee I would like to thank the Internal Audit
and Finance teams for their excellent work this year.”
SHIRINE KHOURY-HAQ
Chair of the Audit Committee
“ I am pleased to present the
Group’s Audit Committee
Report for the year ended
31 December 2021.
This report sets out the
priorities and activities of the
Committee for the year, and
details how the Committee
has worked with the
Group’s finance team, the
operational management
teams and Ernst & Young
LLP (EY), as the Group’s
external auditor, in order to
discharge its responsibilities
around audit, risk and
internal control as outlined
within its terms of reference.”
SHIRINE KHOURY-HAQ
Chair of the Audit Committee
Audit Committee meeting
attendance 2021
Meetings
attended
Percentage
ofmeetings
attended
Shirine
Khoury-Haq
1
(Chair) 2/2 100%
Simon Litherland 4/4 100%
Joanna Place 4/4 100%
Andrew Wyllie 4/4 100%
Rachel Kentleton
2
3/3 100%
1. Shirine Khoury-Haq was appointed to the Committee
on 1 July 2021.
2. Rachel Kentleton retired from the Committee
on31 August 2021.
Persimmon Plc | Annual Report | December 2021
98
Financial reporting
Among the principal ongoing duties of the
Audit Committee is the monitoring of the
effective governance and integrity of the
Group’s financial reporting throughout the
financial year ended 31 December 2021.
The Committee has reviewed both the Half
Year Report and the Annual Report for the
financial year ended 31 December 2021 and
all related regulatory disclosures, including
those describing its management of climate
change risk in line the recommendations of
the Task Force on Climate-related Financial
Disclosures (TCFD). At the request of the
Board, the Audit Committee has considered
the 2021 Annual Report and is satisfied
that taken as a whole it is fair, balanced and
understandable, and provides the necessary
information to assess the Group’s position,
performance, business model and strategy.
External audit oversight
and quality focus
Maintaining the high quality of the
Group’s external audit processes
remains a consistent area of focus for the
Committee. This focus reflects increased
stakeholder expectations on the audit
profession, and the conclusions from the
consultation on ‘restoring trust in audit and
corporate governance’ carried out by the
Government’s Department for Business,
Energy & Industrial Strategy (BEIS).
To ensure the continued high quality of our
external audit, the Committee works closely
with EY to understand and challenge their
methodology, resource commitments and
investments in technology, and ensures
that an appropriate fee structure is in place
to support their work. The Committee also
oversees processes to obtain detailed
input on auditor performance from internal
stakeholders, reviewing feedback from
these processes to inform discussions on
further quality improvements with the audit
partner. The Committee remains satisfied
that EY continue to be independent and
objective and that the audit is effective.
Internal audit
The Committee monitors and reviews the
effectiveness of the Group’s Internal Audit
department. This includes the review and
approval of the annual internal audit plan
developed by the Group Internal Audit
Manager, together with the findings of
internal audit reports and monitors the
status of follow-up actions. The Committee
has overseen changes made by the Group
Internal Audit Manager to implement the
department’s Development Plan, designed
to ensure continuous improvement in
internal audit provision and continued
alignment with good practice and guidance
issued by the Chartered Institute of
Internal Auditors.
Risk management, internal control
and the BEIS consultation
The principal and emerging risks
facing the Group were assessed in
line with the requirements of the UK
Corporate Governance Code, through
a comprehensive survey of the Board
and senior management. The results of
the survey have been reviewed by the
Committee, with particular focus on the
effectiveness of the Group’s controls
to manage and mitigate these risks.
The effectiveness of the Group’s internal
control environment is reviewed routinely
through the work of the Group Internal
Audit department, with a specific summary
report presented to the Committee on an
annual basis.
The BEIS consultation on ‘restoring trust
in audit and corporate governance’ has
been reviewed by the Committee, which
is supportive of many of the consultation’s
recommendations. The Group’s response
to BEIS, prepared through engagement
with The 100 Group, was reviewed by
the Committee members. The Group’s
Internal Control over Financing Reporting
(ICoFR) Steering Group is overseeing the
preparations for implementing the various
actions foreseen from the consultation,
including enhanced formalisation of
reporting on internal controls and the
development of an Audit and Assurance
Policy. The Committee receives regular
updates from the Internal Control over ICoFR
Steering Group and will keep this area under
review through 2022.
Further detailed information on the work
of the Committee during the year in these
areas is set out below.
Shirine Khoury-Haq
Chair of the Audit Committee
1 March 2022
Strategic report Governance Financial statements Other information
99
Audit committee
composition and
attendance
In line with the provisions of the UK
Corporate Governance Code, the Audit
Committee is comprised exclusively of
Non-Executive Directors. Shirine Khoury-Haq
joined the Committee on her appointment
to the Board on 1 July 2021, and replaced
Rachel Kentleton as Chair on 31 August 2021,
following a comprehensive induction and
handover process to ensure an effective
transition. The Committee also includes
Joanna Place and Simon Litherland, who
were joined on the Committee by Andrew
Wyllie on his appointment to the Board on
4 January 2021.
The Board is satisfied that Shirine Khoury-Haq
has recent and relevant financial experience
appropriate to Chair the Audit Committee,
through her role as Chief Financial Officer
for The Co-operative Group. The Audit
Committee members have a broad range
of skills and experience that enable them
to fulfil their duties appropriately; these are
detailed further within the Board biographies
in the governance report on pages 78 and 79.
In addition to the Audit Committee
members,the meetings of the Committee
are attended by the Company Secretary,
Group Finance Director and Group Internal
Audit Manager, as well as representatives
from the external auditors.
By invitation of the Chair of the Audit
Committee, other senior managers of the
Group have attended meetings in part
withinthe year.
The Audit Committee meets four times
per year, with all members in attendance
for each of these meetings within 2021.
In addition to the normal schedule of
meetings, the Committee held discussions
separately and privately with the external
auditors, the senior management team
and the Group Internal Audit Manager, to
consider feedback from the external and
internal audits.
Audit committee cycle
The activities of the Audit Committee follow
a well-established annual cycle aligned with
the Group’s financial reporting calendar,
ensuring appropriate and timely oversight
for audit planning and the other key actions
of the Committee. Planning for the current
year’s audit begins in the spring and evolves
throughout the year, taking into account any
changes in the business environment, the
results of the previous year’s audit, progress
of the business and results of the review of
the Half Year Report. The Committee also
holds separate private meetings with the
external auditors, the senior management
team and the Group Internal Audit Manager
at various points in the year.
The normal cycle of the Committee,
according to its formal meeting cycle,
is set out below:
Audit Committee
key duties
The key duties of the Audit Committee
as per its terms of reference are to
provide oversight and review of the
following areas:
• Financial reporting, announcements,
significant financial judgements and
the viability statement
• The work of the external auditor
• The work of the Group Internal
Audit department
• Risk management and internal
control systems
Directors’ report
AUDIT COMMITTEE REPORT
April August December February Annual
• Agree external audit
strategy and strategy for
external auditor review of
Half Year Report
• Review draft audit plan
• Formal review of
performance of previous
external audit begins
• Review of the first quarter
report of Group Internal
Audit Report
• Review of cyber security
dashboard
• Review of Half Year Report,
including disclosures on
accounting judgements,
asset carrying values,
going concern, and
viability
• Review results of external
auditor report on their
review of Half Year Report
• Private review with
management of feedback
on external
auditor performance
• Private meeting with
external auditor
• Review of the second
quarter report of Group
Internal Audit Report
• Review of cyber security
dashboard
• External audit plan
finalised and agreed, and
fee structure reviewed
and approved
• Following year’s Internal
Audit Plan agreed
• Strategic Risk Register
and Principal Risks review
• Review of Committee
Terms of Reference
• Review of the third quarter
report of Group Internal
Audit Report
• Review of cyber security
dashboard
• Review of Annual Report,
including disclosures on
viability and going concern
• Assessment of whether
the Annual Report
is fair, balanced and
understandable
• Review of external audit
results and report
• Assessment of internal
control effectiveness /
appropriateness
• Private meeting with
external auditor
• Assessment of
independence of
the auditor
• Review of the final report
of Group Internal Audit
• Review of cyber security
dashboard
• Private meeting with
the Group Internal
Audit Manager
• Shared equity loan
receivables status
• Group tax status report
At least triannually
• Provision of non-audit
services from external
auditor
Persimmon Plc | Annual Report | December 2021
100
This approach has been retained in 2021,
with ongoing focus on the evolution in the
Covid-19 pandemic’s impacts on the Group’s
financial position, the effective operation
of risk management and internal control,
and the work of both external and internal
audit functions.
Priorities and main
activities during the year
The Audit Committee’s priorities and main
activities for the 2021 financial year are set
out below.
1. Business environment
and uncertainty
Throughout the year, the Committee has
remained focused on the situation within
the UK economy and ongoing uncertainties
within the business environment driven
by the ongoing impacts of the Covid-19
pandemic, the UK’s departure from the
European Union and the supply chain
and inflationary pressures that have
resulted. Particular emphasis has been
placed on the effects of this heightened
economic uncertainty on financial reporting
considerations, such as accounting
estimates and judgements. Similarly, the
changes in the way we work as a result
of the Covid-19 pandemic have been
also been considered by the Committee.
This has included obtaining update
reports from the Group’s Health, Safety &
Environment Director on the implementation
of the Group’s Covid-19 Safe Operating
Procedures (SOPs), and additional ongoing
assurance reports on the Group’s cyber and
information security controls, ensuring these
remain appropriate to mitigate potential risks
associated with increased home and hybrid
working patterns.
The considerations associated with
uncertainties in the business environment
and effects of Covid-19 are outlined further
within each of the key priority areas below.
2. Financial Reporting
The Audit Committee is responsible for the
integrity of financial reporting, including
the review of the Group’s Annual Report,
the Half Year Report and related regulatory
announcements. Financial reports are
prepared by senior management, with
appropriate verification procedures in place
to ensure the accuracy of the information
presented. Within 2021, the Committee’s
responsibility in this area has included
particular focus on the impacts of Covid-19
and broader economic uncertainty, and the
need to ensure that all accounting estimates
and areas of judgement were suitably tested
and robust.
At the request of the Board, the Audit
Committee considered whether the 2021
Annual Report taken as a whole is fair,
balanced and understandable, and whether
it provides the necessary information to
enable shareholders to assess the Group’s
position, performance, business model
and strategy. Following their review, the
Audit Committee is satisfied that, taken
as a whole, the 2021 Annual Report is
fair, balanced and understandable and
meets the required expectations of
shareholders. In reaching this decision,
the Committee took into consideration a
range of information received through its
normal duties. This including the internal
processes governing financial reporting,
and the feedback and assurances from
both operational teams and external
advisors, concerning quality of information
and adherence to requirements under
the Companies Act, the UK Corporate
Governance Code, Listing Rules and other
relevant reporting regulations.
Assessment of Significant
Financial Judgements
The assessment of significant financial
judgements facing the Group, and
identification of risks of potential
misstatement of the Group’s financial
statements is one of the Audit Committee’s
key responsibilities. The Audit Committee
has assessed that the material financial
issues of the Group for 2021, and their
associated risks and controls, as follows:
Revenue recognition
The Group’s revenue for 2021 was £3,610m.
The analysis of total Group revenues is
found at note 5 to the Financial Statements.
The risk of misstatement in relation to
revenue recognition could materially affect
the revenue in the income statement,
particularly if revenue were to be recorded
in the wrong period, due to cut off errors
or management bias. In order to ensure
the accuracy of revenue recognition and
associated disclosures, the Committee
routinely challenges management to
demonstrate the effectiveness of the internal
controls employed by the Group, including
those for recording of revenue from
housing associations under development
agreements. Revenue recognition is also a
key focus for the external auditors, who have
deployed data analytics tools and detailed
transactional testing to provide positive
assurance on the accurate recording of
revenue and cut-off controls. The Committee
is satisfied that the Group’s processes
and controls over revenue recognition are
operating effectively, and that revenues are
reported accurately.
Carrying value of land and work in
progress, including the accuracy of
cost recoveries
At 31 December 2021, the carrying value of
the Group’s land was £1,798m, the carrying
value of work in progress on-site was
£1,054m and the cost of sales was £2,527m.
There is a risk that the carrying value of
land and work in progress could be subject
to impairment should the assessments
that underpin them, such as management
estimates of market conditions and
anticipated selling prices, prove to be
inaccurate, or if market conditions were to
deteriorate significantly. The Committee
has reviewed the Group’s rigorous internal
processes for monitoring land and work in
progress valuations and profit recognition.
This includes reviewing the outputs of
the bi-monthly valuation meetings held in
each Operating Company to review the
valuation of work in progress at each site.
These meetings are chaired by the Group’s
independent Commercial department, and
are attended periodically by the Group
Internal Audit department, who monitor and
report to the Risk and Audit Committees on
management’s adherence to the Group’s
policies and procedures. The Committee
has again reviewed management’s
assessment of the net realisable value of
the Group’s land and work in progress held
at 31 December 2021, and concluded that
the approach adopted by management
supported the asset carrying values.
Legacy buildings provision
As reported in 2020, in response to evolving
practices in relation to fire safety on multi
storey, multi occupancy buildings, the
Group made a provision for possible future
remediation works of £75.0m.
There is a risk that the value of this
provision could be inaccurate, should
the assessment of affected properties or
estimations on possible future remediation
works prove to be different from the actual
costs incurred. As such, the Committee
has taken time to review and challenge
management’s interim findings and
supporting evidence regarding the
scope and quantum of this obligation.
The Committee reviewed and agreed
the basis on which the legacy buildings
provision has been utilised, treated and
disclosed within the financial statements.
The Committee has also considered
the recent amendments introduced to
the Building Safety Bill and is satisfied
that the carrying value of the provision
remains appropriate. The matter has also
been discussed in detail with the Group’s
external auditor.
Strategic report Governance Financial statements Other information
101
In addition to the Committee’s ongoing focus
on audit quality and effectiveness, EY have
maintained investments in technology and
staffing to support the continued high quality
of their audit. These increased costs have
been recognised in an increase in the audit
fee, which was reviewed and approved by
the Audit Committee. The fee paid to EY
for their audit work for the 2021 financial
year was £360,000, further details of which
are set out on page 152. Further audit
related fees of £65,000 were paid to the
auditor for their work on their review of the
Group’s 2021 Half Year Report. In addition,
the Company paid £5,000 for the audit of
the 2020 annual report of the Persimmon
Charitable Foundation. The ratio of audit
fees to non-audit fees for the year was 5:2:1.
Auditor independence and objectivity
EY have been the Group’s auditor since April
2016, having been appointed following a
competitive tender exercise involving three
leading audit firms. The lead audit partner
is Victoria Venning, who has held the role
since April 2021, replacing Peter McIver in
line with the Group’s policy to rotate the lead
external audit partner every five years.
The Committee routinely monitors the
independence and objectivity of the lead
audit partner on an ongoing basis, with
a formal review annually. In assessing
these matters, the Committee places great
emphasis on the auditor continuing to
demonstrate an appropriate professional
scepticism in the performance of their work.
The Committee’s assessment is further
informed by private meetings with the EY
audit team without management present.
Within these meetings, the Committee
reviews the auditor’s assessment of the
business risks and management’s mitigation
of those risks, the transparency and
openness of the auditor’s interactions with
management, and seeks confirmation that
there has been no restriction in scope or
other hindrance placed upon them.
The Committee formulates and oversees
the Company’s policy on provision of non-
audit services. This policy was reviewed in
detail in 2020, with the next formal review
scheduled for 2023. The policy represents
a key control to ensure that the nature of
any non-audit services performed by the
auditor, and the fee earned for that work
relative to the fees earned for the audit,
do not compromise, and are not seen to
compromise the auditor’s independence,
objectivity or integrity.
Under the terms of the policy, the auditor
is excluded from undertaking a range of
work on behalf of the Group. The auditor
may be commissioned to provide audit
related services and permitted non-audit
related services with the specific approval
of the Audit Committee. The Committee has
confirmed that this policy was adhered to
within the year.
equity receivables. As in the previous years,
audit focus included other key areas such
as the impairment of goodwill and intangible
assets, the accuracy of the Group’s current
tax accrual and deferred tax balances,
valuation of the Group’s defined benefit
pension scheme obligations, and share-
based payments.
In addition, the Audit Committee has
reviewed EY’s assessments as to whether
the Group should properly be considered
as a going concern, their evaluation of the
Viability Statement and their requirements
as auditor to address the Board’s application
of the UK Corporate Governance Code (see
independent auditor’s report on pages 134
to 139).
Audit quality and effectiveness
The Audit Committee has maintained
its focus on ensuring a high quality and
effective external audit as a key priority.
This has been a particular area of attention
in the context of the ongoing pandemic and
the resulting economic uncertainty, and the
Committee’s continued desire for scrutiny on
areas of financial judgement and estimates.
Furthermore, the Committee has been
mindful of the need to maintain high audit
quality despite the continued disruptions
on working practices imposed by Covid-19
within the year.
Ensuring high audit quality is a consideration
throughout the Audit Committee cycle
(see page 100), starting early in the year
with the Committee’s review and approval
of the auditor’s audit strategy for the year.
Before commencing their audit, EY prepared
a detailed draft audit plan for review by
the Committee, including the strategy
for the auditor’s review of the Half Year
Report. The 2021 plan was informed by the
experience gained from the audits in prior
years, which helped to form the basis of the
audit strategy for the year. The Committee
reviewed the draft plan and agreed the
scope of the audit and of the Half Yearly
review with EY. The 2021 plan identified EY’s
assessment of the key risks for audit review
in the year and overall Group materiality,
taking into account the Committee’s request
for further ongoing scrutiny on areas of key
accounting judgements and estimates.
The Committee has well-established
processes to obtain robust and detailed
feedback on auditor performance from
internal stakeholders. The Committee
reviews the feedback from these processes
in detail, and uses it to inform discussions
on further quality improvements with
the auditor. Other measures focused on
maintaining an effective dialogue with the
auditor, including routine engagement
between the Audit Committee Chair and
the lead partner, have been maintained
within 2021.
Defined benefit pension schemes
The Group has defined benefit pension
schemes with a combined surplus on an
accounting-funding basis of £148.8m at
31 December 2021 (2020: £50.6m surplus).
See note 27.
The funding position of the Group’s defined
benefit pension schemes is dependent
on a range of assumptions, including
life expectancy of the pension scheme
members, future rates of inflation and
long-term discount rates, which could
prove to be inaccurate. In addition to
the work of the external auditors, and in
order to provide further assurance on the
accuracy of the funding position, the Audit
Committee obtains six monthly updates and
presentations from the Group’s pension
scheme actuary. The Committee remains
satisfied that the financial statements
accurately reflect the funding position of
the schemes.
Viability Statement
The Group’s Viability Statement (see
pages 68 and 69) is also reviewed by the
Committee. Viability is assessed based on
a range of comprehensive stress testing
scenarios, focusing on the potential impact
of severe market disruption, such as could
arise from the ongoing pandemic or other
significant events, on the short to medium
term demand for new homes. The basis of
these scenarios, which assume substantial
reductions in sales over a relatively short
period, coupled with reduced average
selling prices and asset impairments have
been reviewed and challenged by the
Committee. Based on the outcome of these
detailed assessments, the Committee
considers that the Group will be able to
continue in operation and meet its liabilities
as they fall due over the five-year period to
the end of 31 December 2026.
3. External audit oversight
The Audit Committee has responsibility
for ensuring the Company’s external
auditor provides a high quality audit,
whilst maintaining the required levels
of independence and objectivity in the
performance of their work. The Committee
also manages the process of agreeing the
audit fee structure and the assessment
of the auditor’s overall performance.
Further details are outlined below:
Audit reporting
The Audit Committee receives routine
reports from EY as external auditor
throughout the year, before receiving a final
report and presentation of the audit results.
EY presented their 2021 audit results to
the Committee meeting in February 2022.
The significant financial risks identified were
consistent with the prior year, including
revenue recognition, the carrying value
of the Group’s land and work in progress
(including the accuracy of cost recoveries)
and the carrying value of the Group’s shared
Directors’ report
Audit committee report continued
Persimmon Plc | Annual Report | December 2021
102
Following the most recent formal review
of auditor independence, which took into
consideration a further report from EY on the
auditor’s own independence controls and
the level of audit fees and non-audit fees
paid to the auditor, the Committee continues
to consider that EY, and Victoria Venning as
lead audit partner, remain independent.
Auditor challenge, assessment
and reappointment
The Audit Committee challenges the
external auditor and assesses their
performance on an ongoing basis.
Within 2021, the Committee has sought
to challenge the auditors to provide the
Committee with more detailed breakdown of
their methodology and testing approaches
on various key audit matters, such as
revenue recognition. A formal review
is conducted annually, using a survey
framework that takes into consideration
factors such as the quality and depth of
the auditor’s reporting, their planning and
strategy for undertaking the audit and the
quality of the personnel undertaking the
audit. The Committee also considers the
feedback obtained from surveys of senior
management on the performance of EY,
including any highlighted opportunities to
enhance the audit process. Following the
formal review of auditor performance
for the 2021 audit, the Audit Committee
considers that EY remain independent and
objective, and continue to deliver a high
quality of audit. As such, the Committee has
recommended to the Board that EY be re-
appointed auditor.
The Company has complied with the
provisions of The Statutory Audit Services
for Large Companies Market Investigation
(Mandatory Use of Competitive Processes
and Audit Committee Responsibilities) Order
2014. In line with the provisions of this Order,
the Group is not required to re-tender its
audit provision until the full year audit for
2026; however, the Audit Committee will
monitor the performance of EY continuously,
and will make recommendations on future
tendering plans on an annual basis.
The Committee considers this approach to
tendering to be in the best interests of all
stakeholders given the high quality of audit
being delivered by EY and their detailed
understanding of the Group’s operations.
4. Review of the work of the Group
Internal Audit department
The Group Internal Audit Manager attends
all meetings of the Committee in full, and
presents for approval the annual risk-based
internal audit plan, results of all completed
internal audits, the follow-up status of
agreed actions, and performance indicators
for the department. The Group Internal
Audit department continues to work in
line with the Professional Standards of the
Chartered Institute of Internal Auditors (IIA)
and the IIA’s Internal Audit Code of Practice,
verified through periodic External Quality
Assessments. To ensure the continuous
improvement of the internal audit provision,
the Committee has reviewed and approved
the Group Internal Audit Development Plan,
and receives regular progress reports on
its implementation.
The Audit Committee members meet with
the Group Internal Audit Manager at least
annually without management present, to
ensure that independence and objectivity
of the Group Internal Audit department
is being maintained, and to consider the
appropriateness of the department’s
available skills and resources. Following the
2021 meeting, the Committee confirmed
it was satisfied that the overall level of
resource in place remains appropriate but
that it would be kept under review to ensure
it remains sufficient to support any changes
in the expectations placed on Group Internal
Audit. The Committee recognised that
for some specialist assurance work, the
department’s skills should continue to be
supplemented with co-sourced resource
from external providers.
Within the year, the Group Internal Audit
department has delivered its annual audit
plan effectively, through a combination
of remote auditing and physical site visits
(where permissible under the Group’s
Covid-19 SOPs). Audit reports were provided
on a range of topics, including the Group’s
anti-bribery and corruption controls, waste
management processes, payroll controls,
sub-contractor appointment processes and
professional advisor engagement controls.
The Committee is satisfied that the Group
Internal Audit department remains effective
in its provision of independent assurance
to the Board, and continues to meet the
expectations placed on it through the Group
Internal Audit Charter.
Whistleblowing
The Group Internal Audit department
also reviews all whistleblowing reports,
conducting investigations where necessary,
and provides detailed reporting to the
Committee. Having reviewed the reports
provided on whistleblowing matters within
the year, the Committee is satisfied that
the Group’s approach to whistleblowing
is appropriate, and that investigations
have been conducted swiftly and with the
necessary competence and sensitivity.
There were no material issues or control
weaknesses raised in the whistleblowing
reports received within 2021 that were found
to require any major management actions.
In the spirit of continuous improvement,
the Committee has agreed for the Group
to enter a partnership with Protect,
the whistleblowing charity, for 2022.
This will allow the Group to draw on Protect’s
expertise in this area, and ensure the
Group’s whistleblowing provision remains in
line with accepted good practice.
5. Risk Management, Internal
Control and BEIS Consultation
The effective management of risk is central
to the achievement of the Group’s objectives
and the long-term sustainability of our
business. The Audit Committee monitors
the Group’s systems of risk management
and internal control and reports to the
Board on their effectiveness on an annual
basis. The key aspects of these systems
and related considerations within 2021 are
as follows:
Principal risk identification
and risk management
In line with the provisions of the UK
Corporate Governance Code, the Board
routinely assesses the principal and
emerging risks facing the Group (see pages
55 to 61). The assessment is supported by
a detailed survey of the Board and senior
management, facilitated by the Group
Internal Audit department. The conclusions
of this assessment, including the
identification of new risk areas and
movements in assessment of risk impacts
and probabilities, are reported to the Board
at its annual strategy day. The assessment
feeds into the Group’s overall strategy, which
is agreed by the Board and implemented
operationally by senior management within
the Group. Thereafter, the approach to
risk management and strategy undergo
a continuous and iterative process of
implementation, review and adaptation
at Board meetings, and in response to
the evolution of conditions in which the
Group operates.
The Strategic Risk Register, including the
principal risks faced by the Group, was
presented to the Main Board at its annual
2021 strategy meeting, and was formally
reviewed, and accepted by the Risk and
Audit Committees in December 2021.
The risk register in its entirety (including
operational and departmental risk registers)
is updated on an ongoing basis in response
to the work of the Group Internal Audit
department, and subject to a detailed annual
review in consultation with senior staff
from across the Group, facilitated by Group
Internal Audit. The registers are presented
to the Risk and Audit Committees for their
review and approval.
System of Internal Controls
The Group’s internal control environment
is based upon the widely recognised
‘three lines’ model. The first line is
the routine management oversight of
operations, performed within a framework
of standardised controls developed and
overseen by second line functions operating
at Group level. The Group Internal Audit
department operates as the third line
of defence, providing independent and
objective assurance on the effectiveness
of all aspects of risk and internal control
through the delivery of their risk-based
annual audit plan. The Risk Committee
Strategic report Governance Financial statements Other information
103
monitors the effectiveness of the system
of internal controls, including the review of
reporting provided by the Group Internal
Audit department.
As noted elsewhere within this report, the
onset of the Covid-19 pandemic resulted in
changes in some working practices, with
Covid-19 SOPs introduced and an increase
in home and hybrid working. The Audit
Committee has sought to challenge
management to ensure that the Group’s
robust internal control environment was
not compromised through these changes
in working practices. The Committee
has focused specifically on cyber and
information security controls, and has
obtained detailed reporting of cyber risk and
performance from the Group IT department.
The Committee has also obtained reporting
on staff training regarding awareness of
the risks associated with home working,
such as safeguarding of data and physical
records, and the identification and
prevention of attempted phishing and
socialengineering attacks.
Risk Committee oversight
The Risk Committee reports to the Audit
Committee, which oversees its activities.
The primary focus of the Risk Committee is
to review the work of Group Internal Audit
in providing assurance on the effective
management of risk and the effectiveness
of the Group’s system of internal controls.
In addition to the review of internal audit
activities, the Committee reviews all
whistleblowing reports and investigations,
updates to the Group’s risk registers and
presentations and reports from operational
functions relating to risk and internal
controls. The Risk committee is chaired
byDean Finch (Group Chief Executive).
The other members of the Risk Committee
include Shirine Khoury-Haq (Audit
Committee Chair) and Julia Nichols (Group
Strategy and Regulatory Director), Mike
Killoran (Group Finance Director), served on
the Committee until his retirement in January
2022. The Group Internal Audit Manager
also attends all meetings of the Risk
Committee as an advisor and as secretary
to the Committee. There were five meetings
of the Risk Committee in 2021, ensuring
there has been an ongoing and robust
process for the identification, evaluation and
management of the main risks faced by the
Group and the effectiveness of the controls
in place to mitigate them.
Review of the effectiveness
of Internal Control
In line with the provisions of the UK
Corporate Governance Code, the Audit
Committee reviews the Company’s internal
control and risk management systems on
a continuous basis, through its review of
the work of the external auditor and the
Group Internal Audit department, and the
review of other reports requested from
internal and external partners. A formal
annual assessment of internal controls is
performed by the Committee on behalf
of the Board, drawing on an independent
assessment produced by Group Internal
Audit, produced in line with the Guidance
on Risk Management Reporting, Internal
Control and Related Financial and
Business Reporting issued by the FRC in
September 2014. The 2021 assessment
concluded that controls were generally
operating effectively.
BEIS consultation ‘restoring trust
in audit and corporate governance’
The Audit Committee has paid close
attention to the BEIS consultation on
‘restoring trust in audit and corporate
governance’ and is supportive of many
of the consultation’s recommendations,
particularly those associated with
greater transparency and disclosure
on internal controls. The Committee
has engaged withmanagement on the
key issues within the consultation, and
reviewed the Group’s response to BEIS,
prepared in conjunction with The 100
Group. The Group’s internal Control over
Financing Reporting (ICoFR) Steering
Group is overseeing thepreparations
for implementing the various actions
foreseen from the consultation, including
enhanced formalisation of reporting on
internal controlsand the development
ofanAuditand Assurance Policy.
To support these preparations, the Group
engaged external support to challenge the
approach being taken in addressing the
consultation’s potential outcomes, and share
good practices observed in jurisdictions
that have adopted control frameworks
aligned to Sarbanes-Oxley requirements.
The Committee receives regular updates
from the ICoFR Steering Group as part the
Group Internal Audit Manager’s routine
reports to the Committee, and will keep
thisarea under review through 2022.
Other key actions
In addition to its routine activities, over the
course of 2021 the Audit Committee has
reviewed a range of presentations on other
key issues for the Group:
Cyber Security and the Group’s
Cyber Risk Action Plan
In 2021, the Committee has reviewed as a
standing item a ‘Cyber Dashboard’, provided
by the Group IT Director. This report
provides updates on the Group’s Cyber Risk
Action Plan and measures progress against
the ‘10 steps to cyber security’ framework
issued by the National Cyber Security
Centre. In order to provide additional
assurance on the effectiveness of the
Group’s Cyber Risk Action Plan, the external
service provider previously engaged to
review the Group’s controls has been further
engaged to conduct a follow up of their initial
2020 Cyber Security Review.
Presentation on Health & Safety
The Committee has received an update
report from the Group Health, Safety &
Environment Director. This provided an
overview of the evolution in the Group’s
Safe Operating Procedures in relation to
the Covid-19 pandemic, and an update
on the status of development plans within
the department.
Modern Slavery
Transparency Statement
At the February meeting, the Committee
reviewed the Group’s 2020 Modern
Slavery Transparency Statement prior to
publication. This included a presentation
with an overview of the Group’s controls
and development plans to mitigate possible
exposure to modern slavery and human
trafficking within the Group’s operations
andsupply chain.
Conflicts of interest policy
The Committee has reviewed the
Group’sconflicts of interest policy, which
was enhanced within 2021 to strengthen
controls around the identification,
recording,management and prevention
ofpotential conflicts of interest in the
Group’soperational activities.
Shared Equity Loan Portfolio
Status reports on the performance of the
Persimmon shared equity loan portfolio
are provided to the Committee twice each
year. The reports provide updates on
portfolio valuation, loan redemptions and
performance of the outsourced partner
managing the portfolio on the Group’s
behalf. Within 2021, the Committee has
focused in particular on loan redemptions,
in the context of the economic disruption
caused by Covid-19 and its potential impact
on loan defaults.
Group Tax Status
The Group’s tax status, including all
significant tax matters and overall tax
strategy, is reported to the Committee twice
per year for review. The Group’s Head of Tax
presents this report, ensuring the Committee
members have the opportunity to discuss
the report’s content and other tax matters
as appropriate.
Directors’ report
Audit committee report continued
Persimmon Plc | Annual Report | December 2021
104
The Group’s main trading companies are
Persimmon Homes Limited and Charles
Church Developments Limited. The Group
trades under the brand names of Persimmon
Homes, Charles Church, Westbury
Partnerships, Space4 and FibreNest.
The subsidiary undertakings which
principally affect the profits and assets
of the Group are listed in note 31 to the
Financial Statements. A complete list of
the Company’s subsidiaries and residents’
management companies under its control
are contained on pages 173 to 181.
Strategic Report
The management report for the purposes of
the Disclosure Guidance and Transparency
Rule 4.1.8.R is included in the Strategic
Report on pages 2 to 75 and in the Directors’
Report on pages 76 to 107. A description
of the Group’s future prospects, research
and development, the principal risks and
uncertainties facing the business and
important events affecting the Group since
31 December 2021 are contained within the
Strategic Report. Details of the financial risk
management objectives and policies of the
Group and associated risk exposure are
given in note 22 to the Financial Statements.
The Board has taken advantage of s.414C(11)
of the Companies Act 2006 to include
disclosures in the Strategic Report including:
the principal risks and uncertainties, future
development, performance and position
of the Group; the financial position of
the Group, greenhouse gas emissions,
R&D activities, and engagement with
employees, customers, suppliers and
other stakeholders.
Results and return of cash
The Group’s revenue for 2021 was £3.61bn
and its consolidated profit before taxation
was £966.8m.
The Company may by ordinary resolution
declare dividends not exceeding the
amount recommended by Directors subject
to statute. The Directors may pay interim
dividends and any fixed rate dividend
whenever the financial position of the
Company, in the opinion of the Directors,
justifies its payment.
All dividends and interest shall be paid
(subject to any lien of the Company) to
those members whose names are on the
register of members on the record date,
notwithstanding any subsequent transfer or
transmission of shares.
As set out in the Chairman’s Statement an
interim dividend of 125p per share will be
paid on 1 April 2022 to shareholders on
the register on 11 March 2022 under the
Company’s Capital Return Programme.
A second interim dividend of 110p per
share is intended to be made in July 2022,
subject to continuous assessment in line
with our strategy. Further details of the
Board’s ongoing assessment of its Capital
Return Programme will be provided as part
of Persimmon’s normal market updates
(2021:return of cash of 235p per share).
Going concern
After completing a full review, the Directors
have satisfied themselves that the going
concern basis for the preparation of the
accounts continues to be appropriate and
there are no material uncertainties to the
Group’s and Company’s ability to do so for
the period up to 30 June 2023.
Further details are provided in note 2 to the
Financial Statements.
Directors’ report
OTHER DISCLOSURES
Persimmon Plc (the ‘Company’) is the holding company of the
Persimmon Group of companies (the ‘Group’) and is a public
company listed in the UK and traded on the London Stock Exchange.
Directors and Directors’
interests
The current Directors of the Company and
their biographical details are shown on
pages 78 to 79. Information on Dean Finch’s
service contract and the Non-Executive
Directors’ letters of appointment are given
in the Remuneration Report on page 121.
All of the Directors served for the whole
of the year, with the exception of Shirine
Khoury-Haq who was appointed to the
Board on 1 July 2021. Rachel Kentleton
resigned from the Board on 31 August
2021. Mike Killoran retired from the Board
on 14 January 2022. Jason Windsor was
announced as the Group’s new Chief
Financial Officer on 13 January 2022.
Jason is expected to join in the summer and
will become an Executive Director on the
Board at that time.
The beneficial and non-beneficial interests
of the Directors and their connected
persons in the shares of the Company at
31 December 2021 and as at the date of this
report are disclosed in the Remuneration
Report on page 122. Details of the interests
of the Executive Directors in share options
and awards of shares can be found on page
122 within the same report.
Appointment and
replacement of Directors
The Directors shall be no less than two and
no more than 15 in number. Directors may
be appointed by the Company by ordinary
resolution or by the Board of Directors.
A Director appointed by the Board of
Directors holds office until the next following
AGM and is then eligible for election by the
shareholders. The Company may by special
resolution remove any Director before the
expiration of their term of office.
Strategic report Governance Financial statements Other information
105
In accordance with the UK Corporate
Governance Code 2018 the Board has
determined that all Directors will be subject
to annual re-election by shareholders.
The Company’s Articles of Association (‘the
Articles’) in any event provide that at each
AGM at least one third of the Directors shall
retire from office and shall be eligible for
reappointment and therefore each Director
shall retire from office and shall be eligible
for reappointment at the AGM held in the
third year following their last reappointment.
Powers of the Directors
The business of the Company shall be
managed by the Directors who may exercise
all powers of the Company, subject to the
Articles, the Companies Act 2006 and
any directions given in general meetings.
In particular, the Directors may exercise
all the powers of the Company to borrow
money, issue and buy back shares with
the authority of shareholders, appoint and
remove Directors and recommend and
declare dividends.
Capital structure
The following description summarises
certain provisions of the Articles and
the Companies Act 2006. This is only a
summary and the relevant provisions of
the Companies Act 2006 and the Articles
should be consulted if further information
is required. A copy of the Articles may
be obtained by writing to the Company
Secretary at the registered office.
Amendments to the Articles of the Company
may be made by way of special resolution
in accordance with the provisions of the
Companies Act 2006.
Share capital
The Company has one class of share in
issue, being ordinary shares with a nominal
value of 10 pence each, which carry no
right to fixed income. During 2021 135,213
ordinary shares were issued with a nominal
value of £13,521 to employees exercising
share options. The Company received
consideration of £2.6m for options exercised
under the Group’s savings-related share
option scheme. At 31 December 2021 the
issued share capital of the Company was
319,206,474 ordinary shares with a nominal
value of £31,920,647. At 1 March 2022 the
issued share capital of the Company was
319,223,712 ordinary shares with a nominal
value of £31,922,371. Further details are
provided in note 24 to the Financial Statements.
Shares may be issued with such preferred,
deferred or other rights or restrictions,
whether in regard to dividend, return of
capital, or voting or otherwise, as the
Company may from time to time by ordinary
resolution determine (or failing such
determination as the Directors may decide),
subject to the provisions of the Companies
Act 2006 and other shareholders’ rights.
There are no securities carrying special
rights with regard to control of the Company.
The Directors may allot, grant options
over, or otherwise dispose of shares in
the Company to such persons (including
the Directors themselves) at such times
and on such terms as the Directors may
think proper, subject to the Articles, the
Companies Act 2006 and shareholders’
rights. At the AGM held on 28 April 2021
shareholders gave Directors authority to allot
ordinary shares up to a maximum nominal
amount of £10,636,306, representing
approximately one third of the Company’s
issued share capital as at 16 March 2021.
Shareholders also gave Directors authority
to disapply pre-emption rights on the
issue of shares up to 5% of the issued
share capital, being an aggregate nominal
amount of £1,595,445. These authorities
will expire at the conclusion of the AGM on
27 April 2022. Resolutions to renew these
authorities will be put to shareholders at the
forthcoming AGM.
