Persimmon Plc Annual Report 2022

Building for

tomorrow, today

Contents

For further information

www.persimmonhomes.com/corporate

Strategic report

Our mission and vision 1

Chairman’s statement 2

The strength of our business

– Three strong brands 4

– Key attributes 5

– Vertical integration

Space4, Brickworks, Tileworks, FibreNest 6

– Clear priorities with sustainability at the heart 7

Our marketplace 8

Our business model

– Overview 10

– What we do 11

How we performed

– Financial KPIs 12

– Non-ﬁnancial KPIs 13

Governance

Directors’ Report 86-125

– Chairman’s introduction

to corporate governance 86

– Board leadership 88

– Corporate governance statement 92

– Composition, succession and evaluation

– Nomination Committee Chair’s statement 106

– Nomination Committee report 108

– Audit, Risk and Internal control

– Audit & Risk Committee Chair’s statement 116

– Audit & Risk Committee report 118

– Other disclosures 123

Remuneration 126-153

– Remuneration Committee Chair’sstatement 126

– Remuneration at a glance 130

– Directors’ future Remuneration Policy 132

– Annual report on Remuneration 140

Financial statements

Statement of Directors’ Responsibilities 154

Independent Auditor’s Report 155

Consolidated Statement

of Comprehensive Income 161

Balance sheets 162

Statement of changes

inshareholders’equity 163

Cash ﬂow statements 164

Notes to the ﬁnancial statements 165

Other information

Shareholder Information 198

Financial Calendar 2023 198

Five Year Record 198

Group Chief Executive’s statement 14

Our ﬁve key priorities

– Build quality and safety 21

– Reinforcing trust: customers at the

heart of our business 25

– Disciplined growth:

high quality land investment 28

– Industry-leading ﬁnancial performance 31

– Supporting sustainable communities 33

Our people 36

Sustainability 42

Financial review 53

How we manage risk

– Protecting long-term value creation 56

– Principal risks and material issues 57

Task force on climate related ﬁnancial

disclosures (TCFD) 64

Viability statement 75

Section 172 statement 78

Non-ﬁnancial information statement 85

Strategic report Corporate governance Financial statements Other information

About Persimmon

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.

1. Estimated using an economic toolkit.

2. The value of homes delivered to housing associations, the value of discounted

openmarket value homes plus the value of planning contributions we have

madeover the last ﬁve years.

3. 12-month rolling average calculated on operating proﬁt before legacy

buildingsprovision charge (2022: £275.0m, 2021: £nil) and goodwill impairment

(2022: £6.6m,2021: £6.2m) and total capital employed. Capital employed

beingtheGroup’s net assets less cash and cash equivalents plus land creditors.

Highlights

Number of homes sold

14,868

2021: 14,551

Average selling price 2022

£248,616

2021: £237,078

Construction and supply

chain jobs supported

c.92,000

2021: c.92,000

Investment in local communities

c.£2.4bn

2021: c.£2.3bn

Owned land holdings (plots)

70,768

2021: 67,089

Return on capital employed (‘ROCE’)

30.4%

2021: 35.8%

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

1. Stated before legacy buildings provision charge

(2022: £275.0m, 2021: £nil) and goodwill impairment

(2022: £6.6m, 2021: £6.2m).

Chairman’s statement

A more challenging period

butopportunities ahead

We have a strong platform

to prepare for a new

growth phase when

marketconditions permit.

Roger Devlin

Chairman

I am pleased to report that

Persimmon had a strong year

in2022. For the ﬁrst time in

our50year history we delivered

ﬁve-star quality and service while

alsoachieving underlying pre-tax

proﬁts

in excess of £1 billion.

By contrast 2023 promises to be a tough year,

albeit largely for reasons beyond our control.

While I am conﬁdent that our attention to build

quality and customer care will remain undimmed,

we will inevitably see a sharp fall in the number

ofcompletions as well as a decline in proﬁtability

as a consequence of the nationwide diminution in

demand for housing arising from higher mortgage

rates and challenging economic circumstances.

However, I remain very conﬁdent of the exciting

long-term prospects for Persimmon. We are

constantly reminded by the political classes of the

national need for 300,000 homes to be built every

year. I expect the outturn for 2023 may not be much

more than half this number. Therefore we anticipate

that our company will be a beneﬁciary of strong pent

up demand when the economic and housing cycles

turn in our favour eventually.

When I joined the company as Chairman in 2018

Iquickly commissioned an Independent Review

ofour approach to build quality. I am delighted

thatDean and his team have responded to the

challenge so vigorously and diligently to deliver

better homes built right ﬁrst time.

Many colleagues have commented to me that

2022 was perhaps the most dicult year they have

known in the building trade. The combination of

material and labour shortages, signiﬁcant inﬂation

and the stark drop-o in sales rates in the fourth

quarter presented myriad challenges that my

colleagues have navigated with impressive skill

andcommitment. Our mission is to build homes

withquality our customers can rely on at a price

they can aord and 2022’s results demonstrate

thecompany has done just that.

Persimmon Plc | Annual Report | December 2022

Revenue

£3.82bn

2021: £3.61bn

Dividend per share

paid in the year

235p

2021: 235p

Underlying new housing

operating margin

27. 2%

2021: 28.0%

Forward sales

£1.52bn

2021: £2.21bn

Affordable homes

2,868

2021: 2,759

A more challenging period

butopportunities ahead

Following the swift rise in interest rates the

Groupacted quickly to enhance its already

stronginvestment discipline and working

capitalcostcontrols, to protect our cash

positionandin the longer-term provide the

ﬂexibilityto pursue new growth opportunities.

We have a strong platform to prepare for a

newgrowth phase when market conditions

permit.Although 2023 will be a dicult year,

Persimmon has the opportunity to expand

our outletnetwork at the right time through

disciplinedand targeted investment and a more

sophisticated approach tosecuring planning

toexpedite approvals. We arehopeful that

bynextyear we will be expanding once more,

delivering more new homes for customers

andsustainable returns for shareholders.

Industry leadership

Although the national political environment

hasbecome more challenging as backbench

anti-new housing forces have gained strength,

weare pleased to continue to lead the industry

withcladding and ﬁre safety remediation.

We were proud to be ﬁrst with our initial

commitment in February 2021 to protect

leaseholders from the costsof remediation

in any multi-storey developmentwe built.

The government’s developerremediation

contract seeks to contractualise our existing

commitment; a commitment we are already

making good progresson. We expect to sign

the contract imminently. We are also engaged

in similarly positive discussions with the Welsh

andScottish governments.

As announced in November 2022, the Group

increased our provision for building safety

remediation across the UK to £350m (before spend

to date), resulting in a £275m exceptional charge for

the year. This increase reﬂects the extensive work

we have done to get a more detailed understanding

of costs over the last year. The government has also

broadened the scope of works required this year

to include non-cladding ﬁre related build defects,

resulting in both an increase in the amount of work

required and in the number of eligible buildings.

This has also happened against a background

ofsigniﬁcant build cost inﬂation during the period.

We expect the work to be largely completed

– with the associated cash impact – over the

nextthree years.

Capital allocation policy

Persimmon remains a fundamentally strong

business, with industry-leading ﬁnancial

performance through the cycle. The actions

wearecurrently taking will strengthen our

capabilities to grow and deliver sustainable

returnsover time to shareholders.

A new capital allocation policy was announced

in November to deliver sustainable returns to

shareholders while investing in future growth

through disciplined expansion of our industry-

leading land portfolio and enhancing our quality

and service capabilities. Alongside this the Board

considers our current assessment of prevailing

market conditions, the sector’s increased tax

contribution and building safety remediation costs.

For 2022, the Board proposes a ﬁnal dividend

of 60p per share to be paid on 5 May 2023 to

shareholders on the register on 14 April 2023,

following shareholder approval at the AGM.

This dividend is the ﬁnal and only dividend in

respectof ﬁnancial year 2022. The Board’s intention

is to at least maintain the 2022 dividend per share

in 2023, with a view to growing this over time.

As previously announced, payments will be made

semi-annually with an interim dividend paid in the

second half of this year in relation to 2023.

Board changes

The only Board change during the year was

Jason Windsor joining on 11 July 2022 as Chief

Financial Ocer, replacing Mike Killoran following

his retirement in January 2022. The Board

warmlywelcomes Jason to the business.

Finally, on behalf of the whole Board I would like to

thank our colleagues, subcontractors and suppliers

for their hard work and determination to deliver

agood performance in 2022. This year will not be

easy. Sometimes in life you have to go backwards

in order to move forwards. I am convinced our

long-term future is bright and we all look forward

to working together to maintain Persimmon’s

industry-leading position and deliver more quality

homes for our customers and sustainable returns

forourshareholders through the cycle.

Roger Devlin

Chairman

28 February 2023

1. Based on new housing revenue (2022: £3,696.4m,

2021: £3,449.7m) and underlying operating proﬁt

(2022: £1,006.4m, 2021: £966.7m) (stated before legacy

buildings provision charge (2022: £275.0m, 2021: £nil)

and goodwill impairment (2022: £6.6m, 2021: £6.2m)).

2. As at 28 February 2023 (2021 ﬁgure as at 1 March 2022).

3. Homes provided to our housing association partners

and discounted open market value homes.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

The strength of our business

Three strong brands

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.