Votes of members
All issued shares in the Company are fully
paid and there are no restrictions on voting
rights. Votes may be exercised in person, by
proxy, or in relation to corporate members
by a corporate representative. The deadline
for delivering either written or electronic
proxy forms is not less than 48 hours before
the time for holding the meeting.
To attend and vote at a meeting a
shareholder must be entered on the register
of members at a time that is not more than
48 hours before the time of the meeting,
calculated using business days only.
On a vote on a poll, each member present
in person or by proxy or by duly authorised
representative has one vote for each share
held by the member. On a vote on a show
of hands, each member being an individual
present in person or a duly authorised
representative of a corporation has one
vote. Each proxy present in person who has
been appointed by one member entitled
to vote on a resolution has one vote. If a
proxy has been appointed by more than
one member and has been given the same
voting instructions by those members, the
proxy has one vote.
If the proxy has been appointed by more
than one member and has been given
conflicting instructions, or instructions to
vote for or against by one member and
discretion by another, the proxy has one
vote for and one vote against a resolution.
Details of employee share schemes are set
out in note 29 of the Financial Statements.
The Trustee of the Persimmon Employee
Benefit Trust may vote or abstain on
shareholder resolutions as it sees fit.
Transfer of shares
There are no restrictions on the transfer of
securities in the Company. Any member
may transfer their shares in writing in any
usual or common form or in any other form
acceptable to the Directors and permitted
by the Companies Act 2006 and the UK
Listing Authority. The Company is not aware
of any agreements between shareholders
that may result in restrictions on the transfer
of shares or that may result in restrictions on
voting rights.
Qualifying third party
indemnity provisions and
qualifying pension scheme
indemnity provisions
The Company has granted an indemnity in
favour of its Directors and former Directors,
against liability that they may incur in
the course of performing their duties as
Directors of the Company. The indemnity
has been put in place in accordance with
Section 234 of the Companies Act 2006 and
remained in force on the date of approval of
this report. Prior to granting the indemnity
appropriate legal advice was sought by
the Company.
The Company has not issued any qualifying
pension scheme indemnity provision.
Change of control
provisions
One significant agreement contains
provisions entitling counterparties to exercise
termination or other rights in the event of a
change of control of the Company. Under the
£300m credit facility for Persimmon Plc
dated 1 April 2011 (as amended) disclosed
in note 22 of the Financial Statements, all
amounts become due and payable under
the terms of the facility if any person or group
of persons acting in concert gains control of
the Company.
Directors’ report
Other disclosures continued
Persimmon Plc | Annual Report | December 2021
106
Emissions
The Group’s greenhouse gas emissions are
set out in the Strategic Report on page 43.
Employee involvement
The Group places considerable value on
the involvement of its employees and has
continued to keep them informed on matters
affecting them as employees and on various
financial and economic factors affecting
the performance of the Group. The Group
publishes an employee newsletter and
other communications regularly to ensure
employees are kept well informed of the
Group’s operations.
As mentioned on pages 84 to 88 of
this report, the Group has an Employee
Engagement Panel and a Diversity and
Inclusion Council as part of its commitment
to employee engagement, diversity and
corporate governance best practice.
The Group regularly updates its employment
policies and staff handbooks, to which all
employees have on-line access through
the HR Information System, to keep them
up-to-date with information relating to their
employment. Details of how we engage with
our employees are set out on page 34 and
pages 70 to 71.
The Company makes various benefit
schemes available to employees, including a
savings-related share option scheme which
encourages the awareness and involvement
of employees in the Group’s performance.
All employees are encouraged
to participate.
In addition, information concerning the
financial performance of the Group is sent to
each operating business for circulation.
Equal opportunities
Persimmon is an equal opportunities
employer. We are committed to encouraging
equality, diversity and inclusion among
our workforce and eliminating unlawful
discrimination. Our aim is for our workforce
to be truly representative of all sections of
society and our customers, and for each
employee to feel respected and able to give
their best.
Persimmon is committed to being inclusive
for individuals with disabilities, and will
support candidates and employees with
adjustments to support them to perform at
their best and fulfil their potential.
Financial instruments
Details of the Group’s financial
instruments are set at in note 22 to the
Financial Statements.
Acquisition of own shares
At the AGM held on 28 April 2021
shareholders granted the Company
authority to purchase up to an aggregate
of 31,908,918 of its own shares. No shares
have been purchased to date under this
authority and therefore at 31 December
2021 the authority remained outstanding.
This authority expires on 27 April 2022 and a
resolution to renew the authority will be put
to shareholders at the forthcoming AGM.
At 31 December 2021 the Company held no
shares in treasury.
Annual General Meeting
The AGM will commence at 12 noon
on Wednesday 27 April 2022 at York
Racecourse, Knavesmire Road, York,
YO23 1EX. The Notice of Meeting and an
explanation of the ordinary and special
business are given in the AGM circular,
which is available on the Company’s website
and which has been sent to shareholders.
Due to the ongoing pandemic, shareholders
are advised to regularly check for any
updates concerning physical attendance
at the AGM on the Company’s website at
www.persimmonhomes.com/corporate.
Listing Rule Disclosures
The disclosures required under Listing Rule
9.8 can be found in the tables below. As at
31 December 2021 and as at 1 March 2022,
the Company had been notified under the
Financial Conduct Authority’s Disclosure
Guidance and Transparency Rule 5 of the
following interests in the voting rights of
the Company:
Disclosure of information
to auditors
The Directors who held office at the date of
approval of this report confirm that, so far
as they are each aware, there is no relevant
audit information of which the Company’s
auditor is unaware and that each Director
has taken all steps he ought to have taken
as a Director in order to make himself aware
of any relevant audit information and to
establish that the Company’s auditor is
aware of that information. This confirmation
is given and should be interpreted in
accordance with the provisions of section
418 of the Companies Act 2006.
Directors’ responsibility
The Directors are responsible for preparing
the Annual Report and Financial Statements
in accordance with applicable law and
regulations. The Directors consider that the
Annual Report and Accounts taken as a
whole is fair, balanced and understandable
and provides the information necessary
for shareholders to assess the Company’s
position and performance, business model
and strategy. The Board reached this
conclusion after receiving advice from
the Audit Committee. Further details are
provided on page 101.
By order of the Board
Tracy Davison
Company Secretary
1 March 2022
Persimmon Plc
Company registration number 1818486
Item Further information
Statement of Directors’ share interests
Read more on page 122
Details of the authority for the Company to purchase its own shares
Read more on page 107
Details of any arrangements under which a Director of the Company
has waived or agreed to waive any emoluments from the Company
Read more on page 118
Name
As at 31 December 2021 As at 1 March 2022
Number
of voting
rights
1
% of
total voting
rights
Number
of voting
rights
1
% of
total voting
rights
Nature of
holding
Black Rock Inc 16,718,253 5.43 16,718,253 5.43 Indirect
1. Represents the number of voting rights last notified to the Company by the shareholder in accordance with D.T.R.5.1.
Strategic report Governance Financial statements Other information
107
Remuneration
REMUNERATION COMMITTEE
CHAIR’S STATEMENT
• Following Mike Killoran’s decision to
retire after more than 25 years with the
Group and the appointment of Jason
Windsor as our new Chief Financial
Officer, the Committee agreed the
leaving remuneration for Mike and the
remuneration arrangements for Jason.
We conducted a thorough search of
the market and we were very mindful
of the need to offer a remuneration
package that would attract a high quality
candidate with an appropriate level of
experience. We also recognised that to
secure such an individual it would very
likely be necessary to compensate them
for the forfeit of awards at their existing
employer. However, throughout the
process we applied the principles that the
overall remuneration package should be
competitive but not excessive and that
any compensation due should not result in
an outcome where the individual received
more than would have been due had
they remained in post. Further information
is set out below in this statement with
additional detail on page 128.
• All of this is underpinned by strong
financial results. Further details on our
strategy can be located in our Strategic
Report on pages 12 and 13.
Our focus and approach
in2021
Following a second year in which business
and personal life has been disrupted by the
Covid-19 pandemic I’m pleased that we have
delivered such strong Group performance,
while remaining focused on the health,
safety, and wellbeing of our customers, our
workforce, and our communities.
During the year we have continued to
ensure our approach to remuneration for
all employees is aligned to our strategy
and supports the delivery of long-term
sustainable performance, to benefit
all stakeholders.
• We have continued to improve the quality
of our homes and our customer care,
which has seen us improve our score to
92% under the HBF survey recommend a
friend survey.
• The continued focus on treating our
employees fairly has led to our formal
accreditation as a Living Wage Employer.
• We have developed an environmental
target for the 2022 bonus awards to
support the achievement of our long-
term sustainability targets, reflecting the
importance of this to Persimmon.
• We reviewed the pay and competitive
positioning of remuneration for the Senior
Executive Group.
“ During the year we have continued to ensure our approach
to remuneration for all employees is aligned to our strategy
to build homes with quality our customers can rely on at a
price they can afford. This supports the delivery of long-term
sustainable performance, to benefit allstakeholders.”
ANNEMARIE DURBIN
Chair of the Remuneration Committee
“ I am pleased to present
the Group's Remuneration
Report for the year ended
31 December 2021.”
ANNEMARIE DURBIN
Chair of the Remuneration
Committee
Remuneration Committee
Members and meeting
attendance 2021
Meetings
attended
Percentage
ofmeetings
attended
Annemarie Durbin
(Chair) 4/4 100%
Nigel Mills 4/4 100%
Joanna Place 4/4 100%
Persimmon Plc | Annual Report | December 2021
108
2021 Remuneration
outcomes
The annual bonus opportunities for the
Chief Executive and Group Finance Director
in respect of 2021 were based on a mix of
financial metrics (60%) and cultural metrics
(40%). Reflecting the strong performance
which has been delivered, as set out on
page 112 the annual bonus outcomes for the
Chief Executive Officer and Group Finance
Director were 92% of maximum (185% of
salary) and 90% of maximum (136% of salary)
respectively. Full details of the targets and
performance achieved can be found on
pages 118 and 119. This is consistent with
annual bonus outturns across the Group.
When considering the outturns, the
Committee has taken a holistic view,
including in relation to the employee and
wider stakeholder experience, in addition
to performance relative to the targets and
objectives set. The Committee believes
that the outcomes are an appropriate
reflection of wider performance and the
Committee has not exercised any discretion
in relation to remuneration outcomes for
Executive Directors.
155 employees hold PSP awards which were
granted in 2019 and which vest by reference
to performance over the three years ended
31 December 2021. Reflecting performance
over that three year period, the awards will
vest at 75.82% of the maximum, and then be
subject to a two year holding period before
the shares are released to the participants.
Neither of the Executive Directors
participates in the 2019 PSP awards.
Remuneration arrangements
associated with Mike Killoran’s
retirement
We announced Mike Killoran’s retirement
in July 2021. At that time it was agreed
that he would remain in post until January
2022 and leave after the announcement
of our Trading Update. Mike received his
normal remuneration for 2021 (details of
which are included in the single total figure
of remuneration table) and no payments
have been made in respect of loss of office.
The normal deferral arrangements apply to
his 2021 bonus.
Having regard to Mike’s long service and
retirement, the Committee exercised its
discretion to grant “Good Leaver” status
for the purpose of his 2020 and 2021 PSP
awards. The awards remain subject to
the rules of the PSP and the applicable
performance conditions and have been
reduced pro-rata to reflect the proportion of
the performance period which had elapsed
at Mike’s leaving date. Subject to the
satisfaction of the performance conditions,
the awards will vest at the usual time and
remain subject to a two year holding period
after the end of the performance period.
Full details are set out on page 121.
New Chief Financial
Officer Remuneration
The Committee agreed the remuneration
arrangements for Jason Windsor, our new
Chief Financial Officer, who is expected to
join the Group in summer 2022.
We are delighted to have secured someone
of Jason’s calibre. He is a proven CFO with
a strong track record of working in a large
and complex FTSE 100 business, Aviva is
more than twice as large as Persimmon in
terms of market capitalisation, and Jason
will add significant further strength to the
Persimmon Board. In line with the objectives
set out above, the overall package is
set to match his existing package at his
current employer. While we appreciate
that Jason’s remuneration will exceed
that of his predecessor at Persimmon,
we believe it is appropriate, being at a
level to match but not exceed his current
remuneration arrangements.
The total remuneration package provides:
• Lower total fixed pay than Jason’s current
package at Aviva;
• Lower on-target annual bonus
opportunity (both as a percentage of
salary and an absolute amount) than his
current package;
• The same overall incentive opportunity:
Persimmon annual bonus and PSP: 375%
of salary (i.e. 175% of salary bonus + 200%
of salary PSP as detailed in the table).
Jason’s maximum incentive opportunity
at his current employer was also 375% of
salary (150% of salary bonus + 225% of
salary PSP).
Buy-out awards
In line with usual practice, Jason will receive
awards to compensate for the remuneration
arrangements he forfeits on leaving his
current employer. Further information in
relation to these is set out on page 128.
We applied the following principles in
agreeing these buy-out awards.
• The awards will not exceed the actual
value forfeited. As set out on page 128,
we will buy-out Jason’s forfeited 2019 and
2020 Aviva LTIP in part, not in full.
• The awards will vest on the same
timescales as the forfeited awards.
• Where the buy-out is to replace an Aviva
share award, it will be delivered as an
award over Persimmon shares. In addition,
75% of the buy-out of the 2021 bonus
will be delivered in Persimmon shares.
To ensure ongoing alignment with
Persimmon shareholders Jason will be
required to retain shares he acquires
from the buy-out awards in satisfaction
of the shareholding requirements in our
Directors’ Remuneration Policy.
• The awards remain subject to
performance conditions where
appropriate and will be adjusted to reflect
the actual vesting of the relevant Aviva
awards. This approach avoids a situation
where Persimmon potentially overpays:
compared to the outcome that would have
arisen had Jason stayed at Aviva.
• The awards will be subject to continued
employment and be subject to the malus
and clawback conditions as approved in
our current Remuneration Policy.
Strategic report Governance Financial statements Other information
109
Remuneration
Remuneration committee chair's statement continued
2022 Implementation
Salary
Previously, we have reviewed salaries for the
wider workforce with effect from 1 July, with
the corresponding review of the Executive
Directors’ salaries deferred and taking effect
from the following January. For 2022, Dean
Finch has been awarded a 3% base salary
increase effective 1 January, in line with the
increase received by salaried employees
in 2021. This will be the first increase Dean
has received since joining the Company in
September 2020.
The normal effective date for salary
increases for Executive Directors has now
been moved to 1 July, in line with other
employees. We retain the principle that any
increase will typically be in line with that
received by the wider workforce.
Should the increase awarded to salaried
employees in July 2022 be in excess of 3%,
the Remuneration Committee has agreed
that Dean Finch will receive an incremental
increase from 1 July 2022 so that this reflects
the increase above 3% given to salaried
employees. If the increase awarded in July
2022 is 3% or less then Dean will not receive
any further increase before July 2023.
As set out above, Jason Windsor’s salary has
been set at £675,000, the same salary as
he was receiving in his prior role and before
any increase that would have applied for
that role in respect of 2022. The first salary
review for the new Chief Financial Officer will
take effect from 1 July 2023.
Element Quantum
Salary
£675,000 p.a.
This is the same salary as Jason was receiving in his current role for 2021
and before any increase that would otherwise have applied for 2022.
Pension
9% (in line with the monthly workforce; lower than Jason’s pension at his
current employer).
Annual Bonus
Jason is eligible for consideration for a bonus for the year 2022.
The maximum bonus for 2022 will be calculated by reference to 150% of
salary for the period prior to Jason joining Persimmon (to reflect the bonus
forfeited from his current employer) and by reference to 175% of salary for
the period after Jason joins Persimmon.
The opportunity of 175% of salary represents an increase on our former CFO
bonus, but is in line with our approved Recruitment Policy for the year of
recruitment. As part of our triennial Policy review, we will seek shareholder
approval at our 2023 AGM to allow an annual bonus opportunity of 175% of
salary to continue be awarded to the CFO from 2023 onwards.
Whilst the maximum bonus (175% of salary) is greater than the maximum
bonus Jason could earn at his current employer (150% of salary), his
PSP award will be lower than the maximum at his current employer (see
below). The maximum bonus will be earned only for delivery of stretching
performance targets. In line with the Persimmon policy, the bonus for target
performance at Persimmon will be 87.5% of salary (50% of the maximum)
compared to 100% of salary at his current employer.
Half of any bonus earned will be deferred for 3 years in shares.
Performance
Share Plan ('PSP')
200% of salary
This represents a lower maximum opportunity than the 225% of salary PSP
award Jason had at his current employer. Our PSP has a 3-year performance
period, plus a 2-year holding period. For the 2022 grant, the performance
period will run from 1 January 2022 to 31 December 2024, and the two year
holding period will end in 2027 (two years after the award vests following
the announcement of Persimmon’s 2024 results).
Benefits
In line with the former Group Finance Director’s benefits this includes life
assurance, private health cover, income protection and a car/car allowance.
Shareholding
Requirement
400% of salary
This is a significant increase on the requirement at his current employer.
A holding of at least 200% of salary will be expected to be achieved within
5 years of appointment, with a timescale toachieve 400% to be agreed with
the Chairman. The post-employment shareholding requirement is 2 years.
Ongoing remuneration from 2022
Persimmon Plc | Annual Report | December 2021
110
Annual bonus
The maximum bonus quantum for Dean
Finch will remain at 200%. As set out above,
the bonus opportunity for Jason Windsor
has been agreed at 175% of salary for the
period after he joins Persimmon. He will be
able to earn a bonus for the period in 2022
prior to his joining Persimmon based on
150% of his salary, reflecting the forfeiture
of his bonus opportunity at his current
employer for that period. The performance
measures applying to Jason Windsor’s
bonus opportunity related to the part of
the year before he joins Persimmon will
depend upon the date on which he joins
Persimmon. Details will be included in the
2022 Directors’ Remuneration Report.
The performance measures applying to all of
Dean Finch’s bonus and to Jason Windsor’s
bonus related to the part of the year after
he joins Persimmon have been subject to a
minor change for 2022. The previous 10%
element relating to personal objectives
has been replaced with a 5% additional
weighting on the customer care measures
and a 5% weighting for a new environmental
metric. 60% of the bonus remains subject to
financial performance (profit before tax and
cash generation). The non-financial metrics
are customer care (20%), build quality (15%)
and environmental (5%). The environmental
target will be focused on steps taken to
support achievement of our Scope 1 and 2
science based targets.
Further details are set out on page 126.
The financial targets are commercially
sensitive and therefore will be disclosed in
the 2022 Remuneration Report. A range
of +3%/-7% around the target level of
performance has been set. Delivery of
a stretching target level of performance
will result in the Executive Director
receiving 50% of the maximum award.
Vesting is at 10% of the maximum for
threshold performance.
PSP
The maximum PSP award for each Executive
Director will remain at 200% of salary.
The metrics for PSP awards to be granted in
2022 remain unchanged. These are relative
TSR (40%), cash generation (40%) and a
cultural metric (20%). For 2022 the cultural
metric will again be the HBF customer
‘recommend a friend’ score based on the
9 month HBF survey results.
The Board believes in the importance
of ESG and cultural metrics and this is
reflected in our use of customer care
and quality in both the annual bonus and
PSP. The Committee has considered the
introduction of a specific environmental
metric in the PSP but at this time recognises
that further analysis of more robustly
calibrated meaningful metrics, linked to
our strategic approach to sustainability,
is needed before meaningful long-term
targets can be set. We are addressing this
through the annual bonus as noted above.
In line with our Sustainability Policy and
goals as set out on pages 42 to 62 we will
be tracking several potential measures
during 2022 to allow the Committee to
incorporate specific environmental targets
in 2023. The Committee recognises that
shareholders are supportive of the use of
such measures provided that meaningful
data exists and as such is committed to
delivering this at the appropriate time
The Committee considers the overall
executive remuneration approach is fair,
balanced and reasonable taking into
account the interests of all stakeholders.
Non-Executive Directors
Information in relation to the approach to
Non-Executive Director fees is set out on
page 118. The Committee determines the
Chairman’s fee and the Board (excluding the
Non-Executive Directors) determines the
Non-Executive Directors’ fees.
We explained last year that the fees for the
Non-Executive Directors and Chairman
had not been reviewed since 2017 and
2018 respectively, but that it was not
considered appropriate to increase them
in 2021. During 2021, the Committee and
the Board reviewed the fees and approved
increases to apply with effect from 1 January.
The revised fees were determined having
regard to market rates for the roles, and
details are set out on page 128.
Looking ahead – key focus
areas for the Committee
for 2022
Our Remuneration Policy was approved
by shareholders at the April 2020 AGM,
receiving a high level of shareholder support
at 97.8%. During the course of 2022 we will
be reviewing our Directors’ Remuneration
Policy, in advance of its renewal at the
2023 AGM, to ensure that it continues to
support our strategic priorities and provide
an appropriate level of reward to attract
and retain high calibre individuals in an
increasingly competitive market. Our aim
is to always consider the wider workforce,
our shareholders and other stakeholders
and to remunerate executives fairly
and responsibly.
We remain committed to a responsible
approach to executive pay, as I trust
this Directors’ Remuneration Report
demonstrates. We believe the Policy
operated as intended and consider that the
remuneration received by the Executive
Directors in respect of 2021 was appropriate,
taking into account Group performance,
personal performance, and the experience
of shareholders, employees, and
our customers.
As always, I am happy to meet or speak
with shareholders if there are any questions
or feedback on our approach to executive
remuneration, and I hope that we will earn
your support at the forthcoming AGM.
Annemarie Durbin
Chair of the Remuneration Committee
1 March 2022
Strategic report Governance Financial statements Other information
111
REMUNERATION AT A GLANCE
Remuneration
2021 actual remuneration
CEO
Dean Finch
FD
Mike Killoran
Salary
£725,000 £532,270
Pension/salary supplement
9% of salary in line with wider workforce 9% of salary in line with wider workforce
Annual Bonus
Maximum opportunity
200% of salary 150% of salary
LTIP
Maximum opportunity
200% of salary 200% of salary
Single Figure Total for 2021
£2,578,902* £1,336,439
* Single figure total for 2021 includes an award of shares granted to Dean Finch in March 2021 with a value of £404,384 as compensation for a deferred bonus forfeited when he joined
Persimmon as disclosed in our 2020 Directors’ Remuneration Report. The award is due to vest on 19 March 2022.
Implementation in 2022
CEO
Dean Finch
CFO
Jason Windsor*
Salary
£746,750
(3% increase in line with wider workforce)
£675,000
Pension/salary supplement
9% of salary in line with wider workforce 9% of salary in line with wider workforce
Annual Bonus
Maximum opportunity
200% of salary 150% of salary for the period prior to Jason joining
Persimmon (to reflect the bonus forfeited from
current employer)
175% of salary for the period after Jason
joins Persimmon.
LTIP
Maximum opportunity
200% of salary 200% of salary
* Jason Windsor will succeed Mike Killoran, Persimmon’s long standing Group Finance Director, who retired on 14 January 2022 after more than 25 years with the Group. As detailed in
Remuneration Committee Chair's Statement we are delighted to have secured someone of Jason’s calibre. Jason’s overall package has been set at a level to match but not exceed his
current remuneration arrangements. A bonus opportunity of 175% of salary is in line with our Policy for the year of recruitment. At the 2023 AGM we will seek approval for a continuing
bonus opportunity at this level.
2021 variable pay outturns
Annual bonus earned for 2021
Reflecting the strong performance which has
been delivered the annual bonus outcomes
for the Chief Executive and Group Finance
Director were 92% of maximum (185% of
salary) and 90% of maximum (135% of salary)
respectively
Performance Share Plan
No PSP Awards were due to vest for Executive Directors in respect of 2021.
Outturn (% of maximum)
Weighting (% of maximum)
0% 5% 10% 15% 20% 25% 30%
Profit Before Tax
Pre-land cash generation
Build quality
Customer care
D Finch personal objectives
M Killoran personal objectives
30%
30%
8%
14%
10%
8%
30%
30%
15%
15%
10%
10%
Persimmon Plc | Annual Report | December 2021
112
Alignment to strategy
Place customers
at the heart of our
business with a
compelling brand
A diverse
and talented
workforce
Working safely,
responsibly
andefficiently
Support
andcreate
sustainable
communities
Investing in
high quality land
Maintaining
financial
strength
through the
housingcycle
• Customer care
andquality
metrics included
as performance
conditions for
incentives
• Living Wage
Foundation
accreditation
• Failure of acceptable
health and safety
standards explicitly
included in
recovery provisions
forincentives
• Quality and
environmental metrics
included inannual
bonus
• Financial metrics included as
performanceconditions for incentives
Profit Before Tax
Pre-land Cash
Total Shareholder Return
Annual Bonus
Performance measures 2022
Performance Share Plan
Performance measures 2022
Ensuring shareholder alignment
50% of any bonus earned is
deferred into shares for three years
Subject to performance targets
being met, all PSP shares vest after
three years and vested shares are
then subject to a further two-year
holding period
Shareholding requirement guidelines are set at 400% of salary for the
Executive Directors, with 200% of salary expected to be achieved within
5years of appointment
As is usual practice, Jason Windsor will receive awards to compensate for the remuneration arrangements he forfeits on leaving Aviva. In all cases, the
buy-out awards we make will be delivered as awards over Persimmon shares where the buy-out is to replace a share award forfeited as a result of joining
Persimmon. In addition, 75% of the buy-out of the 2021 bonus will be delivered in Persimmon shares. To ensure ongoing alignment with Persimmon
shareholders Jason will be required to retain shares he acquires from the buy-out awards in satisfaction of the shareholding requirements in Persimmon’s
Directors’ Remuneration Policy.
Investment in our people and communities
Donations by the
Persimmon Charitable
Foundation
£1.8m
No. of employees
granted PSPAwards
in 2021
253
All permanent salaried
employees are eligible to
participate in a bonus or
commission scheme
During 2021 Persimmon
became a Living
Wage Foundation
accredited employer
Profit Before Tax
Pre-land cash generation
Customer care
Quality
Environmental
5%
15%
20%
30%
30%
Relative Total
Shareholder Return
Pre-land cash generation
Customer care
Progress toward holding requirement
Balance of 200% holding requirement expected to be achieved
within 5 years of appointment
20%
40%
40%
Dean Finch CEO
31% 169%
No. of employees
participating
in SAYE
2,010
As at 31 December 2021
Strategic report Governance Financial statements Other information
113
ANNUAL REPORT
ON REMUNERATION
Role of the Remuneration
Committee
The role of the Committee is set out in its
terms of reference, which are reviewed
annually and were last reviewed in
December 2021. These can be found on
our website at www.persimmonhomes.com/
corporate. The Committee meets on at least
four occasions a year and otherwise as
required. In 2021 the Committee met on four
occasions with additional calls as necessary.
The attendance at meetings can be located
on page 98.
The Committee determines the
remuneration policy for the Group’s
Chairman, Executive Directors, and the
Senior Executive Group, which consists
of the Regional Chairmen, the Group
Transformation and Land Strategy Director,
Chief Customer Experience Officer, Group
Strategy and Regulatory Director and the
Company Secretary. Some changes in
roles within the Senior Executive Group
have been announced for 2022. The new
roles are within the Committee's remit.
This is a responsibility which has been
delegated from the Board. The policies and
practices are designed to support strategy
and promote the long-term sustainable
success of the Group. When setting and
implementing the Policy for Executive
Directors, the Committee has reviewed and
taken into account workforce related policies
and the alignment of incentives and rewards
with culture. The Committee carefully
considered the Group’s strategy to increase
customer focus and has aligned the variable
remuneration metrics to meet this.
Further information regarding the
members of the Committee, including their
biographies, can be located on pages 78
to 79.
Alignment of the Policy
with UK Corporate
Governance Code 2018
(the ‘Code’)
In determining the Policy, the Committee
took into account the principles of clarity,
simplicity, risk, predictability, proportionality
and alignment to culture as set out in
the Code.
The annual bonus and PSP performance
metrics are aligned with the Group’s
purpose and strategy to build high quality
homes for our customers, deliver growth
and return cash to shareholders and provide
sustainable value for all stakeholders
through the housing cycle.
Directors are not involved in the setting
of their own remuneration, and are
excused from any conversations on their
own pay. If Directors offer or volunteer to
take reductions, this is something that is
then considered and decided upon by
the Committee.
Principle Alignment to the Code
Clarity
Remuneration arrangements should be
transparent and promote effective engagement
with shareholders and the workforce.
We have taken a fully transparent approach to our Remuneration Policy and arrangements.
Our full Policy can be located in our 2019 annual report at
www.persimmonhomes.com/corporate/investors/results-reports-and-presentations/2019/#tabs.
We continue to engage with shareholders as appropriate and listen to any feedback received.
We liaise with workforce representatives via the Employee Engagement Panel and the Committee
Chair attends meetings as appropriate. We track and discuss a number of workforce related statistics
via the workforce remuneration dashboard that is presented at each Committee meeting. The annual
report is circulated to all employees, which has details of directors’ remuneration.
Simplicity
Remuneration structures should avoid complexity
and their rationale and operation should be easy
to understand.
We consider that our remuneration structures are clear and easily understandable. We welcome
feedback and listen to stakeholder comments regarding the Policy and its implementation.
In determining the incoming Chief Financial Officer’s remuneration, the Committee applied the
principle that the overall remuneration package should be competitive but not excessive and that
any compensation due should not result in an outcome where the individual received more than
would have been due had they remained in post. Details of his remuneration were explained to major
shareholders and leading proxy advisors.
Risk
Remuneration arrangements should ensure
reputational and other risks from excessive
rewards, and behavioural risks that can arise
from target-based incentive plans, are identified
and mitigated.
There are malus and clawback provisions included in the Policy to reflect best practice to override
formulaic outcomes, where appropriate. These provisions are now capable of application in a range
of circumstances including corporate failure, serious reputational damage and material failure of risk
management. Appropriate discretion can be applied, in the case of the annual bonus for three years
from the date on which the amount of the bonus is determined. For PSP awards discretion extends
until the fifth anniversary of the grant date.
Predictability
The range of possible values of rewards to
individual directors and any other limits or
discretions should be identified and explained at
the time of approving the policy.
For the Group Chief Executive annual bonus and PSP awards are 200% of base salary. For the Chief
Financial Officer, the annual bonus maximum award quantum for 2022 is up to 175% (with further
information in the Committee Chair’s statement on page 109 to 110), and the PSP award quantum
is 200% of base salary. Maximum bonus is only payable if stretching targets are met and excellent
Group performance is achieved. Half of the annual bonus and the whole of the PSP vesting is
in shares. The Executive Directors have shareholding requirements, and for awards made from
1 January 2020 this includes a two-year post-cessation shareholding requirement. The value of share
awards are less predictable than cash due to potential fluctuations in the share price. However, it
means that Directors’ remuneration is better aligned to the shareholder experience.
Remuneration
Persimmon Plc | Annual Report | December 2021
114
Principle Alignment to the Code
Proportionality
The link between individual awards, the delivery
of strategy and the long-term performance of the
Company should be clear. Outcomes should not
reward poor performance.
Both the annual bonus and PSP include financial and cultural metrics which are key to our strategy
and future success. Subject to the Committee’s discretion to override formulaic outturns, annual
bonus awards will result in payment at threshold performance of up to 10% of the maximum. Up to
50% of the maximum will be payable for on-target performance and all of the bonus will be payable
for maximum performance. Half of annual bonus that vests will be paid in cash, with the remaining
50% deferred into shares for a period of three years. The PSP award granted in 2021 was based on
performance measures over a three-year period, and a further two-year holding period before the
shares can be released. In relation to shareholding requirements whilst in employment, the Group
Chief Executive and Chief Financial Officer have a requirement of 4 times salary. The Executive
Directors are expected to build up their shareholding over a period of time. The Committee has
discretion to override formulaic outcomes. Directors’ pension contributions/salary supplement are
in aggregate, up to 9% of base salary, in line with the Group’s salaried employees (who make up the
majority of Group employees).
Alignment to culture
Incentive schemes should drive behaviours
consistent with Company purpose, values
and strategy.
Our annual bonus and PSP schemes each contain non-financial cultural metrics to measure
improvements in customer care and build quality. The aim is to focus upon improving customer
experience, customer satisfaction, and build quality. Ultimately, the strategy is to create and protect
superior and sustainable levels of value for the benefit of our customers, workforce, suppliers and
shareholders through the housing cycle and with a clear priority of putting customers before volume.
Further information on our culture can be located on pages 82 to 83. Further information on the non-
financial metrics can be located on pages 118 and 119.
What the Committee has focused upon during the year
Key areas of focus Remuneration Committee activities in 2021
Executive Directors and Senior
Management Remuneration
• Set the remuneration framework for the Executive Directors and Senior Executive Group.
• Agreed a salary increase of 3%, reflecting the increase for the wider salaried workforce in July
2021.
• Agreed to align, in normal circumstances, future pay review dates for Executive Directors and the
Senior Executive Group to 1 July, in line with other employees. Previously reviews for the wider
workforce have taken effect from 1 July, with the corresponding review of the Executive Directors’
salaries deferred and taking effect from the following January.
• Having regard to the alignment of salary review dates, agreed a salary increase for the Group
Chief Executive of 3% with effect from 1 January 2022, with any further increase in July 2022 being
determined as set out in the Committee Chair’s letter on pages 109 to 110.
New Chief Financial Officer remuneration
• Agreed the remuneration arrangements for Jason Windsor, including awards to compensate for the
remuneration forfeited on leaving his previous employer.
• Communicated with shareholders regarding the remuneration arrangements for Jason Windsor.
Departing Group Finance Director remuneration
• Agreed the remuneration arrangements for Mike Killoran in connection with his retirement, details
of which are set out on page 109.
Governance and engagement
• Remuneration Committee Chair attended one meeting of the Employee Engagement Panel to
discuss Executive Remuneration and alignment with broader workforce reward.
• Reviewed the Committee’s terms of reference and agreed minor changes for approval by
theBoard.
• Confirmed the continuing independence of the remuneration consultants.
• Considered and approved the Annual Report on Remuneration.
Annual bonus and PSP awards
• Agreed the structure and performance conditions for the 2021 annual bonus and 2021 PSP awards
made to Executive Directors and senior management.
• Agreed the level of awards made to the Executive Directors, the Senior Executive Group and to
other senior managers in the Group.
Workforce Remuneration
• Noted salary increases for salaried employees and pay practices for employees during the year.
• Reviewed HR dashboard which sets out key workforce data at each meeting and considered the
impact on decisions relating to Executive Directors and Senior Executive Group.
Strategic report Governance Financial statements Other information
115
Advisors
The Committee sought advice during the year on remuneration matters in relation to implementation of the remuneration policy;
remuneration for the incoming Chief Financial Officer and in particular in relation to his buy-out awards; and leaving arrangements for Mike
Killoran. The advice was sought from Deloitte LLP, who act as the Group’s independent remuneration consultants. Deloitte were appointed
by the Remuneration Committee in 2016 and were selected due to their expertise in executive remuneration. During the year Deloitte also
provided Financial Advisory forensic services to the Group. Deloitte LLP are not connected to any Group company or individual directors.
The Committee considers that the advice provided by Deloitte as professional remuneration consultants was appropriate, objective and
independent. The advice provided by Deloitte did not affect the judgements made by the Committee, which remained independent at all
times. Deloitte is a founding member of the Remuneration Consultants Group and adheres to its Code of Conduct in relation to executive
remuneration consulting in the UK.
The amount of fees the Group paid to Deloitte for the services they provided to the Remuneration Committee in 2021 was £53,300, charged
on a time spent basis.
What the Committee is focusing on for 2022
Key areas of focus Remuneration Committee priorities for 2022
ESG Metric
• In line with our Sustainability Policy and goals as set out on pages 42 and 62 we will be tracking
several potential measures during 2022 to allow the Committee to incorporate specific
environmental targets in the PSP in 2023.
Executive Directors and Senior
Management Remuneration
• Agree the remuneration framework for the Executive Directors and Senior Executive Group.
• Take note of reward decisions for the wider workforce and consider any impact on and alignment of
executive pay.
Annual Bonus
• Agree performance conditions for 2022 awards.
PSP Awards
• Agree performance conditions for 2022 PSP awards.
• Agree the level of awards made to the Executive Directors, the Senior Executive Group and to other
senior managers in the Group.
Remuneration Policy review
• Review the approved Remuneration Policy, consider and agree changes where appropriate to reflect
strategy and best practice, and to put these forward for shareholder approval at the 2023 AGM.
Remuneration
Annual report on remuneration continued
Persimmon Plc | Annual Report | December 2021
116
2021 Directors’ Remuneration Report – audited
The auditor is required to report on the following information up to and including the Statement of Directors’ shareholding requirements
andshare interests.
Single total figure of remuneration for the year ended 31 December 2021
The figures set out in the tables below are the actual amounts of salary or fees earned in the year to 31 December 2021.
Executive Remuneration (Fixed)
Executive
Fixed remuneration
Total fixed remunerationSalary Benefits
Salary supplement
in lieu of pension
2021
£
2020
£
2021
£
2020
£
2021
£
2020
£
2021
£
2020
£
D Finch
1
725,000 189,614 43,492 11,647 65,250 17,065 833,742 218,326
M H Killoran
2
532,270 519,838 33,966 48,799 47,904 46,557 614,140 615,194
Total 1,257,270 709,452 77,458 60,446 113,154 63,622 1,447,882 833,520
Executive Remuneration (Variable)
Executive
Variable remuneration
Annual
bonus
Value of long-term
Awards Vesting
Value of SAYE
options vesting
Value of
buy-out award
Total variable
remuneration
2021
£
2020
£
2021
3
£
2020
3
£
2021
£
2020
£
2021
4
£
2020
£
2021
£
2020
£
D Finch
1
1,340,776 – – – – – 404,384 – 1,745,160 –
M H Killoran
2
722, 299 – – – – 7,648 – – 722,299 7,648
Total 2,063,075 – – – – 7,648 404,384 – 2,467,459 –
Executive
Total
2021
£
2020
£
D Finch
1
2,578,902 218,326
M H Killoran
2
1,336,439 622,842
Total 3,915,341 841,168
1. 2020 figures are from 28 September 2020, the date Dean Finch was appointed to the Board.
2. In 2020, Mike Killoran elected to take a temporary 20% reduction in base salary, until such time as the Group was able to recommence work on-site. The salary stated in the table above is after
this reduction.
3. No long-term awards were due to vest in respect of 2021 or 2020.
4. The buy-out award reflects the value of the award granted to Dean Finch in 2022 in respect of remuneration forfeited when he left his previous employer, as referred to in the 2020 Directors’
Remuneration Report. It is valued as the product of the number of Persimmon shares over which the award was granted (13,694) and £29.53 (being the closing share price on the day before the
grant of the award).
Strategic report Governance Financial statements Other information
117
Remuneration
Annual report on remuneration continued
Non-Executive Remuneration
As Non-Executive Directors only receive fees and benefits as part of their remuneration package, only these elements are shown in the
table below.
Chairman
Fixed remuneration
TotalSalaries and fees Benefits
2021
6
£
2020
7
£
2021
£
2020
£
2021
£
2020
£
R Devlin 300,000 285,000 – – 300,000 285,000
Non-Executive
N Mills 75,000 71,250 – – 75,000 71,250
S Litherland 60,000 57,000 – – 60,000 57,000
J Place
1
– 4,066 – – – 4,066
A Durbin
2
75,000 37,500 – – 75,000 37,500
A Wyllie
3
59,616 – – – 59,616 –
S Khoury-Haq
4
35,000 – – – 35,000 –
R Kentleton
5
50,000 71,250 – – 50,000 71,250
Total 654,616 526,006 – – 654,616 526,006
1. Figures for 2020 are from 1 April 2020, the date Joanna Place was appointed to the Board, to 30 April 2020. Joanna waived her fee from 1 May 2020 and continued to do so during 2021.
The Company has chosen to make a payment to the Persimmon Charitable Foundation, equivalent to her waived fees.
2. Figures for 2020 are from 1 July 2020, the date Annemarie Durbin was appointed to the Board.
3. Figures are from 4 January 2021, the date Andrew Wyllie was appointed to the Board.
4. Figures are from 1 July 2021, the date Shirine Khoury-Haq was appointed to the Board.
5. Figures are to 13 August 2021, the date Rachel Kentleton resigned as Non-Executive Director.
6. Non-Executive Director fees can vary based on whether additional duties are required to chair a committee or perform the senior independent role. A more detailed explanation of this can
befound on page 128.
7. Fees for Non-Executive Directors decreased by 20% from 1 April 2020 to 30 June 2020, due to voluntary reductions as a result of the circumstances created by the Covid-19 pandemic.
Additional information for single total figure remuneration table
Benefits
Benefits include car or car allowance, private medical scheme membership, life assurance benefits, income protection scheme membership,
professional subscriptions and phone costs. This is in line with other senior employees across the Group.
Directors’ pension entitlements
Dean Finch and Mike Killoran received a salary supplement in lieu of pension, equal to 9% of their base salary.
Annual Bonus 2021
Each of Dean Finch and Mike Killoran was eligible to earn a bonus of in respect of 2021, up to 200% of salary in the case of Dean Finch
andup to 150% of salary in the case of Mike Killoran.
We have set out below details of the performance measures and targets and the extent to which they were satisfied.
Our financial KPIs (accounting for 60% of the total) reflect the strong underlying financial health of the Group.
Non-financial KPIs (accounting for 40% of the bonus opportunity in total) are important to help the Group to assess our activities in achieving
our strategic objectives. The non-financial KPIs help drive long-term shareholder value and reflect our values of being customer focused,
value driven and delivering excellence.
Measure Weighting
Threshold
(10% achievement)
Target
(50% achievement)
Maximum
(100% achievement) Outturn
Extent Bonus
Measure Met
(% of maximum bonus)
PBT
1
30% £804m £883m £963m £973m 30
Pre-land cash
generation
2
30% £868m £954m £1,040m £1,210m 30
Customer Care 15% See below
3
Met in part 14
Build Quality 15% See below
4
Met in part 8
Personal objectives 10% See below
5
CEO-Met in full 10
FD-Met in part 8
1. Profit before tax (before exceptional items and goodwill impairment).
2. Pre-land cash generation (being net cash inflow before Capital Return Programme and net land payments) with the outturn calculated as:
Cash at 31 December 2020:
1,234.1m
Cash at 31 December 2021: 1,246.6m
Increase in cash: 12.5m
Add: Dividends paid: 749.6m
Net land spend: 447.7m
1,209.8m
Persimmon Plc | Annual Report | December 2021
118
3. 10% of the customer measure was achieved by reference the fraction of those operating businesses in the Group rated as 90% and above as measured by the results of the HBF 8 week
Customer Satisfaction Survey Question “would you recommend Persimmon to a friend?” for the year to 30 September 2021. The outturn shows that 28 of the 31 operating businesses achieved
a score of 90% or above. 5% of the customer measure was achieved by reference to the Group overall operating at the level required to attain classification as a five-star builder by the HBF.
4. The quality score is based on the results of independent assessments carried out on Persimmon sites by the Group’s warranty providers from 1/ 1/21 to 31/12/21. Targets were set for each
warranty provider and the scores weighted based on the proportion of inspections completed by each provider. The targets were set such that an improvement on prior year of between 10%
and 20% was required for target performance, with the level of improvement required based on the warranty provider's scoring system. A summary of outturns is shown in the table below.
Provider Weighting
% of operating companies achieving
threshold but below target
% of operating companies
achieving target or above
outturn (% of maximum
opportunity available)
NHBC 33.6 3.3 56.6
53.3LABC 4.8 25 75
Premier 61.6 46.6 33.3
5. Personal objectives. Specific metrics were set by the Committee for Dean Finch and Mike Killoran and these were assessed by the Committee at the end of the year. Each of these metrics was
linked to delivery of a strategic KPI: The Committee assessed the outputs delivered against the measures set for each objective and also considered the overall performance achieved on a
holistic basis. Further information is set out below.
Dean Finch
Objective Measures Performance Assessment
To reduce carbon
footprint and set new
sustainability policies.
By the end of 2021, zero carbon
targetsandmilestones published.
Become an accredited
LivingWage Employer.
Targets for workforce diversity published.
Science based carbon reduction targets, in line with the Paris Agreement, fully accredited by the
ScienceBased Target Initiative.
Clear interim milestones set for our pathway to 'net zero' homes in use by 2030.
Strong progress made on our carbon reduction roadmap. Introduced electric vehicle options our fleet.
Purchasing 100% renewable energy for our offices and manufacturing facilities and is investigating
methods of reducing the Group's red diesel consumption and increasing the use of alternative fuels.
The Company became an accredited Living Wage Employer in November 2021, reflecting our commitment
to ensure that all our employees feel valued and fairly paid for the work they do.
Appointment of a Director of Talent & Diversity. A talent review has commenced with a view
toprovidingfocused management development and robust succession planning. Targets for
workforcediversity have been published and a D&I audit has been undertaken.
Achieved in full
To build right first time
everytime, delivering
whatthe customer wants.
To enhance trust in
thePersimmon brand.
To ensure the commitment to industry-
leading standards is supported by the
necessary resources.
To strengthen the Group's care procedures
to ensure a consistent approachacross
alloperating businesses.
The expansion of the Group's team of Independent Quality Controllers is delivering the anticipated
benefits of strengthening site supervision, assisting site management teams in monitoring build at
keyconstruction stage.
External verification of our processes in progress with the aim of covering all the Group's operating
companies by summer 2022.
Over 92% of customers that have moved into their new home since 1 October 2020 for the 2020/2021
HBFsurvey year say they would recommend Persimmon to a friend. The Group has continued to trend
ahead of the 90% HBF survey five star threshold since January 2020.
Persimmon Pathways introduced for Site, Sales and Customer Care (5.5% overall increase in Site, Sales and
CC Training year-on-year) and significant increase in training undertaken including delivery of site manager
NVQs (Site Managers holding relevant NVQs increased to 425 from 171 in December 2020).
Customer care procedures strengthened. Chief Customer Experience Officer with responsibility for
Customer Care appointed. Customer portal being developed and rolled out nationally.
Achieved in full
To deliver industry leading
performance and sustained
shareholder value.
To expand the business.
Complete land department restructuring.
Increase in number of operating businesses
using own manufactured bricks and tiles,
group commercial team established to
improve strategic focus of procurement.
Land department restructured to take advantage of market and find new and alternative sources of
landwith a view to increasing the number of active sites. Over 20,500 new plots were brought into
thebusiness in 2021 representing in excess of 140% of current consumption levels.
Operating businesses using Brickworks product: volume increased 5% year-on-year.
Operating businesses using Tileworks product; volume increased 196% year-on-year.
Achieved in full
Mike Killoran
Objective Measures Performance Assessment
To contribute to the
financialsuccess of the
Group through financial
risk and cash management.
Extend the Group's RCF by one
yearthroughtaking advantage of the
documented request process in 2021.
Extended RCF concluded.
The Group's balance sheet and liquidity remain robust. The Group held £1.25bn of cash at 31 December
2021 with deferred land commitments of c.£400m. In addition, the Group has an undrawn £300m
Revolving Credit Facility which extends out to 31 March 2026.
Achieved in full
Create and maintain
investor buy-in of our
strategic objectives.
To contribute to the
Group'sbusiness
objectives by providing
strategic advice and
guidance on financial
policy.
Engage regularly with analysts and
shareholders as well as other stakeholders,
promoting understanding of the Group's
operations and strategy.
Maintain the necessary policies,
proceduresand reporting
protocols toensure sound financial
managementand control.
Multiple meetings held with all analysts and material developed in to support investment attraction
ofPersimmon. Promoted meetings with analysts and investors to clearly communicate the Group’s plans
and actions to decarbonise the business, the supply chain, and homes in use.
2020 Annual Report highlighted by FRC in a number of areas as providing concise visibility of key
areasofreview – highlighted to investors and sell side via inclusion in formal RNS releases.
Facilitated a strong working relationship with the FRC.
HMRC Senior Accounting Officer obligations met in full.
Effectively managed the legacy DB Pension Investment Committee requirements as Chair through aperiod
of significant market turbulence retaining the Group’s positive funding position.
Achieved in full
To deliver industry-
leadingperformance
and sustained
shareholder value.
To contribute effectively
to the Group's
continuing development.
Assist the CEO to identify margin
improvements across the business and
optimising operational efficiency, including
the contribution from our factories.
Support the CEO in delivering the
Group'sobjectives and support his five key
priorities; to improve build quality, enhance
our brand, grow the business, maintain
strong financial performance and create
sustainable communities.
Optimised use of the Group's manufactured product, and the continued evolution and expansion
ofFibreNest to a larger proportion of home owners, with FibreNest now serving c.20,500 new
householdsacross c.260 of our developments.
Provided advice to the Chief Executive and the wider senior executive team to ensure the Group's
strategyis executed effectively.
Achieved
in part
Half of the bonus earned by each Executive Director is paid in cash with half deferred into shares for three years. The amount deferred into
shares is not subject to any further performance condition. In the case of Dean Finch, the deferred share award will ordinarily be subject to
continued employment. Having regard to Mike Killoran’s long service and retirement, he will retain his deferred share award, which will vest
atthe end of the usual three year deferral period.
Strategic report Governance Financial statements Other information
119
Remuneration
Annual report on remuneration continued
Savings-Related Share Option Scheme (‘SAYE’)
The SAYE Scheme is an HMRC approved all employee savings related share option scheme. Invitations are issued annually to all employees
to apply for the grant of an option under the SAYE. There are no performance conditions attached to options granted under the SAYE.
No options matured and became exercisable in 2021.
CEO buy-out award
This was granted to Dean Finch on 19 March 2021 as compensation for a deferred bonus forfeited when he joined Persimmon as disclosed
inour 2020 Director’s Remuneration Report. This award is not subject to performance conditions and therefore the value at grant is included
in the Single Figure for 2021 in line with the regulations. The award is due to vest on 19 March 2022.
Performance share plan awards made during the year
PSP awards were granted on 19 March 2021 to Dean Finch and Mike Killoran.
Type of award Basis of award
Threshold level
of vesting
Face value
of award
£000
1
Performance
period
2
Shares subject
to option
Dean Finch Nil-cost option Percentage of
salary – 200%
25% 1,450 1/1/21 – 31/12/2023 49,103
Mike Killoran
3
Nil-cost option Percentage of
salary – 200%
25% 1,065 1/1/21 – 31/12/2023 36,049
1. The face value of the award is based on the closing share price on the day before the grant of the award (£29.53).
2. The awards will vest in 2024 based on the achievement of the performance conditions but are then subject to a further two-year holding period before the shares can be released.
3. Mike Killoran’s share awards were reduced post 31 December 2021. See page 118 for more details.
Each award is subject to the performance conditions set out below.
Performance measure Weighting
Threshold
(25% vesting)
Target
(50% vesting)
Maximum
(100% vesting)
Relative TSR
1
40% Median – Upper quartile or above
Average pre land cash generation over
thethree year performance period
2
40% £833m £1,111m £1,389m
Underpin applying to the pre-land cash
measure – An average ROCE
3
of 20% over
the three-year performance period
Customer Care
4
20% Group HBF Score
is 75%
– Group HBF Score
is 80% or above
1. Compared to a peer Group of the UK’s largest listed house builders: Barratt Developments Plc; Bellway p.l.c.; Countryside Properties PLC; Crest Nicholson Holdings plc; Redrow plc;
Taylor Wimpey plc; The Berkeley Group Holdings plc; Vistry Group PLC.
2. Net cash inflow before capital return and net land payments.
3. ROCE = annual underlying profit from operations/average capital.
Annual Underlying Profit from Operations = 12 month consolidated Group profit before tax, interest, goodwill impairment and exceptional items;
Average Capital Employed = average of Capital Employed during the relevant calendar year; and
Capital Employed = Consolidated Shareholders Funds, plus consolidated borrowings, less consolidated cash holdings.
4. The Customer Care measure is based on the HBF 9 month 'recommend a friend' question. Awards vest on a straight-line basis for a score between 75% and 80%. The customer care metric
issubject to an underpin that the Group is a four-star builder in each of the three years of the performance period.
Persimmon Plc | Annual Report | December 2021
120
Payments for loss of office
There were no payments for loss of office.
Payments to past directors
There were no payments to past Directors for the year ended 31 December 2021 where the total payment to the former Director exceeded
the threshold set by the Group of £20,000.
Mike Killoran retired from the Board and the Group on 14 January 2022. His remuneration for the year ended 31 December 2021 is included
inthe single total figure table. Amounts earned by Mike in 2022 will be disclosed in the 2022 Directors’ Remuneration Report.
As noted in the statement from the Committee’s Chair on page 109, having regard to Mike’s long service and retirement, the Committee
exercised its discretion to grant “Good Leaver” status for the purpose of his outstanding PSP awards. The awards remain subject to the rules
of the PSP and the applicable performance conditions and have been reduced pro-rata to reflect the proportion of the performance period
which had elapsed at Mike’s leaving date. Subject to the satisfaction of the performance conditions, the awards will vest at the usual time
andremain subject to a two year holding period after the end of the performance period, as set out below.
Award
Shares originally
subject to award
Shares subject to
award after
pro-rata reduction Performance Period Vesting
End of holding
period
2020 PSP 49,530 33,667
1 January 2020 –
31 December 2022 Spring 2023 Spring 2025
2021 PSP 36,049 12,477
1 January 2021 –
31 December 2023 Spring 2024 Spring 2026
Service contracts
The Chief Executive Dean Finch has a service contract with a 12-month rolling notice period, while the new CFO Jason Windsor will have
a 6-month rolling notice period. The Board recognises that external appointments can broaden an individual’s skills and experience. If an
Executive Director wishes to take up an external appointment, they must first seek approval from the Chairman. Dean Finch was appointed
asa non-executive director of Diploma Plc in May 2021.
The Chairman and Non-Executive Directors are not employees, they have letters of appointment which set out their duties and
responsibilities. They do not have service contracts. Their letters of appointment are available for inspection at the Group’s registered office.
A Non-Executive’s appointment is initially for a three-year term, subject to re-election at each AGM but their appointment may be terminated
on one month’s notice.
Name
Service Contract/
Letter of Appointment
commencement date Unexpired term remaining as at 31 December 2021
Dean Finch 28 September 2020 Terminable on 12 months’ notice
Roger Devlin 1 June 2018 Terminable on three months’ notice and subject to reappointment at the AGM each year
Nigel Mills 4 April 2016 Terminable on one month’s notice and subject to reappointment at the AGM each year
Simon Litherland 3 April 2017 Terminable on one month’s notice and subject to reappointment at the AGM each year
Joanna Place 1 April 2020 Terminable on one month’s notice and subject to reappointment at the AGM each year
Annemarie Durbin 1 July 2020 Terminable on one month’s notice and subject to reappointment at the AGM each year
Andrew Wyllie 4 January 2021 Terminable on one month’s notice and subject to reappointment at the AGM each year
Shirine Khoury-Haq 1 July 2021 Terminable on one month’s notice and subject to reappointment at the AGM each year
Strategic report Governance Financial statements Other information
121
Remuneration
Annual report on remuneration continued
Directors’ share option scheme interests
Scheme
Total
interests
outstanding
at 31
December
2020
Granted
in year
Acquired
in year
Lapsed
in year
Exercise
price/
market
price at
date of award
Interests
without
performance
conditions
Interests with
performance
conditions
Total
interests
outstanding
at
31 December
2021
Options
vested but
unexercised
Latest
vesting
date
D Finch Buy-Out
Award
– 13,694 – – 2953p 13,694 – 13,694 – March
2022
PSP 2017 17,917 – – – 2411p – 17,917 17,917 – Spring
2023
PSP 2017 – 49,103 – – 2953p – 49,103 49,103 – Spring
2024
M Killoran
1
PSP 2017 49,530 – – – 2128p – 49,530 49,530 – Spring
2023
PSP 2017 – 36,049 – – 2953p – 36,049 36,049 – Spring
2024
SAYE 970 – – – 1854p 970 – 970 – December
2023
1. Mike Killoran’s PSP awards were reduced following the end of the year in connection with his retirement as set out on page 109.
All of the above represent share options and were granted for no financial consideration.
Statement of Directors’ shareholding requirements and share interests
The share ownership requirements for the Executive Directors serving during the year and the share interests of the Directors and of their
connected persons in the ordinary share capital of the Group are as shown below. The shareholding requirements set out below are the
requirements from 1 January 2020:
Director
Shareholding
requirement
Value of base salary held
at 31 December 2021 (including shares
held by connected persons but excluding vested
awards which have not yet been exercised)
¹
Beneficial holdings (including interests of the
Director’s connected persons)
31 December 2021
(or if earlier, date of
leaving the Board)
31 December 2020
(or if later, date of
joining the Board)
D Finch 4 times salary
2
62%
3
15,708 6,600
M H Killoran 5 times salary 10,362% 1,931,192 1,931,192
Chairman
R Devlin N/A N/A 12,575 12,575
Non-Executives
J Place N/A N/A 3,408 –
N Mills N/A N/A 716 716
S Litherland N/A N/A – –
A Durbin N/A N/A – –
A Wyllie N/A N/A 1,012 –
S Khoury-Haq N/A N/A 355 –
Total 1,957,708 1,951,083
1. Calculated based on the closing price of £28.56 at 31 December 2021 and on base salary at 31 December 2021.
2. The Committee expects that a holding with a value equal to 2x salary will be achieved within five years of appointment, with the balance of the requirement acquired within a period agreed with
the Chairman.
3. This includes a buy-out award which vests on 19 March 2022.
The Directors’ beneficial holdings at 31 December 2021 were 1,957,708 shares, representing 0.6% of the Group’s issued share capital as at
that date. There have been no changes in these interests between 31 December 2021 and 1 March 2022, other than an acquisition by Joanna
Place of 3,907 shares on 18 January 2022.
The Committee has an agreed Post-Employment Shareholding requirement pursuant to which it is a condition of any PSP or deferred bonus
award granted to an Executive Director on or after 1 January 2020 that:
• any shares acquired pursuant to the award (including any shares acquired as part of a ‘dividend equivalent’) may be held in a nominee
arrangement reasonably determined by the Remuneration Committee; and
• the Remuneration Committee may determine that the award will lapse if the Executive Director does not comply with the post-employment
shareholding requirement.
Persimmon Plc | Annual Report | December 2021
122
There are no share ownership requirements for the Chairman and Non-Executive Directors.
An Executive Director may be asked to agree to the post-employment shareholding requirement as part of their settlement agreement
or similar at the time of leaving. The Executive Director will be asked to confirm annually that they still comply with the post-employment
shareholding requirement. The Remuneration Committee retains the discretion, in exceptional circumstances (such as serious illness), to
determine that the post-employment shareholding requirement shall not apply or that its application shall be relaxed. The post-employment
shareholding requirement shall not apply if an Executive Director’s cessation of employment is by reason of death.
Should the Executive Director wish to sell shares which are subject to the post-employment shareholding requirement then they may request
dispensation to sell from the Chairman. In determining whether to grant permission to sell, the Chairman will take into account such factors as
they consider relevant which may include, but are not limited to, the underlying performance of the business since the Executive Director left
the Group and the individual’s conduct.
Total Shareholder Return
We have chosen to compare the Group’s total shareholder return performance with that of the FTSE 350, being a broad index of the UK’s
largest companies and with the largest UK listed house builders, being the Group’s peer group. The graph shows a hypothetical £100 holding
in the Group’s shares over ten years, relative to the FTSE 350.
Persimmon Plc Peer Set FTSE 350
200
0
400
600
800
1,000
1,200
Jan
2012
Jan
2013
Jan
2014
Jan
2015
Jan
2016
Jan
2017
Jan
2018
Jan
2019
Jan
2020
Jan
2021
+897.1%
+562.4%
+110.3%
Jan
2022
Group Chief Executive Remuneration 2012 to 2021
Year Chief Executive
Single total figure
of remuneration £
Annual bonus paid against
maximum opportunity
PSP/LTIP awards vesting against
maximum opportunity
2021* D Finch 2,578,902 92% n/a
2020 D Finch/D Jenkinson** 658,212 n/a n/a
2019 D Jenkinson 672,998 n/a n/a
2018 J Fairburn 38,967,197 n/a 100%
2017 J Fairburn 45,739,514 95.7% 100%
2016 J Fairburn 2,123,692 97.3% n/a
2015 J Fairburn 1,995,213 97.3% n/a
2014 J Fairburn 1,890,918 91.6% n/a
2013*** M P Farley/J Fairburn 5,957,479 100% 100%
2012 M P Farley 4,989,127 100% 100%
* The increase in the CEO single total figure of remuneration between 2020 and 2021 reflects: (1) that Executive Directors’ bonuses for 2020 were forgone; and (2) the inclusion in the 2021 single
total figure of remuneration of a buy-out award granted to Dean Finch.
** This is the total remuneration for Dave Jenkinson, who was Group Chief Executive until 20 September 2020, and remuneration for Dean Finch from 28 September 2020, the date he became
Group Chief Executive.
*** This is the total remuneration for Mike Farley, who was Group Chief Executive until 18 April 2013, and remuneration for Jeff Fairburn from 18 April 2013, the date he became Group Chief Executive.
Strategic report Governance Financial statements Other information
123
Remuneration
Annual report on remuneration continued
The Wider Workforce
When making decisions about reward for the Executive Directors and Senior Executive Group the Remuneration Committee take account
of the reward principles which apply across the Group. Fundamental to this are our beliefs that all employees should be treated fairly, as
evidenced by our status as a Living Wage Employer, and that all employees should have the opportunity to share in the success of the
business as shown through extensive participation in bonus, commission and share plans. We also continue to invest in our wider employee
population through training and development opportunities and through the work being carried out by our D&I Council. All of this together is
aimed at improving the overall experience of being a Persimmon employee. Further information on this can be found on page 34.
An overview of our reward policy for salaried employees and how this cascades down the business is shown below.
Executive Directors Senior Executive Group Senior management Management Salaried Employees
Competitive base salary
Annual bonus
PSP
All employee share plan
Pension
Car/car allowance
*
Private health cover
*
* Dependent on role and/or job grade
Employee Engagement
When setting Executive Remuneration Policy the Committee engaged with the Employee Engagement Panel. Engagement is made with
employees to explain how executive remuneration aligns with wider Group pay policy. The Employee Engagement Panel outcomes are
reported to the Board and meetings are attended by the Non-Executive who has responsibility for workforce engagement. The Committee
Chair met with the Engagement Panel during 2021. We publish an employee newsletter, called ‘HQ’, regularly throughout the year.
The Committee tracks a number of workforce related statistics via a workforce remuneration dashboard of Group wide workforce
pay statistics and trends. The Committee and Board are informed of the outcomes of Employee Engagement Surveys which are
undertaken annually.
The remuneration policy for the workforce is given due consideration when determining the remuneration of the Executive Directors.
Pay ratios
The table below compares the 2021 and 2020 Single Total Figure of Remuneration for the Group Chief Executive with that of employees who
are paid at the 25th percentile, 50th percentile and 75th percentile of the Group’s employee population and also shows the total pay and
benefits at quartile points.
Year Method 25th percentile pay ratio Median ratio 75th percentile ratio
2021 Option B 99:1 60:1 45:1
2020
1
Option B 28:1 17:1 14:1
2019 Option B 23:1 20:1 15:1
1. The pay ratio for 2020 is based on the aggregate of the remuneration earned by Dave Jenkinson and Dean Finch for the period each was CEO during 2020.
The median ratio for 2021 is 60:1. The Company considers that the median pay ratio for 2021 is consistent with the pay, reward and
progression policies for the Company’s UK employees taken as a whole (albeit that the total remuneration pay ratio is expected to increase
going forward due to the grant of bonus and PSP awards to Executive Directors). The increase in the pay ratio between 2020 and 2021 is
impacted by the inclusion in the CEO’s 2021 remuneration of the buy-out award granted to him in 2021 in connection with a deferred bonus
forfeited at his previous employer and the fact that 2020 bonus was forgone.
The Company adopted ‘Option B’ from The Companies (Miscellaneous Reporting) Regulations 2018. The latest available gender pay gap
data (i.e. from April 2021) was used to identify the best equivalents in respect of each year for three Group employees whose hourly rates of
pay were at the 25th, 50th and 75th percentiles of all Group employees. The Company adopted Option B because it was the most practical
approach to total calculation of these ratios taking into account the availability of data, and because it means that the data used to calculate
the Company’s gender pay gap and CEO ratios is applied on a consistent basis. The full time equivalent total pay and benefits figures for
the three employees at each percentile were determined with reference to the relevant year ended 31 December. No adjustments were
made, other than approximate pro-rating to achieve full-time equivalent, or leaver data where relevant, and no components of pay have been
omitted. The Committee understands that the three employees represent the relevant percentiles, and each was remunerated in line with the
Group remuneration policies.
A small number of employees at either side of the quartile points identified from the gender pay gap data were also considered, together with
their corresponding full time equivalent total pay and benefits figures to ensure that the employees identified at each of the three percentile
points are reasonably representative of each quartile.
Persimmon Plc | Annual Report | December 2021
124
The CEO pay is the single total figure of remuneration for the relevant year, as stated in the Group Chief Executive Remuneration 2012 to 2021
table on page 123.
The total salary, and pay and benefits of employees who are paid at the 25th percentile, 50th percentile and 75th percentile is shown below:
Year CEO 25th percentile pay ratio Median ratio 75th percentile ratio
2021 Total pay and benefits 833,742 £26,005 £43,306 £57,485
2021 Salary 725,000 £21,178 £33,551 £46,000
2020 Total pay and benefits £658,212 £23,748 £39,645 £47,828
2020 Salary £561,842 £21,608 £36,297 £38,300
2019 Total pay and benefits £672,998 £29,500 £33,409 £44,728
2019 Salary £511,625 £26,667 £19,425 £27,726
Gender Pay Gap
At the year end the median Gender Pay Gap for the Group was 18.1% (2020: 12.7 %). Our median gender pay gap is driven by the composition
of our workforce with a higher proportion of men in skilled construction roles (such as bricklaying and site management) the market for which
is competitive. Further information on gender pay gap reporting can be located in the Strategic Report, on page 35, and in the Nomination
Committee Report on page 94. Whilst there is a higher proportion of men working in the Group, we are focusing on attracting a more diverse
workforce, especially women, who are under-represented in the industry as a whole. The Group has set gender diversity targets, details of
which can be found on page 35.
We currently do not record and calculate ethnicity pay data. The Group has appointed a Director of Talent & Diversity, and she is working with
the D&I Council to develop and then implement our strategy in this area. As part of this we will be reviewing relevant pay data with a view to
publishing ethnicity pay ratios in the future.
Further information on our interaction with the workforce can be located in the Strategic Report on page 34.
Directors’ change in remuneration
Set out below is a comparison of the change in remuneration of each of the Company’s Directors from 2019 to 2021, with the change in
remuneration of Persimmon Plc’s employees. Andrew Wyllie and Shirine Khoury-Haq were appointed to the Board in 2021 and, accordingly,
they have been excluded from the table below. As Persimmon Plc has a relatively small number of employees, we have also chosen to
compare the change in remuneration with the Group’s salaried employees (the same comparator group as we have used in previous years).
Salary/fees Bonus Benefits
2020/21 2019/20 2020/21 2019/20 2020/21 2019/20
Average of Persimmon Plc’s employees 5% 5% 21% -19% 2 18%
Average of Group salaried employees 5% 2% 21% -19% 2% 0%
R Devlin 5% – N/A N/A – –
D Finch* – N/A N/A*** N/A -7% N/A
M H Killoran 2% 1.6% N/A*** N/A**** -30% -15%
N Mills 5% – N/A N/A – –
S Litherland 5% – N/A N/A – –
J Place – N/A N/A N/A – N/A
A Durbin 5% N/A N/A N/A – N/A
R Kentleton** 5% – N/A N/A – –
* The 2020 remuneration for Dean Finch has been “annualised” for the purposes of the above table to enable a valid comparison.
** The figures have been calculated on the pro-rated equivalent of a full year’s fees for R Kentleton. She retired from the Board on 31 August 2021.
*** Executive Directors’ bonuses for 2020 were forgone such that the percentage change between 2020 and 2021 is not considered a meaningful comparison.
**** No bonus was payable for 2019 and bonus was forgone for 2020.
Salaried staff generally received a 3% salary increase in July 2021, their normal salary review date, although there were also a number of
promotional increases during the year. Due to timing issues the bonus comparison for employees is based on the actual amount paid in 2021
versus the actual amount paid in the 2020 financial year.
Relative importance of spend on pay
Set out below is the amount spent on remuneration for all employees of the Group (including for Executive Directors) and the total amounts
paid in distributions to shareholders over the year.
2021
£m
2020
£m
Difference
in spend
£m
Difference as a
percentage
Remuneration for all employees* 224.0 204.2 19.8 10%
Total Capital Return Programme payments made 749.6 350.7 398.9 114%
* Figures are taken from note 7 of the accounts relating to staff and employee costs except that employer social security costs and IFRS2 Share-based payment charges have been removed.
Strategic report Governance Financial statements Other information
125
Remuneration
Annual report on remuneration continued
Statement of voting at general meeting
The Directors’ Remuneration Policy, effective from 29 April 2020 was put to shareholders for approval at the 2020 AGM. The 2020 Annual
Report on Remuneration was put to shareholders for approval at the 2021 AGM. The voting at each AGM was conducted on a poll. The table
below summarises the result of the poll vote on the 2020 Directors’ Remuneration Policy and the 2020 Annual Report on Remuneration.
Votes for % for Votes against % against Total votes cast Votes withheld
Approval of the Directors’
Remuneration Policy
–29April2020 196,105,834 97.80 4,403,134 2.20 200,508,968
63,556
(representing 0.02% of the
issued share capital)
Approval of the Annual Report
onRemuneration
– 28April 2021 212,361,086 99.17 1,785,058 0.83 214,146,144
1,503,379
(representing 0.471% of the
issued share capital)
Statement of Remuneration Policy implementation 2022
A summary of the 2022 remuneration for each Executive Director is set out below, including for the Chief Financial Officer who is expected
tocommence his role in summer 2022.
Group Chief Executive pay Chief Financial Officer pay
• Base salary of £746,750 (3% increase in line with the wider workforce
increase awarded with effect from July 2021);
• Pension salary supplement of 9% (in line with the pension of
salariedemployees);
• Benefits including life assurance, car allowance and phone costs;
• Maximum annual bonus opportunity of 200% of base salary; and
• Maximum PSP award of 200% of base salary.
• Base salary £675,000
• Pension salary supplement of 9% (in line with the pension of the
salariedemployees);
• Benefits including life assurance, car allowance and phone costs;
• Maximum annual bonus opportunity of up to 175% of base salary
1
; and
• Maximum PSP award of 200% of base salary.
1. As reported in the Committee Chair’s Statement, for the period from 1 January 2022 to the date of joining Persimmon the CFO’s maximum annual bonus will be capped at 150% of base salary,
inline with the opportunity forgone at Aviva. From the date of joining until 31 December 2022 the bonus maximum will be 175% of base salary.
Annual bonus
Each Executive Director will be eligible for consideration of a bonus in respect of 2022, with maximum opportunities as referred to above.
In line with the 2021 metrics, the majority of the bonus will be based on financial metrics, being profit before tax and cash generation.
As these financial targets are commercially sensitive they will be disclosed in next year’s Remuneration Report. . As we continue to take
action to improve our build quality and customer care, we have applied an appropriate level of non-financial cultural and ESG metrics which
are key to our future success. Delivery of a stretching target level of performance will result in the Executive Director receiving 50% of the
maximum award. 50% of any bonus earned will be deferred into shares for three years.
In 2022 there will be three non-financial metrics; 20% of bonus will be based on customer care measures, 15% will be based on quality
and 5% will be based on an environmental measure. The customer care metric will be based on the strategy to score 90% or above
under the HBF 8 week customer satisfaction survey which is the equivalent of a five star rating. The quality measure will be based on the
results of independent warranty provider inspections and the HBF 8 week quality survey, to drive continued improvement in build quality.
The environmental measure will be based on developing an annualised glide-path with targets, key actions and milestones to support us in
achieving our Scope 1 and 2 science based carbon reduction targets; updating and embedding more efficient processes for data capture,
tracking and reporting and delivery of actions needed to improve energy efficiency and reduce carbon emissions.
Performance Share Plan awards
The Remuneration Committee intends to make PSP awards to the Executive Directors of 200% of base salary, with vesting subject to the
performance conditions set out below. The three-year performance period will run from 1 January 2022 to 31 December 2024 (as regards the
financial measures) and from October 2021 to September 2024 for the cultural measure, reflecting the periods applicable to the HBF survey.
Awards will vest in 2025 subject to meeting the performance conditions, with a further two-year holding period before the shares can be
released to the Executive Director.
PSP performance metrics are aligned with the Company’s strategy to return cash to shareholders through the housing cycle and with relative
TSR performance to link Executive Directors’ reward to outperformance of sector peers. In addition, as we continue to drive cultural change
in the business, there is a cultural measure based on the HBF customer care survey linked to the Company’s purpose to build high quality
homes for our customers. Collectively, these are important factors in ensuring overall business performance, sustainability and reputation.
The performance conditions remain the same as for 2021 awards, and details are provided below.
Persimmon Plc | Annual Report | December 2021
126
PSP performance metrics and targets – financial measures
Financial metrics will be based on relative TSR (40% of the overall award) and cash generation subject to a ROCE underpin (40% of the overall
award). No change is proposed to the relative TSR measure, where performance will continue to be assessed against a comparator group
consisting of other listed housebuilders.
We will continue to use a pre-land measure for cash generation. This is directly linked to strategy, encourages optimisation of sales volumes
and prices of homes and encourages good cost control. It is also a measure which is easily understood by our management teams and
therefore has a strong line of sight for them as participants in the PSP. We recognise that pre-land cash generation continues to be a measure
in the annual bonus. However, we considered that the merits of using a pre-land measure referred to above warranted its inclusion in the PSP,
and in reaching this decision we had regard to the fact that it is measured over a three year period for PSP purposes and is subject to a ROCE
underpin. The ROCE underpin that we introduced for the 2020 PSP awards taking into account shareholder feedback will operate in the
same way for the 2022 awards. Our pre-land cash targets have been set based on strategy of investing in work in progress and accelerating
cladding remediation work, both of which will impact our cash generation. In addition the targets for the 2022 awards reflect increases to
taxation which take effect in 2022 and 2023. These additional charges were not taken into account when setting 2021 targets, and the
Committee has decided not to adjust the 2021 targets for these factors, however it is important that they are recognised when setting the
forward-looking targets for 2022 to ensure that the targets for the 2022 PSP grant are appropriately stretching.
Performance measure Weighting
Threshold
(25% vesting)
Target
(50% vesting)
Maximum
(100% vesting)
TSR Ranking
1
40% Median – Upper quartile or above
Average pre-land cash
generation
2
over the three
year performance period 40% £949m £1,117m £1,285m
Underpin applying to the pre-
land cash measure – An average
ROCE
3
of 20% over the
three year performance period
1. Compared to a peer Group of the UK’s largest listed house builders: Barratt Developments Plc; Bellway p.l.c.; Countryside Properties PLC; Crest Nicholson Holdings plc; Redrow plc; Taylor
Wimpey plc; The Berkeley Group Holdings plc; Vistry Group PLC.
2. Net cash inflow before capital return and net land payments.
3. ROCE = annual underlying profit from operations/average capital, where:
Annual Underlying Profit from Operations = 12 month consolidated Group profit before tax, interest, goodwill impairment and exceptional items;
Average Capital Employed = average of Capital Employed during the relevant calendar year; and
Capital Employed = Consolidated Shareholders Funds, plus consolidated borrowings, less consolidated cash holdings.
PSP performance metrics and targets – cultural measure
As with the 2021 PSP awards, the metric we use to measure customer care will continue to be based on the HBF Survey.
The HBF survey operates in the 8 week period following completion of a sale, the results of this survey are used by the HBF to determine
a house builder’s star rating. The HBF also operates a survey in the 9 month period following completion. For the 2022 PSP awards we will
continue to use the 9 month survey results.
Measurement basis and targets
For the 2022 awards, we will assess the measure by reference to the overall Group scores because this aligns all participants with an
improvement in Group performance.
The Group 9 month survey score for the year to 30 September 2021 is currently 66.5% and the targets for the 2022 awards require an
improvement on this for all performance levels. An underpin will continue to apply that the Group scores at least 80% in the 8 week score in
each of the three yearsof the performance period.
Performance measure Weighting
Threshold
(25% vesting)
Maximum
(100% vesting)
Customer care 20%
Group HBF 9 month
score in February 2025
for the 2023/24
year is 75%
Group HBF 9 month
score in February 2025
for the 2023/24
year is 80%
Discretion
The Remuneration Committee has discretion to override formulaic outcomes in relation to annual bonus awards and PSP awards. In line
with market practice this includes the ability to adjust for exceptional or unforeseen items in order that performance is assessed on a fair and
consistent basis. Any such exercise of discretion would be disclosed in the subsequent Directors' Remuneration Report.