The Charles Church brand complements and

dierentiates 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 aordable 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, oering solutions to some

ofthe country’s aordable housing needs.

Average selling price

£262,461

2021: £249,498

Revenue

£2,961m

2021: £2,736m

Completions

11, 2 82

2021: 10,965

Average selling price

£395,460

2021: £360,575

Revenue

£353m

2021: £380m

Completions

892

2021: 1,053

Average selling price

£142,017

2021: £131,976

Revenue

£383m

2021: £334m

Completions

2,694

2021: 2,533

Group housing revenue %

Persimmon

Homes 80%

Charles

Church 10%

Westbury

Partnerships 10%

Homes sold %

Persimmon

Homes 76%

Charles

Church 6%

Westbury

Partnerships 18%

Landholdings %

Persimmon

Homes 70%

Charles

Church 10%

Westbury

Partnerships 20%

Persimmon Plc | Annual Report | December 2022

Key attributes

UK-wide network

We have a UK-wide network with 30 operating

businesses, three housebuilding brands and

off-site manufacturing facilities providing homes

and serving local communities.

We are a national housebuilder with a

localfocus. This ensures that our developments

are aligned with local needs, as we build

good-quality homes which are affordable

forlocal people.

Innovation and

technology

We are continuing to innovate through

the increased use of Modern Methods of

Construction (‘MMC’) providing security of our

supply chain and exploring solutions to meet

changing regulations within the building industry.

We are investing in a second Space4 factory

to complement our existing factory and our

Tileworks and Brickworks manufacturing

facilities. We are also exploring where we

canmanufacture additional components

andfurther improve the quality of our homes.

Our FibreNest business was developed in

response to feedback from customers and

alignswith the current Government strategy

todeliver modern technology to new homes.

Disciplined approach

Persimmon has a strong track record of

acquiring high quality land. We have significant

experience in identifying high potential sites

in attractive locations where people wish to

live and work. We acquire land from multiple

channels and have a strong track record of

designing sites that deliver for both Persimmon

and our customers. This achieves high quality

embedded margins across our portfolio.

Attheend of 2022, we had 87,190 plots owned

andunder our control across the UK, providing

good visibility over future developments.

We have a highly disciplined approach to

work in progress investment, taking into account

current levels of demand, the cash cost of fire

safety remediation works and land creditor

commitments. The Group operates from an

already lean fixed cost base and has an

established and disciplined cost control process.

With a strong balance sheet, we can be agile

toquality opportunities as they arise.

Strong operating

platform

We have a strong platform led by an

experienced operational management team

thathave deep industry skills and knowledge.

The national footprint of our business means

webenefit from scale with a good track

recordof building efficiently.

We have made significant progress on

quality over recent years, with The Persimmon

Way fullyembedded across the business

aswe lookto build right, first time, every time.

This,combined with the Group’s longstanding

commercial excellence, positions the business

well to meet the strong demand for new

homesover the long-term.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

The strength of our business

Vertical integration

Our vertical integration provides us with security

of supply over key material components while

allowing continued innovation.

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 MMC system

helps us to improve site productivity, increase build

capacity and mitigate construction industry skills

shortages. Space4 supports all of our brands and

supplied 4,448 timber frame kits and roof systems

to the Group in 2022. Our Space4 factory provides

us with the unique ability to implement (among

other initiatives) innovative ‘fabric ﬁrst’ solutions

toenhance the future eciency of our homes.

Tileworks

Tileworks, the Group’s own concrete roof tile

manufacturing facility, produces tiles solely for

theGroup. During the year, Tileworks supplied

c.12mtiles to 264 sites across the Group.

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. At the end of 2022,

therewere over 30,000 connected customers

across c.330 housing developments.

www.fibrenest.com

Brickworks

Brickworks produces concrete bricks and is entirely

focused on supplying the Group’s housebuilding

operations. During 2022, Brickworks supplied

c.53mbricks to 239 sites across the Group.

The factory has the capacity to produce c.80m

bricks per year, which is approximately two thirds

ofthe Group’s brick requirements.

Persimmon Plc | Annual Report | December 2022

Clear priorities with

sustainabilityatthe heart

Our sustainability pillars

Read more on pages 21 to 35.

Build quality

and safety

Reinforcing trust:

customers at

the heart of

our business

Disciplined growth: high

quality land investment

Industry-leading

financial

performance

Supporting

sustainable

communities

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Our marketplace

The UK housing market

The UK housing market started strongly with

some signs of weakness emerging during

the summer months. Demandparticularly

weakened in the fourth quarter as economic

uncertainty, high inflation and an increase in

interest rates impacted consumer confidence.

Housing supply

A substantial shortage of homes is still evident in

the UK with an estimated shortfall of c.1.3m 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.

How we are responding

We continue to play our part in addressing this

challenge, delivering 14,868 homes in 2022

(including 2,694 home to our housing association

partners). This brings the total number of homes

delivered to 146,121 over the last 10 years. We oer

high quality homes that are aordable, with our

average selling price signiﬁcantly below the

market average

Estimated homes

shortfall

c.1.3m

Government’s

ambition

300k

1. Based on the Group’s private average selling price of £272,206

for the year to 31 December 2022 compared with the national

average selling price for newly built homes sourced from the

UK House Price Index, as calculated by the Oce for National

Statistics from data provided by HM Land Registry.

Mortgage availability and affordability

Mortgage availability and aordability came under

pressure in 2022, with interest rates increasing

materially in the second half of the year. This,

combined with the closure of the Government

Help to Buy scheme in England, had a material

impact on aordability, particularly for ﬁrst-time

buyers. We estimate that the monthly cash

cost of mortgage payments for some ﬁrst-time

buyers approximately doubled during 2022

compounded by limited availability of high

loantovalue mortgages.

There was some stabilisation in the mortgage

market towards the end of the year along with a

reduction in interest rates, albeit availability of 95%

loan to value products remained limited. In Wales,

the Welsh Government announced in December

its intention to extend the scheme for a further

twoyears until April 2025.

How we are responding

The Group provides 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 selling price of £272,206, which

isover20%below the UK national average

With the closure of Help to Buy in England, we

arelooking at alternative solutions to help ﬁrst-

timebuyers. We have signed up to Deposit Unlock,

a scheme devised in collaboration with lenders

and the housebuilding industry, which enables

buyers to purchase a new build home with just

a5% deposit.

Considering the demand for home ownership

within the UK, Persimmon is well placed to

continue toprovide homes for its customers

overthe long-term, given itsrange of house

typesand price points.

Increase in Bank of England

baserateduring2022

+325bps

Mortgage approvals

c.754k in 2022

2. Illustration based on a property price of £250,000 with

anestimated monthly mortgage cost of £753 in March 2022

(Helpto Buy customer, with 5% deposit, 75% loan to value

mortgage at a rate of 1.53% and 25 year term) compared

withanestimated monthly mortgage cost of £1,488 in

December2022 (Deposit Unlock customer with 5% deposit,

95%loan to value mortgage ata rate of 5.71% and 25 year term).

Quoted monthly mortgage rates

Net additional dwellings

2 year (75% LTV) 2 year (95% LTV)

5 year (75% LTV) 5 year (95% LTV)

30 Jun

2019

31 Dec

2019

30 Jun

2020

31 Dec

2020

30 Jun

2021

31 Dec

2021

30 Jun

2022

31 Dec

2022

Source: UK Oce for National Statistics

2002 2007 2012

Government target

2017 2022

300,000

250,000

200,000

150,000

100,000

50,000

Source: Bank of England

Persimmon Plc | Annual Report | December 2022

Planning and regulation

During 2022, new Building Regulations came

into eect, with parts L, F, O and S applicable for

new developments from June 2022, covering all

developments from June 2023. Amendments to

Part L require a c.30% improvement in the eciency

of a new home, which will result in new homes

having improved insulation, ventilation and more

ecient boilers, some may also have solar panels.

The Future Homes Standard (‘FHS’), which is likely

to be implemented in 2025, requires a c.80%

improvement in the eciency of a new home.

In December 2022, the Government launched a

consultation into the Levelling Up and Regeneration

Bill which seeks views on the proposed approach

toupdating to the National Planning Policy

Framework. While the government has reconﬁrmed

its commitment to delivering 300,000 new

additional dwellings p.a., it has recommended

theremoval of ‘top down’ housing targets

and the lack of clarity is causing further delays

inachallenged planning system.

How we are responding

The Group is supportive of the objectives to

improve the quality of homes and is well placed

to continue delivering sustainable and attractive

developments through our Group master-planning

team. The time taken to achieve planning consents

continues to increase, and we are working with

local authority teams to help speed up the process.

We welcome initiatives aimed at increasing the

eciency of this system.

The Group strongly supports the initiatives to

reduce carbon usage within the industry and

is already heavily involved in the research and

implementation of greener building methods

through our Low Carbon Homes Steering Group.

Skilled labour andmaterials

During the year, the UK construction market

continued to see high build cost inﬂation as a

resultof material shortages, compounded by the

conﬂict in Ukraine and resulting impact on energy

prices. Overall, build cost inﬂation was 8-10% in

2022. With energy costs having peaked and a

weaker outlook for the housing market in 2023,

we would anticipate this to soften as we progress

through the next ﬁnancial year.

The shortage of skilled workers, as a result

ofanageing workforce and labour migration

post-Brexit,also continues to present

challengesfor the industry.

How we are responding

We have a strong supply chain across the

businessand we look to make use of Group

agreements where possible to keep costs down.

Our vertical integration helps to protect us from

supply chain shortages, and we are expanding

theproduct range. For example, we added ridge

tiles toour Tileworks products during 2022.

To address the labour shortage, we continue

to recruit and train large numbers of apprentices

and trainees alongside our graduate recruitment

programme. We engage with schools and colleges

and support subcontractors’ apprentice recruitment.

Read more on pages 21 to 52.

HBF score

90.6%

HBF survey – percentage

of customers who would

recommend Persimmon

toa friend

New homes delivered

14,868

2,694 delivered to

housing associations

‘Homes for all’

£272,206

our private average selling

priceis over 20% lower than

theUK national average

Jobs supported

c.92k

construction and

supplychain jobs

Employment

5,862

people directly employed

onaverage in 2022

Investing in communities

c.£2.4bn

over the last ﬁve years

Investing in communities

c.630

local charities supported

in the year

Public open spaces

674

acres created

Strong financial returns

30.4%

ROCE

Financial

strength

£3.4bn

balance sheet net assets

at 31 December 2022

Surplus capital returned

toshareholders

£750m

in the year to 31 December 2022

High

quality

86.6%

build quality score based

oncustomer satisfaction

1. Based on the Group’s private average selling price of £272,206 for the year to 31 December 2022 compared with the National average selling

price for newly built homes sourced from the UK House Price Index as calculated by the Oce for National Statistics from data provided by

HMLand Registry.

2. Estimated using an economic toolkit.

3. 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 £275m (2021: £nil) and goodwill impairment (2022: £6.6m, 2021: £6.2m).

Persimmon Plc | Annual Report | December 2022

What we do

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, land owners 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.

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 dierence

to improving build quality across

the Group.

Create sustainable

communities

The Group has introduced a new

Placemaking Framework aligned to

the Government’s planning policy

requirements to ensure that all

developments create a sense of place

for our customers and put communities

at the heart of our developments.

The Group has well-designed core

house types which provide a range of

aordably priced homes, meeting the

lifestyle needs of our customers, from

ﬁrst time buyers to larger family homes.

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.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

How we performed

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.

Profit measures

We have a strong track record of delivering

industry-leading returns. Our disciplined land

replacement processes, cost management

and eciency programmes aim to generate

superior returns which provides a platform for

further investment in the Group’s resources

tosupportour future growth.

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.

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.

New housing revenue (£m)

£3,696m (+7%)

Read more on page 48.

Link to priorities:

2022

2021

2020

2019

2018

90.6

92.0

89.7

83.7

78.9

2022

2021

2020

2019

2018

3.6

4.0

3.4

3.8

3.2

2022

2021

2020

2019

2018

87,190

88,043

84,174

93,246

99,088

2022

2021

2020

2019

2018

86.6

87.9

84.7

79.2

77.6

2022

2021

2020

2019

2018

96%

94%

96%

97%

96%

1. Based on new housing revenue (2022: £3,696.4m, 2021: £3,449.7m) and underlying

operating proﬁt (2022: £1,006.4m, 2021: £966.7m) (stated before legacy buildings provision

(2022: £275.0m, 2021: £nil) and goodwill impairment (2022: £6.6m, 2021: £6.2m)).

2. 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 (2021: £nil; 2020: £0.7m; 2019: £13.9m; 2018: £46.7m; 2017: £nil).

3. 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 (2022: £275.0m, 2021: £nil) and goodwill impairment (2022: £6.6m, 2021: £6.2m).

4. Stated before legacy buildings provision (2022: £275.0m, 2021: £nil) and goodwill

impairment(2022: £6.6m, 2021: £6.2m). Proﬁt before tax after legacy buildings provision

andgoodwill impairment is £966.8m (2021: £783.8m).

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Group Chief Executive’s statement

A strong year and actively

managing the challenges we face

Persimmon delivered a very

strong performance in 2022. I am

delighted that the Group’s second

half delivery was 15% higher year

on year, resulting in 14,868 legal

completions for 2022 (2021: 14,551),

with a new housing gross margin

of30.9%

(2021: 31.4%) and a ﬁve-star

HBF 8 week customer satisfaction

score

maintained.

This performance – perhaps Persimmon’s strongest

ever – was delivered despite prevailing economic

headwinds and supply constraints. Its achievement

is testament to the hard work of colleagues across

the whole Group to preserve Persimmon’s great

strengths while making good progress in enhancing

our build quality and customer service.

2022 trading

The Group generated total revenues of £3.82bn,

a6% increase year on year (2021: £3.61bn).

Our newhousing revenues increased to £3.70bn

in2022, from £3.45bn in the prior year.

Our build rates, which were a record for the Group,

were 8% higher year on year. The build rate in the

second half of the year was particularly strong, up

15% year on year. Delivering these build rates while

maintaining a ﬁve-star HBF score demonstrates the

progress we have made through The Persimmon

Way to strengthen our key build quality and

customer service capabilities and embed them

throughout the Group.

Demand reﬂected the broader market, with a

signiﬁcant weakening in the second half of the year

as concerns over the economy, mortgage rates

and the cost of living weighed heavily on customer

conﬁdence. Overall private net sales rates for 2022

were 0.69 per outlet per week (2021: 0.83), driven

by a steep decline in Q4 to 0.30 (Q4 2021: 0.77).

Indeed, after the well-publicised problems catalysed

by September’s ‘mini-budget’, the last 7 weeks of the

year saw 0.19 private net sales per outlet per week,

compared to 0.61 in the comparative period the

year before.

Our build rates, which were a record

for the Group, were 8% higher year on

year. The build rate in the second half

of the year was particularly strong,

up 15% year on year. Delivering these

build rates while maintaining a ﬁve-star

HBF score demonstrates the progress

we have made through The Persimmon

Way to strengthen our key build quality

andcustomer service capabilities and

embed them throughout the Group.

Dean Finch

Group Chief Executive

1. Stated before legacy buildings provision charge (2022: £275.0m,

2021: £nil) and based on new housing revenue (2022: £3,696.4m,

2021: £3,449.7m).

2. 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. The rating

used here reﬂects the live score at time of publication.

Persimmon Plc | Annual Report | December 2022

Average selling prices increased 5% year on

yearto £248,616 (2021: £237,078), reﬂecting house

price inﬂation, our more sophisticated approach

to local market pricing and the mix of homes

sold. The Group’s private average selling price

was £272,206 in 2022, 5% higher than the prior

year(2021: £259,231).

These price increases helped mitigate build

costinﬂation of c.8-10% for the year. Our vertically

integrated factories – Brickworks, Tileworks and

Space4 – also helped here, with all three increasing

their production year on year. Our increased use

of Space4 timber frame also helped deliver the

improved build rate and eciency in the year.

The Group delivered a 4% year on year increase

in underlying operating proﬁt

to £1,006.5m

(2021: £966.7m) generating an underlying

new housing operating margin of 27.2%

(2021: 28.0%). This 80bps reduction reﬂects the

Group’s investment in its enhanced operational

capabilities,delivering improved quality and

servicefor its customers.

Underlying proﬁt before tax

grew 4% year on year

to £1,012.3m (2021: £973.0m). Reﬂecting the £275.0m

exceptional charge for building safety remediation

made in the year, proﬁt before tax was £730.7m

(2021: £966.8m). The Group’s cash generation was

strong at £1,002.7m pre-capital return of £750.1m

and net land spend of £637.6m (2021: £1,209.8m).

Cash held at 31 December 2022 was £861.6m

(2021: £1,246.6m) reﬂecting strong investment

inlandand work in progress and capital returns.

Disciplined investment

The Group’s high quality land holdings are a

key strength for the business. At 31 December

2022, theGroup held 70,768 plots in its owned

land holdings with a plot cost to anticipated

revenue ratio of 11.4%

. During the year, we

invested in someexciting land opportunities

adding 14,670plotsacross 66 sites into the

Group’s portfolio,a plot replacement rate of 99%.

These additions maintained our industry-leading

embedded margins through our well-established,

disciplined approach to land investment.

Reﬂecting this strong position, in current market

conditions we are being highly selective, taking

advantage of only the very best opportunities

attheright time.

The Group entered 2022 with 234 selling outlets,

which it successfully built up through the year

as planned, ending at 272 selling outlets at

31 December 2022 and operating from an average

of 259 for the year. As market conditions became

increasingly uncertain, particularly during the last

quarter of the year, we carefully managed outlet

openings to ensure that infrastructure and work

inprogress investment met local demand.

Creating sustainable communities

We have a clear approach to sustainability that

is centred around three core pillars: transforming

communities, safe and inclusive and building

fortomorrow. Our approach is embedded in our

day-to-day operations and we are proud of the

workthat we do in creating sustainable communities

for our customers. Our new Placemaking Framework

considers social value and the wellbeing of our

communities within our site design, for example

providing public open spaces, walkways, play

areasand enhancing bio-diversity.

Our private average selling price is over 20% below

the UK national average

, enabling customers to

access the housing market when otherwise they

might not have been able to do so. The business

also delivered 2,694 homes to its Housing

Association partners during the year (2021: 2,533).