Strategic report Governance Financial statements Other information
127
New CFO – Joining arrangements
As referred to in the statement from the Committee’s Chair and in line with usual practice, the Committee has agreed that, in recognition
ofJason Windsor’s forfeiture of remuneration on leaving his current employer, he will receive the following buy-out awards:
Remuneration Forfeited Replacement
Annual bonus for 2021
The bonus buy-out will not exceed the amount of the bonus in respect of Aviva’s financial year ended 31 December
2021 that would have been received if Jason had not resigned. We will pay the buy-out bonus 50% in cash and 50%
in shares, which will be deferred for 3 years in line with the Persimmon 2020 Deferred Bonus Plan. 50% of the amount
received in cash (net of income tax and national insurance) will be used to purchase Persimmon shares.
2019, 2020, 2021 Deferred Bonus
These will be replaced with awards of Persimmon shares to be granted as soon as practicable after Jason begins
employment with Persimmon. The number of Persimmon shares will be calculated to reflect the value of the forfeited
Aviva shares, including any adjustment to those awards that would have been made to reflect Aviva dividends and
capital returns before Jason joins Persimmon. The awards will vest as follows:
• the award in respect of the 2019 award will vest immediately as the Aviva award would have vested in March 2022
• the award in respect of the 2020 award will vest half immediately and half in March 2023 in line with the
forfeitedaward
• the award in respect of the 2021 award will vest 1/3 immediately, 1/3 in March 2023 and 1/3 in March 2024, in line with
the forfeited award.
These awards will not be subject to performance conditions which reflects the fact the Aviva deferred bonus shares
forfeit are not subject to performance conditions.
2019 Restricted Stock
This will be replaced with an award of Persimmon shares to be granted as soon as practicable after Jason begins
employment with Persimmon. The number of Persimmon shares will be calculated to reflect the value of the forfeited
Aviva shares, including any adjustment to those awards that would have been made to reflect Aviva dividends and
capital returns before Jason joins Persimmon.
This award vests immediately as the Aviva award would have vested in March 2022.
2020 and 2021 LTIP
These awards will be replaced with awards of Persimmon shares to be granted as soon as practicable after Jason
begins employment with Persimmon. We will buy-out 2/3rds of the 2020 award (which was 2/3rds of the way through
its performance period) and 1/3rd of the 2021 award (which was 1/3rd of the way through its performance period).
The number of Persimmon shares will be calculated to reflect the value of the time reduced Aviva awards, including
any adjustment to those awards that would have been made to reflect Aviva dividends and capital returns before
Jason joins Persimmon. The awards will vest as follows:
• the award in respect of the 2020 award will vest in March 2023
• the award in respect of the 2021 award will vest in March 2024
In addition to the time based reduction to the number of shares to be granted, both of these awards remain subject
to performance conditions and will be adjusted to reflect the actual vesting of the relevant Aviva LTIP awards, thus
ensuring no windfall gain or loss to Jason.
Chairman and NED fees
The Board as a whole determines the fees of the Non-Executive Directors, with the Non-Executive Directors being recused from that
discussion and decision. The Remuneration Committee determines the Chair’s fees. The Non-Executive Director and Chairman fees have
not been revised since 2017 and 2018 respectively. The Board and the Remuneration Committee have carried out a review during the year
to establish how the competitive market has changed taking into account the impact of increasing regulation and responsibilities. Given the
movement in the external market since the fees were last increased, meaning that the fees had fallen significantly behind our FTSE 100
competitors it was agreed (by the Remuneration Committee for the Chair and by the Board for the NEDs) that increases will be applied for
2022 as set out below. This moves the fees to a market positioning around the median, but with the fees remaining below those at other
FTSE 100 housebuilders. The new fees remain below for the NEDs and broadly in line for the Chair with what the fee level would have been if
an increase in line with the wider workforce had been given each year since the last review.
The fees for 2022 are set out below, together with a comparison to 2021.
Position Fees for 2022 Fees for 2021
Chairman £330,000 £300,000
Non-Executive Director £65,000 £60,000
Senior Independent Director £17,000 £15,000
Audit Committee Chair £17,000 £15,000
Nomination Committee Chair £17,000 £15,000
Remuneration Committee Chair £17,000 £15,000
Workforce Engagement NED fee £10,000 N/A
Annemarie Durbin
Chair of the Remuneration Committee
1 March 2022
Remuneration
Annual report on remuneration continued
Persimmon Plc | Annual Report | December 2021
128
SUMMARY OF DIRECTORS’
REMUNERATION POLICY
The Group’s Remuneration Policy for Executive Directors and Non-Executive Directors was approved by
shareholders at the AGM on 29April 2020, and took effect from that date fora period of three years.
The Policy received 97.8%votes in favour. A summary of the Policy for the Executive Directors, Chairman
and Non-Executive Directors is set out below.
The entire Policy, as approved by shareholders, may be found on the Group’s website at
https://www.persimmonhomes.com/corporate/investors/results-reports-and-presentations/ in the 2019 Annual Report
on pages 101 to 109. The Policy is forward-looking and intended to last for three years from its approval by shareholders,
with a new policy intended to be submitted to shareholders at the 2023 AGM.
During the year there were no deviations from the Policy.
Remuneration Policy for Executive Directors
Purpose How it operates Maximum payable Performance framework
Base salary
Core element of fixed
remuneration reflecting
individual’s role
and experience.
Usually reviewed annually with any increases
normally taking effect from 1 January.
When reviewing salaries, consideration is given
to business and market conditions, any increases
awarded to the Group’s salaried employees and
any change in a Director’s role and experience.
Where an Executive Director is to be promoted or
where their role is to be expanded or changed,
the Committee will review the salary payable and
decide whether an adjustment is appropriate.
The Committee does not consider
it appropriate to set maximum
salary levels. Any increases will
generally be in line with increases
applied to the Group’s salaried
employees (in percentage terms).
Increases may be made either
above or below that level in
appropriate circumstances,
which may include but are not
limited to, promotions, where
the Committee has purposefully
set a lower starting salary for a
newly appointed Director, or if
a Director’s salary is no longer
market competitive or to reflect
development and performance
in role or a change in the size or
complexity of the role.
Although performance conditions
do not apply, the individual’s
performance is taken into account
in determining the level of any
salary increase.
Pension/
Salary supplement
Provide a competitive
means of saving to
deliver appropriate
income in retirement.
Base salary is the only component of remuneration
which is pensionable. The Group operates a
defined benefit (DB) pension scheme, which is
closed to new members and a defined contribution
(DC) scheme.
Accrual in the DB scheme is based on a career
average revalued earnings (CARE) basis for
all active members and normal retirement age
for Directors is 60 or 65, dependent on date of
appointment to the Board.
A Director may receive a salary supplement in lieu
of some or all of the pension benefits available
under either of the schemes.
Pension accrual in the DB scheme
is on a CARE basis at one-sixtieth
of Pensionable Salary per year.
The maximum DC pension
contribution or salary supplement
(or combination of those two
elements) is 9% of base salary,
subject to any increase to take
account of changes to the
pension/ salary supplement
provided to the Group’s
salaried employees.
None
Benefits
Provided on a market
competitive basis.
The benefits include: a fully financed car or
cash car allowance, group medical scheme
membership, life assurance, provision of a mobile
phone (or reimbursement of mobile phone costs),
and income protection scheme membership.
The Committee does not currently expect to
change the range of benefits offered to Executive
Directors but retains the discretion to add to the
benefits available in appropriate circumstances,
which may include providing relocation allowances
where appropriate.
The Committee has not set a
maximum value of benefits for
Executive Directors, but the
value will be set at a level which
the Committee considers to
be appropriately positioned,
taking into account the nature
and location of the role and
individual circumstances.
None
Strategic report Governance Financial statements Other information
129
Remuneration
Summary of directors' remuneration policy continued
Purpose How it operates Maximum payable Performance framework
HMRC qualifying all-
employeescheme
HMRC qualifying
all employee share
schemes are to
encourage employees
to take a stake in the
business, which aligns
their interest with that
of shareholders.
Executive Directors are eligible to participate in
all-employee schemes on the same basis as other
qualifying employees.
Maximum is subject to limits in the
applicable tax legislation.
None
Annual bonus
The annual bonus
rewards Executive
Directors for
performance in the
relevant year against
targets and objectives
linked to the delivery of
the Company’s strategy.
50% of any annual bonus earned is paid in cash.
To further link the Executive Director’s pay to
the interests of shareholders, 50% of any bonus
earned (subject to a de minimis limit of £5,000) is
deferred into shares for three years.
The Committee has the discretion to override
the formulaic outturn of the bonus, including
where it believes the outcome is not reflective of
underlying performance or is not appropriate in the
context of circumstances that were unexpected or
unforeseen at the start of the bonus year.
Vesting of deferred bonus awards is not subject to
further performance conditions.
Deferred bonus awards may incorporate the
right to receive additional shares calculated by
reference to the value of dividends which would
have been paid on the shares up to the time
of vesting.
Recovery provisions apply, as referred to on
page131.
The maximum annual bonus
potential is 200% of base salary
for the Group Chief Executive
and 150% of base salary for
other Executive Directors.
Maximum bonus is only payable
if stretching targets are met and
excellent Company performance
is achieved.
Annual bonus performance
conditions are set annually by the
Committee to ensure that they take
into consideration the Company’s
strategy and the outlook for
the Company over the medium
term and are appropriate from a
risk perspective.
Financial metrics such as profit,
and cash generation will have the
majority weighting. Non-financial
metrics such as customer care and
quality, where applied, will have a
minority weighting.
Financial metrics:
Subject to the Committee’s discretion
to override formulaic outturns,
payment at threshold performance
is up to 10% of the maximum, up to
50% of the maximum will be payable
for on-target performance and all
of the bonus will be payable for
maximum performance.
Non-financial strategic or
individual metrics:
Subject to the Committee’s
discretion to override formulaic
outturns, payment of the non-
financial strategic or individual
metrics will apply on a scale between
0% and 100% of that element based
on the Committee’s assessment of
the extent to which a non-financial
performance metric has been met.
The PSP
To provide a link
between the
remuneration of
Executive Directors
and the creation of
shareholder value by
rewarding Executive
Directors for the
achievement of longer
term objectives aligned
to shareholder interests.
Under the PSP, the Committee may grant awards
as conditional shares, nil-cost options or in such
other form as the Committee determines has a
substantially similar economic effect.
Awards vest subject to the satisfaction of
performance conditions assessed over a period
ofnot less than three years.
The Committee has the discretion to reduce the
formulaic vesting outturn applying to any PSP
award, including where it believes the outcome
is not reflective of underlying performance or is
not appropriate in the context of circumstances
that were unexpected or unforeseen at the date
of grant.
Awards are granted subject to a holding period of
two years following the end of the performance
period, with the awards usually only released
to the Executive Director (so that the Executive
Director can acquire the shares subject to the
award) following the end of the holding period.
PSP awards may incorporate the right to receive
additional shares calculated by reference to the
value of dividends which would have been paid on
the shares up to the time of release.
Recovery provisions apply, as referred
to on page 131.
The usual maximum award
level in respect of any financial
year of the Company is 200%
of base salary. However, in
exceptional circumstances (such
as on recruitment of an Executive
Director), awards may be granted
in respect of any financial year of
the Company at the level of up to
300% of base salary.
Performance conditions applying
to awards under the PSP will be
based on financial and/or strategic
measures aligned to the Company’s
long-term strategy, which may
include, but is not limited to, cash
generation, relative TSR, and a
cultural metric.
Awards will vest as to 25% for
threshold performance, increasing to
100% for maximum performance.
Persimmon Plc | Annual Report | December 2021
130
Choice of performance conditions
Annual bonus conditions Rationale for selection and how performance targets are set
Profit before tax and
cash generation
Customer satisfaction, quality, or
other non-financial, strategic, or
personal measure
Aligned with the Company’s strategy to deliver high quality growth and return cash to shareholders. These are
important factors in ensuring overall business performance, sustainability and reputation.
Annual bonus performance measures and targets are reviewed annually by the Committee to ensure that they
take into consideration the Company’s strategy and the outlook for the Company over the medium term and are
appropriate from a risk perspective.
PSP Rationale for selection and how performance targets are set
Cash generation
(subjectto Return of Capital
Employed underpin)
Relative TSR
A cultural metric
Performance conditions for the PSP will be determined by the Committee and aligned with the Company’s strategy.
The rationale for the proposed performance conditions is as follows.
• Cash generation: Ensures generation of cash to fund returns to shareholders is the result of long-term sustainable
financial performance which is a core element of the strategy. Return on Capital Employed underpin ensures that
returns to shareholders are the result of long-term sustainable financial performance.
• Relative TSR: Provides a means of comparing the Company’s performance with that of peers. Aligns the rewards
received by executives with the returns received by shareholders. Ensures rewards are linked to outperformance of
sector peers. Aligned with market practice in wider FTSE 100 and sector peers.
• Cultural metric: Performance against cultural metrics is key to our future success.
The Committee retains the right to adjust or set different performance measures if events occur (such as, but not limited to, a change
in strategy, a material acquisition and/or a divestment of a Group business or a change in prevailing market conditions), which cause
the Committee to determine that the measures are no longer appropriate and that amendment is required so that they achieve their
original purpose.
Share ownership
guidelines
In-service requirement
During employment, Executive Directors in
office at the date on which the 2020 Policy
is approved are required to acquire and
retain shares with a value equal to 500% of
base salary. The guideline for any Executive
Director appointed on or after the date on
which the 2020 Policy is approved is 400%
of base salary. The Committee expects
that a holding with a value equal to 200%
of salary will be achieved within five years
of appointment, with the balance of the
guideline acquired within a period agreed
with the Chairman; progress towards the
guideline will be reviewed regularly.
Post-employment requirement
Following employment, Executive Directors
are required to retain for a period of two
years such number of shares as they
were required to acquire and retain during
employment (or, if fewer, the number of
shares they held at the date of cessation of
employment); shares which the Executive
Director purchases or acquires pursuant to
the Company’s SAYE scheme and shares
acquired pursuant to any other share plan
awards granted before 1 January 2020 will
not be subject to any post-employment
holding requirement.
Recovery provisions (malus and
clawback)
Recovery provisions may be applied in the
event of the following:
• a material misstatement of any Group
member’s financial results;
• gross misconduct on the part of the
participant which affects substantially the
financial performance or reputation of a
Group member;
• an error in assessing a
performance condition;
• a material failure of risk management;
• serious reputational damage to any
Group member;
• serious misconduct or material error on
the part of the participant;
• a material corporate failure;
• a failure of acceptable health and safety
standards, which may include a fatality; or
• any other circumstances considered to be
similar in their nature or effect to those set
out above.
The recovery provisions may be applied
in the case of the annual bonus for three
years from the date on which the amount of
the bonus is determined and, in the case of
PSP awards, until the fifth anniversary of the
grant date.
Differences between the Executive Directors’
and general employees’ remuneration
policy
Performance-related pay makes up
a significantly higher proportion of
remuneration for the Executive Directors
and senior employees than for employees
generally, reflecting the role of these
individuals in managing the business to
achieve the Company’s strategic objectives.
The Committee considers that the emphasis
on performance related pay for Executive
Directors and senior employees closely
aligns the Directors’ interests with those
of shareholders and helps to deliver
excellent long-term Company performance.
However all salaried employees do
participate in a bonus plan and have the
opportunity to acquire shares through the
all-employee share plan.
Strategic report Governance Financial statements Other information
131
Remuneration
Summary of directors' remuneration policy continued
Non-Executive Directors
Purpose How it operates Maximum payable Performance framework
Fees
Fees are the principal
element of Non-Executive
Directors’ remuneration
and set at a level
appropriate to attract Non-
Executive Directors with a
broad range of skills and
experience to complement
the Board.
Non-Executive Directors
with diverse skills and
experience will assist
the Board when setting
the Company’s strategy
and overseeing its
successful implementation.
Benefits relevant to the
role may also be provided.
Fees for the Chairman are determined by the
Committee and fees for other Non-Executive
Directors are determined by the Board as a
whole. They are set at levels, commensurate
with the individual’s duties and responsibilities
for a company of our size and complexity.
Fees are reviewed annually with any increases
normally taking effect from 1 January.
When reviewing fees consideration is given
to market conditions, the size of the business
and any increases awarded to the Group’s
salaried employees.
Non-Executive Directors do not receive bonus,
pension or salary supplement payments
or share scheme awards. Benefits may be
provided in connection with the undertaking by
a Non-Executive Director of their duties.
Increases to Non-Executive
Directors’ fees will be determined
having regard to increases applied
to the Group’s salaried employees
(in percentage terms), although
fee increases may be awarded
above this level in appropriate
circumstances including (but not
limited to): where there has been a
change in market practice; where
there has been a change in the
size or complexity of the business;
where there has been an increase
in the time commitment required
for the role.
Additional fees are payable to
Non Executive Directors for
extra responsibilities, such as
chairing a Board committee,
holding the office of Senior
Independent Director or any other
additional responsibilities.
N/A
Recruitment and
promotion policy
Ongoing remuneration
The Committee’s approach to recruitment
remuneration is to pay no more than is
necessary to attract candidates with the
appropriate skills for the housebuilding
industry. The Committee retains discretion
to include other elements of remuneration
which are not included in the provisions
of the 2020 Policy set out above should
business needs require. However, this
discretion is subject to the following
principles and limitations, and the
commercial rationale for taking such action
will be disclosed in the following Annual
Report on Remuneration.
• The salary for a new Executive Director
may be set below the normal market rate,
with increases over such period as the
Committee determines as the Director
gains experience in their new role.
• Pension/salary supplement benefits will
be provided in line with the provisions of
the 2020 Policy set out above.
• The variable remuneration that may be
awarded will be subject to the limit set
out below.
• Without prejudice to the ability to offer
additional cash and/or share-based
elements to take account of remuneration
relinquished when leaving the former
employer as discussed below, the
discretion will not be used to make non-
performance related incentive payments.
Examples of the circumstances in
which these other elements may be
provided include:
• An interim appointment being made to
fill an Executive Director role on a short
term basis;
• If exceptional circumstances require that
the Chairman or a Non-Executive Director
takes on an executive function on a short
term basis; and
• If an Executive Director is recruited at
a time in the year when it would be
inappropriate to provide a bonus or a PSP
award for that year as there would not be
sufficient time to assess performance,
subject to the limit on variable
remuneration set out below, the quantum
in respect of the months employed
during the year may be transferred to
the subsequent year so that reward is
provided on a fair and appropriate basis.
The Committee may alter the performance
measures and vesting/deferral/holding
period of annual bonus and PSP awards
to take account of the circumstances of
the recruitment.
The maximum level of variable remuneration
which may be granted to a new Executive
Director on appointment (excluding any
award to take account of remuneration
relinquished when leaving the former
employer) will be 450% of salary and, for a
new Chief Executive, 500% of salary.
As described in the policy tables
above, it may also be necessary to offer
relocation benefits for external and
internal appointments.
‘Buy-out’ awards
The Committee may offer additional
cash and/or share-based elements at
recruitment when it considers these to be
in the best interests of the Company (and
therefore shareholders) to take account of
remuneration relinquished when leaving the
former employer and would take account of
the nature, time horizons and performance
requirements attaching to that remuneration.
These awards will ordinarily be granted on
the basis that they are subject to forfeiture
or ‘clawback’ in the event of departure
within 12 months of joining the Company,
although the Committee will retain discretion
to not apply forfeiture or clawback in
appropriate circumstances.
Internal appointments
For an internal Executive Director
appointment, any variable pay element
awarded in respect of the prior role will be
allowed to pay out according to its terms.
Non-Executive Director
appointments
The remuneration package for a newly
appointed Non-Executive Director would be
in line with the structure set out in the policy
table for Non-Executive Directors.
Persimmon Plc | Annual Report | December 2021
132
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
In respect of the annual report and the financial statements
The current Directors are listed on pages 78
to 79 and are responsible for preparing the
Annual Report and the Group and Parent
Company financial statements in accordance
with applicable law and regulations.
Such law requires the preparation of the
Group financial statements in accordance
with UK adopted International Accounting
Standards and the preparation of the
Parent Company financial statements in
accordance with UK-adopted International
Accounting Standards in conformity with the
requirements of the Companies Act 2006 as
applied in accordance with section 408 of
the Companies Act 2006.
Company law requires that Directors
prepare Group and Parent Company
financial statements for each financial year.
However, the Directors must not approve
the financial statements unless they are
satisfied that they give a true and fair view of
the state of affairs of the Group and Parent
Company and of their profit or loss for that
period. In preparing each of the Group and
Parent Company financial statements, the
Directors are required to:
• select suitable accounting policies and
then apply them consistently;
• make judgements and estimates that are
reasonable and prudent;
• state whether for the Group financial
statements they have been prepared in
accordance with UK-adopted International
Accounting Standards in conformity
with the requirements of the Companies
Act 2006 and UK adopted International
Accounting Standards, and for the Parent
Company financial statements that they
have been prepared in accordance with
UK-adopted International Accounting
Standards in conformity with the
requirements of the Companies Act 2006
as applied in accordance with section 408
of the Companies Act 2006; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the Group
and the Parent Company will continue
in business.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Parent
Company’s transactions and disclose
with reasonable accuracy at any time the
financial position of the Parent Company
and enable them to ensure that its financial
statements comply with the Companies
Act 2006. They have general responsibility
for taking such steps as are reasonably
open to them to safeguard the assets of the
Group and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations,
the Directors are also responsible for
preparing a Strategic Report, Directors’
Report, Directors’ Remuneration Report
and Corporate Governance Statement that
complies with that law and those regulations.
The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on the
Company’s website. Legislation in the UK
governing the preparation and dissemination
of financial statements may differ from
legislation in other jurisdictions.
Responsibility statement of the
Directors in respect of the annual
financial report
We confirm that to the best of
our knowledge:
• the financial statements, prepared in
accordance with the applicable set of
accounting standards, give a true and
fair view of the assets, liabilities, financial
position and profit or loss of the Company
and the undertakings included in the
consolidation taken as a whole; and
• the Strategic Report includes a fair review
of the development and performance of
the business and the position of the issuer
and the undertakings included in the
consolidation taken as a whole, together
with a description of the principal risks and
uncertainties that they face.
We consider the Annual Report and
Accounts, taken as a whole, is fair, balanced
and understandable and provides the
information necessary for shareholders
to assess the Group’s position and
performance, business model and strategy.
On behalf of the Board,
Dean Finch
Group Chief Executive
1 March 2022
133
Strategic report Governance Financial statements Other information
134
Opinion
In our opinion:
• Persimmon plc’s group financial statements and parent company financial statements (the “financial statements”) give a true and fair view of
the state of the group’s and of the parent company’s affairs as at 31 December 2021 and of the group’s profit for the year then ended;
• the group financial statements have been properly prepared in accordance with UK adopted international accounting standards;
• the parent company financial statements have been properly prepared in accordance with UK adopted international accounting standards
as applied in accordance with section 408 of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Persimmon plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended
31 December 2021 which comprise:
Group Parent company
Group balance sheet as at 31 December 2021 Company balance sheet as at 31 December 2021
Consolidated statement of comprehensive income
fortheyearthenended
Company statement of changes in shareholders’ equity for the
yearthenended
Group statement of changes in shareholders’ equity
fortheyearthenended
Company cash flow statement for the year then ended
Group cash flow statement for the year then ended Related notes 1 to 32 to the financial statements including
asummaryofsignificant accounting policies
Related notes 1 to 32 to the financial statements including
asummaryofsignificant accounting policies
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting
standards and as regards the parent company financial statements, as applied in accordance with section 408 of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the group and parent in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of
the financial statements is appropriate. Our evaluation of the directors’ assessment of the group and parent company’s ability to continue to
adopt the going concern basis of accounting included:
• In conjunction with our walkthrough of the Group’s financial close process, we confirmed our understanding of management’s going
concern assessment process and also engaged with management early to ensure all key factors were considered in their assessment.
• We obtained management’s going concern assessment, including the cash forecasts and covenant calculations for the going concern
period which covers the period to 30 June 2023. Management has prepared three downside scenarios. Firstly, a scenario which reflects a
similar downturn to the impact of the Global Financial Crisis that took place in the late 2000s. This scenario assumes a decrease in revenue
through to 30 June 2023 of c. 57% compared to the prior year. The second scenario assumes a more severe downside scenario, with a
decrease in revenue through to 30 June 2023 of c. 67% compared to the prior year. The last scenario assesses the impact of a complete
shutdown of the housing market up to 30 June 2023. This scenario assumes that the Group does not receive any further sales receipts for
the period whilst maintaining its current level of fixed costs.
• In all of these scenarios, the Group maintains a positive cash balance throughout the Going Concern period to 30 June 2023 with no
requirement to access the Group’s £300m Revolving Credit Facility. For more detail on the assumptions in the three models, please refer to
Note 2 to the financial statements.
• We assessed the appropriateness of the scenarios modelled by management and considered them to be reasonable.
• We have tested the factors and assumptions included in each modelled scenario for the cash forecast and covenant calculation.
We considered the appropriateness of the methods used to calculate the cash forecasts and covenant calculations and determined
through inspection and testing of the methodology and calculations that the methods utilised were appropriate to be able to make an
assessment for the entity.
• We have performed reverse stress testing in order to identify what factors would lead to the Group utilising all liquidity or breaching the
financial covenants during the going concern period.
Independent Auditor’s Report to the
membersof Persimmon Plc
Persimmon Plc | Annual Report | December 2021
135
• We reviewed the Group’s going concern disclosures included in the annual report in order to assess that the disclosures were appropriate
and in conformity with the reporting standards.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the group and parent company’s ability to continue as a going concern for the period to
30 June 2023.
In relation to the group and parent company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the group’s ability to continue
as a going concern.
Overview of our audit approach
Audit scope • We performed an audit of the Persimmon Plc group, as a single aggregated set of financial information.
Ourwork therefore covered 100% of Profit before tax, 100% of Revenue and 100% of Total assets
• This is consistent with our approach to the prior year audit
Key audit matters • Revenue recognition
• Inventory valuation and profit recognition
Materiality • Overall group materiality of £48.3m which represents 5% of profit before tax
An overview of the scope of the Parent Company and Group audits
Tailoring the scope
We performed an audit of the Persimmon plc group, as a single aggregated set of financial information. Our work therefore covered 100% of
Profit before tax, 100% of Revenue and 100% of Total assets.
This is consistent with our approach to the prior year audit.
All audit work performed for the purposes of the audit was undertaken by the same audit team.
Climate change
There has been increasing interest from stakeholders as to how climate change will impact companies. The Group has determined that
the most significant future impacts from climate change on its operations will be from various factors, that are explained on pages 64 to 68
in the required Task Force for Climate related Financial Disclosures and on page 61 in the principal risks and uncertainties, which form part
of the “Other information,” rather than the audited financial statements. Our procedures on these disclosures therefore consisted solely of
considering whether they are materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or
otherwise appear to be materially misstated.
Our audit effort in considering climate change was focused on ensuring that the effects of the physical climate risk of flooding have
been appropriately reflected in inventory asset values. Details of our procedures and findings on inventory are included in our key audit
matters below. We also challenged the Directors’ considerations of climate change in their assessment of going concern and viability and
associated disclosures.
Persimmon Plc | Annual Report | December 2021
Strategic report Governance Financial statements Other information
136
Independent Auditor’s Report to the
membersof Persimmon Plc continued
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified.
These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a
whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
Risk Our response to the risk
Key observations
communicated to
theAuditCommittee
Inventory valuation andprofitrecognition
Refer to the Audit Committee Report (page 104);
Accounting policies (page 156); and Note 17 of
the Consolidated Financial Statements (page
166).
At 31 December 2021, the Inventory balance
includes WIP of £1,054.1m (2020 – £1,091.6m)
and Land of £1,798.2m (2020 – £1,722.1m).
There is a risk that the margin used to
recognise profit on each development is
incorrect and that the carrying value of
Inventory could be subject to impairment write
downs.
The carrying value of Inventory is determined
by reference to a number of assumptions
inherent in the site forecasts, such as costs to
complete and expected selling price. These are
used to calculate the expected margin on each
development and the cost of sale recorded
when a plot is sold. There is a risk that these
assumptions may be subject to management
override and that costs incurred are not
allocated to the appropriate developments due
to either override or error
We performed the following procedures over this risk area:
• We performed walkthroughs to understand the key processes
and identify key controls;
• We performed testing on the Group’s controls over the
bi-monthly valuation process. In testing these controls we
attended two regional valuation meetings virtually to observe
the level of rigour and the tolerances applied by management
in challenging the assumptions within the site valuations. We
inspected a sample of valuation meeting minutes in respect
of the valuation meetings held throughout the year to ensure
that matters were appropriately considered and followed up.
This included ensuring that the appropriate individuals were in
attendance at the meeting, understanding the process which is
undertaken to challenge the margin, cost to complete forecasts
and any other factors that could impact on the margin, and
confirming that any updates were made to the forecasts;
• For a sample of development sites with unusual margins we
compared the estimated and actual costs and margin across
the development lifecycle, validating the key drivers for
significant changes
• We selected a sample of costs incurred from within inventory
and agreed them to source documentation, ensuring that the
costs had been appropriately allocated to sites;
• We tested the appropriateness of any provisions included
within the calculations, including those in relation to net
realisable value and specific site provisions. We compared
movements to prior periods, re-computed calculations and
performed sensitivity analysis on sites where the margin was
close to breakeven; and
• For a sample of land assets, we considered their location within
the UK and assessed whether there was any impairment risk
due to potential flooding
Based on our audit
procedures we have
concluded that the
inventory balance and
profit recognised in the
year are not materially
misstated.
Revenue recognition
Refer to Accounting policies (page 154);
and Note 5 of the Consolidated Financial
Statements (page 158).
The Group has reported revenues for the
yearof £3,610.5m (2020 – £3,328.3m).
There is potential for material misstatement
within revenue, particularly in relation to
revenue being recorded in the wrong period,
due to cut off errors or management override.
We performed the following procedures over this risk area:
• We performed walkthroughs to understand the key processes
and identify key controls;
• We tested whether revenue was recorded in the correct period
by selecting a sample from the housing sales recorded within
2 weeks either side of the year end and testing that the sales
selected had legally completed and settled in cash in the
period in which they were accounted for;
• We performed procedures using EY bespoke data analytics
tools to test the appropriateness of journal entries recorded
in the general ledger by correlating sales postings with cash
receipts throughout the year; and
• We tested all material manual journals posted to revenue to
assess for any evidence of management override by checking
to supporting documentation.
Based on our audit
procedures we have
concluded that revenue is
appropriately recognised,
and that there was no
evidence of management
override.
Persimmon Plc | Annual Report | December 2021
137
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and
in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our
audit procedures.
We determined materiality for the Group to be £48.3 million (2020: £42.9 million), which is 5% (2020: 5%) of Profit Before Tax (2020: Profit
Before Tax adjusted for the legacy buildings provision charge). We believe that Profit Before Tax provides us with an appropriate basis for
materiality and is the most relevant measure for stakeholders as it is a focus of both management and investors.
We determined materiality for the Parent Company to be £22.3 million (2020: £22.2 million), which is 1% (2020: 1%) of equity.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement was that
performance materiality was 75% (2020: 75%) of our planning materiality, namely £36.3m (2020: £32.2m). We have set performance
materiality at this percentage based on our assessment of the control environment of the Group and expectation of errors.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £2.4m (2020: £2.1m), which is
set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other
relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the annual report set out on pages 2 to 141, other than the financial statements
and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the
other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies
Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is
consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Persimmon Plc | Annual Report | December 2021
Strategic report Governance Financial statements Other information
138
Independent Auditor’s Report to the
membersof Persimmon Plc continued
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in
our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from
branches not visited by us; or
• the parent company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Corporate Governance Statement
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance
Statement relating to the group and company’s compliance with the provisions of the UK Corporate Governance Code specified for our
review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties
identified set out on page 111;
• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the period is
appropriate set out on page 111;
• Director’s statement on whether it has a reasonable expectation that the group will be able to continue in operation and meets its liabilities
set out on page 111;
• Directors’ statement on fair, balanced and understandable set out on page 141;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 57 to 63;
• The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on
page 109; and;
• The section describing the work of the audit committee set out on page 104.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 141, the directors are responsible for the preparation of
the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group and parent company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below.
Persimmon Plc | Annual Report | December 2021
139
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the company
and management.
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most
significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting
framework (UK adopted international accounting standards, the Companies Act 2006 and the UK Corporate Governance Code) tax
compliance legislation, employment law and building safety legislation.
• We understood how Persimmon plc is complying with those frameworks by making enquiries of management, Internal Audit, those
responsible for legal and compliance procedures and the Company Secretary. We corroborated our enquiries through our review of board
minutes and papers provided to the Audit Committee.
• We assessed the susceptibility of the Group financial statements to material misstatement, including how fraud might occur by meeting
with management to understand where it considered there was a susceptibility to fraud. We also considered performance targets and their
propensity to influence efforts made by management to manage earnings. We considered the programmes and controls that the Group
has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those
programmes and controls. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud
risk. These procedures included testing manual journals and were designed to provide reasonable assurance that the financial statements
were free from fraud and error.
• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations.
Our procedures involved journal entry testing, with a focus on manual consolidation journals, and journals indicating large or unusual
transactions based on our understanding of the business; enquiries of Group management and Internal Audit; and focused testing, as
referred to in the key audit matters section above. In addition, we completed procedures to conclude on the compliance of the disclosures
in the Annual Report and Accounts with the requirements of the relevant accounting standards, UK legislation and the UK Corporate
Governance Code.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at
https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report
Other matters we are required to address
• Following the recommendation from the Audit Committee, we were appointed by the company on 14 April 2016 to audit the financial
statements for the year ending 31 December 2016 and subsequent financial periods.
The period of total uninterrupted engagement including previous renewals and reappointments is 6 years, covering the years ending
31 December 2016 to 31 December 2021.
• The audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Victoria Venning (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
Leeds
1 March 2022
Persimmon Plc | Annual Report | December 2021
Strategic report Governance Financial statements Other information
140
Consolidated Statement ofComprehensiveIncome
For the year ended 31 December 2021
Note
2021
Total
£m
2020
Total
£m
Revenue 5 3, 61 0. 5 3 , 328. 3
Cost of sales (2 , 526 .7) (2,433.9)
Gross profit 1,083.8 894 .4
Analysed as:
Underlying gross profit 1,083.8 969.4
Legacy buildings provision 21 – (75 .0)
Other operating income 6.4 5 .4
Operating expenses (1 29.7) (116. 3)
Profit from operations 9 96 0.5 783.5
Analysed as:
Underlying operating profit 9 66 .7 8 62.8
Legacy buildings provision 21 – (75.0)
Impairment of intangible assets 13 (6. 2) (4 . 3)
Finance income 8 9.9 8.9
Finance costs 8 (3.6) (8.6)
Profit before tax 966.8 783.8
Analysed as:
Underlying profit before tax 97 3.0 863.1
Legacy buildings provision 21 – (75 .0)
Impairment of intangible assets 13 (6. 2) (4 . 3)
Tax 10.1 (179.6) (145.4)
Profit after tax
(all attributable to equity holders of the parent) 12 7 8 7. 2 638.4
Other comprehensive income/(expense)
Items that will not be reclassified to profit:
Remeasurement gain/(loss) on defined benefit pension schemes 27 83. 3 (42. 5)
Tax 10.2 (24.8) 6.5
Other comprehensive income/(expense) for the year, net of tax 58.5 (36.0)
Total recognised income for the year 8 45 .7 602.4
Earnings per share
Basic 12 246.8p 200 . 3p
Diluted 12 2 45.6p 19 9.6p
The Company is taking advantage of the exemption in section 408 of the Companies Act 2006 not to present its individual
incomestatement.
Financial statements
Persimmon Plc | Annual Report | December 2021
141
Balance Sheets
As at 31 December 2021
Note
Group
2021
£m
Group
2020
£m
Company
2021
£m
Company
2020
£m
Assets
Non-current assets
Intangible assets 13 175.6 181.8 0.5 0.7
Property, plant and equipment 14 9 9.0 9 0.4 2.8 3.2
Investments accounted for using the equity method 15.1 0. 3 2.1 – –
Investments in subsidiaries 15.2 – – 3,205.7 3,205.7
Shared equity loan receivables 16 35 .7 41.7 – –
Trade and other receivables 18 0.6 4.0 – –
Deferred tax assets 23 9 .7 7. 7 4.7 2.9
Retirement benefit assets 27 148 .8 5 0.6 148.8 50.6
4 69.7 378. 3 3,362.5 3,263.1
Current assets
Inventories 17 2, 920.7 2, 90 1. 3 – –
Shared equity loan receivables 16 9.9 14.5 – –
Trade and other receivables 18 123 .9 8 6.6 1,969.8 1,863.7
Cash and cash equivalents 25 1 , 24 6 .6 1 , 23 4 .1 1,054.9 1,010.9
Current tax assets 21.4 8.3 – –
4, 322. 5 4, 24 4 . 8 3,024.7 2,874.6
Total assets 4,792 . 2 4, 623 .1 6,387.2 6,137.7
Liabilities
Non-current liabilities
Trade and other payables 20 (203.4) (179. 3) (1.8) (1.0)
Deferred tax liabilities 23 (54 .6) (22.9) (37.4) (9.6)
Partnership liability 28 (23.8) (27 .8) – –
(281.8) (230.0) (39.2) (10.6)
Current liabilities
Trade and other payables 20 (8 0 7. 0) (79 4. 2) (4,133.9) (3,896.7)
Partnership liability 28 (5.5) (5.5) – –
Legacy buildings provision 21 (7 2 .7) (75 .0) – –
(885.2) (8 74 . 7) (4,133.9) (3,896.7)
Total liabilities (1 ,1 6 7. 0) (1,1 0 4 .7) (4,173.1) (3,907.3)
Net assets 3,625 . 2 3 , 518 . 4 2,214.1 2,230.4
Equity
Ordinary share capital issued 24 31.9 31 .9 31.9 31.9
Share premium 24. 9 22. 3 24.9 22.3
Capital redemption reserve 236.5 236.5 236.5 236.5
Other non-distributable reserve 276 .8 276 .8 – –
Retained earnings 3 , 0 55 .1 2,950.9 1,920.8 1,939.7
Total equity 3,625. 2 3 , 51 8 .4 2,214.1 2,230.4
The profit for the year dealt with in the accounts of the Company is £665.0m (2020: £666.7m).
The financial statements of Persimmon Plc (Company number: 1818486) on pages 140 to 183 were approved by the Board ofDirectors
on1March 2022 and were signed on its behalf by:
D Finch
Group Chief Executive
Persimmon Plc | Annual Report | December 2021
Strategic report Governance Financial statements Other information
142
Statement of changes in shareholders’ equity
For the year ended 31 December 2021
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Other non-
distributable
reserve
£m
Retained
earnings
£m
Total
£m
Group
Balance at 1 January 2020 3 1.9 1 9.2 236.5 276 . 8 2, 693. 9 3 , 258 . 3
Profit for the year – – – – 638.4 638.4
Other comprehensive expense – – – – (36. 0) (36.0)
Transactions with owners:
Dividends on equity shares – – – – (3 50.7) (3 50.7)
Issue of new shares – 3 .1 – – – 3.1
Exercise of share options/share awards – – – – (0 .2) (0 .2)
Share-based payments – – – – 7. 7 7. 7
Net settlement of share-based payments – – – – (2.4) (2.4)
Satisfaction of share options from own shares held – – – – 0.2 0. 2
Balance at 31 December 2020 31.9 22 .3 236.5 276 .8 2 ,950. 9 3,5 18.4
Profit for the year – – – – 7 8 7. 2 7 8 7. 2
Other comprehensive income – – – – 58.5 58.5
Transactions with owners:
Dividends on equity shares – – – – (749.6) (749.6)
Issue of new shares – 2.6 – – – 2.6
Share-based payments – – – – 8 .1 8 .1
Balance at 31 December 2021 31.9 24 . 9 23 6.5 276. 8 3 , 0 55 .1 3,625 . 2
The other non-distributable reserve arose prior to transition to IFRSs and relates to the issue of ordinary shares to acquire the shares
ofBeazer Group Plc in 2001.
The Board have decided to net settle the withholding tax obligations associated with the exercise of the Persimmon Plc 2012 Long Term
Incentive Plan option. There are currently no plans to extend this decision to other share options.
Financial statements continued
Persimmon Plc | Annual Report | December 2021
143
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Total
£m
Company
Balance at 1 January 2020 31.9 19.2 236.5 1,656.3 1,943.9
Profit for the year – – – 666.7 666.7
Other comprehensive expense – – – (36.0) (36.0)
Transactions with owners:
Dividends on equity shares – – – (350.7) (350.7)
Issue of new shares – 3.1 – – 3.1
Exercise of share options/share awards – – – (0.2) (0.2)
Share-based payments – – – 5.8 5.8
Net settlement of share-based payments – – – (2.4) (2.4)
Other reserve movements – – – 0.2 0.2
Balance at 31 December 2020 31.9 22.3 236.5 1,939.7 2,230.4
Profit for the year – – – 665.0 665.0
Other comprehensive income – – – 58.5 58.5
Transactions with owners:
Dividends on equity shares – – – (749.6) (749.6)
Issue of new shares – 2.6 – – 2.6
Share-based payments – – – 7.2 7.2
Balance at 31 December 2021 31.9 24.9 236.5 1,920.8 2,214.1
During the year the Company received dividends from wholly owned subsidiary undertakings of £700.0m (2020: £700.0m).
Retained earnings include £4.4m of non-distributable items (2020: £8.1m).
The other non-distributable reserve arose prior to transition to IFRSs.
Persimmon Plc | Annual Report | December 2021
Strategic report Governance Financial statements Other information
144
Cash flow statements
For the year ended 31 December 2021
Note
Group
2021
£m
Group
2020
£m
Company
2021
£m
Company
2020
£m
Cash flows from operating activities:
Profit for the year 7 8 7. 2 638. 4 665.0 666.7
Tax charge/(credit) 10.1 1 79.6 145.4 (8.2) (8.0)
Finance income 8 (9.9) (8.9) (0.7) (3.3)
Finance costs 8 3.6 8 .6 0.6 2.3
Depreciation charge 14 14.5 1 4.1 1.1 1.3
Amortisation of intangible assets 13 – – 0.2 0.3
Impairment of intangible assets 13 6.2 4. 3 – –
Legacy buildings provision 21 – 75.0 – –
Share-based payment charge 6.4 6 .4 6.4 6.4
Net imputed interest income/(expense) 6 .1 (1.4) – –
Other non-cash items (7. 9) (7. 3) 2.3 2.7
Cash inflow from operating activities 985.8 8 74 . 6 666.7 668.4
Movements in working capital:
(Increase)/decrease in inventories (9.8) 265.0 – –
Increase in trade and other receivables (59. 5) (4 5. 8) (122.7) (107.5)
Increase/(decrease) in trade and other payables 3 7. 4 (116.9) 239.4 158.2
Decrease in shared equity loan receivables 18.9 1 6.4 – –
Cash generated from operations 972 .8 993. 3 783.4 719.1
Interest paid (3. 7) (4 .1) (2.1) (2.3)
Interest received 1.9 4.7 0.1 1.7
Tax (paid)/received (1 86. 2) (228 .4) 10.3 19.5
Net cash inflow from operating activities 784.8 765. 5 791.7 738.0
Cash flows from investing activities:
Joint venture net funding movement 1.8 – – –
Purchase of property, plant and equipment 14 (20. 9) (18.9) (0.5) (0.5)
Proceeds from sale of property, plant and equipment 0.9 0.8 – –
Net cash outflow from investing activities (18 .2) (1 8 .1) (0.5) (0.5)
Cash flows from financing activities:
Lease capital payments (3.3) (3.6) (0.2) (0.3)
Payment of Partnership liability (3.8) (3.6) – –
Share options consideration 2.6 3 .1 2.6 3.1
Net settlement of share-based payments – (2.4) – (2.4)
Dividends paid 11 (74 9 .6) (3 50.7) (749.6) (350.7)
Net cash outflow from financing activities (7 5 4 .1) (3 5 7. 2) ( 747.2) (350.3)
Increase in net cash and cash equivalents 25 12.5 390. 2 44.0 387.2
Cash and cash equivalents at the beginning of the year 1 , 2 3 4 .1 8 43.9 1,010.9 623.7
Cash and cash equivalents at the end of the year 25 1 , 24 6 .6 1 , 23 4 .1 1,054.9 1,010.9
Financial statements continued
Persimmon Plc | Annual Report | December 2021
1 Adoption of new and revised
International Financial Reporting
Standards (IFRSs) and Interpretations
(IFRICs)
The following relevant UK endorsed new amendments to standards
are mandatory for the first time for the financial year beginning
1 January 2021:
• Amendments to IFRS 4 Insurance Contracts
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest
Rate Benchmark Reform – phase 2
• Amendments to IFRS 16 Leases: Covid-19 Related Rent
Concessions beyond 30 June 2021
The effects of the implementation of these amendments have
beenlimited to disclosure amendments where applicable.
The Group has not applied the following new amendments
tostandards which are not yet effective:
• Amendments to IFRS 3 Business Combinations; IAS 16 Property,
Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and
Contingent Assets; and Annual Improvements 2018-2020
• IFRS 17 Insurance Contracts; including Amendments to IFRS 17
The Group is currently considering the implication of these
amendments with the expected impact upon the Group being
limited to disclosures if applicable.
2 Accounting policies
Statement of compliance
The consolidated Group financial statements are prepared in
accordance with UK adopted International Accounting Standards
(‘IAS’). This constitutes a change from International Accounting
Standards as it applied in the EU and a change in accounting
framework. There has been no impact on recognition, measurement
or disclosure in the period reported as a result of the change in
framework. Parent Company financial statements are prepared
inaccordance with UK adopted IAS in conformity with the
requirements of theCompanies Act 2006.
Basis of preparation
The financial statements have been prepared on the historical
costbasis except for the revaluation of certain financial
instruments. Historical cost is generally based on the fair value
oftheconsiderationgiven in exchange for assets.
In preparing the Group financial statements management has
considered the impact of climate change, taking into account the
relevant disclosures in the Strategic Report, including those made in
accordance with the recommendations of the Taskforce on Climate
Related Disclosures. This included an assessment of Inventories and
Goodwill and Intangible Assets and how they could be impacted by
measures taken to address global warming.
Recognising that the environmental impact on the Group’s
operations is relatively low, no issues were identified that would
impact the carrying values of such assets or have any other impact
on the financial statements.
Going concern
The Group has performed well in the twelve months ended
31 December 2021. Persimmon’s long-term strategy, which
recognises the risks associated with the housing cycle by
maintaining operational flexibility, investing in high quality land,
minimising financial risk and deploying capital at the right time in the
cycle, has equipped the business with strong liquidity and a robust
balance sheet.
The Group delivered a strong trading performance in the twelve
months to 31 December 2021, completing the sale of 14,551 new
homes (2020: 13,575; 2019: 15,855) and generating a profit before tax
of £966.8m (2020: £783.8m; 2019: £1,040.8m). At 31 December 2021,
the Group’s strong financial position included £1,246.6m of cash
(2020: £1,234.1m; 2019: £843.9m), high quality land holdings and land
creditors of £407.6m (2020: £329.3m; 2019: £435.2m). In addition,
the Group has an undrawn Revolving Credit Facility of £300m, which
extends out to 31 March 2026.
The Group’s forward order book, including legal completions taken
so far in 2022, is 3% weaker than year on year with new home
forward sales of c.£2.2bn. We have over 6,200 new homes sold
forward into the private owner occupier market with an average
selling price of over £259,350. The cumulative average private sales
reservation rate for the first 8 weeks of the year is c.2% ahead of
last year.
The Directors have carried out a robust assessment of the principal
risks facing the Group, as described on page 54. The Group has
considered the impact of these risks on the going concern of the
business by performing a range of sensitivity analyses, covering the
period to 30 June 2023, including severe but plausible scenarios
materialising together with the likely effectiveness of mitigating
actions that would be executed by the Directors. For further
detail regarding the approach and process the Directors follow in
assessing the long-term viability of the business, please see the
Viability Statement on page 68.
The scenarios emphasise the potential impact of severe market
disruption, for example including the effect of a pandemic, on short
to medium term demand for new homes. The scenarios’ emphasis
on the impact on the cash inflows of the Group through reduced new
home sales is designed to allow the examination of the extreme cash
flow consequences of such circumstances occurring. The Group’s
cash flows are less sensitive to supply side disruption given the
Group’s sustainable business model, flexible operations, agile
management team and off-site manufacturing facilities.
In the first scenario modelled, the combined impact is assumed
to cause a c.45% reduction in volumes and a c.11% reduction in
averageselling prices through to 30 June 2023. The combined
impact results in a c.57% fall in the Group’s housing revenues.
The assumptions used in this scenario reflect the experience
management gained during the Global Financial Crisis (‘GFC’) from
2007 to 2010, it being the worst recession seen in the housing
market since World War Two.
A second, even more extreme, scenario assumes a significant
and enduring depression of the UK economy and housing market
causing a reduction of c.47% in new home sales volumes and a c.
37% fall in average selling prices through to 30 June 2023. As a
result of these factors, the Group’s housing revenues were assumed
to fall by c.67% during this period.
In addition, the Directors have assessed the impact of a complete
shutdown of the housing market from the date of this announcement
to 30 June 2023 on the resilience of the Group. This scenario
assumes that the Group does not receive any further sales receipts
for the period whilst maintaining its current level of fixed costs.
Throughout this scenario, the Group maintains substantial liquidity
with a positive cash balance and no requirement to access the
Group’s £300m Revolving Credit Facility.
The Group has been increasingly assessing climate related risk
and opportunities that may present to the Group. During the period
assessed for going concern no significant risk has been identified
that would materially impact the Group’s ability to generate sufficient
cash and continue as a going concern.
Notes to the financial statements
For the year ended 31 December 2021
145
Persimmon Plc | Annual Report | December 2021
Strategic report Governance Financial statements Other information
2 Accounting policies continued
Having considered the continuing strength of the UK housing
market, the sales rates being achieved by the Group, the resilience
of the Group’s average selling prices, the Group’s scenario analysis
as detailed above and significant financial headroom, the Directors
have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis
in preparing these financial statements.
Basis of consolidation
The consolidated financial statements include the financial
statements of the Company and its subsidiaries up to 31 December
each year. Subsidiaries are entities controlled by theGroup.
The Group controls an entity when it is exposed to, or has rights
to, variable returns from its involvement with the entity and has
the ability to affect the returns through its power over theentity.
The acquisition date is the date on which control is transferred to
the acquirer. The financial statements of subsidiaries are included
in the consolidated financial statements from the datethat control
commences until the date that control ceases. Where necessary,
adjustments are made to the financial statements of subsidiaries
tobring the accounting policies used into line with those used
by theGroup. All intra-group transactions, balances, income
andexpenses are eliminated on consolidation.
Business combinations
The acquisition of subsidiaries is accounted for using the acquisition
method. The subsidiary’s identifiable assets, liabilities and contingent
liabilities are recognised at their fair value at the acquisition date.
Goodwill
Goodwill arising on consolidation represents the excess of the
cost of acquisition over the Group’s interest in the fair value of
the identifiable assets, liabilities and contingent liabilities of the
acquired entity at the date of the acquisition. Goodwill arising on
acquisition of subsidiaries and businesses is capitalised as an asset.
Goodwill is subsequently measured at cost less any accumulated
impairment losses.
Brand intangibles
Internally generated brands are not held on the balance sheet.
The Group carries assets on the balance sheet only for brands
thathave been acquired. Acquired brand values are calculated
based on discounted cash flows. No amortisation is charged
onbrand intangibles as the Group believes that the value of the
brands ismaintained indefinitely. The factors that result in the
durability ofthe brands capitalised are that there are no material
legal, regulatory, contractual, competitive, economic or other factors
thatlimit the useful life of these intangibles. The acquired brands
are tested annually for impairment by performing avalue inuse
calculation, using a discount factor based ontheGroup’s pre-tax
weighted average cost of capital, onthebrandedincomestream.
Where a brand’s life is not deemed to be indefinite it is written
offover its expected useful life on a straight-line basis.
Revenue recognition
Revenue is recognised as the fair value of the consideration
received or receivable on legal completion of a newly built
residential property sale. Revenue also includes the fair
valueof theconsideration received or receivable on the sale
ofpartexchange properties and amounts contractually due under
a development agreement at the balance sheet date relating to
the stage of completion of the agreement as verified bysurveys
performed by the relevant customer as this reflects theperformance
obligations delivered bythe Group at the balancesheet date.
Revenue relating to the provision of internet services
isrecognisedas the service is provided.
Government grants
Grants are included within work in progress in the balance
sheetandare credited to the statement of comprehensive
incomeover the life of the developments to which they relate.
Grants related toincome are deducted from the related
expenseinthe statementofcomprehensive income.
Other operating income
Other operating income comprises profits from the sale
oflandholdings, freehold reversions, rent receivable, and
otherincidental sundry income.
Operating expenses
Operating expenses represent the administration costs of the
business, which are written off to the statement of comprehensive
income as incurred.
Borrowing costs
Interest bearing bank loans, overdrafts and Partnership liabilities are
initially measured at fair value (being proceeds received, net ofdirect
issue costs) and are subsequently measured at amortised cost,
using the effective interest rate method. Finance charges, including
direct issue costs are accounted for and taken to the statement of
comprehensive income using the effective interest rate method.
Borrowing costs directly attributable to the acquisition, construction
or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use
or sale, are added to the cost of those assets, until such time as the
assets are substantially ready for their intended use or sale.
Where bank agreements include a legal right of offset for in
handand overdraft balances, and the Group intends to settle
thenetoutstanding position, the offset arrangements are
appliedtorecord the net position in the balance sheet.
Exceptional items
Exceptional items are items of income and expenditure that, in
thejudgement of management, should be disclosed separately
onthe basis that they are material, either by their nature or their size,
to an understanding of the financial performance and significantly
distort the comparability of financial performance between
accounting periods. Items of income or expense that areconsidered
by management for designation as exceptional include such items
asmajor restructuring and significant impairment of assets.
Share-based payments
Charges for employee services received in exchange for
share-based payment have been made for all options/awards
inaccordance with IFRS 2 Share-based Payment, to spread
thefairvalue of the grant over the anticipated vesting period.
Notes to the financial statements
For the year ended 31 December 2021
146
Persimmon Plc | Annual Report | December 2021
2 Accounting policies continued
The fair value of such options has been calculated using generally
accepted option pricing models, based upon publicly available
market data at the point of grant. Share options include both market
and non-market conditions. Market conditions are considered in the
establishment of the initial valuation of the options. In the event of
failure to meet market conditions share-based payment charges are
not reversed. In the event of failure tomeet non-market conditions
share-based payment charges arereversed.
Where options are net settled in respect of withholding tax
obligations, these are accounted for as equity settled transactions.
Payments to HMRC are accounted for as a deduction from equityfor
the shares withheld, except to the extent (if any) thatthepayment
exceeds the fair value of shares withheld, inwhich case the excess
will be charged to the statement ofcomprehensive income.
Share-based payments are charged wholly in the ultimate
ParentCompany.
Retirement benefit costs
The Group operates two defined benefit pension schemes. It also
operates two defined contribution schemes for employees who
arenot members of a defined benefit scheme. The asset/liability
inrespect of the defined benefit schemes is the present value of
the defined benefit obligation at the balance sheet date, less the
fair value of the schemes’ assets, together with adjustments for
remeasurement gains and losses. Where a net asset results it is
limited to the present value of economic benefits available in the
form of future refunds from the scheme or reductions in future
contributions, subject to any minimum funding requirements.
Further details of the schemes and the valuation methods
appliedmay be found in note 27.
Interest cost on the scheme liabilities and finance returns on
scheme assets are recognised at the applicable discount rate asnet
finance income/costs in the statement of comprehensive income
and remeasurement gains and losses via the statement ofother
comprehensive income.
Subsidiary entities bear a charge for current employees based upon
their current pensionable salaries. Differences between this charge
and the current service cost are borne by the Company asthe
legal sponsor, as are all experience gains and losses. There is no
contractual arrangement or stated policy for rechargingthe other
Group entities involved in the Scheme.
Payments to the defined contribution schemes are accounted foron
an accruals basis. Once the payments have been made, theGroup
has no further payment obligations.
Taxation
Income tax on the profit for the year comprises current and deferred
tax. Income tax is recognised in the statement of comprehensive
income except to the extent that it relates toitemsrecognised
directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income
forthe year, using enacted or substantially enacted tax rates,
andadjusted for any tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method,
providing for temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. The following temporary
differences are not provided for: goodwill, the initial recognition of
assets or liabilities that affect neither accounting or taxable profit, and
differences relating to investment in subsidiaries to the extent that
they will probably not reverse in theforeseeable future. The amount
of deferred tax provided is based on the carrying amount of assets
and liabilities, using the tax rates applicable, orexpected to be
applicable at the date ofsettlement, based onenacted rates at the
reporting date.
Where the deferred tax asset recognised in respect of share-
based payments would give rise to a credit in excess of the related
accounting charge at the prevailing tax rate the excess is recognised
directly in equity.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against which
the asset can be utilised. Deferred tax assets are reviewed at each
balance sheet date.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities when the Group intends to settle its current tax assets and
liabilities on a net basis.
Leases
The Group recognises a single recognition and measurement
approach for all leases, except for short-term leases and leases
oflow value assets. The Group recognises lease liabilities to
makelease payments and right of use assets representing the right
to use the underlying assets.
Right of use assets are recognised at the commencement date
ofthe lease and are measured at cost. The right of use assets are
depreciated on a straight line basis over the shorter of the lease term
and the estimated useful lives of the assets.
The Group recognises lease liabilities at the commencement dateof
the lease and are measured at the present value of lease payments
to be made over the lease term. In calculating the present value of
lease payments, the Group uses its incremental borrowing rate at
the lease commencement date because the interest rate implicit in
the lease is not readily determinable. After the commencement date,
the amount of lease liabilities isincreased to reflect the accretion of
interest and reduced forthelease payments made.
The Group applies the short-term lease exemption and the low
value asset recognition exemption to leases that have a lease term
of 12 months or less from commencement date or are considered to
be low value. Lease payments on short-term leases or leases oflow
value assets are charged to work in progress or operating expenses
on a straight line basis over the lease term.
Property, plant and equipment
It is the Group’s policy to hold property, plant and equipment at cost
less accumulated depreciation, subject to the requirement totest
assets for impairment.
Depreciation on property, plant and equipment is provided usingthe
straight line method to write off the cost less any estimated residual
value, over the estimated useful lives onthefollowing bases:
Plant and equipment – 3 to 5 years.
Fixtures and fittings – 3 to 5 years.
Owned utility infrastructure – 15 to 40 years.
Freehold buildings – 50 years.
No depreciation is provided on freehold land.
The assets’ useful economic lives and residual values are
reviewed and adjusted, if appropriate, at each financial year end.
An impairment loss is recognised for the amount by which the
asset’scarrying amount exceeds its recoverable amount.
Investments
Interests in subsidiary undertakings are valued at cost less
impairment. Other investments are stated at fair value.
147
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2 Accounting policies continued
Joint ventures
A joint venture is an entity in which the Group holds an interest
with one or more other parties where a contractual arrangement
has established joint control over the entity, and where the
arrangements entitle the Group to a share of the net assets
oftheentity.
Investments in joint ventures are accounted for under the equity
method of accounting.
Joint operations
A joint operation is an arrangement or entity in which the
Groupholds an interest with one or more other parties where
acontractual arrangement has established joint control over the
operation and where the arrangements entitle the Group to rights
over specific assets or obligations of the operation. The Group
recognises its share of revenue, costs, assets and liabilities
foritsjoint operations.
Shared equity loan receivables
Receivables on extended terms granted as part of a sales
transaction are secured by way of a second legal charge
on therespective property. The loans are classified as
financial assetsheld at fair value through profit or loss and
are carried inthebalance sheet at fair value with net changes
in fair valuerecognised in the statement of comprehensive
incomeasdescribed in note 16.
Inventories
Inventories are stated at the lower of cost and net realisable value.
Land with planning includes undeveloped land and land under
development and is initially recorded at discounted cost. Where,
through deferred purchase credit terms, the carrying value differs
from the amount that will ultimately be paid in settling the liability,
this difference is charged as a finance cost in the statement of
comprehensive income over the period of settlement. Work in
progress comprises direct materials, labour costs, site overheads,
associated professional charges and other attributable overheads.
Net realisable value represents theestimated selling prices less all
estimated costs of completion and overheads. Investments in land
without the benefit of a planning consent are initially included at
cost. Regular reviews are carried out to identify any impairment in
the value of the land considering the existing use value of the land
and the likelihood of achieving a planning consent and the value
thereof. Provision is made to reflect any irrecoverable amounts.
Expenditure relating to forward land, including options and
fees, isheld at cost. If the option expires or the Directors no
longer consider it likely that the option will be exercised prior
to the securing of planning permission, the amount is written
offonthatdate.
Impairment of financial assets
The Group recognises an allowance for expected credit losses
forall debt instruments not held at fair value through profit and loss.
Expected credit losses are based on the difference between the
contracted cash flows due in accordance with the contract and all
thecash flows that the Group expects toreceive, discounted atan
approximation of the original effective interest rate.
For trade receivables and, in the Parent Company, intercompany
receivables, the Group applies a simplified approach in calculating
expected credit losses. The Group does not track changes in
credit risk, but instead recognises a loss allowance based on
lifetime expected credit losses at each reporting date.
Inter-Group guarantees
Where the Company enters into financial guarantee contracts
toguarantee the indebtedness of other companies within the
Group, the Company considers these to be insurance arrangements
and accounts for them as such. In this respect, theCompany
treats theguarantee contract as a contingent liability until such
time asitbecomes probable that the Company will be required
tomakeapayment under the guarantee.
Trade and other payables
Trade payables on normal terms are not interest bearing and
arestated at amortised cost. Trade payables on extended terms,
particularly in respect of land purchases, are initially recorded attheir
fair value and subsequently measured at amortised costusing the
effective interest method.
Provisions
Provisions are recognised when the Group has a present
commitment as a result of a past event, it is probable that anoutflow
of resources embodying economic benefits will be required to settle
that commitment. Provisions are measured at the Directors’ best
estimate of the expenditure required to settle the commitment at the
balance sheet date and are discounted topresent value where the
effect is material.
Deposits
New property deposits and on account contract receipts are held
within current trade and other payables until the legal completion of
the related property or cancellation of the sale.
Cash and cash equivalents
Cash and cash equivalents include cash and balances in the bank
accounts with no notice or less than three months’ notice from
inception, and are subject to insignificant risk of changes in value.
Interest bearing borrowings
Interest bearing borrowings and Partnership liabilities are carried at
amortised cost.
Dividends
Dividends receivable by the Parent Company from subsidiaries
areaccounted for on acash basis, or once formally approved bythe
shareholders ofthe subsidiary companies.
Dividends payable are recorded in the period in which they
areapproved or paid, whichever is earliest.
Own shares held
The Group may acquire holdings in its own shares either directly
orvia employee benefit trusts. The acquisition cost of such shares
(including associated purchase costs) is treated as a deduction
from retained earnings. Such shares may be used in satisfaction
ofemployee options or rights, in which case the cost of such shares
is reversed from the profit reserves on a ‘first in first out’basis.
Transactions of the Company sponsored EBT are treated
asbeingthose of the Company and are therefore reflected
intheCompany financial statements. In particular, the trust’s
purchasesand sales of shares in the Company are debited
andcredited directly to equity.
Notes to the financial statements
For the year ended 31 December 2021
148
Persimmon Plc | Annual Report | December 2021
3 Critical accounting judgements and
keysources ofestimation uncertainty
In applying the Group’s accounting policies which are described
innote 2, the Directors have made no individual judgements
thathave a significant impact upon the financial statements,
excepting those involving estimation which are dealt with below.
The key sources of estimation uncertainty at the balance sheet
date are:
Goodwill
The impairment testing of goodwill is substantially dependent upon
the ability of the Group to successfully progress its strategic land
holdings. The assumptions on which this estimate is based may
be undermined by any significant changes in the current planning
regime, or adverse economic conditions in the UK. The carrying
amount of goodwill at the balance sheet date was £115.6m with an
impairment of£6.2m recognised during the year.
Brand intangibles
The intangible brand assets have been assessed against the
discounted cash flows arising. These are based upon estimated
returnsfrom the related businesses, which may be impacted by
various factors, most notably government social housing policy
and further deterioration in the economic conditions in the UK.
The carrying amount of indefinite life brands at thebalance
sheetdate was£60.0m,withno impairment recognised
duringtheyear ended 31 December 2021.
Shared equity loan receivables
Shared equity loan receivables comprise loans granted as
partofsales transactions that are secured by way of a second
legal charge on the respective property. The fair value of these
receivables is determined by taking into account factors such asthe
length of time that the loan has been outstanding, market conditions,
including those in respect of house price inflation, forced sale
discount and probability of borrower default. The variables used
are kept under regular review to ensure that asfar as possible they
reflect current economic circumstances; however changes in house
prices, redemption dates, interest rates,unemployment levels and
bankruptcy trends in the UK couldresult in actual returns differing
from reported valuations. At 31 December 2021 the loan recognised
on the balance sheetwas £45.6m (2020: £56.2m).
Pensions
The Directors have employed the services of a qualified,
independent actuary in assessing pension assets/liabilities.
However, they recognise that final liabilities and asset returns may
differ from actuarial estimates and therefore the ultimate pension
asset/liability maydiffer from that included in the financial statements.
Land and work in progress
Given the high quality of the Group’s inventory asset base, the
sensitivity of the assumptions used in assessing the Net Realisable
Value (‘NRV’) of the Group’s inventories is relatively low. As such no
reasonably possible change in assumptions is likely to result in a
material impact to the carrying value of the Group’s land and work
in progress balance within the next twelve months. The disclosure
below provides additional insight into thecarrying value of the
Group’s land and work in progress.
Valuations of the Group’s developments, which include an estimation
of costs to complete and anticipated revenues, are carried out at
regular intervals throughout the year. The valuations allocate total
expected site development costs between units built in the current
year and those to be built in future years. These valuations therefore
include a degree of uncertainty when estimating the profitability
of a site and in assessing any impairment provision which may
be required.
During the year ended 31 December 2021, the Group conducted
reviews of the NRV of its development land and work in progress
carrying values. The reviews were conducted on a site by site basis,
using assumptions surrounding anticipated selling prices and the
level of future development costs, based on local management and
the Board’s assessment of market conditions existing at the balance
sheet date. As noted above, the sensitivity of these assumptions
to inventory carrying value is relatively low. However, the most
sensitive assumption relates to the consideration of the Group’s
average selling price prognosis – for example, the Directors have
modelled a scenario involving an immediate and enduring reduction
in Group average selling price of 20% across each plot in the Group’s
land holdings (it is important to note that the enduring nature of this
assumption would present unusually unique circumstances when
considered in the context of the UK housing market). Such a scenario
would not result in a material adjustment to the carrying value of the
Group’s inventory. Given these factors, the Board does not believe
that a reasonably possible change in the assumptions could result
inamaterial impairment of land and work in progress carrying values
in the next twelve months.
If there are significant movements in UK house prices or
developments costs, beyond management’s reasonably possible
expectations, then further impairments of land and work in progress
may be necessary.
Provisions
The Group carries a provision of £72.7m (2020: £75.0m) based on
management’s best estimates of the costs of completing works to
ensure fire safety on affected buildings under direct ownership, and
to work with and support owners and other relevant stakeholders on
buildings it has developed, in order to reach positive solutions where
these buildings are affected. These estimates may change over time
as further information is assessed, remedial works progress and the
interpretation of fire safety regulations further evolves. This is a highly
complex area with judgements and estimates in respect of the cost
of remedial works to be incurred.
4 Principal activities
The Group has only one reportable operating segment,
being housebuilding within the UK, under the control of the
Executive Board. The Executive Board has been identified as
the Chief Operating Decision Maker as defined under IFRS 8
Operating Segments.
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5 Revenue
An analysis of the Group’s revenue is as follows:
2021
£m
2020
£m
Revenue from the sale of new housing 3,449.7 3,129.5
Revenue from the sale of part exchange properties 155.4 196.2
Revenue from the provision of internet services 5.4 2.6
Revenue from the sale of goods and services as reported in the statement of comprehensive income 3,610.5 3,328.3
Other operating income 6.4 5.4
Finance income 9.9 8.9
3,626.8 3,342.6
Sale of goods includes £126.5m (2020: £161.3m) in respect of the value of properties accepted in part exchange by the Group onthesale of
new housing.
6 Key management remuneration
Key management personnel, as disclosed under IAS 24 Related Party Disclosures, have been identified as the Board of Directors.
Detailed disclosures of individual remuneration, pension entitlements and share options, for those Directors who served during the year, are
given in the Annual Report on Remuneration on pages 108 to 128. A summary of key management remuneration is as follows:
2021
£m
2020
£m
Short-term benefits 3.1 1.9
Termination benefits – 0.2
Share-based payments 2.4 0.2
5.5 2.3
Total gains on exercise of options by key management in the year amount to £nil (2020: £4.5m).
7 Employees
Group
The average monthly number of persons (including Executive Directors) employed by the Group during the year was 5,121 (2020: 5,156).
2021
£m
2020
£m
Staff costs (for the above persons):
Wages and salaries 217.1 198.3
Social security costs 23.0 21.4
Pensions charge 6.9 5.9
Share-based payments 6.0 6.4
253.0 232.0
The Group also uses the services of a substantial number of self-employed labour only site operatives.
Notes to the financial statements
For the year ended 31 December 2021
150
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7 Employees continued
Company
The average monthly number of persons (including Executive Directors) employed by the Company during the year was 353 (2020: 282).
2021
£m
2020
£m
Staff costs (for the above persons):
Wages and salaries 24.9 19.4
Social security costs 3.0 3.0
Pensions charge 2.3 1.7
Share-based payments 6.0 6.4
36.2 30.5
8 Net finance income
2021
£m
2020
£m
Recognised in profit after tax
Interest receivable on bank deposits 0.2 1.4
Gains on shared equity loan receivables 7.9 4.0
Net interest on pension asset 0.7 1.7
Other interest receivable 1.1 1.8
Finance income 9.9 8.9
Interest expense on bank overdrafts and loans – 1.0
Imputed interest on deferred land payables 1.8 5.4
Interest on Partnership liability 1.5 1.7
Other interest payable 0.3 0.5
Finance costs 3.6 8.6
Net finance income 6.3 0.3
9 Profit from operations
2021
£m
2020
£m
Profit from operations is stated after charging/(crediting):
Staff costs (note 7) 253.0 232.0
Profit on sale of land holdings (2.2) –
Government grants (0.3) (0.3)
Rent receivable (2.9) (3.6)
Profit on sale of property, plant and equipment (0.9) (0.6)
Depreciation of owned assets 14.5 14.1
Impairment of intangible assets 6.2 4.3
The Group did not receive any new government grants in either year, however the Group’s customers have benefited from the availability of
finance through the Government’s ‘Help to Buy’ scheme which has provided indirect assistance to the Group.
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Strategic report Governance Financial statements Other information
9 Profit from operations continued
Amounts receivable by the auditor, Ernst & Young LLP, and their associates in respect of:
2021
£‘000
2020
£‘000
Audit fees
Audit of the Parent Company and consolidated financial statements 335 290
The audit of the Company’s subsidiaries pursuant to legislation 25 25
Total fees for the audit of the Company and its subsidiaries 360 315
Non-audit fees
Audit related assurance services 65 60
Total non-audit fees 65 60
425 375
The extent of non-audit fees and non-audit related service fees payable to Ernst & Young LLP and its affiliated entities are reviewed bythe
Audit Committee in the context of fees paid by the Group to its other advisors during the year. The Committee also reviews the nature and
extent of non-audit services to ensure that independence is maintained.
Fees to major firms of accountants other than Ernst & Young LLP and its affiliated entities for non-audit services amounted to £206,176
(2020: £70,576).
10 Tax
10.1 Analysis of the tax charge for the year
2021
£m
2020
£m
Tax charge comprises:
UK corporation tax in respect of the current year 181.2 148.5
Adjustments in respect of prior years (8.3) (6.4)
172.9 142.1
Deferred tax relating to origination and reversal of temporary differences 5.4 2.6
Adjustments recognised in the current year in respect of prior years deferred tax 1.3 0.7
6.7 3.3
Tax charge for the year recognised in Statement of Comprehensive Income 179.6 145.4
The tax charge for the year can be reconciled to the accounting profit as follows:
2021
£m
2020
£m
Profit from continuing operations 966.8 783.8
Tax calculated at UK corporation tax rate of 19% (2020: 19%) 183.7 148.9
Accounting base cost not deductible for tax purposes 0.2 0.3
Goodwill impairment losses that are not deductible 1.2 0.8
Expenditure not allowable for tax purposes 0.2 0.2
Effect of change in rate of corporation tax 2.7 0.9
Enhanced tax reliefs (1.3) –
Adjustments in respect of prior years (7.1) (5.7)
Tax charge for the year recognised in Statement of Comprehensive Income 179.6 145.4
The Group’s overall effective tax rate of 18.6% has been reduced from the mainstream rate of 19.0% by a prior year tax credit arising from the
removal of some uncertainties regarding the Group’s prior year tax computations.
The applicable corporation tax rate remains at 19% in line with corporation tax rates effective from 1 April 2017. On 10 June 2021, the Finance
Act 2021 was enacted into law, introducing a new higher rate of corporation tax of 25% coming into effect from 1 April 2023. Consequently,
the expected tax rate for the full year includes the effect of revaluing deferred tax assets and liabilities at this higher rate where these are
expected to be realised or settled on or after 1 April 2023.
Following consultation by HM Treasury to implement a Residential Property Developer Tax (“RPDT”) on profits arising from residential
property activity, on 27 October 2021, the Chancellor of the Exchequer announced new legislation and an RPDT rate of 4% on all annual
residential property profits in excess of £25m, effective from 1 April 2022. This additional rate once enacted will add to the standard rate of
corporation tax of 25% effective from 1 April 2023, as noted above.
As the RPDT was not substantively enacted prior to 31 December 2021, the additional 4% tax rate is not reflected in the valuation of the
Group’s deferred tax assets and liabilities at that date. The estimated impact on the Group’s deferred tax balances as at 31 December 2021
would be to increase the net deferred tax liability by £7m with a corresponding charge to the Statement of Comprehensive Income/Statement
of Shareholders Equity.
Notes to the financial statements
For the year ended 31 December 2021
152
Persimmon Plc | Annual Report | December 2021
10 Tax continued
10.2 Deferred tax recognised in other comprehensive income (note 23)
2021
£m
2020
£m
Recognised on remeasurement gain/(loss) on pension schemes 24.8 (6.5)
10.3 Tax recognised directly in equity
2021
£m
2020
£m
Arising on transactions with equity participants
Current tax related to equity settled transactions 0.1 (1.1)
Deferred tax related to equity settled transactions (note 23) (1.8) (0.2)
(1.7) (1.3)
11 Dividends/Return of capital
2021
£m
2020
£m
Amounts recognised as distributions to capital holders in the period:
2019 dividend to all shareholders of 40p per share paid 2020 – 127.5
2019 dividend to all shareholders of 70p per share paid 2020 – 223.2
2020 dividend to all shareholders of 125p per share paid 2021 398.7 –
2020 dividend to all shareholders of 110p per share paid 2021 350.9 –
Total capital return 749.6 350.7
The Directors propose to return 125p of surplus capital to shareholders for each ordinary share held on the register on 11 March 2022 with
payment made on 1 April 2022 as an interim dividend in respect of the financial year ended 31 December 2021. The Directors intend to return
surplus capital of 110p per ordinary share as an interim dividend with respect to the financial year ended 31 December 2021. This distribution
to shareholders is anticipated to be made in July 2022 subject to continuous Board assessment in line with the Group’s strategy. The total
anticipated distributions to shareholders is 235p per share (2020: 235p per share) in respect of the financial year ended 31 December 2021.
The Parent Company received £700.0m dividends from wholly owned subsidiary undertakings during 2021 (2020: £700.0m).
12 Earnings per share
Basic earnings per share is calculated by dividing the profit for the year attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the year, excluding those held in the employee benefit trusts (see note 24) and any treasury shares,
all of which are treated as cancelled, which were 319.0m (2020: 318.8m).
Diluted earnings per share is calculated by dividing the profit for the year attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue adjusted to assume conversion of all potentially dilutive ordinary shares from the start of the year, giving a
figure of 320.2m (2020: 319.9m).