We aim to provide a scalable, cost eective way of

ensuring our customers can live more sustainable

lives through exploring innovative solutions to

deliver net zero carbon homes in use. We are

undertaking a number of trials to support this

transition by 2030. A “net zero carbon home”

wasbuilt at one of our developments in York to

evaluate how we could achieve this in a practical,

repeatable way. We are working in conjunction

withthe University of Salford to assess the

“liveability” of the home for our customers.

Building on from this trial, we are constructing a

highly thermally ecient timber frame home utilising

new wall cassettes from Space4, our timber frame

manufacturing facility, together with zero carbon

heating from air source heat pumps with connection

to a 100% renewable electricity supply. This is an

exciting opportunity to establish if, through use

ofinnovative technology at our Space4 factory,

wecan achieve a net zero carbon home in use

with relatively simple technologies inside the home

forour customers to maintain. We are also trialling

alternative heating solutions, such as infra-red and

underﬂoor systems on other developments.

3. Stated before legacy buildings provision charge of £275.0m (2021: £nil) and goodwill impairment (2022: £6.6m, 2021: £6.2m).

4. Stated before legacy buildings provision charge (2022: £275.0m, 2021: £nil) and goodwill impairment (2022: £6.6m, 2021: £6.2m)

andbasedonnew housing revenue (2022: £3,696.4m, 2021: £3,449.7m).

5. Stated before legacy buildings provision charge (2022: £275.0m, 2021: £nil) and goodwill impairment (2022: £6.6m, 2021: £6.2m).

6. Land cost value for the plot divided by the anticipated future revenue of the new home sold.

7. National average selling price for newly built homes sourced from the UK House Price Index as calculated by the Oce

forNationalStatisticsfrom data provided by HM Land registry. Group average private selling price is £272,206.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Group Chief Executive’s statement continued

Investing in our colleagues

Sta engagement scores demonstrate the

progresswe have made in supporting our

colleagues’ professional development and

makingPersimmon a great place to work.

In 2022’s survey our sta engagement score

was83% (2021: 78%). Managing Directors and

SiteManagement teams are good examples

of ourapproach to colleagues’ development.

Both havereceived tailored training courses

andplans to enhance their skills further.

Alongside rolling out enhanced technical

standards through The Persimmon Way, we have

actively assessed our site team’s understanding

of the requirements to identify any gaps.

Our NVQ programme continues, with over 500

sitemanagement sta undertaking courses since

2021. Managing Directors have also received

assessments with plans put in place to develop

skills and strengthen any gaps. As we drive

up ourstandards and the consistency of their

deliveryweare investing to make Persimmon

aneven betterplace to work where colleagues’

skills are developed and career aspirations

fulﬁlled.We were delighted to be announced

as a Top 100Apprenticeship Employer by the

Department forEducation in 2022.

FibreNest

FibreNest continues to be a real strength for

the Group, with over 30,000 customers across

more than 330 developments now connected

to our national ultrafast broadband network.

FibreNest wascreated to address persistent

customer frustration that larger and established

internet providers were not connecting their

homes from the day they moved in, and has seen

asustained improvement in day one connection

rates. In 2022, FibreNest’s Day One connection

ratewas 90% (2021: 85%). FibreNest’s customer

ratings on Google and Trustpilot are currently

aheadof the larger and established national

internetproviders. Customers view broadband

asakey utility and FibreNest’s gigabit ready,

ultrafastnetwork is therefore an important part

ofour service.

Building safety and the developer

remediation contract

Persimmon was proud to lead the industry with

our original commitment made in February 2021 to

protect leaseholders in multi storey developments

we built from the cost of any necessary cladding

removal or ﬁre safety remediation. Since that

original commitment, we have worked proactively

with management companies and their agents

to progress remediation. We have also worked

positively with the Department for Levelling

Up, Housing and Communities (DLUHC) this

year to agree a ﬁnal developer remediation

contract. This was recently published by DLUHC,

contractualising the Developer Pledge made in

April2022. We have signalled our intention to sign

ahead of the March 13th deadline setby DLUHC.

As indicated in November 2022, the Group

has increased its provision for building safety

remediation at the 2022 year end to £350m.

This rise reﬂects the more detailed understanding

of costs, which now include non-cladding ﬁre

related build defects, the broader scope required

by Government and an increase in the number

of eligible buildings, against a background of

signiﬁcantcost inﬂation. We currently have

73 multi-storey developments identiﬁed that

requirecladding removal or life-critical ﬁre safety

work. Any necessary work has already been

completed on 33 developments and is underway

on a further 9.We aim for work to have started

atallremaining sites by the end of 2023.

FibreNest’s Day One

connection rate

90%

20 21: 85 %

Persimmon Plc | Annual Report | December 2022

Read more on pages 21 to 41.

Our five priorities

Our 2022 performance demonstrates that we

have delivered against the ﬁve priorities I ﬁrst set

out 2 years ago. These priorities have guided

ourapproach of building on Persimmon’s great

strengths and enhancing our capabilities in

key areas:

• Build quality: our ambition has grown from

“buildright, ﬁrst time, every time” to trusted

todeliver ﬁve-star homes consistently;

• Reinforcing trust: in seeking to build a

compellingbrand we will place customers at

theheart of our business, trusted to deliver the

best value homes customers can be proud of;

• Disciplined growth: maintain our stringent

appraisal, investing in high quality land in the

right areas;

• Industry-leading ﬁnancial performance: sustain

our industry-leading margins and returns and

drive healthy proﬁt and cash; and

• Supporting sustainable communities: actively

part of the net zero carbon economy transition,

the communities we operate in and eorts

towiden opportunity.

2023: A year of discipline

Our progress against these ﬁve

priorities also provides a strong

platform from which to continue

todeliver against the backdrop

of achallenging operational

environment in 2023. We are

combining operational excellence

with commercial excellence to

improve our product, our systems

and processes and our position

inthe market, to serve customers

well while building a stronger

business for the long-term.

Proactive response to a

challengingsales environment

As set out above, the sales environment has

become more challenging. The sales window

for 2023 completions eectively opened around

September 2022. With the signiﬁcant drop in sales

rates in Q4 2022, we ended the year with a forward

sales position of £1bn, 36% lower year on year

(2021: £1.6bn). Private forward sales revenue was

down more markedly (55%) at £0.5bn (2021: £1.1bn).

We responded proactively, including with a

marketing campaign launched on Boxing Day.

This campaign oered “up to 10 months mortgage

free” or 105% part exchange for those reserving

before the end of February. Our website visitors

increased markedly year on year after its launch.

Beyond the campaign speciﬁcally, our marketing

ismore sophisticated, using targeted, digital

channels to drive sales and our brand reputation.

These actions have helped drive an improvement

insales rates in 2023 compared to the end of last

year. Private sales rates per outlet per week are

running at 0.52 for the ﬁrst 8 weeks of the year.

This is still below last year’s comparable rate of 0.96.

Pricing has remained ﬁrm and cancellation

rates have returned to typical historical norms.

Sales incentives costs have increased slightly

toaround 3% of gross sales price from 2.39% in

thefourth quarter of last year. Part Exchange is

proving popular, accounting for around 25% of

salesin the ﬁrst 8 weeks of the year (2021: c.6%).

There have been some encouraging signs in the

mortgage market recently, with rates reducing

compared to late last year. However, aordability

and mortgage product availability still remain the

key issues, with particular challenges in the south

ofEngland. Our sales rates are proving more resilient

in the North and Midlands. The end of Help to Buy

means that for the ﬁrst time in over a decade there

is not a signiﬁcant government scheme to assist

ﬁrst time buyers in place. With the aordability

challenges in London and the south east, its

removalis being felt most strongly there.

Our enduring relative pricing position in the market

and national network has helped maintain ﬁrst time

buyer interest outside of London and the South East

especially, and helped mitigate the impact on sales

rates. Given the political salience of young families

and the aspiration of homeownership, this may

prove to be a policy area that the major parties revisit

ahead of the general election. In the meantime, we

will continue to focus on improving our product, our

quality and our service whilst maintaining this price

advantage within the market for the beneﬁt of our

customers. Our mission ‘to build homes with quality

our customer can rely on at a price they can aord’

has never been more relevant.

Our Partnership Homes team has also been working

to improve our business processes and reputation

amongst Registered Providers (RP) and local

authorities. By drawing on our improved product

and build quality consistency, they have reviewed

our standard approach to working with RPs across

the Group. This is leading to more RPs looking to

partner with us and puts us in a stronger position

to drive market competition and secure enhanced

returns. Equally, we have proactively engaged with

the First Homes pilot scheme which delivers homes

to ﬁrst time buyers at a 30% discount to prevailing

market value. We have around 215 homes either

completed or allocated within the current Homes

England programme. We have also identiﬁed

the potential foradditional homes to be included

subjecttoHomes England’s approval.

Our people

and values

Our five

key priorities

Build quality

and safety

Supporting

sustainable

communities

Reinforcing

trust: customers

at the heart of

our business

Industry-leading

financial

performance

Disciplined growth:

high quality

land investment

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Disciplined cost controls and

opportunities for further efficiency

Within this challenging market we are exerting

ever-more discipline and even greater cash

and costcontrol. Since Q4 2022 we have been

increasingly selective on new land investment.

We are only targeting exceptional deals and expect

our land spend to be down in 2023, compared to

2022. Our local teams are focused on securing

planning consents from sites we already own and

are working closely with our External Aairs team

to enhance our stakeholder engagement and

presentation to achieve approvals from planning

committees. Recent successes with previously

stalled applications are already demonstrating

the beneﬁt of this new approach. We are also

embedding this more proactive approach earlier

onin our new planning application process.

Persimmon has a strong track record of disciplined

cost control and we have strengthened these

further. We are taking clear actions to mitigate

the impact of the deterioration in sales rates and

have added extra control stages into our existing

processes to ensure work in progress is being spent

most eectively and at the right time to secure the

best returns. A key part of this is closely managing

construction programmes to local sales rates.

We already operate with a lean cost base and are

operating from a relatively low number of outlets but

we also have a hiring freeze in place, except where

the role is business critical. Our approach is one of

prudent discipline and agility: seeking to reduce

costs where appropriate while making sure the

company is ready for an upturn in demand. We are

therefore looking to retain and enhance key skills

and capabilities in the business to respond with

evenbetter customer service and build quality.

Securing eciency gains in our build programmes

continues to be a key area of focus for the business.

A detailed review last year found that Space4

timber frame construction is around 7 weeks faster

than traditional build. Space4’s timber frames are

therefore being rolled out to more regions across

the Group. We are looking to expand timber frame’s

use more widely and our planning application for

our new state of the art factory in Leicestershire was

submitted last year. This factory will provide a wider

variety of timber frame products and innovative

solutions to delivering increasingly energy ecient

homes even more cost eectively.

Our tendering processes have been strengthened

through greater central oversight and an expanded

use of framework agreements. Build cost inﬂation

is currently c.8%, showing some slight moderation

from last year but still persisting. Strict disciplines

have been in place since the fourth quarter of

2022 to ensure new contracts did not ﬁx prices

beyond 6 months, to give the opportunity for

price reductions at that time. Where incumbents

are not willing to negotiate we will go to a tender

process, while maintaining quality, service and

safety standards, to secure best value. With greater

central speciﬁcation and standardisation of layouts

and products (such as internal door sets) the

Group is using framework agreements to secure

cost eciency, enhanced quality consistency

andgreatercertainty on materials’ delivery.

We have conducted a thorough review of build

programmes to identify further opportunities.

Every business now has a build programme

that better matches their prevailing conditions.

This allows for more accurate forecasting and the

timely call o and delivery of materials. This provides

greater assurance of delivery and eciency in build.

We are also trialling the procurement of some key

materials directly from manufacturers, as opposed

toa traditional supply and ﬁx model, as part of this

drive for assurance and eciency.

This combination of disciplined cost control

andinvestment, alongside ever-improving build

eciency underpins our next phase of the

Group’sindustry-leading ﬁnancial performance.

Quality and customer improvements

Alongside this drive for ever-greater eciency our

focus on enhancing quality continues. Our NHBC

Construction Quality Review score improved by

9% in 2022 compared to 2021. We are stepping up

further our Persimmon Way programme including

trialling a new app to provide direct personal

communication with our site-based workforce,

providing induction, site-speciﬁc, quality and

health and safety information amongst other

areas. We were also pleased to become one of

only 10 companies to be awarded a Certiﬁcate

ofCommitment and Progress – Building Safety

Stage 1, as part of the Building a Safer Future

CharterChampion application process.

As well as our enhancements to our sales and

marketing set out above, we have been investing

innew tools and training to strengthen our

customerservice. A training programme has

been rolled out to support Sales Advisors selling

in this more challenging market. This has been

complemented by a mystery shopper exercise on

every site, identifying areas for further improvement

to help drive sales. This training builds on recent

progress. We were pleased to become the ﬁrst

homebuilding company to achieve the Institute

for Sales Professionals’ Investor in Sales award

for our commitment to develop strong customer

relationships based onintegrity, trust, and

ethical selling.

Group Chief Executive’s statement continued

Persimmon Plc | Annual Report | December 2022

We also welcomed the New Homes Quality Board’s

New Homes Quality Code and registered last year.

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. We intend to activate in the coming

months and have rolled out training programmes

across the Group – not limited to customer service

roles – to prepare. We are also putting extra

assurance in place to align our build programme

to meet its requirements, including eective earlier

legal completion dates ahead of our year end.

We have procured a new CRM system (YourKeys,

developed by the Zoopla Group), which will

allow acomprehensive and integrated system

from initialinstruction through to completion.

This platformwill allow both customers and our

colleagues to communicate more eectively

and provide enhanced information such as on

progression and layouts all in one place. We will

bepiloting it shortly, with a view to rolling out

acrossthe Group later this year.

We are continuing to invest in our sta and are

further enhancing our training oer to colleagues,

including through a new e-learning initiative. We are

also pioneering new approaches, as the Persimmon

Academy in Llanilid, South Wales demonstrates.

In partnership with Bridgend College, we have

established an innovative on-site education and

training academy, which is producing the next

generation of construction workers and site sta

in South Wales. It has already been recognised

for best-practice by key political stakeholders

and shortlisted in the Welsh Government’s

Apprenticeships Awards Cymru and the National

Federation of Builders’ Construction Excellence

Awards 2023. As part of building the next generation

or tradespeople we are looking to develop similar

academies elsewhere across the Group.

We continue to beneﬁt from highly experienced

management teams across the business.

Our seniormanagement teams bring decades

of experience to managing the current market

challenges and are driving our investment

disciplines while leading programmes to enhance

our capabilities. We will continue to invest in

our colleagues’ development and our systems

and technology to support them in both their

professionaldevelopment and drive to deliver

evermore consistent quality for our customers.

Capital allocation policy

A new capital allocation policy was announced

in November to deliver sustainable returns

toshareholders while investing in future

growththrough disciplined expansion of

our industry-leading land portfolio and

enhancing ourquality and service capabilities.

Alongside thisthe boardconsiders our current

assessment of prevailing market conditions,

thesector’s increased tax contribution and

buildingsafety remediation costs.

Outlook

The longer-term fundamentals of the UK housing

market remain strong. Despite the current

challenges and uncertainty, the historic lack of

supply means demand for new housing will remain.

The key current challenges are aordability and

mortgage product availability. While there has been

some recent easing in mortgage rates from their

high at the end of last year, the majority of respected

forecasters do not expect them to return quickly

tothe levels seen during the previous cycle.

Persimmon’s 2022 performance demonstrates

our capabilities to deliver both strong ﬁnancial

performance and consistent build quality and

customer service for the ﬁrst time in our history.

We have an improved – and improving – product

that is well positioned in the market, with a below

average selling price at a time when aordability

is key. The breadth of our nationwide network

and near absence from London provides some

protection from the most acute aordability

challenges. Combined with our excellent land

holdings with its industry-leading embedded

margins, we have a strong platform for the future.

A strong balance sheet also provides options

andﬂexibility to pursue future growth.

Our proactive sales and marketing initiatives and

improved market conditions have helped increase

the sales rate in recent weeks but they still remain

lower than last year. With our focus on continually

enhancing our product, including through an ever-

greater consistency of quality and service delivery,

and investment in a new CRM and further training,

we aim to improve the sales rate further.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

It is too early to assess sales rates for the year as

a whole, but were our prevailing 0.52 sales rate to

continue for the rest of the selling year, the current

outlet network would imply 8,000–9,000 legal

completions for 2023. This includes homes sold to

housing associations, which we anticipate will deliver

a higher proportion of this year’s completions than

istypical, with a higher weighting in the ﬁrst half.

At these lower completion levels, there will be a

margin impact. To provide an illustration, assuming

cost inﬂation which is currently running at around 8%

continues all year without a mitigating increase in

average selling price, margins may reduce by around

500bps. As well as assuming this level of inﬂation,

reduced volumes and increased sales incentives and

marketing costs may further impact operating margins

by around 800bps. Ultimately any margin impact will

of course be a product of the interplay between each

of these factors. Equally, as they improve, it will drive

relative margin growth.

We are taking action to manage our already lean

cost base through disciplined cost control and £40m

of eciencies were identiﬁed in the 2023 operating

budget, meaning that our combined overhead costs

on an underlying basis are holding broadly ﬂat year

on year. We have a hiring freeze in place, other than

where the role is business critical. We believe 2023

will represent the ﬂoor in our volumes and we want to

retain our experienced and skilled teams to respond

quickly when the market turns back in our favour.

We have been rebuilding our outlet position

following the pause in investment a few years ago.

At the start of 2022 we had a relatively low number

of selling outlets (234) and successfully grew this

to 272 outletsby year end. This ﬁgure is itself still

relatively low for the Group – we have been up in the

high 300s in the past – and we have been looking

to progressively grow our outlet network while

maintaining our disciplined approach to investment.

In light of the market shift late in 2022, we exerted

even greater control on land spend and were highly

selective with any new investment. We expect to

spend less on land in 2023 than in the previous

year and forecast land creditor spend of £270m in

2023. We anticipate lower levels of cash balances

in 2023, reﬂecting lower completion levels, careful

investment in land and work in progress and

building safety remediation costs. We will continue

to exert disciplined cash control and ensure our

infrastructure and build programme spend matches

local demand. Some outlet openings have been

delayed as a result of this action. We are likely to

have a broadly similar number of average sales

outlets in 2023 as 2022.