Underlying earnings per share excludes the legacy buildings provision charge and goodwill impairment. The earnings per share from
continuing operations were as follows:
2021 2020
Basic earnings per share 246.8p 200.3p
Underlying basic earnings per share 248.7p 220.7p
Diluted earnings per share 245.6p 199.6p
Underlying diluted earnings per share 247.6p 219.9p
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12 Earnings per share continued
The calculation of the basic and diluted earnings per share is based upon the following data:
2021
£m
2020
£m
Underlying earnings attributable to shareholders 793.4 703.5
Legacy buildings provision (net of tax) – (60.8)
Goodwill impairment (6.2) (4.3)
Earnings attributable to shareholders 787.2 638.4
13 Intangible assets
Group
Goodwill
£m
Brand
£m
Know-how
£m
Total
£m
Cost
At 1 January 2020, 1 January 2021 and 31 December 2021 408.8 60.0 1.9 470.7
Accumulated impairment losses/amortisation
At 1 January 2020 282.7 – 1.9 284.6
Impairment losses for the year – utilisation of strategic land holdings 4.3 – – 4.3
At 1 January 2021 287.0 – 1.9 288.9
Impairment losses for the year – utilisation of strategic land holdings 6.2 – – 6.2
At 31 December 2021 293.2 – 1.9 295.1
Carrying amount
At 31 December 2021 115.6 60.0 – 175.6
At 31 December 2020 121.8 60.0 – 181.8
Goodwill brought forward at the start of the year of £121.8m includes £100.5m (2020: £104.0m) which arose on acquisitions before thedate
oftransition to IFRSs and is retained at the previous UK GAAP amounts, subject to being tested for impairment. £37.0m (2020: £37.0m)
ofthisamount represented the brand value of Charles Church, acquired with Beazer Group plc in 2001.
Acquired brand values, including the brand value of Charles Church which is classified as goodwill as this was acquired before the date
oftransition to IFRSs, are calculated based on discounted cash flows and are tested annually for impairment. The remainder of goodwill
isallocated to acquired strategic land holdings and is tested annually for impairment.
The recoverable amounts of the intangibles are determined from value in use calculations. Goodwill is allocated for impairment testing
purposes down to a lower level than the Group’s single operating segment, being to Charles Church and to the portfolios of strategic
landholdings throughout the UK acquired with Beazer and Westbury. The key assumptions for value in use calculations are those regarding
discount and growth rates. Growth rates incorporate volume, selling price and direct cost changes.
The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management and extrapolated for four
years, to form the basis of the Group’s five-year business plan. When performing the impairment review of the brands, the relevant retraction/
growth rates included therein vary between 0% to 3% (2020: 0% to +2%), reflecting the potential economic uncertainties associated with the
UK’swithdrawal from the EU.
The retraction/growth rates in relation to the impairment review of goodwill allocated to strategic land holdings vary between 0% to +3%
(2020: 0%to +2%).
After this period the growth rates applied to calculate the cash flow forecasts vary between 1 and 2% (2020: nil and 2%) reflecting
management’s estimate of the forecast recovery in the UK housing market, which do not exceed the long-term average growth rates
forthe industry.
Management used pre-tax discount factors between 2% and 8% (2020: 2% and 7%) over the forecast periods.
The goodwill allocated to acquired strategic land holdings is further tested by reference to the proportion of legally completed plots in the
periodcompared to the total plots which are expected to receive satisfactory planning permission in the remaining strategic landholdings,
takingaccount of historic experience and market conditions. This review resulted in an underlying impairment of £6.2m (2020: £4.3m).
This charge reflects ongoing consumption of the acquired strategic land holdings. The effect of testing goodwill for impairment in the manner
set out is that the goodwill will be completely impaired once the final plot for which management expects to receiveasatisfactory planning
permission is sold.
On concluding the annual impairment testing, there remains £58.5m (2020: £63.5m) and £20.1m (2020: £21.3m) of Beazer and Westbury
goodwill allocated to strategic land holdings and £37.0m (2020: £37.0m) allocated to the Charles Church brand. In addition, there is
£60.0m(2020: £60.0m) of carrying value in relation to the Westbury brand.
Notes to the financial statements
For the year ended 31 December 2021
154
Persimmon Plc | Annual Report | December 2021
13 Intangible assets continued
No reasonable possible change in any of the assumptions noted above would lead to an impairment charge being required. However,in
the event of deterioration in the UK housing market conditions, operating margins reducing, or appropriate discount ratesincreasing the
possibility of impairment losses in the future remains.
Company
Trademarks
£m
Cost
At 1 January 2020, 1 January 2021 and 31 December 2021 5.0
Amortisation
At 1 January 2020 4.0
Charge for the year 0.3
At 1 January 2021 4.3
Charge for the year 0.2
At 31 December 2021 4.5
Carrying amount
At 31 December 2021 0.5
At 31 December 2020 0.7
14 Property, plant and equipment
Group
Land and
buildings
£m
Plant
£m
Fixtures and
fittings
£m
Total
£m
Cost
At 1 January 2020 45.6 103.3 29.3 178.2
Additions 4.1 17.3 1.4 22.8
Disposals (0.5) (3.7) (1.0) (5.2)
At 1 January 2021 49.2 116.9 29.7 195.8
Additions 1.1 20.0 2.1 23.2
Disposals (0.2) (10.9) (2.2) (13.3)
At 31 December 2021 50.1 126.0 29.6 205.7
Accumulated depreciation
At 1 January 2020 6.8 73.4 16.0 96.2
Charge for the year 1.6 10.0 2.5 14.1
Disposals (0.3) (3.7) (0.9) (4.9)
At 1 January 2021 8.1 79.7 17.6 105.4
Charge for the year 1.5 9.9 3.1 14.5
Disposals (0.1) (10.9) (2.2) (13.2)
At 31 December 2021 9.5 78.7 18.5 106.7
Carrying amount
At 31 December 2021 40.6 47.3 11.1 99.0
At 31 December 2020 41.1 37.2 12.1 90.4
At 31 December 2021, the Group had £2.8m contractual commitments for the acquisition of property, plant and equipment (2020: £nil).
At 31 December 2021, the Group had £nil held for sale (2020: £nil).
Within additions for the year are £2.2m of ‘Right of Use’ assets (2020: £3.9m). At 31 December 2021 a ‘Right of Use’ asset of £8.6m is reported
within Property, plant andequipment (2020: £9.4m).
155
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14 Property, plant and equipment continued
Company
Land and
buildings
£m
Plant
£m
Computer
equipment,
fixtures and
fittings
£m
Total
£m
Cost
At 1 January 2020 2.0 0.6 5.6 8.2
Additions 0.1 0.3 0.4 0.8
Disposals – – (0.8) (0.8)
At 1 January 2021 2.1 0.9 5.2 8.2
Additions – 0.3 0.5 0.8
Disposals – (0.1) – (0.1)
At 31 December 2021 2.1 1.1 5.7 8.9
Accumulated depreciation
At 1 January 2020 0.6 0.2 3.7 4.5
Charge for the year 0.1 0.3 0.9 1.3
Disposals – – (0.8) (0.8)
At 1 January 2021 0.7 0.5 3.8 5.0
Charge for the year – 0.2 0.9 1.1
Disposals – – – –
At 31 December 2021 0.7 0.7 4.7 6.1
Carrying amount
At 31 December 2021 1.4 0.4 1.0 2.8
At 31 December 2020 1.4 0.4 1.4 3.2
15 Investments
15.1 Investments accounted for using the equity method
Group
Investments
in joint ventures
£m
Cost
At 1 January 2020 and 1 January 2021 2.1
Distributions (1.8)
At 31 December 2021 0.3
Investments in joint ventures are accounted for under the equity method of accounting. All principal joint ventures have a single external
partner holding a 50% interest giving an equal interest in the trade and net assets of the joint ventures. There are no significant restrictions on
these entities.
During the year the Group disposed of all its significant joint venture investments.
The Group’s share of assets and liabilities of joint ventures is shown below:
2021
£m
2020
£m
Non-current assets 0.1 0.5
Current assets 0.2 4.3
Current liabilities – (2.7)
Net assets of joint ventures 0.3 2.1
Notes to the financial statements
For the year ended 31 December 2021
156
Persimmon Plc | Annual Report | December 2021
15 Investments continued
15.2 Investments in subsidiaries
Company
2021
£m
2020
£m
Cost
At 1 January 2020, 31 December 2020 and 31 December 2021 3,540.7 3,540.7
Impairment
At 1 January 2020, 31 December 2020 and 31 December 2021 335.0 335.0
Net book value
At 31 December 3,205.7 3,205.7
The annual review of the carrying value of the investment in subsidiaries identified £nil impairment issues (2020: £nil impairment).
Details ofGroup undertakings are set out in notes 31 and 32.
16 Shared equity loan receivables
Group
2021
£m
2020
£m
At 1 January 56.2 68.6
Settlements (18.9) (16.4)
Gains 8.3 4.0
At 31 December 45.6 56.2
All gains/losses have been recognised inthe statement of comprehensive income. Of the gains recognised in finance income for the period
£4.2m (2020: £1.5m) was unrealised.
Shared equity loan receivables, comprise loans, largely with a ten year term and variable repayment amounts, provided as part of sales
transactions that are secured by way of a second legal charge on the related property. Loans are repayable at the borrower’s option, onsale
or transfer of the related property or other redemption of the first legal charge or at the end of the fixed term. The loans are recorded at fair
value, being the estimated future amount receivable by the Group, discounted to present day values. The fair value offuture anticipated cash
receipts takes into account the Directors’ view of future house price movements, the expected timing of receiptsand thelikelihood that a
purchaser defaults on a repayment.
The Directors revisit the future anticipated cash receipts from the loans at the end of each financial reporting period. The difference between
the anticipated future receipt and the initial fair value is credited over the estimated deferred term to finance income, with theloan increasing
to its full expected cash settlement value on the anticipated receipt date. Credit risk, which the Directors currently consider to be largely
mitigated through holding a second legal charge over the assets, is accounted for in determining fair values andappropriate discount
factorsare applied. The Directors expect an average maturity profile of between five and ten years from thebalancesheet date.
Further disclosures relating to loans are set out in note 22.
17 Inventories
2021
£m
2020
£m
Land 1,798.2 1,722.1
Work in progress 1,054.1 1,091.6
Part exchange properties 24.8 40.9
Showhouses 43.6 46.7
2,920.7 2,901.3
The Directors consider all inventories to be essentially current in nature although the Group’s operational cycle is such that a proportion
ofinventories will not be realised within 12 months. It is not possible to determine with accuracy when specific inventory will be realised
asthisis subject to a number of issues, including consumer demand and planning permission delays.
The Group conducted a further review of the net realisable value of its land and work in progress portfolio during 2021. Our approach tothis
review has been consistent with that conducted at 31 December 2020. This review gave rise to a reversal of £nil (2020: £nil) ofprovision
on inventories that were written down in a previous accounting period and an impairment of land and work in progress of£nil(2020: £nil).
This reversal/charge arose due to forecast selling prices and development costs on individual sites being higher orlower than previously
estimated by management as a result of changing conditions, and/or development plans. Net realisable provisionsheld against inventories
at31 December 2021 were £18.6m (2020: £25.4m).
157
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Strategic report Governance Financial statements Other information
17 Inventories continued
The key judgements in estimating the future net realisable value of a site were the estimation of likely sales prices, house types and
coststo complete the developments. Sales prices and costs to complete were estimated on a site by site basis based upon existing market
conditions. If the UK housing market were to improve or deteriorate in the future then further adjustments to the carrying value ofland and
work in progress may be required. Following the 2021 review, £4.1m (2020: £5.9m) of inventories are valued at net realisable value rather than
at historical cost.
Land with a carrying value of £811.4m (2020: £667.1m) was used as security for land payables (note 20).
The value of inventories expensed in 2021 and included in cost of sales was £2,443.6m (2020: £2,256.1m).
18 Trade and other receivables
Group
2021
£m
Group
2020
£m
Company
2021
£m
Company
2020
£m
Non-current assets
Other receivables 0.6 4.0 – –
Current assets
Trade receivables 87.9 52.7 0.7 0.9
Other receivables 26.0 27.3 27.0 21.1
Amounts owed by Group undertakings – – 1,940.4 1,840.5
Prepayments and accrued income 10.0 6.6 1.7 1.2
123.9 86.6 1,969.8 1,863.7
Trade and other receivables are non-interest bearing, and the Group applies a simplified approach in calculating expected credit losses.
The Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime expected credit losses at
eachreporting date. The Directors consider that the carrying value of trade receivables approximates to their fair value.
No allowance for expected credit losses is deemed necessary in respect of amounts owed by Group undertakings.
2021
£m
2020
£m
Ageing of overdue but not impaired receivables
Less than 3 months 13.7 17.1
Over 3 months 6.3 5.7
20.0 22.8
The carrying value of trade and other receivables are stated after the following allowance for expected credit losses:
2021
£m
2020
£m
Group
At 1 January 2.0 2.1
Allowance for expected credit losses charged 0.1 0.2
Amounts written off during the year as uncollectable (0.1) (0.3)
Allowance for expected credit losses reversed – –
At 31 December 2.0 2.0
19 Borrowings
Detailed disclosure of the Group’s usage of financial instruments is included in note 22. There are £nil borrowings at 31 December 2021
(2020: £nil).
The contractual repayment terms of facilities are as noted below.
Currency
Nominal
interest rate
Year of
maturity
2021
£m
2020
£m
Bank overdrafts GBP
Base
+1%-3.25% 2022 31.0 31.0
Syndicated loan GBP
SONIA
+0.90%-0.93% 2026 300.0 300.0
Available facilities 331.0 331.0
The interest rate applicable to the syndicated loan may increase dependent upon the Group’s gearing level. The discount rate applies to
current and forecast gearing levels.
Notes to the financial statements
For the year ended 31 December 2021
158
Persimmon Plc | Annual Report | December 2021
20 Trade and other payables
Group
2021
£m
Group
2020
£m
Company
2021
£m
Company
2020
£m
Non-current liabilities
Land payables 190.2 167.7 – –
Other payables 13.2 11.6 1.8 1.0
203.4 179.3 1.8 1.0
Group
2021
£m
Group
2020
£m
Company
2021
£m
Company
2020
£m
Current liabilities
Trade payables 227.2 206.5 0.7 0.6
Land payables 217.4 161.6 – –
Deposits and on account contract receipts 25.8 47.8 – –
Other payables 48.6 47.6 9.2 13.2
Accrued expenses 288.0 330.7 9.9 15.0
Amounts owed to Group undertakings – – 4,114.1 3,867.9
807.0 794.2 4,133.9 3,896.7
Trade payables subject to payment terms were 14 days (2020: 13 days), based on the ratio of year end trade payables (excluding retentions
and unagreed claims) to amounts invoiced during the year by trade creditors. The Group has financial risk management policies in place
to ensure that all payables are paid within the pre-agreed terms. The Directors consider that the carrying amount oftradepayables
approximates to their fair value.
Land payables are reduced for imputed interest, which is charged to the statement of comprehensive income over the credit period
ofthepurchase contract.
21 Legacy buildings provision
Group
2021
£m
Group
2020
£m
At 1 January 75.0 –
Additions to provision in the year – 75.0
Provisions utilised in the year (2.3) –
At 31 December 72.7 75.0
The Company has no provisions.
In the prior year we made a commitment that no leaseholder living in a building we had developed, including all those above 11 metres,
should have to cover the cost of cladding removal. As part of this commitment, we created a £75.0m provision to cover the cost of any
necessary works. Work has been ongoing throughout 2021 at a cost of £2.3m. The provision at 31 December 2021 remains management’s
best estimate of the costs of completing works to ensure fire safety on the remaining affected buildings under direct ownership and on those
under third party ownership we have developed. As a result no further charge to the Statement of Comprehensive Income has been made
in the year. These estimates may change over time as further information is assessed, remedial works progress and the interpretation of fire
safety regulations further evolves. This is a highly complex area with judgements and estimates in respect of the cost of the remedial works
and the scope of the properties requiring remedial works may change should regulation further evolve.
22 Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
• Market risk
• Liquidity risk
• Capital risk
• Credit risk
This note presents basic information regarding the Group’s exposure to these risks and the Group’s objectives, strategy and processesfor
measuring and managing exposure to them. Unless otherwise stated references to Group should be considered toapplyto the Company
as well.
The Board has overall responsibility for risk management of the Group. The Board has established the Risk Committee which has
thedelegated task of overseeing the Board’s responsibility with respect to risk and internal control. The Risk Committee reports
totheAuditCommittee on a regular basis.
The Risk Committee is supported in this task by the Group Risk management function. The Group Risk function performs an annual
assessment of the risks faced by the Group. This assessment is used to drive a risk focused programme of work aimed to improve
businessprocesses and increase internal control effectiveness.
159
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Strategic report Governance Financial statements Other information
22 Financial risk management continued
Market risk
Market risk represents the potential for changes in foreign exchange prices and interest rates to affect the Group’s profit and thevalueofits
financial instruments. It also incorporates the effect of the overall UK housing market on the Group. The Group’s objective inmarket risk
management is to minimise its exposures to fluctuations within such variables whilst optimising returns.
The Group had investments in a number of Portuguese joint ventures that were disposed of during the year. These interests were not
hedged. At 31 December 2021 the Groupalso holds €nil (2020: €nil) of cash.
The Group has no other significant currency exposures.
The following exchange rates applied during the year:
2021 2020
Average
rate
Year end
spot rate
Average
rate
Year end
spot rate
Euro 1.16 1.19 1.13 1.11
The Group’s exposure to foreign currency risk may be summarised as follows:
2021
€m
2020
€m
Investments – 2.3
Cash – –
Total – 2.3
Sensitivity analysis
A rise/fall in the Euro/Sterling exchange rate of 10% would result in a £nil loss/gain in relation to investments (2020: £0.2m).
Interest rate risk
The Group currently holds no fixed interest borrowings. This reflects both the low borrowing requirements of the Group and the currentlow
interest rates applicable to floating borrowings. The Group has no formal target for a ratio of fixed to floating funding. The responsibility
for setting the level of fixed rate debt lies with the Board and is continually reviewed in the light of economic dataprovided by a variety
of sources.
Sensitivity analysis
If in the year ended 31 December 2021 UK interest rates had been 0.5% higher/lower than the Group’s pre-tax profit would have increased/
decreased by £5.3m (2020: increased/decreased by £3.9m). The Group’s post-tax profit would have increased/decreased by£4.3m (2020:
increased/decreased by £3.2m).
These sensitivities have been prepared in respect of the direct impact of such an interest rate change on the net financing expense
offinancial instruments only, and do not attempt to estimate the indirect effect such a change may have on the wider economic environment
such as house pricing, mortgage availability and exchange rates.
Housing market risk
The Group is fundamentally affected by the level of UK house prices. These in turn are affected by factors such as credit availability,
employment levels, interest rates, consumer confidence and supply of land with planning. The UK’s withdrawal from the EU may have
asignificant impact on these factors.
Whilst it is not possible for the Group to fully mitigate such risks on a national macroeconomic basis the Group does continually monitor its
geographical spread within the UK, seeking to balance its investment in areas offering the best immediate returns with a long-term spread of
its operations throughout the UK to minimise the risk of local microeconomic fluctuations. The Group has taken steps to controlits speculative
build, land acquisition activities and work in progress levels so as to manage the exposure of the Group to any further market disruption.
Sensitivity analysis
At 31 December 2021, if UK house prices had been 10% higher/lower, and all other variables were held constant, the Group’s house price
linked financial instruments, which are solely shared equity loan receivables, would increase/decrease in value, excluding any effects of
current or deferred tax, by £4.6m (2020: £5.6m).
Liquidity risk
Liquidity risk reflects the risk that the Group will have insufficient resources to meet its financial obligations as they fall due. The Group’s
strategy in relation to managing liquidity risk is to ensure that the Group has sufficient liquid funds to meet all its potential liabilities as they
fall due.
This is true not only of normal market conditions but also of negative projections against expected outcomes, so as to avoid any risk of
incurring contractual penalties or damaging the Group’s reputation, which would in turn reduce the Group’s ability to borrow at optimal rates.
Therefore the Group remains confident of its continued compliance with financial covenants under the syndicated loan even in theevent
ofdeterioration in market conditions. Further information on the Group’s liquidity forecast process is included in the Viability Statement
onpages 68 to 69.
Notes to the financial statements
For the year ended 31 December 2021
160
Persimmon Plc | Annual Report | December 2021
22 Financial risk management continued
The Group has entered into a number of deferred payment guarantees and performance bonds in the normal course of operations.
The liabilities to which these guarantees relate are recognised and accounted for in accordance with our standard accounting policies.
Liquidity forecasts are produced on (i) a daily basis to ensure that utilisation of current facilities is optimised; (ii) a monthly basis to
ensurethatcovenant compliance targets and medium term liquidity is maintained; and (iii) a long-term projection basis for the purpose
ofidentifying long-term strategic funding requirements.
The Directors also continually assess the balance of capital and debt funding of the Group. They consider the security of capital funding
against the potentially higher rates of return offered by debt financing in order to set an efficient but stable balance appropriate to the
sizeofthe Group.
The Group operates short term uncommitted overdraft facilities to meet day-to-day liquidity requirements. These facilities are cancellable
onrequest from the bank; however the Group generally maintains low levels of borrowing on these in favour of more costefficient facilities.
These overdraft facilities are provided by five leading clearing banks to minimise exposure to any one lender.
The Group maintains a £300m revolving credit facility committed to March 2026. These committed facilities are sufficient to meet
projectedliquidity requirements to this date. Undrawn committed facilities at the reporting date amount to £300m (2020: £300m).
Cash deposits
The Group has a policy of ensuring cash deposits are made with the primary objective of security of principal. Accordingly deposits are
madeonly with approved, respected, high credit rating financial institutions. Deposits are spread across such institutions to minimise
exposureto any single entity and are made on a short term basis only to preserve liquidity.
Capital risk
The capital structure of the Group consists of net cash/debt (borrowings as detailed in note 19 offset by cash and bank balances) and equity
of the Group (comprising issued capital, reserves and retained earnings as detailed in the statement of changes in shareholders’ equity).
The Group’s objective in managing capital is primarily to ensure the continued ability of the Group to meet its liabilities as they falldue whilst
also maintaining an appropriate balance of equity and borrowings and minimising costs of capital. Close control of deployment of capital is
maintained by detailed management review procedures for authorisation of significant capital commitments, such as landacquisition, capital
targets for local management and a system of internal interest recharges, ensuring capital cost impact isunderstoodand considered by all
management tiers.
Decisions regarding the balance of equity and borrowings, dividend policy and all major borrowing facilities are reserved for the Board.
The Group is currently pursuing a strategy of capital return to shareholders, whilst at the same time building a stronger, larger business.
Full details are available in the Strategic Report on pages 50 to 53.
The following are the contractual maturities of financial liabilities, including interest payments (not discounted):
Group
2021
Carrying
amount
£m
Contractual
cash flows
£m
Less than
1 year
£m
1–2
years
£m
2–5
years
£m
Over
5 years
£m
Trade and other payables 577.0 580.0 565.4 7.7 2.7 4.2
Land payables 407.6 409.6 218.7 105.3 81.8 3.8
Partnership liability 29.3 33.7 5.5 5.6 16.9 5.7
Financial liabilities 1,013.9 1,023.3 789.6 118.6 101.4 13.7
Group
2020
Carrying
amount
£m
Contractual
cash flows
£m
Less than
1 year
£m
1–2
years
£m
2–5
years
£m
Over
5 years
£m
Trade and other payables 596.5 599.8 585.9 4.3 4.9 4.7
Land payables 329.3 332.5 164.7 85.1 73.4 9.3
Partnership liability 33.3 39.2 5.5 5.5 16.8 11.4
Financial liabilities 959.1 971.5 756.1 94.9 95.1 25.4
Company
2021
Carrying
amount
£m
Contractual
cash flows
£m
Less than
1 year
£m
1–2
years
£m
2–5
years
£m
Over
5 years
£m
Trade and other payables (including
intercompany balances) 4,135.7 4,135.7 4,133.9 0.3 1.5 –
Financial liabilities 4,135.7 4,135.7 4,133.9 0.3 1.5 –
161
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Strategic report Governance Financial statements Other information
22 Financial risk management continued
It is noted that £4,114.1m (2020: £3,867.9m) of other payables refer to amounts owed to subsidiary undertakings. Whilst generally repayable
upon demand, in practice it is unlikely there will be any required repayment in the short term.
Company
2020
Carrying
amount
£m
Contractual
cash flows
£m
Less than
1 year
£m
1–2
years
£m
2–5
years
£m
Over
5 years
£m
Trade and other payables (including intercompany
balances) 3,897.7 3,897.7 3,896.7 0.6 0.4 –
Financial liabilities 3,897.7 3,897.7 3,896.7 0.6 0.4 –
Credit risk
The nature of the UK housing industry and the legal framework surrounding it results in the Group having a low exposure to credit risk.
In all but a minority of cases the full cash receipt for each sale occurs on legal completion, which is also the point of revenue recognition under
the Group’s accounting policies.
In certain specific circumstances the Group has entered into shared equity arrangements (not applicable to the Company). The pressures of
market conditions during recessionary periods necessitated an increase in this form of sales structure from 2008. In such cases the long-term
debt is secured upon the property concerned. The Group does not recognise collateral rights as a separate asset, nor does it have rights to
trade such collateral. Reductions in property values leads to an increase in the credit risk of the Group in respect of such sales. There was
£0.3m requirement fora charge in relation to credit impairment in the year (2020: £0.6m).
The maximum total credit risk is as follows:
Group
2021
£m
2020
£m
Trade and other receivables 114.5 84.0
Shared equity loan receivables 45.6 56.2
Cash and cash equivalents 1,246.6 1,234.1
1,406.7 1,374.3
Company
Loans and receivables (including intercompany balances) 1,968.1 1,862.5
Cash and cash equivalents 1,054.9 1,010.9
3,023.0 2,873.4
The maximum credit exposure of the Group to overseas parties is £nil (2020: £nil) (Company: £nil (2020: £nil)). The Group’s credit
riskis widely distributed. The maximum credit risk should any single party (excepting financial institutions) fail to perform is £20.4m
(2020: £3.8m) and is not yet due (Company: £1,339.5m (2020: £1,239.5m) being a subsidiary debtor). The Directors consider these financial
assets to be of high quality and the credit risk is assessed as low. The maximum credit risk associated with afinancial institutionin respect of
short term cash deposits is £216.1m (2020: £325.0m).
Fair value
The fair value of financial assets and liabilities is as follows:
Group
2021 2020
Fair
value
£m
Carrying
value
£m
Fair
value
£m
Carrying
value
£m
Trade and other receivables 114.5 114.5 84.0 84.0
Shared equity loan receivables 45.6 45.6 56.2 56.2
Cash and cash equivalents 1,246.6 1,246.6 1,234.1 1,234.1
Trade and other payables (577.0) (57 7.0) (596.4) (596.4)
Land payables (407.6) (407.6) (329.3) (329.3)
Partnership liability (30.1) (29.3) (35.2) (33.3)
(392.0) (392.8) 413.4 415.3
Notes to the financial statements
For the year ended 31 December 2021
162
Persimmon Plc | Annual Report | December 2021
22 Financial risk management continued
In aggregate, the fair value of financial assets and liabilities are not materially different from their carrying value.
Company
2021 2020
Fair
value
£m
Carrying
value
£m
Fair
value
£m
Carrying
value
£m
Trade and other receivables (including intercompany balances) 1,968.1 1,968.1 1,862.5 1,862.5
Cash and cash equivalents 1,054.9 1,054.9 1,010.9 1,010.9
Trade and other payables (including intercompany balances) (4,135.7) (4,135.7) (3,897.7) (3,897.7)
(1,112.7) (1,112.7) (1,024.3) (1,024.3)
Income and expense in relation to financial instruments is disclosed in note 8.
Financial assets and liabilities by category:
Group Company
2021
£m
2020
£m
2021
£m
2020
£m
Financial assets designated fair value through statement of comprehensive
income 45.6 56.2 – –
Trade and other receivables 114.5 84.0 1,968.1 1,862.5
Cash and cash equivalents 1,246.6 1,234.1 1,054.9 1,010.9
Financial liabilities at amortised cost (1,013.9) (959.1) (4,135.7) (3,896.7)
392.8 415.2 (1,112.7) (1,023.3)
Financial assets and liabilities carried at fair value are categorised within the hierarchical classification of IFRS 13 Revised (as defined within the
standard) as follows:
Group
2021
Level 3
£m
2020
Level 3
£m
Shared equity loan receivables 45.6 56.2
Shared equity loan receivables
Shared equity loan receivables represent loans advanced to customers and secured by way of a second charge on their new home.They are
carried at fair value. The fair value is determined by reference to the rates at which they could be exchanged byknowledgeableand willing
parties. Fair value is determined by discounting forecast cash flows for the residual period of the contractbyarisk adjusted rate.
There exists an element of uncertainty over the precise final valuation and timing of cash flows arising from these loans. As a result theGroup
has applied inputs based on current market conditions and the Group’s historic experience of actual cash flows resulting fromsuch
arrangements. These inputs are by nature estimates and as such the fair value has been classified as level 3 under the fairvalue hierarchy
laid out in IFRS 13 Fair Value Measurement.
Significant unobservable inputs into the fair value measurement calculation include regional house price movements based on the Group’s
actual experience of regional house pricing and management forecasts of future movements, weighted average duration oftheloans from
inception to settlement of ten years (2020: ten years) and discount rate 5% (2020: 5%) based on current observedmarket interest rates
offered to private individuals on secured second loans.
The discounted forecast cash flow calculation is dependent upon the estimated future value of the properties on which the shared
equityloans are secured. Adjustments to this input, which might result from a change in the wider property market, would have aproportional
impact upon the fair value of the loan. Furthermore, whilst not easily assessable in advance, the resulting change insecurityvalue may affect
the credit risk associated with the counterparty, influencing fair value further.
Detail of the movements in shared equity loan receivables in the period are disclosed in note 16.
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Strategic report Governance Financial statements Other information
23 Deferred tax
The following are the deferred tax assets and liabilities recognised by the Group and the movements thereon during the current
andprioryear:
Note
Accelerated
tax
depreciation
£m
Retirement
benefit
obligation
£m
Share-based
payment
£m
Intangible
assets
£m
Other
temporary
differences
£m
Total
£m
At 1 January 2020 2.0 (13.2) 2.6 (10.2) 0.2 (18.6)
(Charge)/credit to income statement 10.1 – (2.9) 1.0 (1.2) (0.2) (3.3)
Credit to other comprehensive income 10.2 – 6.5 – – – 6.5
Amounts taken directly to equity 10.3 – – 0.1 – 0.1 0.2
At 1 January 2021 2.0 (9.6) 3.7 (11.4) 0.1 (15.2)
(Charge)/credit to income statement 10.1 (1.7) (2.8) 2.1 (3.6) (0.7) (6.7)
Charge to other comprehensive income 10.2 – (24.8) – – – (24.8)
Amounts taken directly to equity 10.3 – – 1.8 – – 1.8
At 31 December 2021 0.3 (37.2) 7.6 (15.0) (0.6) (44.9)
As permitted by IAS 12 Income Taxes, certain deferred tax assets and liabilities have been offset. The following is an analysis of the deferred
tax balances (after offset) for financial reporting purposes:
2021
£m
2020
£m
Share-based payments 7.6 3.7
Other items, including accelerated capital allowances 2.1 4.0
Deferred tax assets 9.7 7.7
Brands (15.0) (11.4)
Other items, including accelerated capital allowances (39.6) (11.5)
Deferred tax liabilities (54.6) (22.9)
Net deferred tax liability (44.9) (15.2)
The Group has recognised deferred tax liabilities of £37.2m (2020: liabilities of £9.6m) on retirement benefit assets of £148.8m
(2020:assets of £50.6m).
The following are the deferred tax assets and liabilities recognised by the Company and the movements thereon during the current
andprior year:
Accelerated
tax
depreciation
£m
Retirement
benefit
obligation
£m
Share-based
payment
£m
Other
temporary
differences
£m
Total
£m
At 1 January 2020 0.2 (13.2) 1.5 1.0 (10.5)
Credit/(charge) to income statement 0.1 (2.9) 1.0 (0.1) (1.9)
Credit to other comprehensive income – 6.5 – – 6.5
Amounts taken directly to equity – – (0.8) – (0.8)
At 1 January 2021 0.3 (9.6) 1.7 0.9 (6.7)
(Charge)/credit to income statement (0.5) (2.8) 1.2 – (2.1)
Charge to other comprehensive income – (24.8) – – (24.8)
Amounts taken directly to equity – – 0.9 – 0.9
At 31 December 2021 (0.2) (37.2) 3.8 0.9 (32.7)
No deferred tax assets and liabilities have been offset (2020: £nil).
Notes to the financial statements
For the year ended 31 December 2021
164
Persimmon Plc | Annual Report | December 2021
24 Share capital
2021
£m
2020
£m
Allotted, called up and fully paid
319,206,474 (2020: 319,071,261) ordinary shares of 10p each 31.9 31.9
The Company has one class of ordinary shares which carry no right to fixed income. All issued shares are fully paid. During the year 135,213
ordinary shares (2020: 168,876) were issued in satisfaction of share option exercises.
The Company has established an Employee Benefit Trust to hold shares for participants of the Company’s various share schemes.
The Trustee is Persimmon (Share Scheme Trustees) Limited, a subsidiary company. During 2021, the Trustee transferred no shares
(2020: 115,489) toemployees. At 31 December 2021 the trust held 105,523 shares (2020: 105,523) on which dividends have been waived.
The market value of these shares at 31 December 2021 was £3,013,737 (2020: £2,919,821).
Own shares
Own shares held at cost are reconciled as follows:
Group
£m
Balance at 31 December 2020 0.4
Disposed of on exercise/vesting to employees –
Balance at 31 December 2021 0.4
25 Reconciliation of net cash flow to net cash and analysis of net cash
Group
2021
£m
2020
£m
Cash and cash equivalents at 1 January 1,234.1 843.9
Increase in net cash and cash equivalents in cash flow 12.5 390.2
Cash and cash equivalents at 31 December 1,246.6 1,234.1
IFRS 16 lease liability (8.8) (9.6)
Net cash at 31 December 1,237.8 1,224.5
Net cash is defined as cash and cash equivalents, bank overdrafts, finance lease obligations and interest bearing borrowings.
26 Contingent liabilities
As disclosed in note 21 the Group has undertaken a review of all of its legacy buildings that used cladding on their façades.
The Financial Statements have been prepared based on the latest available information, however the relevant government guidance
and retrospective review of building materials continues to evolve. As such, the costs of remedial works may change as work and
regulations progress.
In the normal course of business the Group has given counter indemnities in respect of performance bonds and financial guarantees.
Management estimate that the bonds and guarantees amount to £372m (2020: £379m), and confirm that the possibility of cash outflow is
considered minimal and no provision is required.
Provision is made for the Directors’ best estimate of all known legal claims and all legal actions in progress. The Group takes legal adviceas
to the likelihood of success of claims and actions and no provision is made where the Directors consider, based on that advice, that the action
is unlikely to succeed, or a sufficiently reliable estimate of the potential obligation cannot be made.
The Company has entered into guarantees of certain financial liabilities of related undertakings as detailed in note 31.
165
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Strategic report Governance Financial statements Other information
27 Retirement benefit assets
As at 31 December 2021 the Group operated four employee pension schemes, being two Group personal pension schemes and two defined
benefit pension schemes. Remeasurement gains and losses in the defined benefit schemes are recognised in full as other comprehensive
income within the consolidated statement of comprehensive income. All other pension scheme costs are reported inprofit or loss.
Group personal pension schemes
The Group makes contributions to the Group personal pension schemes which are open to employees who are not members of the defined
benefit schemes. Dependent upon an employee’s role and length of service the Group may make contributions to the schemes ofup to
a maximum of 9% of basic salary. The Group has no liability beyond these contributions. Group contributions to these schemes of £4.9m
(2020: £4.6m) are expensed through the statement of comprehensive income as incurred.
Persimmon Plc Pension & Life Assurance Scheme
The Persimmon Plc Pension & Life Assurance Scheme (the ‘Persimmon Scheme’) is a defined benefit scheme which was closed to new
members in 2001. Active members of the Persimmon Scheme accrue benefits on a career average revalued earnings basis. The assets of
the Persimmon Scheme are held separately from those of the Group.
On 12 December 2012 Persimmon Plc made a one-off cash contribution of £57.8m to the Persimmon Scheme. The Persimmon Schemeused
these funds to invest in Persimmon Scottish Limited Partnership, which has undertaken to provide fixed cash payments tothe Persimmon
Scheme to meet its liabilities over a 15 year period. See note 28 for further details.
Prowting Pension Scheme
The Group also operates the Prowting Pension Scheme (the ‘Prowting Scheme’), a defined benefit scheme. Benefits accrue on a career
average revalued earnings basis. The assets of the Prowting Scheme are held separatelyfrom those of the Group.
Role of Trustees
Both the Persimmon Scheme and the Prowting Scheme (jointly ‘the Pension Schemes’) are managed by Trustees who are legally separate
from the Company. The Trustees are composed of representatives appointed by both the employer and employees. The Trustees are
required by law to act in the interest of all relevant beneficiaries and are responsible in particular for the asset investment policy plus the
day-to-day administration of the benefits. They are also responsible for jointly agreeing with the employer thelevel of contributions due to the
Pension Schemes (see below).
Funding requirements
UK legislation requires that pension schemes are funded prudently i.e. to a level in excess of the current expected cost of providing benefits.
The last funding valuation of the Persimmon Scheme was carried out by a qualified actuary as at 1 January 2020 and as at 31 March 2021 for
the Prowting Scheme. The next funding valuation will be as at 1 January 2023 for the Persimmon Scheme and as at 31 March 2024 for the
Prowting Scheme. Subsequent valuations will be at intervals of no more than three yearsthereafter. Following each valuation, the Trustees
and the Company must agree the contributions required (if any) to ensure thePension Schemes are fully funded over time on a suitable
prudent measure. Contributions agreed in this manner constitute aminimum funding requirement.
Given the current strength of the Persimmon and Prowting Scheme’s funding (due to recent cash contributions made to the Schemes)
nodeficit contributions are required for either scheme. Salary related contributions for active members and expense related contributions are
payable for the Persimmon Scheme.
Under the governing documentation of the Pension Schemes, any future surplus in either scheme would be returnable to the Group
byrefund, assuming gradual settlement of the liabilities over the lifetime of the Pension Schemes. As a result the Group does not consider
there to be an asset ceiling in respect of the Pension Schemes.
The Group has determined that in accordance with the rules of the Pension Schemes the present value of refunds or reductions in
futurecontributions is not lower than the balance of the fair value of funding obligations. As such no decrease in the defined benefit
assetwas necessary.
Both Pension Schemes are in a strong funding position. The Group remains committed to the continuity of this position and will review future
contribution levels in the event of any significant deficit arising.
The Pension Schemes investment strategy is to maintain a portfolio of suitable assets of appropriate liquidity which will generate investment
returns to meet, together with future contributions, the benefits of the members as they fall due. The Pension Schemes donotinvest directly
in complex financial instruments, though there may be limited indirect investment through investment funds.
Regulation
The UK pensions market is regulated by The Pensions Regulator whose key statutory objectives in relation to UK defined benefit plans are:
• to protect the benefits of members;
• to promote, and to improve understanding of good administration; and
• to reduce the risk of situations arising which may lead to compensation being payable from the Pension Protection Fund (PPF).