However, we are working now to grow our outlet

network, at the right time, to provide the capacity

todeliver ahead of pre-Covid volumes over the

longer-term. We are focusing on securing consents

on land we already own to pull through more outlets

most eciently. A more proactively engaged

approach to local planning is already starting to

unlock some blocked consents and we are also

embedding it at an earlier stage in our applications

process to seek consents quicker. We will remain

very disciplined on new investment. Where we see

excellent land investment opportunities meeting

our strict ﬁnancial disciplines, we will invest at the

right time. We are also strengthening our strategic

land teams to secure new opportunities in the

years ahead.

Our 2022 performance demonstrates that we have

combined our great ﬁnancial strength with renewed

capabilities of build quality and customer service.

We will continue to invest in these capabilities, in

a disciplined manner, so that we are even more

ecient and ever more consistent in the quality

homes we deliver to our customers. The investment

in a new timber frame factory willprovide the

capacity to deliver an additional 7,000 timber

frame units a year, as well as new innovations

in wall systems andpanelling. As timber frame

homes are typically 7weeks faster to construct,

this investment will enhance our build eciency

further. Targeted investment will help deliver further

enhancements to our BrickWorks and TileWorks

factories. We will continue to improve our product

and our service to meet customer demand with

excellence and eciency. Our existing land portfolio

gives us a strong platform to build from and again

we will invest in it further in a disciplined manner.

While our margin will be impacted by the contraction

in volumes this year, it will grow as we increase

completions in the years ahead.

The hard work of recent years has enhanced

ourvalue proposition to customers and built a

stronger and more sustainable business for the

future. By combining operational excellence and

commercial excellence along with disciplined

investment we will grow the business from 2024

onwards. We will expand our outlet network at

the right time and enhance our capabilities to

respond quickly and eciently to any increase

in market demand. This growth will deliver the

opportunity ofanew home to more customers,

create sustainablecommunities across the country

and drivesustainable returns to our shareholders

for the years to come that will include payment

ofanattractive and improving dividend.

Dean Finch

Group Chief Executive

28 February 2023

By combining operational

excellence and commercial

excellence along with disciplined

investment we will grow the

business from 2024 onwards.

Wewill expand our outlet network

at the right time and enhance our

capabilities to respond quickly

andefficiently to any increase

inmarket demand.

Group Chief Executive’s statement continued

Our five key priorities

Build quality score

86.6%

We are determined to continue to

improve the quality of the homes we

build. We have made great strides since

the introduction of The Persimmon Way,

with improvements across all measures,

including achieving HBF ﬁve-star status.

Weare particularly pleased with the

progress made in 2022 with Construction

Quality Reviews undertaken by the

NHBC, where we have seen year on

yearimprovements of nearly 10%.

Weintend to keep building on this

excellent progressfor our customers.

Andy Fuller

Group Construction Director

Build quality

and safety

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Our five key priorities

Build quality and safetycontinued

Our mission is to build homes with quality our

customers can rely on at a price they canaord.

We aim to build high quality homes at attractive prices, enabling

our customers to access the housing market when otherwise they

may be unable to do so. Through The Persimmon Way, the Group’s

Construction Excellence programme, we deliver a comprehensive

approach which covers all aspects of our build programmes, from

colleague training to quality assurance and innovation.

Build quality – trusted to deliver five-star

homes consistently

Reﬂecting the progress we have already made, our build quality

ambition has grown from, ‘build right, ﬁrst time, every time’ to ‘trusted

todeliver ﬁve-star homes consistently’. We are striving to deliver

furtherquality improvements for our customers together with

strongon-site operational eciency.

We are pleased with our progress to date – our National House

Building Council (‘NHBC’) Reportable Items (the number of items

reported on by the NHBC on inspections of our homes) have improved

by 25.8% since the introduction of The Persimmon Way in 2020.

The NHBC is also conducting Construction Quality Reviews (‘CQR’)

which provide root cause analysis of quality issues. Our CQR score

is currently running 9% ahead of last year’s average (2022: 79.6%,

2021: 70.6%).

Our progress is also being recognised by our customers. We were

delighted to be awarded the HBF ﬁve-star rating for the ﬁrst time

in theGroup’s history in March 2022. Our eight-week customer

satisfaction score

for the survey year ended 30 September 2022

continues to exceed the threshold required to achieve the HBF

ﬁve-star rating.

Our 9-month HBF customer satisfaction score has improved by c.10%

since the implementation of The Persimmon Way; however, this has

fallen slightly when compared year on year (2022: 73.4%, 2021: 75.9%).

We are conﬁdent that we will drive further improvements through

theinitiatives outlined on pages 26 to 27.

We are also improving our operational eciencies and capabilities.

During 2022, the Group made good progress on build rates, which

werearound 8% ahead of the prior year. At 31 December 2022,

theGroup held c.3,900 equivalent units of new home construction.

For 2023, the Group will be carefully monitoring its work in progress

investment and aligning it to relevant demand levels.

1. The Group participates 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 build quality score is based on how satisﬁed customers are with the quality of their

new home and the customer satisfaction score is based on the number of customers

who would recommend their builder to a friend.

The Persimmon Way

The Persimmon Way was initially rolled out during 2020 and

became fully operational in summer 2021. Having seen the progress

the programme delivered, the Group sought to go further and faster

in its implementation of The Persimmon Way during 2022.

Improving quality, delivering value

Training

• A complementary training programme is crucial to delivering

ThePersimmon Way and achieving high quality homes consistently

acrossthe business.

• The ‘Persimmon Construction Pathway’ provides a comprehensive

internal training programme for our site and assistant site managers,

driving up build quality and increasing on-site eciency.

• All site managers undertake the ‘Site Managers Essentials’

programmecovering the implementation of The Persimmon Way.

In addition, site teams perform mandatory online modules and

on-siteToolbox Talks targeting build quality.

• Persimmon is an accredited National Vocational Qualiﬁcation

(‘NVQ’)assessment centre, a ﬁrst for a UK housebuilder.

Persimmon Plc | Annual Report | December 2022

• c.90% of the Group’s site management colleagues have

receivedanNVQ qualiﬁcation appropriate to their role.

• We were delighted to be recognised as a Top 100 Apprentice

Employer during 2022. In partnership with Bridgend College,

wehave developed a Persimmon Academy, an on-site education

and training facility for brickwork and joinery apprentices and

trainee site managers. This is a model we will bereplicating

in otherlocations, starting with Castle Bromwich intheWest

Midlands(see page 38).

Build quality

• More exacting building tolerances than current industry standards

have been introduced, driving improved quality and eciency

acrossthe Group.

• A ‘Good Practice Guide’ has been developed which shares

areasofbest practice and assists in the further development

oftheGroup’sconstruction disciplines.

Our culture

• The Group launched internal ‘Construction Excellence Awards’

in 2021 which recognise and reward site teams that demonstrate

innovations and outstanding management skill to achieve

excellenceon their development (see page 96 for further detail).

• Management incentive programmes have been revised to reward

the successful achievement of improvement in build quality and

customer care standards. This has included a new bonus scheme

forsite management to provide an increased focus on quality

oneach of our developments.

• Currently, a proportion of all colleagues’ bonus schemes is

dependent upon achieving high standards of build quality and

customer care across the Group, aligning all employees with

thesekey priorities for the business.

Quality assurance

• The Group has a large team of Independent Quality Inspectors,

which we believe to be the largest of its type in the industry.

The team, who report directly to the Group Construction

Director, undertake quality assurance inspections on each

of ourdevelopments, monitoring construction build quality

acrossallelements of new home construction.

• We perform a seven-stage pre-completion inspection process

onallour homes before we hand them over to our customers.

During this quality assurance process, each of our homes is

inspected by senior employees from the relevant regional company.

• All of our homes are sold with a 10-year warranty backed by either

the NHBC, Premier Guarantee or LABC Warranty. Each warranty

provider conducts its own independent checks at key build stages.

Innovation

• The Group is investing in its digital systems and applications,

including the ‘Site Manager Application’, which is being rolled

outacross the business. The application allows site managers

torecord and monitor build progress and quality across the site.

• Development work has commenced on The Persimmon Way

application to track and monitor site induction and attendance.

Once fully developed, the application will host all communication

forour wider workforce (including our subcontractors).

Building a safer future

In 2021, the Group 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.

Our ‘Building a Safer Future Charter Champion’ accreditation

involvesthorough reviews of our approach across each of our

operating companies and is progressing well. Persimmon is one

of only10 UK Companies to have been awarded a Certiﬁcate

of Commitment and Progress – Building Safety Stage One,

demonstratingthe Group’s leadership andcommitment to

thisbuildingsafety accreditation scheme.

NHBC Pride in the Job Awards

We are delighted that three of our site managers have won

theprestigious NHBC Pride in the Job Awards in 2022.

The NHBC Pride in the Job Awards is considered the most highly

regarded competition of its type 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.

c.90%

of site management colleagues

have received relevant NVQs

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Our five key priorities

Build quality and safetycontinued

Our vertical integration

Off-site manufacturing

The Group operates three o-site manufacturing facilities: Space4,

atimber frame manufacturing facility providing ‘MMC’ for the Group,

andBrickworks and Tileworks. Each of our facilities provides a resiliency

of supply together with enhanced quality and cost eciencies.