The Pensions Regulator has sweeping powers including the powers:
• to wind up a scheme where winding up is necessary to protect members’ interests;
• to appoint or remove a trustee;
• to impose a schedule of company contributions or the calculation of the technical provisions where a trustee and company fail toagree on
appropriate contributions; and
• to impose a contribution where there has been a detrimental action against a scheme.
Notes to the financial statements
For the year ended 31 December 2021
166
Persimmon Plc | Annual Report | December 2021
27 Retirement benefit assets continued
Risks associated with the Pension Schemes
The Pension Schemes expose the Group to a number of risks, the most significant of which are:
Risk Description
Volatile asset returns The defined benefit obligation (DBO) is calculated using a discount rate set with reference to corporate bond
yields. If assets underperform this discount rate, this will create an element of deficit. The Persimmon Scheme
holds a significant proportion (c.50%) of assets in growth assets (such as equities) which, although expected to
outperform corporate bonds in the long term, create volatility and risk in the short term. The allocation to growth
assets is monitored to ensure itremains appropriate given the Pension Schemes’ long-term objectives.
Changes in bond yields A decrease in corporate bond yields will increase the value placed on the DBO for accounting purposes,
although this will be partially offset by an increase in the value of the Pension Schemes’ bond holdings.
Inflation risk A significant proportion of the DBO is indexed in line with price inflation and higher inflation will lead to higher
liabilities (although, in most cases, this is capped at an annual increase of 5%).
Life expectancy The majority of the Pension Schemes’ obligations are to provide benefits for the life of the member, so increases
in life expectancy will result in an increase in the liabilities.
There are a number of other risks of running the Pension Schemes including operational risks (such as paying out the wrong benefits),
legislative risks (such as the Government increasing the burden on pension through new legislation) and other demographic risks, suchasa
higher proportion of members having a dependant eligible to receive a survivor’s pension.
Net Pension Asset
The amounts included in the balance sheet arising from the Group’s obligations in respect of the Pension Schemes are as follows:
2021
£m
2020
£m
Fair value of Pension Scheme assets 751.9 694.4
Present value of funded obligations (603.1) (643.8)
Net pension asset 148.8 50.6
A deferred tax liability totalling £37.2m (2020: £9.6m) has been recognised on the balance sheet in relation to the net pension asset.
Movements in the net pension asset on the balance sheet were as follows:
2021
£m
2020
£m
As at 1 January 50.6 77.6
Total gain/(loss) recognised in the period 81.4 (43.8)
Company contributions paid in the period 16.8 16.8
Net pension asset 148.8 50.6
The Group has recognised a Net Pension Asset on the basis that under the rules of the scheme any future surplus would be returnable to the
Group by refund, assuming gradual settlement over the lifetime of the schemes.
The Company does not present valuations of its own separate assets and liabilities under the Pension Schemes as the entire net assets of
the Pension Schemes are included in the Company balance sheet, as ultimate scheme sponsor.
The amounts recognised in the consolidated statement of comprehensive income are as follows:
2021
£m
2020
£m
Current service cost 2.0 1.9
Past service cost – 0.5
Administrative expense 0.6 0.6
Pension cost recognised as operating expense 2.6 3.0
Interest cost 8.9 11.7
Return on assets recorded as interest (9.6) (13.4)
Pension cost recognised as net finance credit (0.7) (1.7)
Total defined benefit pension cost recognised in profit or loss 1.9 1.3
Remeasurement (gain)/loss recognised in other comprehensive income (83.3) 42.5
Total defined benefit scheme (gain)/loss recognised (81.4) 43.8
The past service cost recognised in the prior period reflects the impact of the legal rulings regarding Guaranteed Minimum Pension
equalisation (GMP).
167
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Strategic report Governance Financial statements Other information
27 Retirement benefit assets continued
Assets
The assets of the Pension Schemes have been calculated at fair value and are invested in the following asset classes:
2021
£m
2020
£m
Equity
– UK 31.3 29.1
– US 124.0 99.6
– Eurozone 40.3 28.6
– Other 21.8 20.0
Bonds
– Government 174.3 157.2
– sub-investment grade 105.7 107.2
Asset backed funding 30.1 35.2
Diversified Growth Fund 155.6 138.5
Cash 68.8 79.0
Total 751.9 694.4
All assets have a quoted market value in an active market, with the exception of Asset backed funding of £30.1m (2020: £35.2m),
whichrelated to secured cash flows.
The Persimmon Scheme holds 93% (2020: 93%) of the gross assets of the Pension Schemes and 95% (2020: 95%) of the gross liabilities.
The remainder relates to the Prowting Scheme. The Pension Schemes do not engage in investments in complex financial assets such
asInsurance Contracts or Longevity Derivatives.
Changes in the fair value of scheme assets were as follows:
2021
£m
2020
£m
As at 1 January 694.4 672.8
Return on assets recorded as interest 9.6 13.4
Remeasurement gain on assets 53.6 15.6
Contributions 16.8 16.8
Benefits and expenses paid (22.5) (24.2)
As at 31 December 751.9 694.4
Defined Benefit Obligation
The liabilities of the Pension Schemes, at each balance sheet date, have been calculated on the following financial assumptions:
2021
% p.a.
2020
% p.a.
Discount rate 1.9 1.4
General pay increases 3.1 2.7
RPI Inflation assumption 3.1 2.7
CPI Inflation assumption 2.6 2.2
Post retirement life expectancy for retirement aged members are as follows:
2021
Years
2020
Years
Male current pensioner 22.6 22.5
Male future pensioner 23.2 23.2
The defined benefit obligation includes benefits for current employees, former employees and current pensioners.
The following table provides an analysis of the defined benefit obligation by membership category.
2021
£m
2020
£m
Total value of current employees’ benefits 39.8 45.1
Deferred members’ benefits 244.0 264.0
Pensioner members’ benefits 319.3 334.7
Total defined benefit obligation 603.1 643.8
The Pension Schemes’ duration is an indicator of the weighted average time until benefit payments are made. For the Pension Schemes as a
whole, the duration is around 17 years.
Notes to the financial statements
For the year ended 31 December 2021
168
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27 Retirement benefit assets continued
Changes in the defined benefit obligation were as follows:
2021
£m
2020
£m
As at 1 January (643.8) (595.2)
Current service cost (2.0) (1.9)
Past service cost – (0.5)
Interest cost (8.9) (11.7)
Remeasurement loss on liabilities 29.7 (58.1)
Benefits paid 21.9 23.6
As at 31 December (603.1) (643.8)
Sensitivities
The key assumptions used for IAS 19 are: discount rate, inflation and mortality. If different assumptions were used, this could have amaterial
effect on the results disclosed. The sensitivity of the results to these assumptions is as follows.
2021
£m
2020
£m
Present value of defined benefit obligation (DBO) 603.1 643.8
– DBO following a 0.25% decrease in the discount rate 628.7 671.1
– DBO following a 0.25% increase in the discount rate 579.2 617.5
– DBO following a 0.25% decrease in the inflation assumption 591.1 631.1
– DBO following a 0.25% increase in the inflation assumption 617.4 660.5
– DBO following a 1 year decrease to life expectancy 575.6 611.6
– DBO following a 1 year increase to life expectancy 630.8 676.4
The sensitivity information shown above has been prepared using the same methodology as the calculation for the current DBO.
28 Partnership Liability to the Persimmon Plc Pension & Life Assurance Scheme
Persimmon Scottish Pension Trustees Limited, a wholly owned Group subsidiary, is general partner in Persimmon Scottish Limited Partnership
(‘the Partnership’). Persimmon Pension Trustees Limited, the Trustee of the Persimmon Plc Pension & Life Assurance Scheme (‘the Persimmon
Scheme’) is a limited partner. The Partnership is included in the consolidated results of the Group. The Partnership has taken advantage of
the exemptions in the Partnerships (Accounts) regulations 2008 not to file separate accountsonthis basis.
The terms of the Persimmon Scheme’s interest in the Partnership give the pension scheme obligatory rights to cash returns but insignificant
operational control over the Partnership. The interest has been classified as a financial liability and is accounted for onanamortised cost
basis. During the year the Group has made payments in relation to the Partnership liability (including interest) totalling £5.5m (2020: £5.5m).
Under IAS 19 the partnership interest of the Persimmon Scheme is included within the UK pension scheme assets. For further
detailsseenote 27.
The Partnership is the beneficial owner of a bond secured on a proportion of the Group’s shared equity loan receivables andguaranteedby
Persimmon Plc, which will support the Partnership investment return to the Persimmon Scheme.
29 Share-based payments
The Group operates a number of share option schemes, the details of which are provided below. All schemes were equity settled, however
the Board have decided to net settle the withholding tax in relation to the Persimmon Plc 2012 Long Term Incentive Plan. Payments made or
due in association with the withholding tax have been accounted for as a deduction from equity. These amounts totalled £nil (2020: £2.4m).
There are currently no plans to net settle other option schemes.
The Savings-Related Share Option Scheme is an HMRC approved scheme open to all permanent employees. Options can normally
beexercised three years after the date of grant.
Options have been issued to senior management (including the Executive Directors) under the Group’s various executive share option
schemes, which include awards under the Group’s long term incentive plans. Future vesting of options is dependent upon the return ofcash
to shareholders between 2017 and 2019 for options granted in 2017 under the Persimmon Plc 2017 Performance Share Plan, and upon TSR
relative to a peer group, customer care performance and return of cash to shareholders between 2018 and 2020 for options granted in 2018
under the Persimmon Plc 2017 Performance Share Plan and on customer care, cash generation and TSR performance between 2019 and
2021 for options granted between 2019 and 2021 under the Persimmon Plc 2017 Performance Share Plan.
Options granted under the Persimmon Long Term Incentive Plan 2007 (‘2007 LTIP’) between September 2010 and September 2011 consisted
of unapproved awards and HMRC approved awards where appropriate, with an exercise price equivalent to market value onthedate of the
award, plus a linked award. In the event that the market price of a share at the date of exercise of an approved option exceeds the option
price, then the value of the linked award that vests is restricted to an amount capped at the cost of exercise of the approved option.
169
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Strategic report Governance Financial statements Other information
29 Share-based payments continued
Reconciliations of share options outstanding during each period, under each type of share scheme, are as follows:
2021
Savings-Related Share
Option Scheme
2020
Savings-Related Share
Option Scheme
Group and Company
Number
of shares
under option
Weighted
average exercise
price (p)
Number
of shares
under option
Weighted
average exercise
price (p)
Outstanding at the beginning of the year 946,876 1,804.6p 798,842 1,788.3
Granted during the year 284,985 2,197.0p 402,937 1,854.0
Forfeited during the year (161,543) 1,808.9p (89,918) 1,792.0
Exercised during the year (135,213) 1,908.2p (164,985) 1,853.2
Outstanding at the end of the year 935,105 1,908.5p 946,876 1,804.6
Exercisable at the end of the year 38,212 1,888.0p 29,391 1,982.1
Group and Company
2021
Bonus Share Scheme
2020
Bonus Share Scheme
Number of shares under option Number of shares under option
Outstanding at the beginning of the year – 8,639
Exercised during the year – (8,639)
Outstanding at the end of the year – –
Exercisable at the end of the year – –
Group and Company
2021
Long Term Incentive Plan 2007
Non HMRC Approved
2020
Long Term Incentive
Plan 2007 Non HMRC Approved
Number of shares under option Number of shares under option
Outstanding at the beginning of the year – 3,320
Forfeited during the year – (2,749)
Exercised during the year – (571)
Outstanding at the end of the year – –
Exercisable at the end of the year – –
Group and Company
2021
Long Term Incentive
Plan 2007 HMRC Approved
2020
Long Term Incentive
Plan 2007 HMRC Approved
Number
of shares
under option
Weighted average
exercise price (p)
Number
of shares
under option
Weighted average
exercise price
(p)
Outstanding at the beginning of the year – – 3,320 451.8
Exercised during the year – – (3,320) 451.8
Outstanding at the end of the year – – – –
Exercisable at the end of the year – – – –
Notes to the financial statements
For the year ended 31 December 2021
170
Persimmon Plc | Annual Report | December 2021
29 Share-based payments continued
Group and Company
2021
Long Term Incentive
Plan 2012*
2020
Long Term Incentive
Plan 2012*
Number of shares
under option
Number of shares
under option
Outstanding at the beginning of the year 12,000 454,903
Forfeited/waived during the year – (241,293)
Exercised during the year – (201,610)
Outstanding at the end of the year 12,000 12,000
Exercisable at the end of the year 12,000 12,000
* Under 2012 LTIP grants the option exercise price is variable dependent on share price at the date of award and the performance condition being return of cash to shareholders post grant date.
Group and Company
2021
2017
Performance Share Plan
2020
2017
Performance Share Plan
Number of shares
under option
Number of shares
under option
Outstanding at the beginning of the year 1,261,754 697,527
Granted during the year 680,515 646,841
Forfeited during the year (171,926) (82,614)
Outstanding at the end of the year 1,770,343 1,261,754
Exercisable at the end of the year 126,544 –
The weighted average share price at the date of exercise for share options exercised during the period was 2,835.0p (2020: 2,611.3p).
The options outstanding at 31 December 2021 had a range of exercise prices from nil to 2,197.0p and a weighted average remaining
contractual life of 1.3 years (2020: 1.6 years).
The inputs into the Black Scholes option pricing model for options that were granted in the year were as follows:
Option Valuation Assumptions
PSP 2021
Tranche 1
PSP 2022
Tranche 2
SAYE
2021
Grant date 21 September 2021 19 March 2021 15 October 2021
Risk free interest rate 0.48% 0.17% 0.69%
Exercise price – – £21.97
Share price at date of grant £27.71 £29.52 £26.92
Expected dividend yield* 0% 0% 4.65%
Expected life 2.4 years 2.9 years 3.1 years
Holding period 2.0 years 2.0 years n/a
Date of vesting 28 February 2024 28 February 2024 1 December 2024
Expected volatility 37.0% 34.7% 34.6%
Fair value of option £19.60 £20.39 £3.22
* At the discretion of the Remuneration Committee a cash bonus may be paid to holders of 2021 PSP grants equivalent to the value of any dividend which might have been paid on the shares held
under option had those instead been issued. For purposes of valuation it has been assessed that such a payout will be made and the foregone dividend yield assumption setto nil.
Expected volatility was determined by calculating the historic volatility of the Group’s share price over various timescales.
The expected life used in the model has been adjusted, based on best estimates, to reflect exercise restrictions and
behaviouralconsiderations.
In 2021, the Group recognised total expenses before tax of £6.4m (2020: £6.4m) in relation to equity settled share-based payment
transactions in the consolidated statement of comprehensive income. These option charges have been credited against the
retainedearnings reserve. As at 31 December 2021 the total credit recognised in relation to equity settled share-based payments was£16.9m
(2020: £10.7m) of which £0.1m (2020: £1.3m) related to options currently vested awaiting exercise. All share-based paymentsare expensed by
the Company.
171
Persimmon Plc | Annual Report | December 2021
Strategic report Governance Financial statements Other information
30 Related party transactions
The Board and certain members of senior management are related parties within the definition of IAS 24 Related Party Disclosures.
Summary information of the transactions with key management personnel is provided in note 6. Detailed disclosure of the individual
remuneration of Board members is included in the Remuneration Report on pages 108 to 128. There is no difference between transactions
with key management personnel of the Company and the Group.
The Company has entered into transactions with its subsidiary undertakings in respect of the following: internal funding loans andprovision
of Group services (including senior management, IT, accounting, marketing, purchasing, legal and conveyancing services).Recharges are
made to subsidiary undertakings for Group loans, based on funding provided, at an interest rate linked toaverage Groupborrowing costs.
No recharges are made in respect of balances due to or from otherwise dormant subsidiaries. Recharges aremade for Group services based
on utilisation of those services.
During the year these recharges amounted to:
2021
£m
2020
£m
Interest charges on intra-group funding (52.8) (50.9)
Group services recharges 54.5 46.5
1.7 (4.4)
In addition to these services the Company acts as a buying agent for certain Group purchases, such as insurance. These are recharged at
cost based on utilisation by the subsidiary undertaking.
The amount outstanding from subsidiary undertakings to the Company at 31 December 2021 totalled £1,969.8m (2020: £1,840.5m).
Amounts owed to subsidiary undertakings by the Company at 31 December 2021 totalled £4,114.1m (2020: £3,867.9m).
The Company provides the Group’s defined benefit pension schemes. Current employer contributions are charged to the operating
businesses at cost. There is no contractual arrangement or stated policy relating to the net defined benefit cost. Experience and
remeasurement gains and losses are recognised in the Company.
The Company guarantees a bond issued from Persimmon Shared Equity Limited to Persimmon Scottish Limited Partnership (bothsubsidiary
undertakings). The fair value of the bond at 31 December 2021 is £30.1m (2020: £35.2m).
Certain subsidiary undertakings have entered into guarantees of external bank loans and overdrafts of the Company. The total valueofsuch
borrowings at 31 December 2021 was £nil (2020: £nil). The Company has entered into guarantees over bank loans andborrowings of the
subsidiary undertakings. The total value of such borrowings at 31 December 2021 was £nil (2020: £nil).
The Company has suffered £nil expense in respect of bad or doubtful debts of subsidiary undertakings in the year (2020: £nil).
31 Details of major Group undertakings
The Directors set out below information relating to the major subsidiary undertakings (those that principally affect the profits and assetsof
the Group) of Persimmon Plc at 31 December 2021. All of these companies are registered in England. All voting rights are heldby companies
within the Group. A full list of subsidiary undertakings and jointly controlled entities can be found in note 32.
Major subsidiary undertakings
Persimmon Homes Limited° Charles Church Developments Limited
∆
Persimmon Holdings Limited* Persimmon Shared Equity Limited** Persimmon Scottish Limited Partnership***
° The shares of this company are held by Persimmon Holdings Limited and Persimmon Plc.
∆
The shares of this company are held by Persimmon Holdings Limited.
* The shares of this company are held by Persimmon Finance Limited and Persimmon Plc.
** The shares of this company are held by Persimmon Plc.
*** This entity is controlled by Persimmon Scottish Pension Trustees Limited (see note 28).
Notes to the financial statements
For the year ended 31 December 2021
172
Persimmon Plc | Annual Report | December 2021
32 Details of all subsidiary undertakings
Persimmon Group subsidiary companies
The following companies, included in these consolidated accounts, are wholly owned by the Persimmon Group and are incorporated
in the UK unless otherwise stated. Persimmon Plc or its subsidiary companies also hold all of the voting rights unless otherwise stated.
The Registered Office for each company is Persimmon House, Fulford, York, YO19 4FE unless otherwise stated.
Name of undertaking
Description
ofshares held
@Home Limited Ordinary* and 3.5%
Preference*
A.E.A Prowting Limited Ordinary*
A Monk & Company
Developments(S.W.) Limited
Ordinary*
andDeferred*
Alford Brothers Limited Ordinary*
Anjok 157 Limited Ordinary*
Anjok 171 Limited
1
Ordinary*
Anjok 172 Limited Ordinary*
Anjok 173 Limited Ordinary*
Anjok 269 Limited
1
Ordinary*
andDeferred*
Anjok 28 Limited Ordinary* and
8%Preference*
Anjok 31 Limited Ordinary*
Anjok Five (1996) Limited Ordinary*
Anjok Holdings Limited Ordinary*
andDeferred*
Anjok Investments Limited Ordinary*
Anjok Twenty Limited
1
A Ordinary* andB
Ordinary*
Anjok Two Limited Ordinary*
Aria Homes Limited A Ordinary* andB
Ordinary*
Arthur S Nixon and Company 1% Non-Cumulative
Preference*
andOrdinary*
Aspect Homes Limited Ordinary*
Atlantis One Limited Ordinary*
andPreference*
Beazer Group Limited Ordinary*
Beazer Homes (Anglia) Limited Deferred*
andAOrdinary*
Beazer Homes (Barry) Limited Ordinary*
Beazer Homes (FLE) Limited A Ordinary* andB
Ordinary*
Beazer Homes (FNLHS) Limited Ordinary*
Beazer Homes
(South Wales) Limited
Ordinary*
Beazer Homes (Wessex) Limited Ordinary*
Beazer Homes and PropertyLimited Ordinary*
Beazer Homes
Bedford Limited
Deferred*
andAOrdinary*
Beazer Homes
Birmingham CentralLimited
Deferred*
andAOrdinary*
Beazer Homes
Bridgwater Limited
Deferred*
andAOrdinary*
Beazer Homes
Bristol Limited
Deferred*
andAOrdinary*
Beazer Homes
Cardiff Limited
Deferred*
andAOrdinary*
Beazer Homes
Doncaster Limited
Deferred*
andAOrdinary*
Beazer Homes
Edinburgh Limited
1
Deferred*
andAOrdinary*
Beazer Homes
Glasgow Limited
1
Deferred* and
AOrdinary*
Name of undertaking
Description
ofshares held
Beazer Homes Limited Ordinary*,
Deferred*
andAOrdinary*
Beazer Homes
Nottingham Limited
Ordinary*
Beazer Homes
Reigate Limited
Ordinary*
Beazer Homes
Stockport Limited
Deferred*
andAOrdinary*
Beazer Homes
Yateley Limited
Deferred*
andAOrdinary*
Beazer London Limited Ordinary*
Beazer Partnership Homes (Scotland)
Limited
1
Ordinary*
Beazer Partnership Homes Midlands
Limited
Ordinary*
Beazer Swaffham Limited Ordinary*
Beazer Urban Developments
(Anglia)Limited
Deferred*
andAOrdinary*
Beazer Urban Developments
(Bedford) Limited
Ordinary*
Beazer Urban Developments
(EastMidlands) Limited
Ordinary*
Beazer Urban Developments
(SouthWest) Limited
Ordinary*
Beazer Western Engineering
ServicesLimited
Ordinary*
Belsco 1020 Limited
1
Ordinary*
Breakblock Limited Ordinary*
Broomco (3385) Limited Ordinary*
Bruce Fletcher
(Leicester) Limited
Ordinary*
Charles Church Civil
EngineeringLimited
Ordinary*
Charles Church
DevelopmentsLimited
Ordinary*
Charles Church Essex Limited Ordinary*
Charles Church Estates Limited Ordinary*
Charles Church Holdings plc A Convertible
Ordinary*,
BOrdinary*,
BRedeemable
Preference*,
C Preference*,
DOrdinary*,
DPreference*,
Deferred*,
EDeferred*,
EOrdinary*
andPreference*.
Charles Church Housing Limited Ordinary*
Charles Church Investment Properties
Limited
Ordinary*
Charles Church Kent Limited Ordinary*
Charles Church Limited Ordinary*
Charles Church London Limited Ordinary*
Charles Church
Management Limited
Ordinary*
Charles Church Partnership
HomesLimited
Ordinary*
Name of undertaking
Description
ofshares held
Charles Church Residential
Developments Limited
Ordinary*
Charles Church
South East Limited
Ordinary*
Charles Church
Southern Limited
Ordinary*
Charles Church
Thames Valley Limited
Ordinary*
Charles Church Trading Limited Ordinary*
Charles Church Village
Heritage plc
Ordinary*
Coatglade Limited Ordinary*
Comben Group Limited A Deferred
Ordinary, B
Deferred Ordinary
andOrdinary
Cresswellshawe
Properties Limited
Ordinary* and 3.5%
Preference*
Crowther Homes
(Darlington) Limited
Ordinary*
Crowther Homes
(Midland) Limited
Ordinary*
Crowther Homes
(Nat W) Limited
Ordinary*
Crowther Homes
(Yarm) Limited
Ordinary*
Crowther Homes Limited Ordinary*
D Dunk (Builders) Limited Ordinary*
D R Dunthorn & Son Limited Deferred*,
Deferred*
andOrdinary*
Datblygwyr Dorothea Limited
(94% of nominal value owned)
Ordinary*
Delany Brothers
(Housebuilders) Limited
Ordinary* and
Preference*
Domus Group Limited Deferred*,
Deferred* and
AOrdinary*
E.E. Reed & Co. (Builders) Limited Ordinary*
E F G H Limited Ordinary*
E F G H Nominees Limited Ordinary*
Emerson Park Limited Ordinary*
F C Spear Limited Ordinary*
Ferry Quay
Developments Limited
A Ordinary*,
BOrdinary* andC
Ordinary*
FibreNest Limited Ordinary*
FibreScale Limited Ordinary*
Frays Property Management
(No.1)Limited
Ordinary*
Frays Property Management
(No.2)Limited
Ordinary*
Frays Property Management
(No.6)Limited
Ordinary*
Friary Homes Limited Ordinary*
Galliford Developments Limited Ordinary*
Galliford Homes
(London) Limited
A Ordinary* andB
Ordinary*
173
Persimmon Plc | Annual Report | December 2021
Strategic report Governance Financial statements Other information
Name of undertaking
Description
ofshares held
Galliford Homes
Holdings Limited
A Ordinary*,
BOrdinary*
andPreference*
Galliford Homes Limited Ordinary*
Galliford Properties SouthernLimited Ordinary*
Galliford Southern Limited Ordinary*
Geo. Wright & Co.
(Contractors Wolverhampton)
Limited
Deferred*,
ADeferred*
andAOrdinary*
Glamford Building CompanyLimited Ordinary*
Gomersal Mills Limited Deferred*
andOrdinary*
Gosforth Business Park Management
Company (No.2)Limited
Ordinary*
Haven Retirement Homes Limited Ordinary*
Hazels Development
Company Limited
A Ordinary* andB
Ordinary*
Hillreed Developments Limited Ordinary*
Hillreed Holdings Limited Ordinary*,
Management
Shares* and
Cumulative
Preference*
Hillreed Homes Limited Ordinary*
Hillreed Properties Limited Ordinary*
Ideal Developments Limited Ordinary*
Ideal Homes (UK) Limited Ordinary*
Ideal Homes Anglia Limited Ordinary*
Ideal Homes Central Limited A Non Voting
Ordinary* and
BOrdinary*
Ideal Homes Holdings Limited Deferred
andOrdinary
Ideal Homes Limited Ordinary*
Ideal Homes Midlands Limited Ordinary*
Ideal Homes North West Limited Ordinary*
Ideal Homes Northern Limited Ordinary*
Ideal Homes Scotland Limited Ordinary*
Ideal Homes Services Limited Ordinary*
Ideal Homes Southern Limited Ordinary*
J.W. Liptrot & Company Limited Ordinary*
Jaboulet Limited Ordinary*
John Maunders Group Limited Ordinary*
Kenton Contracting
(Yorkshire) Limited
Ordinary*
Kenton Contractors
(Yorkshire) Limited
Ordinary*
Kenton Homes (Builders) Limited Ordinary*
Kenton Homes
(Developments) Limited
Ordinary*
Kenton Homes (Estates) Limited Ordinary*
Knightsmoor Homes Limited Ordinary*
Lady’s Lane Property Co. Limited Ordinary*
Lansdown Homes Limited Ordinary*
Lazy Acre Investments Limited Ordinary*
Leech Homes (Showhouses) Limited Ordinary*, 0.1%
Non-Cumulative
Preference A* and
1% Non-Cumulative
PreferenceB*
Leech Homes (Wales) Limited Ordinary*
Leech Homes (Yorkshire) Limited Ordinary*
Leech Homes Limited Deferred*
andAOrdinary*
Name of undertaking
Description
ofshares held
Leech Northumbria Limited Ordinary*
Leech Partnership Homes Limited Ordinary*
Leisurama Homes Limited Ordinary*
Linkway Properties Limited Ordinary*
Locking Castle Limited A Ordinary*,
BOrdinary*
andCOrdinary*
Magnus Design Build Limited Ordinary*
Magnus Holdings Limited A Ordinary*,
BOrdinary*,
COrdinary*,
Enduring Ordinary*
and Cumulative
Redeemable
Preference*
Mapleleigh Limited Ordinary*
Marriott Homes Limited Ordinary*
Maunders Homes
(East Anglia) Limited
Ordinary*
Maunders Homes (Midlands) Limited Ordinary*
Maunders Homes (North West) LimitedOrdinary*
Maunders Homes (South) Limited Ordinary*
Maunders Inner City Limited Ordinary*
Maunders Urban Renewal Limited Ordinary*
Mayclose Research Limited Ordinary*
Melville Homes Limited A Ordinary*,
BOrdinary*,
COrdinary*,
Deferred* and
Cumulative
Redeemable
Preference*
Merewood (Kendal) Limited Ordinary*
Merewood Group Limited Ordinary*
Merewood Homes Limited Ordinary*
Merewood Investments Limited Ordinary*
Mightover Limited Ordinary
Milton Keynes Housing Group Limited Ordinary*
Mitrebuild Limited Ordinary*
andDeferred
Ordinary*
Monk Homes Limited Ordinary*
Monsell Youell Construction Limited Ordinary*
Monsell Youell Limited Deferred*
andAOrdinary*
Montague Developments Limited Ordinary*
Mount Row Finance Limited Ordinary*
Mount Row Securities Limited Ordinary*
NGP Management Company
Residential (Cell C) Limited
2
Ordinary*
Pacemaker Developments Limited Ordinary*
Park House Developments
(Petersfield) Limited
Ordinary*
Partnership Homes Limited Ordinary*
Pennant Developments Limited Ordinary* and 5%
Non-Cumulative
Preference*
Pentra Limited Ordinary*
Perlease Limited Ordinary*
Persimmon
(City Developments) Limited
Ordinary*
Persimmon (Eccleshall) Limited Ordinary*
Persimmon (Share Scheme Trustees)
Limited
Ordinary
Persimmon (SHL) Limited Ordinary*
Name of undertaking
Description
ofshares held
Persimmon (Strensall) Limited Ordinary*
Persimmon Brickworks Limited Ordinary*
Persimmon Developments
(No1)Limited
Ordinary*
Persimmon Developments
(No2)Limited
Ordinary*
Persimmon Developments
(Didcot)Limited
Ordinary*
Persimmon Developments
(No5)Limited
Ordinary*
Persimmon Developments
(No6)Limited
Ordinary*
Persimmon Developments
(No7)Limited
Ordinary*
Persimmon DN Limited (Incorporated
in Ireland)
3
Ordinary*
Persimmon Finance (Jersey)
Limited(Incorporated in Jersey)
4
Ordinary
Persimmon Finance (No 2) Limited Ordinary
Persimmon Finance Limited Ordinary
Persimmon Harts Limited Ordinary
Persimmon GR (No 4) Limited Ordinary*
Persimmon GR (No 10) Limited Ordinary*
Persimmon GR (No 11) Limited
Ordinary*
Persimmon Holdings Limited Ordinary and
AOrdinary*
Persimmon Homes (Anglia) Limited Ordinary*
Persimmon Homes
(Doncaster) Limited
Ordinary*
Persimmon Homes
(East Midlands) Limited
Ordinary*
Persimmon Homes
(East Scotland) Limited
Ordinary*
Persimmon Homes
(East Yorkshire) Limited
Ordinary*
Persimmon Homes
(Edmonstone) Limited
Ordinary
Persimmon Homes
(Essex) Limited
Deferred*
andAOrdinary*
Persimmon Homes
(Lancashire) Limited
Ordinary*
Persimmon Homes
(Mercia) Limited
Ordinary*
Persimmon Homes
(Midlands) Limited
Ordinary*
Persimmon Homes
(North East) Limited
Ordinary*
Persimmon Homes
(North Midlands) Limited
Ordinary*
Persimmon Homes
(North West) Limited
Ordinary*
Persimmon Homes
(Partnerships) Limited
Ordinary
Persimmon Homes
(South Coast) Limited
Ordinary*
Persimmon Homes
(South East) Limited
Ordinary*
Persimmon Homes
(South Midlands) Limited
Deferred*
andAOrdinary*
Persimmon Homes
(South West) Limited
Ordinary*
Persimmon Homes
(South Yorkshire) Limited
Ordinary*
Persimmon Homes
(Teesside) Limited
Ordinary*
32 Details of all subsidiary undertakings continued
Notes to the financial statements
For the year ended 31 December 2021
174
Persimmon Plc | Annual Report | December 2021
32 Details of all subsidiary undertakings continued
Name of undertaking
Description
ofshares held
Persimmon Homes
(Thames Valley) Limited
Ordinary*
Persimmon Homes
(Wales) Limited
Ordinary*
Persimmon Homes
(Wessex) Limited
Ordinary*
Persimmon Homes
(West Midlands) Limited
Deferred*
andAOrdinary*
Persimmon Homes
(West Scotland) Limited
Ordinary*
Persimmon Homes
(West Yorkshire) Limited
Ordinary*
Persimmon Homes (Woodley) Limited Ordinary
Persimmon Homes (York) Limited Ordinary
Persimmon Homes
(Yorkshire) Limited
Deferred*
andOrdinary*
Persimmon Homes
Developments Limited
Ordinary
Persimmon Homes Limited Ordinary*
Persimmon Partnerships
(Scotland) Limited
Ordinary*
Persimmon Pension Trustees Limited Ordinary
Persimmon Residential Limited Ordinary*
Persimmon Scottish Limited
Partnership**
1
n/a
Persimmon Scottish Pension
TrusteesLimited
1
Ordinary
Persimmon Shared Equity Limited Ordinary
Persimmon Tileworks Limited Ordinary*
Persimmon Trustees Limited Ordinary
Pinnacle Developments
(Scotland) Limited
1
Ordinary*
Practical Finance Co. Limited Ordinary*
Prowting Homes
Anglia Limited
B Ordinary*,
COrdinary*
andDOrdinary*
Prowting Homes Central Limited Ordinary*
Prowting Homes
Chatsworth Limited
Ordinary*
Prowting Homes Limited Ordinary*
Prowting Homes Ludlow Limited Ordinary*
Prowting Homes Midlands Limited Ordinary*
Prowting Homes
South East Limited
Ordinary*
Prowting Homes
South West Limited
Ordinary*
Prowting Homes West Limited Ordinary*
Prowting Homes Wolds Limited Ordinary*
Prowting Limited Ordinary*
Prowting Projects Limited Ordinary*
Prowting Properties Limited Ordinary*
Repac Homes Limited Ordinary*
SLB Construction
Management Limited
Ordinary*
Second City Homes Limited Deferred*
andAOrdinary*
Senator Homes Limited Ordinary*
Sequoia Developments Limited Ordinary*
Severnbrook Homes Limited Ordinary*
Sherbourne Properties
(Warwick) Limited
Ordinary*
Space4 Limited Ordinary*
Springfir Estates Limited Ordinary*
Springfir Holdings Limited Ordinary*
Name of undertaking
Description
ofshares held
Steelhaven (7) Limited Ordinary* and 1%
Non-Cumulative
Redeemable
Participating
Preference*
Tamborough Developments Limited Ordinary*
Tela Properties Limited Ordinary*
The Charles Church Group Limited A Ordinary*
The Charles Church Group Share
Trustees Limited
Ordinary*
Townedge (Holdings) Limited Ordinary*
Townedge Estates Limited Ordinary*
Trent Park Regeneration Limited A Ordinary* andB
Ordinary*
Tryall Developments Limited Ordinary*
Tudor Jenkins & Company Limited Ordinary*
Walker Homes (Scotland) Limited
1
Ordinary*
Wardour Limited
(Incorporated inGibraltar)
5
Ordinary*
Wenshaw Limited Ordinary*
Wescott Holdings Limited Ordinary*
Wescott Homes Limited Ordinary*
Wescott Land Limited Ordinary*
Westbury Direct Limited Ordinary*
Westbury Homes
(Holdings) Limited
Irredeemable
Preference*,
Ordinary*,
Deferred*
and9.25%
Preference*
Westbury Homes
(Midlands) Limited
Ordinary*
Westbury Homes
(Oval) Limited
Ordinary*
Westbury Homes
(Severnside) Limited
Ordinary*
Westbury Homes
(Somerset) Limited
Ordinary*
Westbury Homes
(South West) Limited
Ordinary*
Westbury Homes
(Stadium) Limited
Ordinary*
Westbury Homes
(Venymore) Limited
A Ordinary*
and B Ordinary*
Westbury Homes
(Wales) Limited
Ordinary*
Westbury Homes
(West Midlands) Limited
Ordinary*
Westbury Homes Limited Ordinary*
Westbury Housing
Investments Limited
Ordinary*
Westbury Limited Ordinary
William Leech Builders
(North West) Limited
Ordinary*
William Leech Limited Ordinary* and
6.5% Cumulative
Preference*
* Share class held by another Group company, butultimately
held by Persimmon Plc.
** A Scottish Limited Partnership.
1. 180 Findochty Street, Garthamlock, Glasgow, G33 5EP
2. 3rd Floor Citygate, St. James’ Boulevard, Newcastle upon
Tyne, Tyne & Wear, NE1 4JE
3. 10 Earlsfort Terrace, Dublin 2, D02 T380, Ireland
4. 44 Esplanade, St Helier, JE4 9WG, Jersey
5. 3 Bell Lane, Gibraltar
6. The Office, 12 Westfield Close, Gravesend, Kent, DA12 5EH
7. 6 Europa Court, Sheffield Business Park, Sheffield, S91XE
8. 6 Drakes Meadow, Penny Lane, Swindon, Wiltshire,
SN3 3LL
9. 250 Aztec West, Almondsbury, Bristol, BS32 4TR
10. 137 Scalby Road, Scarborough, North Yorkshire, YO12 6TB
11. Av. Duque de Loulé 47-2, 1050-086, Lisbon, Portugal
12. Gate House, Turnpike Road, High Wycombe,
Buckinghamshire, HP12 3NR
175
Persimmon Plc | Annual Report | December 2021
Strategic report Governance Financial statements Other information
32 Details of all subsidiary undertakings continued
Joint Arrangements
Name of undertaking
Description
of shares
held
Proportion
of nominal
value of share
class held
Proportion
of all share
classes
Beechpath Limited Ordinary 50% 50%
Bentwaters Housing Limited Ordinary 50% 50%
Bentwaters Nominees Limited Ordinary 50% 50%
Brentford Lock Limited A Ordinary 100% 50%
Coton Park Consortium Limited
6
WD 50% 25%
Cramlington Developments Limited A Ordinary 100% 50%
Genesis Estates
(Manchester) Limited
7
Ordinary 50% 50%
Gosforth Business Park
ManagementCompany Limited
A Ordinary 100% 33.3%
Haydon Development
Company Limited
8
Ordinary 20.5% 20.5%
Leebell Developments Limited A Ordinary 100% 50%
Newcastle Great Park
(Estates) Limited
2
A Ordinary 100% 50%
North Haven Developments
(Sunderland) Limited
B Ordinary 100% 50%
North Swindon Development
Company Limited
8
Ordinary 15% 15%
Oxfordshire Land Limited Ordinary 33.3% 33.3%
Quedgeley Urban Village Limited
9
C Ordinary 100% 25%
Rothley Temple Estates Limited
10
Ordinary 28.5% 28.5%
Sociedade Torre de Marinha
Realizacoes Turisticas SA
(Incorporated in Portugal)
11
Ordinary 50% 50%
Trafalgar Metropolitan
Homes Limited
A Ordinary 100% 50%
Triumphdeal Limited
12
Ordinary 50% 50%
Wick 3 Nominees Limited B Ordinary 100% 33.3%
Notes to the financial statements
For the year ended 31 December 2021
176
Persimmon Plc | Annual Report | December 2021
32 Details of all subsidiary undertakings continued
Residents Management Companies
The companies listed below are Residents Management Companies (RMCs) currently controlled by the Group. Control isexercised by the
Group’s power to appoint Directors andthe Group’s voting rights in these companies. All RMCs arecompanies limited by guarantee without
share capital (unlessotherwise stated) and incorporated in the UK.