We believe that this vertical integration is a key dierentiator for the

Group, and we are committed to continuing to invest in our o-site

manufacturing facilities.

Space4

The Group operates one of the UK’s largest o-site timber frame

factories, known as ‘Space4’. This 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, which utilises CAD/

CAM (‘Computer-Aided Design/Manufacturing’) techniques from the

automotive industry, supports increased site production and eciencies

by reducing the time to build the ‘superstructure’ of a new home by

almost two thirds while also easing the requirements and reliance on-

site for some traditional supply-constrained skills, such as bricklaying.

Manufacturing these components within a factory setting also delivers

improved quality and consistency.

In addition to on-site eciencies and enhanced quality, the ‘fabric ﬁrst’

solution delivers high levels of thermal eciency for the new homes built.

Our homes are c.30% more energy ecient than existing housing stock

and are cheaper to run for our customers (see page 34).

The fabric ﬁrst solution will support the Group in delivering the

requirements 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 eciency.

Given the signiﬁcant advantages of this solution, we will be investing in

a second, new Space4 facility at our site in Garendon. The new factory

will provide updated technology and techniques that will further drive

enhanced quality and eciency gains using state of the art robotic

automation. The existing Space4 factory has the capacity to supply

uptoc.9,500 units per year, consisting of c.7,000 timber frames and

c.2,500 ‘room in the roof’ systems. The new factory will have the

potential to match this, almost doubling our capacity.

During 2022, Space4 delivered 4,448 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. As part of our ongoing commitment to MMC, we have

committedto building 50% of our homes using Space4 by 2025.

Brickworks

The Group’s Brickworks 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.53m bricks across 239 sites (2021: c.45m bricks to 203 sites across the

Group), representing an 18% year on year increase in the supply of bricks.

Tileworks

The Group’s roof tile manufacturing plant, also based at Harworth,

hassupplied approximately 12 million tiles to 264 sites across the

Group(2021: c.9 million tiles to 227 sites across the Group) representing

a25% yearonyear increase in the supply of tiles.

Engaging with our supply chain

The Group recognises the importance of an eective and engaged

supply chain, which it achieves through regular engagement with

alloursuppliers and subcontractors at both local and Group levels.

As members of the Group’s wider workforce, the health, safety and

mental wellbeing of our subcontractors is important to us, and as

notedonpage 51, they take part in regular ‘Toolbox Talks’ covering

thehealth and safety aspects of our sites.

Each of our subcontractors must complete the Persimmon site induction

course before commencing work on any of our developments.

As noted on page 41, the Group continues to take its role in combating

modern slavery and human tracking seriously, and has further

developed its training provision, ensuring greater awareness ofthe

risks in this area for sta in key functions that interact with the supply

chain. The Group is a signatory to the Prompt Payment Code (PPC).

The Code sets standards for payment practices and best practice

and is administered by the Oce of the Small Business Commissioner

(OSBC) on behalf of the Department for Business, Energy and

IndustrialStrategy (BEIS).

The Group’s centralised procurement department is responsible for

managing the strong, longstanding relationships we hold with our main

suppliers. The department seeks 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, while providing

our suppliers with certainty over volumes, revenues and cash ﬂows.

We have also been engaging with our suppliers to assess the

embodied carbon of our house types in order to identify materials

withthe most impact (see page 48 for more details).

Our operating businesses work closely with a large number of

regionalsuppliers to secure locally sourced materials. The Group

workswith c.4,500 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 local subcontractors with continuity

and consistency of work. The Group supports over 40,000* jobs

acrossits sites.

In total, the Group supports c.92,000* jobs across its wider supply

chain (2021: c.92,000*).

SAP rating

Equivalent to a ‘B’ EPC rating

* Estimated using an economic toolkit.

Persimmon Plc | Annual Report | December 2022

Our five key priorities

Our customers want attractively priced,

high quality, sustainable and energy

efﬁcient homes, as well as good customer

service. Putting customers at the heart

of our business, we have, and will

continue to, enhance both our service

andproduct offerings in order to meet

their expectations.

Sonia Da Costa

Chief Customer Experience Officer

Reinforcing trust: customers

at the heart of our business

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Our five key priorities

Reinforcing trust: customers at the heart of our business continued

Our customer service

Our aim is to build a compelling brand through placing customers

at theheart of our business and being a trusted partner delivering

the best value homes customers can be proud of. We understand

that buying a home is one of the biggest investments our customers

will make.

Our goal is to deliver an excellent experience throughout our

customers’ home-buying journey, from researching buying their home

to the biennial anniversary of their moving in day. We aim to achieve

this by providing a good blend of both digital and interpersonal

service, engaging with our customers through a variety of channels,

as well as investing in and empowering our sales and customer care

representatives to deliver good customer experiences.

Training

Through the ‘Persimmon Pathway’ (see page 40 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 year, the Group has achieved its ISP Investor

in Sales award. This is an industry-ﬁrst programme that has resulted

in122of our sales advisors being accredited by the ISP, withafurther

33engaged onthe programme.

Through the Persimmon 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 enhanced the in-house customer care training-

proposition by adding tailored pathways for a variety of roles, as

well as registering with the Institute of Customer Service, which will

also provide an accredited route to the training of our customer

service teams.

The sales teams undergo internal and external review and assessment.

Our Training department utilises the results of these assessments

to establish bespoke training modules and courses that address

keylearnings identiﬁed.

Customer relationship management

Feedback and research tells us that customers today value a blend

ofdigital and interpersonal customer experiences – they want to be

able to communicate with our teams quickly and easily, at times and

inways convenient to them.

To enhance our customer engagement and empower our teams

todeliver the type of customer experiences our customers expect,

weare investing in a new customer relationship management

system (YourKeys developed by the Zoopla Group). This system

will not only enhance our existing Customer Portal by digitising

more of our customer experience, providing customers with more

real-time updates and greater transparency, itwillalso create better

employeeexperiences through arobust andeasy to use tool

withwhich to do their job.

This signiﬁcant enhancement will enable us to continue to develop

better relationships with our customers throughout the totality of

theirhome-buying journey.

1. National average selling price for new build homes sourced from the UK House Price Index

ascalculated by the Oce for National Statistics from data provided by HM Land Registry.

Our homes

We are proud to oer attractively priced homes for the beneﬁt of our

local communities.

As noted on page 4, the Group oers three brands across its UK-wide

network of sales outlets, delivering a range of house types in well-

serviced locations providing customers with high quality, sustainable

and energy ecient homes at prices they can aord. Our average

private selling price of £272,206 is over 20% below the UK’s national

averageselling price

, demonstrating the enduring strength of our

valueoer to customers.

We have strengthened our oering to customers both in the house

types we provide and the developments we design, through to

the improved quality of our homes (see page 22) and an enhanced

customer experience.

Persimmon Plc | Annual Report | December 2022

Our progress

We are delighted to be a ﬁve-star homebuilder for the ﬁrst time

in the Group’shistory. The progress that we have made on build

quality and customer service is being recognised by our customers.

As noted on page 22, our eight-week customer satisfaction score

continues to trend ahead of the ﬁve-star threshold. Our nine-month

HBF customer satisfaction score has improved by c.10% since the

implementation of The Persimmon Way; however, this has fallen

slightly when compared year on year (2022: 73.4%, 2021: 75.9%).

We are conﬁdent that we will drive further improvements through

the initiatives outlined on pages 26 to 27.

The Group’s Trustpilot score has improved by approximately

30%since the start of 2022, reﬂecting our improved customer

service andbrand reputation.

New Homes Quality Code

The Group became one of the ﬁrst housebuilders to formally

commence the registration process for the New Homes Quality

Code(‘NHQC’) on 14 January 2022. We welcome the introduction

of theNHQC, which aims to drive up quality and customer service

standards across the industry.

Persimmon complies with the Consumer Code.

Our customer care

The Persimmon Way aims 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 eciently as possible.

We have continued to invest in our customer care resource, in digital

technology and in training. The Group has strengthened its centralised

customer care team, providing specialist skill sets that complement

our local teams. This centralised resource also drives a consistent

andstructured approach across the business for our customers.

The Group Training department has developed structured training

modules for our customer care teams to drive improvements in the

service we provide and enhance customer satisfaction.

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 over 30,000 customers

across over 330 sites, withfurtherroll outs continuing. In 2022,

theFibreNest day one connection rate was 90% (2021: 85%).

It continues to be a key strength for the business and its customer

ratings on Google and Trustpilot are currently ahead of the larger

and established internet national market providers.

Customers

c.30,000

over 30,000 customers

acrossmore than 330 sites

Trustpilot

30%

Trustpilot score has improved

byapproximately 30% since

thestart of 2022

Day one connection rate

90%

2021: 85%

Accredited sales advisors

122

sales advisors being

accreditedbythe ISP

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.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Our five key priorities

Disciplined growth: high

quality land investment

Owned and controlled land

holdings (plots)

87,19 0

2021: 88,043 plots

The Group’s high quality land holdings

are a key strength for the business. During

the year, we invested in some exciting

land opportunities adding 14,670 plots

across 66 sites into the Group’s portfolio,

a plot replacement rate of 99%.