The capital, reserves and profit or loss for the year has not beenstated for these RMCs as beneficial interest in any assetsorliabilities of these
companies is held by the residents. These companies have not been included in the consolidated accounts, are temporary members of the
Group and will be handedover to residents in due course.
The Registered Office of each RMC is Persimmon House, Fulford,York, YO19 4FE (unless otherwise stated).
Company Name
Abbey Green (Amesbury) Management Company Limited
Abbeyvale Taunton Management Company Limited
Ackton Pastures (Castleford) Management Company Limited
Agusta Park Flats Yeovil Management Company Limited
Agusta Park Yeovil Management Company Limited
Aldenham Road (Bushey) Management Company Limited
Alderman Park (Hasland) Management Company Limited
Allt Y Celyn (Rhos) Management Company Limited
Amberwood (Carlisle) Management Company Limited
Amblehurst Green (Billingshurst) Management Company Limited
1
Amherst Hill (Brompton) Management Company Limited
Appledore Grove Management Company Limited
Arisdale (Phase 2) Residents Management Company Limited
Arnold Way (Grove) Management Company Limited
Arnold Way No. 2 (Grove) Management Company Limited
Ashworth Place (Phase 2) Management Limited
Augusta Park (Dinnington) Management Company Limited
Avalon (Mansfield) Management Company Limited
2
Aveley Village (Aveley) Residents Management Company Limited
Aveley Village (Thurrock) Management Company Limited
Avery Fields (Birmingham) Management Company Limited
Avon Fields (Durrington) Management Company Limited
Aykley Woods (Durham) Management Company Limited
Aylesham Village Phase 1b (Aylesham) Residents Management Company Limited
Aylesham Village Phase 2 (Aylesham) Residents Management Co Limited
Badbury Park (Swindon) Management Company Limited
Badbury Park (Swindon) No 2 Management Company Limited
Badbury Park (Swindon) No 3 Management Company Limited
Bannerbrook Management Company Limited
3
Bannerbrook Park Phase II (Coventry) Management Company Limited
Barber Court (Birmingham) Management Company Limited
Barrington Park Management Company Limited
4
Barry Waterfront Residents Management Company Limited
5
Beauchamp Grange (Caister) Residents Management Company Limited
Beckets Grove Management Company Limited
Beckets Grove Phase 2 (Wymondham) Residents Management Company Limited
Beckford Road (Alderton) Management Company Limited
Belgrave Court (Cheltenham) Management Company Limited
5
Bell Lane (Little Chalfont) Management Company Limited
Bells Hill Management Company Limited
6
Berrow Court Management Company Limited
5
Bishops Green (Coundon) Management Company Limited
Bishops Mead (Lydney) Management Company Limited
Bishops Meade (Downton) Management Company Limited
Blossom Meadows (Buttershaw) Management Company Limited
Bluebell Meadow (Bradwell) Management Company Limited
Bluebell Wood (Willenhall) Management Company Limited
7
Booths Farm Residents Management Company Limited
8
Boulton Moor (Derby) Properties Limited
Boyton Place (Haverhill) Residents Management Company Limited
Brackenleigh (Carlisle) Management Company Limited
Bradley Barton View Management Company Limited
Bramble Rise (Hetton) Management Company Limited
Bramblewood (Old Basing) Residents Management Company Limited
Branshaw Park (Keighley) Management Company Limited
Bridgefield (Ashford) Management Company Limited
Company Name
Bridgefield Nine Management Company Limited
Brislington House Management Company Limited
5
Broadway (Rainham) Residents Management Company Limited
Brockeridge Road (Twyning) Resident Management Company Limited
9
Brook View (Blackburn) Management Company Limited
Brookfield (Golborne) Management Company Limited
4
Buckton Place (Leiston) Residents Management Company Limited
Bugbrooke Road (Kislingbury) Management Company Limited
10
Burfield Park (Witham St Hughs) Residents Management Company Limited
Burfield Valley Estate Management Limited
11
Buttercup Leys (Boulton Moor) Residential Management Company Limited
Buzzard Meadows (Leighton Buzzard) Residents Management Company Limited
10
Calder Grange (Dewsbury) Management Company Limited
Canalside (Burton Upon Trent) Residential Management Company Limited
Canonbury Rise (Berkeley) Management Company Limited
Carleton Meadows Management Company Limited
Carpenters Field (Denmead) Management Company Limited
Castellum Grange (Colchester) Residents Management Company Limited
Castle Hill (Cottingham) Management Company Limited
Castle Park (West Durrington) Management Company Limited
12
Castlemead (953) Trowbridge Management Company Limited
Castlemead (Persimmon 950) Town Trowbridge Limited
Castlemead (Persimmon 964) Town Trowbridge Limited
Castleton Court (Haverfordwest) Management Company Limited
Cathedral Court (Salisbury) Management Company Limited
Cathedral Gate (Salisbury) No.1 Management Company Limited
5
Cathedral Gate (Salisbury) No.2 Management Company Limited
5
Cathedral View (Durham) Management Company Limited
Cayton Meadows (Scarborough) Management Company Limited
Central Square (Stroud) Management Company Limited
5
Century Rise (Emersons Green) Management Company Limited
Charlton Place (Keynsham) Management Company Limited
Chilmark Glade Management Company Limited
Chorley G 1 Management Company Limited
6
Chosen View (No. 2) Management Company Limited
5
Church Lane (Deal) Residents Management Company Limited
Clarence Place (Bracknell) Residents Management Company Limited
Cloatley Cresent Management Company Limited
Clock Tower (Wolverhampton) Management Company Limited
6
Clos Ty Gwyn (Hendy) Management Company Limited
Clover Chase (Lingwood) Residents Management Company Limited
Coastal Dunes (Lytham St Annes) Management Company Limited
Coed Darcy (Llandarcy) Management Company Limited
College Park (Thurston) Residents Management Company Limited
Colliers Walk (Nottingham) Management Company Limited
6
Colonial Wharf (Chatham) Residents Management Company Limited
Copperfield Place (Chelmsford) Residents Management Company Limited
Copperfield Truro Management Company Limited
Coquet Grange (Amble) Management Company Limited
Corelli Sherborne Management Company Limited
Cote Farm (Thackley) Management Company Limited
Coton Park (Rugby) Management Company Limited
Cotswold Vale (Long Marston) Management Company Limited
9
Coverdale Paignton Management Company Limited
13
Cranborne Heights Management Company Limited
5
177
Persimmon Plc | Annual Report | December 2021
Strategic report Governance Financial statements Other information
Company Name
Crofton Walk (Fair Oak) Management Company Limited
Cromwell Gardens (Huntingdon) Residents Management Company Limited
Cromwell Place (Little Dunmow) Residents Management Company Limited
Crosland Road (Lindley) Management Limited
8
Cross Quays (Westwood) Management Company Limited
Cross Quays Phase 2 (Thanet) Residents Management Company Limited
Cumnor Hill Management Company Limited
Cwrt Y Llwyfen (Johnstown) Management Company Limited
Daisy Hill (Morley) Management Company Limited
Dan Y Bryn Management Company Limited
Dartford Bow Arrow (Management Company) Limited
14
Deerwood Park (Colne) Management Company Limited
Dol Yr Ysgol (Bridgend) Management Company Limited
Douglas Gardens (Hesketh) Management Company Limited
6
Downs View (Swanley) Residents Management Company Limited
Dukes Meadow (Tangmere) Management Company Limited
D'urton Heights (Preston) Management Company Limited
Dyffryn Management Limited
15
Earlesmead (Framingham Earl) Residents Management Company Limited
East Benton Rise (Benton) Management Company Limited
Eclipse House (Andover) Management Company Limited
Edinburgh Park (Liverpool) Management Company Limited
6
Eldon Whins (Middridge) Management Company Limited
Elkas Rise (Ilkeston) Management Company Limited
Ellesmere Park (The Oaks) Management Company Limited
4
Ellis Mews (Micheldever) Management Company Limited
11
Elm Farm (Wymondham) Residents Management Company Limited
Emerald Gardens (Yapton) Management Company Limited
5
Emily Fields (Swansea) Management Company Limited
Eton Place (Bracknell) Management Company Limited
Eve Parc (Falmouth) Management Company Limited
Fair Mile Rise (Blandford St Mary) Management Company Limited
Fairfax Mews Crediton Management Company Limited
13
Fairmoor (Morpeth) Management Company Limited
Fairways (Retford) Management Company Limited
Fallow (Benton) Residents Management Company Limited
Farley Fields South Petherton Management Company Limited
Field Place (Faversham) Management Company Limited
14
Fleckney Road Management Company Limited
Flint Grange (Clacton) Residents Management Company Limited
Foley Gardens (Newent) Residential Management Company Limited
9
Folly Grove (Hockley) Residents Management Company Limited
Forest View (Calverton) Management Company Limited
Forge Wood (Crawley) Management Company Limited
16
Foundry Meadows (Bexhill) Residents Management Company Limited
Foxfields (Stoke-On-Trent) Management Company Limited
5
Foxley Park (Dereham) Residents Management Company Limited
Friarwood Park (Pontefract) Management Company Limited
Garden Valley (Aylesham) Residents Management Company Limited11
George Ward Gardens (Melksham) Management Company Limited
Germany Beck (Fulford) Management Company Limited
Gilden Park (Old Harlow) Resident Management Company Limited
6
Gipping Mill (Great Blakenham) Residents Management Company Limited
Glan Yr Afon (Swansea) Management Company Limited
Golwg Y Glyn (Fforest) Management Company Limited
5
Golwg Y Mynydd (Mountain Ash) RMC Limited
15
Gotherington Grange Resident Management Company Limited
Grangewood Park (Burnham On Crouch) Residents Management Company Limited
Grays Court (Orpington) Residents Management Company Limited
11
Great Western Park (Didcot) No 1 Management Company Limited
Great Western Park (Didcot) No 2 Management Company Limited
Company Name
Great Western Park (Didcot) No 3 Management Company Limited
Great Woodcote Park Exeter Management Company Limited
Greenacres (Easington) Management Company Limited
Greenfields (Narberth) Management Company Limited
Greetwell Fields (Lincoln) Residents Management Company Limited
Griffin Wharf (Ipswich) Residents Management Company Limited
Grove Street (Raunds) Residents Management Company Limited
Hailes Wood (Elsenham) Residents Management Company Limited
Hamilton Gate (Frinton) Residents Management Company Limited
Hamlet Crescent (Little Walden) Residents Management Company Limited
Hampton Gardens Phase 3 (Peterborough) Residents Management Company Limited
Hampton Park (Littlehampton) Residents Management Company Limited
Hansons Reach (Stewartby) Residents Management Company Limited
Hanwell Chase (Banbury) Residents Management Company Limited
Harbourside View (Portchester) Management Company Limited
Harbury Lane (Warwick) Management Company Limited
Hardings Wood (Kidsgrove) Residents Management Company Limited
4
Harford Mews Ivybridge Management Company Limited
13
Harlands Park (Uckfield) Residents Management Company Limited
Harlow Fields (Mackworth) Residential Management Company Limited
Harlow Hill Grange (Harrogate) Management Company Limited
Harpur Hill (Buxton) Residents Management Company Limited
4
Harrow View West (Harrow) Residents Management Company Limited
Hartcliffe Meadows (Penistone) Management Company Limited
Hartley Grange (Whittlesey) Residents Management Company Limited
Hartnells Farm Management Company Limited
Hastings Place (Bentley) Management Company Limited
Hatchwood Mill (Winnersh) Management Company Limited
Hathern Road (Shepshed) Management Company Limited
9
Hauxley Grange (Amble) Residents Management Company Limited
Hawthorn Chase (Aston Clinton) Residents Management Company Limited
Haybridge (Wells) Management Company Limited
5
Haywards Gardens (Kegworth) Man Co. Limited
17
Haywood Heights (Writhlington) Management Company Limited
Hazel Brook Management Company Limited
18
Heathfield Gardens (Phase 7) Management Company Limited
Heathpark Wood (Windlesham) Management Company Limited
Hellingly 415 Residents Management Company Limited
Hellingly 416 Management Company Limited
Hellingly 418 Management Company Limited
Hepburn Chase Management Company Limited
19
Heritage Gate (Llantwit Major) Residents Management Company Limited
Heritage Green (Newbottle) Management Company Limited
20
Heritage Park (Shinfield) Residents Management Company Limited
Heritage Park (Sutton Courtenay) Residents Management Company Limited
Herne Vale Ilminster Management Company Limited
Herons Park (Angmering) Management Co Limited
11
Herrington Grange (Philadelphia) Management Company Limited
Hethersett Residents Management Company Limited
6
Higham Lane Management Company Limited
Highfield Farm (West Melton) Residents Management Company Limited
Highfields Management (Littleport) Limited*
5
Hill Barton Vale Exeter Management Company Limited
Hill Barton Vale Flats Exeter Management Company Limited
Hillfield Meadows (Sunderland) Management Company Limited
Hillies View (Wombwell) Management Company Limited
Holdingham Grange (Sleaford) Residents Management Company Limited
Horsbere Mews (Longford) Management Company Limited
Horseshoe Meadows (Westbury) Management Company Limited
HRC (Ware) Residents Management Company Limited
Hurdle Court (Andover) Management Company Limited
Notes to the financial statements
For the year ended 31 December 2021
32 Details of all subsidiary undertakings continued
178
Persimmon Plc | Annual Report | December 2021
Company Name
Hydro (St Neots) Number One Management Company Limited
Imperial Park (Bristol) Management Company Limited
Ingleby (Barwick) Management Company Limited
Iwade Meadows (Iwade) Management Company Limited
Iwade Meadows (Yalding Apartments Plots 74-79) Management Company Limited
James Avenue (Calne) Management Company Limited
Jasmine Gardens Management Company Limited
Kennedy Place (Ulverston) Management Company Limited
Kings Grove Cranbrook Management Company Limited
Kingsbridge Court (Gorseinon) Management Company Limited
Kingsbridge Fields Management Company Limited
Kingsbury Gardens (St Albans) Residents Management Company Limited
Kingsbury Meadows (Wakefield) Management Company Limited
Kingsmead (Gloucester) Management Company Limited
Knights Court (Old Sarum) Management Company Limited
Knightswood Place (Rainham) Residents Management Company Limited
Kyngshouton (Houghton Regis) Residents Management Company Limited
Ladgate Woods (Middlesbrough) Management Company Limited
Lakeside Edge (Peterborough) Residents Management Company Limited
Lambourn Meadow (Thatcham) Management Company Limited
12
Lauder Mews Crediton Management Company Limited
Launds Field (Galgate) Management Company Limited
Laureate Heights Sidmouth Management Company Limited
Lime Tree Court Derby Management Company Limited
Limes Place (Upper Harbledown) Residents Management Company Limited
Lindale Park (Alverthorpe) Management Company Limited
Lindley Moor Meadows (Huddersfield) Management Company Limited
Lingfield Meadows (Houghton) Management Company Limited
Llanilid Management Company Limited
Llanilltern Village RMC Limited
15
Llys Ystrad (Bridgend) Management Company Limited
Lodmoor Sands (Weymouth) Management Company Limited
5
Longbridge Place (Longbridge) Management Company Limited
Longleaze Management Company Limited
Low Moor Meadows (Morley) Management Company Limited
Low Street (Sherburn In Elmet) Management Company Limited
20
Lowen Bre Truro Management Company Limited
Lucknam Crescent (Swindon) Management Company Limited
Lythalls Lane (Coventry) Management Company Limited
Lythalls Place (Coventry) Management Company Limited
Maes Dyfed Management Company Limited
Maes Y Parc (Cross Hands) Management Company Limited
Maiden Vale (Ryhope) Management Company Limited
Malvern Rise (Malvern) Management Company Limited
Malvern Vale (Malvern) Management Company Limited
9
Manor Farm (Doncaster) Management Company Limited
Manor Farm (Micklefield) Management Company Limited
Manor Park (Appleby Magna) Management Company Limited
9
Manor Park Residents Company Limited
18
Manor Park Sprowston Residents Management Company Limited
6
Manor Place (Maidenhead) Residents Management Company Limited
Maple (221) Limited
5
Maple Oak (Alton) Management Company Limited
5
Mariners Walk (Swansea) Apartment Management Company Limited*
Mariners Walk (Swansea) Management Company Limited*
Marshfoot Lane (Hailsham) Residents Management Company Limited
Martello Park (Pembroke) Management Company Limited
Martineau Gardens Harborne Management Company Limited
7
Mascalls Grange (Paddock Wood) Residents Management Company Limited
Meadow View (Oundle) Management Company Limited
Meadow View (Redditch) Resident Management Company Limited
Company Name
Mendip Chase Management Company Limited
5
Meon Way Gardens Management Company Limited
9
Merchants Walk Cullompton No 2 Management Company Limited
Mercians Place Management Company Limited
Meridian Place (Hertford) Residents Management Company Limited
Merlins Lane (Scarrowscant) Management Company Limited
Mersey View (Bromborough Pool) Management Company Limited
21
Mill Valley (Pevensey) Residents Management Company Limited
Mill View (Willingdon) Management Company Limited
Millbeck Grange (Bowburn) Management Company Limited
Millennium Farm (New Waltham) Management Company Limited
Monkswood (Sacriston) Management Company Limited
Montague Park Residents Management Company Limited
22
Montfort Place (Odiham) Management Company Limited
6
Moorfield (Easington) Management Company Limited
Moorfield Park Management Company Limited
6
Moorlands Walk (Sherburn) Management Company Limited
Mulberry Grange (Castleford) Management Company Limited
Mulberry Grove (St Fagans Cardiff) Management Company Limited
Nautica Management Company Limited
12
Nelson's Park (North Walsham) Residents Management Company Limited
Newcastle Great Park (Estates) Limited*
23
NGP Management Company (Cell E) Limited*
23
NGP Management Company (Cell F) Limited*
23
NGP Management Company (Commercial) Limited*
23
NGP Management Company (Town Centre) Limited*
23
NGP Management Company Residential (Cell G) Limited*
23
Norton Gardens Residents Management Company Limited
Norton Hall Meadow Management Limited
6
Oak Heights (Northiam) Residents Management Company Limited
11
Oak Tree Gardens (Audley) Management Company Limited
8
Oakhurst Village (Shirley) Management Company Limited
Oakland Gardens (Wilthorpe) Management Company Limited
Oakley Grange & Eden Villas (Cheltenham) Management Company Limited
Oakwood Meadows (Colchester) Residents Management Company Limited
Oakwood Meadows Phase 4 (Stanway) Residents Management Company Limited
Oakwood Park (Wymondham) Residents Management Company Limited
Oakwood View (Brackla) Management Company Limited
Oakwood View (Weston-Super-Mare) Management Company Limited
Oast Court Farm Management Company Limited
24
Old Road (Churwell) Management Company Limited
Open Space Management Limited
8
Orchard Croft (Diss) Residents Management Company Limited
Orchard Grove (Coxheath) Residents Management Company Limited
Orchard Leaze Management Company Limited
18
Orchard Manor (Cheddington) Residents Management Company Limited
Orchard Mews Pershore Management Company Limited
9
Otterham Park (Rainham) Residents Management Company Limited
Oxley Springs (Milton Keynes) Management Company Limited
Oxley Springs 8b (Milton Keynes) Management Company Limited
Oxley Springs 8b (Milton Keynes) Management Company Limited
Paddocks 21 (Andover) Management Company Limited
Palmerston Heights Plymouth Management Company Limited
Paragon Park (Coventry) Management Company Limited
Parc Brynderi (Llanelli) Management Company Limited
Parc Yr Onnen (The Limes) Management Company Limited
Park Farm (South East) Management Company Limited
25
Parklands (Maidstone) Management Company Limited
Parrett Gardens (Langport) Management Company Limited
Pavilion Gardens (Monkton Heathfield) Management Company Limited
Pedlars Meadow (Swaffham) Residents Management Company Limited
32 Details of all subsidiary undertakings continued
179
Persimmon Plc | Annual Report | December 2021
Strategic report Governance Financial statements Other information
Company Name
Pembridge Court (Clehonger) Residents Management Company Limited
Penny Pot Lane (Harrogate) Management Company Limited
Perry Park View (Perry Barr) Management Company Limited
9
Persimmon Gardens (Hindley) Management Company Limited
4
Persimmon Gardens (Martham) Residents Management Company Limited
Persimmon Grange Framlingham Residents Management Company Limited
Persimmon Homes The Oaks (Selly Oak) Management Company Limited
Phoenix Park (Dunstable) Residents Management Company Limited
Phoenix Wharf (West Bromwich) Management Company Limited
9
Picket 20 Management Company Limited
Picket Twenty Two (Andover) Management Company Limited
Port Marine Management Limited
26
Pottery Gardens (Cheadle) Residents Management Company Limited
4
Priory Green (Chilton Polden) Management Company Limited
13
Priory Meadows (Bodmin) Management Company Limited
Quantock View Management Company Limited
Quinta Mews Management Company Limited
27
Radstone Road (Brackley) Management Company Limited
Rainton Gardens (Chilton Moor) Management Company Limited
Rainton Meadows (Chilton Moor) Management Company Limited
20
Ramsdell (Ashford Hill) Management Company Limited
Readers Retreat (Hay-On-Wye) Residents Management Company Limited
5
Rectory Lane (Standish) Management Company Limited
Redhayes Management Company Limited
28
Redland Grange (Cottenham) Residents Management Company Limited
Regent Park (Calne) Management Company Limited
Regents Place (Chellaston) Management Company Limited
Repton Park 18 (Ashford) Residents Management Company Limited
Repton Park 19-23 (Ashford) Residents Management Company Limited
Repton Park 8 & 10 (Ashford) Residents Management Company Limited
Rivendell (Gedling) Management Company Limited
Riverbourne Fields Management Company Limited
Rooley Park (Bradford) Management Company Limited
Roseberry Park (Pelton) Management Company Limited
Salterns (Terrington) Residents Management Company Limited
Saltram Meadow Plymouth Management Company Limited
Samford Gardens (Capel St Mary) Residents Management Company Limited
Sandfield Walk (Nottingham) Management Company Limited
Sandgate Drive (Kippax) Management Company Limited
Sandpipers (Minster) Residents Management Company Limited
Saxon Fields (Bridgwater) Management Company Limited
Saxon Gate (Chelmsford) Management Company Limited
Saxon Grove (Purton) Management Company Limited
Saxon Meadow (Sutton On Trent) Residents Management Company Limited
Saxons Chase (Headcorn) Residents Management Company Limited
Scholar's Green (Northampton) Residents Management Company Limited
Seaside Lane (Easington) Management Company Limited
Sharpes Meadow (Heybridge) Residents Management Company Limited
Sherborne Fields (Basingstoke) Management Limited
Sherborne Fields Apartments Ph3 (Basingstoke) Management Limited
Sherborne Fields Apartments Ph6 (Basingstoke) Management Company Limited
Shilton Place (Coventry) Management Company Limited
29
Shirewood (Beighton Road) Management Company Limited
Silver Hill (Preston) Management Company Limited
Solway View (Workington) Management Company Limited
Sovereign Quarter (Gillingham) Management Company Limited
Speckled Wood (Carlisle) Management Company Limited
Spring Meadows (Darwen) Management Company Limited
6
St Andrews (Uxbridge) Management Company Limited
9
St Andrews Park (Phase 3c Uxbridge) Management Company Limited
St Andrews Park (Vine Lane 1a) Management Company Limited
9
Company Name
St Andrews Park (Vine Lane 2a) Management Company Limited
St Andrews Park 2b/3a (Churchill Road, Uxbridge) Management Company Limited
St Andrews Park 3b (Uxbridge) Management Company Limited
9
St Andrews Ridge (Swindon) Management Company Limited
St Dunstans Place (Burbage) Management Company Limited
St Edeyrns Apartments (Cardiff) Rmc Limited
St Edeyrns Village (Cardiff) Residents Management Company Limited
St Edmunds (Frome) Management Company Limited
St George (Lancaster) Management Company Limited
St Georges Keep Management Company Limited
St James Park (Bramley) Residents Management Company Limited
St Johns (Lichfield) Management Company Limited
St Michaels Way (South Ryhope) Residents Management Company Limited
St Oswalds Park (Gloucester) Management Company Limited
St Peters Place (Salisbury) Management Company Limited
St Wilfrid View (Ripon) Management Company Limited
Stanbridge Meadows (Petersfield) Management Company Limited
Stanford Meadows (Stanford-Le-Hope) Residents Management Company Limited
Staynor Hall K (Selby) Management Company Limited
Stephenson Park (Wallsend) Residents Management Company Limited
Stortford Fields (Bishops Stortford) (Persimmon) Resident Management Company Limited
Strawberry Fields Penryn Management Company Limited
Stream View Management Limited
27
Stroud Water Management Company Limited
Sycamore Gardens (Oakdale) RMC Limited
15
Sycamore Rise (Thame) Residents Management Company Limited
Tanners Meadow (Brockham) Management Company Limited
11
Tarraby View (Carlisle) Management Company Limited
Teasdale Place (Carlisle) Management Company Limited
The Acorns (Shirley) Management Company Limited
9
The Alders (Gilwern) Residents Management Company Limited
The Blossoms (Blackburn) Management Company Limited
6
The Boulevards (East Tilbury) Residents Management Company Limited
The Boulevards (Newport) Residents Management Company Limited
The Bridge (Dartford) 29 And 31a Residents Management Company Limited
The Bridles (Ffos Las) Management Company Limited
15
The Carriages (Burscough) Management Company Limited
The Copse (Bridgwater) Management Company Limited
18
The Cottons (Holmes Chapel) Management Company Limited
The Croft (Burgess Hill) Residents Management Company Limited
The Edge (Hempstead) Management Limited
The Gateway (Colchester) Residents Management Company Limited
The Goldings Newquay Management Company Limited
The Grange (Chalfont St Peter) Management Company Limited
The Grange (Chepstow) Limited
The Grange (Wellesbourne) Management Company Limited
The Hamptons (Newcastle) Resident Management Company Limited
4
The Haven (Swansea) Management Company Limited
The Heath (Sandbach) Management Company Limited
6
The Hedgerows (Alsager) Management Company Limited
4
The Hedgerows (Thurcroft) Management Company Limited
21
The Heights (Newark) Residents Management Company Limited
The Lancasters (Cambridge) Residents Management Company Limited
The Landings (Waddington) Residents Management Company Limited
The Links (Machynys East) Management Company Limited
5
The Longlands (Management Company) Limited
30
The Maltings (Shaftesbury) Management Company Limited
The Maples (NGP) Management Company Limited
The Middles (Stanley) Management Company Limited
The Mile (Pocklington) Management Company Limited
The Oaklands (NGP) Residents Management Company Limited
Notes to the financial statements
For the year ended 31 December 2021
32 Details of all subsidiary undertakings continued
180
Persimmon Plc | Annual Report | December 2021
Company Name
The Oval (Selly Oak) Management Company Limited
7
The Paddocks (Aintree) Management Company Limited
4
The Paddocks (Farcet) Residents Management Company Limited
The Paddocks (Highworth) Management Company Limited
4
The Pastures (Lowton) Management Company Limited
4
The Pinnacles Management Company (Thamesmead) Limited
The Poppies (Harleston) Management Company Limited
The Poppies Management Company Limited
The Priory (Llandough) Residents Management Company Limited
31
The Reeds Lower Halstow Management Limited
27
The Rosary (Emersons Green) Management Company Limited
The Rydons Exeter Number Two Management Company Limited
The Sands (Durham) Management Company Limited
The Shires (Oswaldtwistle) Management Company Limited
6
The Swallows Management Company Limited
18
The Village, Aveley Phase II Residents Management Company Limited
The Weald (Easingwold) Management Company Limited
The Whinmoor (Leeds) Management Company Limited
21
The Wickets (Penenden Heath) Residents Management Company Limited
The Willows Earlestown (Newton Le Willows) Management Company Limited
21
The Windmills (Kirton) Residents Management Company Limited
Thornley Woods (Gateshead) Management Company Limited
Tilbury Fields (Oxford) Management Company Limited
6
Tir Y Bont (Bridgend) Management Company Limited
Towcester Grange (Towcester) Residents Management Company Limited
17
Trelawny Place (Felixstowe) Residents Management Company Limited
Trevelyan Grange (Morpeth) Residents Management Company Limited
Trevethan Meadows Liskeard Management Company Limited
Tudor Park (Saffron Walden) Management Company Limited
Tundra Point (Emersons Green) Management Company Limited
Urban Central (Grays) Residents Management Company Limited
Valley Heights (Frome) Management Company Limited
19
Village Mews (Southowram) Management Company Limited
Walmsley Park (Leigh) Management Company Limited
4
Watercress Way Management Company Limited
27
Waterfield Place (Market Harborough) Residential Management Company Limited
Waters Edge (Buckshaw) Management Company Limited
Waterside At The Bridge Management Company Limited
Watling Place (Newington) Residents Management Company Limited
Weavers Meadow Estates Management Company Limited
Weavers Meadow Phase 2 (Hadleigh) Residents Management Company Limited
Weavers View (Pleasley Hill) Residents Management Company Limited
Weavers Wharf Apartments (Coventry) Management Company Limited
Wellington Gate (Grove) Management Company Limited
Wellington Gate (Maresfield) Management Company Limited
Wellswood Park (Reading) Residents Management Company Limited
Wentworth Green Management Company Limited
West Gate House (Machynys East) Management Company Limited
5
Westgate (Llanfoist) Management Company Limited
5
Westhaven Apartments (Barry) Residents Management Company Limited
Westhoughton (Lee Hall) Residents Management Company Limited
4
Weston Park Limited
Westvale Park (Horley) Management Company Limited
1
Westwood Park (Churwell) Management Company Limited
White Rose Park (Norwich) Residents Management Company Limited
Whiteford Mews Management Company Limited
Whitewood Park (Bristol) Management Company Limited
Whittington Walk (Worcester) Management Company Limited
9
Whitworth Dale Management Company Limited
Company Name
Willow Court (Abergavenny) RMC Limited
Willow Park (Aylsham) Management Company Limited
Windmill View (Stanground) Residents Management Company Limited
Windrush Place Witney Management Company Limited
Wombwell (Barnsley) Management Company Limited
Woodbridge House Management Company Limited
Woodhorn Meadows (Ashington) Residents Management Company Limited
Woodland Gardens (Pyle) Management Company Limited
Woodland Rise (Great Cornard) Residents Management Company Limited
Worcester Gate (Worcester) Management Company Limited
9
Yew Tree Farm (Droitwich) Management Company Limited
Yew Tree Gardens (Tuffley) Management Company Limited
Ysgol Maes Dyfan (Barry) Residents Management Company Limited
5
32 Details of all subsidiary undertakings continued
1. Homer House, 8 Homer Road, Solihull, B91 3QQ
2. Fountain House, Southwell Road West, Mansfield, Nottinghamshire, NG18 4LE
3. Persimmon House, Birmingham Road, Studley, Warwickshire, B80 7BG
4. Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
5. Fisher House, 84 Fisherton Street, Salisbury, SP2 7QY
6. RMG House, Essex Road, Hoddesdon, Hertfordshire, EN11 0DR
7. 2nd Floor, 154-155 Great Charles Street, Queensway, Birmingham, B3 3LP
8. North Point,Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
9. Whittington Hall, Whittington Road, Worcester, Worcestershire, WR5 2ZX
10. Persimmon Homes, 3 Waterside Way, Northampton, NN4 7XD
11. 94 Park Lane, Croydon, Surrey, CR0 1JB
12. 250 Aztec West, Almondsbury, Bristol, BS32 4TR
13. Pembroke House, Torquay Road, Paignton, Devon, TQ3 2EZ
14. 1 Georges Square, Bath Street, Bristol, BS1 6BA
15. 46 Whitchurch Road, Cardiff, CF14 3LX
16. Unit 8, The Forum Minerva Business Park, Peterborough, PE2 6FT
17. 2 Hills Road, Cambridge, CB2 1JP
18. Units 1,2, & 3 Beech Court Wokingham Road, Hurst, Reading, RG10 0RU
19. Queensway House, 11 Queensway, New Milton, Hampshire, BH25 5NR
20. 4335 Park Approach, Thorpe Park, Leeds, LS15 8GB
21. Gateway House, 10 Coopers Way, Southend On Sea, Essex, SS2 5TE
22. 20 King Street, London, EC2V 8EG
23. 3rd Floor Citygate, St. James’ Boulevard, Newcastle Upon Tyne, Tyne And Wear, NE1 4JE
24. Acorn Estate Management, 9 St Marks Road, Bromley, Kent, BR2 9HG
25. Foundation House, Coach & Horses Passage,Tunbridge Wells, TN2 5NP
26. Castlewood Business Park, Tickenham Road, Clevedon, BS21 6FW
27. Scholars House, 60 College Road, Maidstone, Kent, ME15 6SJ
28. Woodwater House, Pynes Hill, Exeter, Devon, EX2 5WR
29. 1st Floor Lancaster House, 67 Newhall Street, Birmingham, B3 1NQ
30. Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
31. Avon House, Stanwell Road, Penarth, CF64 2EZ
* Private Limited Company
181
Persimmon Plc | Annual Report | December 2021
Strategic report Governance Financial statements Other information
Shareholder information
Band analysis as at 31 December 2021
Size of shareholding
Number of
shareholders
%
of shareholders
Number of
shares
%
of shares
1 – 5,000 7,693 86.52 4,833,749 1.51
5,001 – 50,000 732 8.23 12,820,139 4.02
50,001 – 250,000 288 3.24 33,538,602 10.51
250,001 – 999,999,999 179 2.01 268,013,984 83.96
Total 8,892 100.00 319,206,474 100.00
Share price – year ended 31 December 2021
Price at 31 December 2021 £28.56
Lowest for year £25.14
Highest for year £32.38
The above share prices are the closing share prices as derived from the London Stock Exchange Daily Official List.
Financial Calendar 2022
Ex-Dividend Date of 125p interim dividend 10 March 2022
Record Date of 125p interim dividend 11 March 2022
Payment of interim dividend of 125p 1 April 2022
Annual General Meeting 27 April 2022
Trading Update 27 April 2022
Trading Update 7 July 2022
Announcement of Half Year Results 17 August 2022
Trading Update 8 November 2022
Five Year Record
2021 2020 2019 2018 2017
Unit sales 14,551 13,575 15,855 16,449 16,043
Housing revenue £3,449.7m £3,129.5m £3,420.1m £3,545.8m £3,422.3m
Average selling price £237,078 £230,534 £215,709 £215,563 £213,321
Profit from operations £966.7m £862.8m £1,036.7m £1,091.9m £966.1m
Profit before tax £973.0 m £863.1m £1,048.1m £1,100.0m £977.1m
Basic earnings per share 248.7p 220.7p 269.1p 286.3p 258.6p
Diluted earnings per share 247.6p 219.9p 268.6p 283.7p 246.5p
Cash return/dividend per share 235.0p 110.0p 235.0p 235.0p 235.0p
Net assets per share 1,135.7p 1,102.7p 1,021.7p 1,006.0p 1,036.6p
Total shareholders’ equity £3,625 .2m £3,518.4m £3,258.3m £3,194.5m £3,201.6m
Return on capital employed 35.8% 29.4% 37.0% 41.3% 40.3%
All figures stated before exceptional items, goodwill amortisation/impairment, legacy buildings provision and includes land creditors where applicable.
Other information
182
Persimmon Plc | Annual Report | December 2021
Some of the photographs in this report were taken before the
Covid-19 pandemic. Any images taken during the pandemic
were taken in compliance with our Covid-secure protocols.
Designed and produced by Radley Yeldar ry.com
This report is printed on Edixion offset and Amadeus Silk
whichareboth FSC® certified papers. This report was printed
by Pureprint Group, a CarbonNeutral® company and ISO 14001
certified printer using vegetable oil based inks and Carbon
Balanced withWorld Land Trust.
Balancing is delivered by World Land Trust, an international
conservation charity, who offset carbon emissions through the
purchase and preservation ofhigh conservation value land.
Through protecting standing forests, under threat of clearance,
carbon is locked in that would otherwise be released. These
protected forests are then able to continue absorbing carbon from
the atmosphere, referred to as REDD (Reduced Emissions from
Deforestation and forest Degradation). This is nowrecognised as
one of the most cost-effective and swiftest ways to arrest the rise
in atmospheric CO2e and global warming effects. Additional to the
carbon benefits is the flora and fauna thisland preserves, including
a number of species identified at riskof extinction on the IUCN Red
List of Threatened Species.
CBP00019082504183028
Directors
Roger Devlin
Chairman
Dean Finch
Group Chief Executive
Nigel Mills
Senior Independent Director
Simon Litherland
Non-Executive Director
Joanna Place
Non-Executive Director
Annemarie Durbin
Non-Executive Director
Andrew Wyllie CBE
Non-Executive Director
Shirine Khoury-Haq
Non-Executive Director
Jason Windsor*
Chief Financial Officer
* to be appointed in summer 2022
Life President
Duncan Davidson founded Persimmon in
1972.The Company floated on the London
Stock Exchange in 1985 and became the
firstpure housebuilder to enter the FTSE
100in December 2005. Mr Davidson
retiredas Chairman in April 2006 and
assumed the role of Life President.
Company information
Company Secretary
Tracy Davison
Registered office
Persimmon House
Fulford, York YO19 4FE
Telephone (01904) 642199
Company number
1818486
Incorporated in England
Auditor
Ernst & Young LLP
Bankers
The Royal Bank of Scotland plc
Lloyds Banking Group plc
Barclays Bank PLC
HSBC plc
Santander UK plc
Investec Bank Plc
Financial PR Consultants
Citigate Dewe Rogerson
8th Floor, Holborn Gate
26 Southampton Buildings
London
WC2A 1AN
Telephone (020) 7638 9571
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Telephone 0370 7030178
www.investorcentre.co.uk
Persimmon Plc
Persimmon House
Fulford
York YO19 4FE
Telephone 01904 642199
Email feedback@persimmonhomes.com
www.persimmonhomes.com/corporate