Dean Finch

Group Chief Executive

Read more on page 15.

Persimmon Plc | Annual Report | December 2022

Our land investment opportunities

The Group has a well-established strategy of disciplined land

replacement. This is a key driver of value for the business and

oneofitscore strengths.

When reviewing each land investment opportunity, we consider

theneeds of local government and the local communities we serve.

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 30 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

A consistent approach to our land buying is applied across the

business. All of our experienced land, planning and design teams

bringa wealth of knowledge to the delivery of the Group’s land

replacement strategy. Each team works closely with all relevant

stakeholders, including land owners, local communities and local

planning authorities, to deliver new housing in areas that have the

greatest need. As well as delivering increased housing, we help

providegreater access to local amenities and existing infrastructure.

Climate change and environmental

riskmanagement

As we work through the planning process, we continually assess the

signiﬁcant environmental risks for each of our potential sites. A detailed

‘Planning and Environmental Risk Assessment’ is performed that

considers a number of risk factors, including local housing needs,

ﬂood risk, issues of existing land contamination, water pollution and

biodiversity impacts.

This ensures that we respect the natural environment, mitigating

adverse environmental impacts and enhancing biodiversity

where possible.

See page 50 for more detail.

Governance

The Group’s well-established strategy of minimising ﬁnancial risk and

investing 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.

The Group’s Land Committee governs this process. It comprises

members of the Group’s senior executive team. The Committee meets

regularly and reviews each signiﬁcant land investment opportunity

on a consistent basis. In approving each opportunity, the Committee

takes into account the existing land portfolio, the needs of the local

community, all environmental issues and the planned and projected

levels of proﬁtability and return. Only opportunities that meet relevant

criteria will gain approval and proceed.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Forward land supply

70,768

owned plots

Investment in land

£664m

gross land payments in 2022

Strategic land

13,100

acres of strategic land

Our five key priorities

Disciplined growth: high quality land investment continued

Continuously driving value

Once land opportunities have been identiﬁed and Land Committee

approval has been obtained, the Group focuses on creating

sustainable, attractive communities for our customers and delivering

optimal value for all stakeholders. This is achieved through the use of

our core house types, which meet customers’ needs, innovative design

and MMC, which introduce simplicity and economies of scale.

We have stepped up our approach to working with local authorities

and communities to secure planning consents as quickly as possible.

Our new housing range and Placemaking Framework, which sets out

planning and design techniques to develop attractive communities,

provide local teams with enhanced tools to meet customer needs and

local planning authority requirements. A new stakeholder engagement

team is proactively engaging local authorities across the country to

identify how we can help them deliver their key objectives. We are

oering support on nutrient neutrality to help interested local authorities

identify solutions, deal with the challenge and unlock permissions.

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 2022, the Group owned 70,768 plots of land, with

industry-leading embedded returns, broadly ﬂat on the start of the

year. The business has c.4.8 years of forward land supply at 2022

output levels.

Over 50% of the Group’s owned plots of land are on sites with

detailedplanning consent. The Group has also entered into

conditionalcontracts for a further 16,422 plots on land which

weareactively promoting through the planning system.

The Group’s land recovery rate (i.e. land cost relative to revenue

generated) was 12.0% in 2022 (2021: 13.2%), reﬂecting our

dierentiated,well-balanced land holdings that will beneﬁt

ourstakeholders for the longer-term.

During the ﬁrst half of the year, the Group continued to pursue

exciting land replacement opportunities, investing around £416m in

land payments (of which around £137m were deferred land creditor

payments), while bringing 8,829 new plots into the business. As the

economy and housing market tightened in the latter months of the

year, the Group became more cautious in its land investment activities,

protecting liquidity and the inherent strength in its balance sheet.

As aresult, land payments of £248m were made during the second

halfof 2022, of which £70m related to the settlement of land creditors.

5,841 newplots were brought into the business during this period.

In all, the Group has made land payments of £664m in the year,

adding 14,670 new plots to its owned and under control land holdings

at a replacement rate of 99% based on current consumption levels.

This strong pipeline of land will provide excellent momentum for

theGroup when we exit this current period of market uncertainty.

Over the last 10 years, the Group has invested £5.4bn in new

landpayments and has delivered 146,121 homes during this time,

atexcellent industry-leading levels of return.

Our brands’ investment in land

Our strategic land

Investment in new strategic land and its conversion through the

planning system as eectively and eciently as possible continues

to be a key feature of the Group’s strategy and business model.

The successful promotion of our strategic land portfolio through

theplanning system, in partnership with local planning authorities

and the communities we serve, will deliver land with detailed

residential consents that will allow the Group to provide the

muchneeded new homes to our local communities.

Interests in a further c.450 acres of strategic land were acquired

during the year, providing a total of c.13,100 acres at 31 December

2022 (2021: c.13,700). We are conﬁdent that this will, in due course,

yield around 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 5,348 plots from

its strategic land portfolio into its owned and under control land

holdings, representing 36% of plots legally completed in the year.

Persimmon Plc | Annual Report | December 2022

Our five key priorities

Return on average

capital employed

30.4%

Underlying new housing

operating margin

27. 2%

Industry-leading

ﬁnancialperformance

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

Read more on pages 53 to 55.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Our five key priorities

Industry-leading ﬁnancial performance continued

• Exercising discipline and strong control over the Group’s outlets

andlevels of work in progress across all of our developments,

ensuringthat our investment appropriately aligns with current

market conditions

• Engaging with and managing our supply chain and entering into

robusttendering processes to help manage our costs (see page 24)

• Vertical integration and the manufacture of some key material

elements (see pages 6 and 24)

• Maintaining strict levels of governance and ﬁnancial discipline

acrossall our operational and ﬁnancial processes

• 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 to keep us at the forefront

ofindustry standards, while maintaining operational eciency

Land investment

The Group’s high quality land holdings are a key driver that

supports the delivery of superior sustainable returns to the beneﬁt

of all our stakeholders over the longer term. The Group’s ability to

exercise disciplined land replacement through the housing cycle is

supported by its existing land holdings assembled over many years.

Such a strongplatform enables the Group to continue to deliver

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 pages 29 to 30.

Our build programmes

The Group has an established range of standard core house types

thatensure consistency of construction across the Group. This enables

us to build more cost eectively, without compromising on build quality

or customer service.

The Group continues to invest in digital technology, improving

the consistency, eciency and productivity of our detailed build

programme processes and aligning our technology with our build

andquality assurance processes. Our build and direct costs are

170 basis points higher than last year, at 57.1% of housing revenue

(2021: 55.4% of housing revenue).

Strong liquidity

The Group delivers strong cash generation by applying strict

operational controls and the eective, disciplined management

ofitsworking capital levels.

Senior management carefully monitors and manages the levels

of workinprogress investment on our sites. Balancing investment

needsagainst relevant market demand, the requirement to achieve

high levels of quality and customer service, along with generating

strong and sustainable returns through the cycle are key factors

inhelping management determine the level and timing of investment.

The Group will continue to deliver strong cash generation while

minimising ﬁnancial risk through the cycle by exercising this

disciplineover capital investment, in addition to maximising

thecasheciency ofits operational activities.

Tax strategy

The Group operates an overarching principle of full compliance

withcurrent UK tax legislation. We adopt a low risk approach to our

taxaairs, recognising our wider corporate social responsibilities,

and are open and transparent in all our dealings with HMRC.

The commercial activities of the Group are planned to ensure that

statutory reliefs and allowances permitted by existing tax law are

claimed and all taxes are paid in full and on time in accordance

withtax law.

1. 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 charge (2022: £275.0m, 2021: £nil) and goodwill

impairment(2022: £6.6m, 2021: £6.2m).

2. Stated before legacy buildings provision charge (2022: £275.0m, 2021: £nil)

andgoodwillimpairment (2022: £6.6m, 2021: £6.2m).

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 quality

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 pages 29 to 30)

• 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

Persimmon Plc | Annual Report | December 2022

Our five key priorities

Supporting sustainable

communities

1. The value of homes delivered to housing associations, the value

of discounted open market value homes plus the value of planning

contributions we have made.

£506m

investment in local communities

The Group introduced a new Placemaking

Framework in the year to ensure that all

our developments create a sense of place

for our customers and put communities

atthe heart ofourdevelopments.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Our five key priorities

Supporting sustainable communities continued

Persimmon is committed to leaving a positive

legacy in the communities in which we work.

While we are a national business, operating across the UK, we are

proud to contribute to widening opportunity for our local communities.

Social impact is one of our values – we build homes for the future

insustainable communities.

We are proud to provide attractively priced sustainable and energy

ecient homes to meet the demand of our customers – our

average private selling price of £272,206 is over 20%

below the

UK national average. Through our on-site development, we are also

providing local people with local jobs – we are pleased to support

approximately40,000 construction jobs

across our sites.

Local engagement

In 2022, the Group developed a ‘Placemaking Framework’ providing

our site design teams with the tools needed to design attractive

developments which promote our customers’ wellbeing through,

for example, the provision of public open spaces. We engage with

our local communities and local planning authorities throughout the

development process of our sites to ensure that they will provide

the right range of house types, from apartments to four bedroom

homes, to meet local needs. Through the planning process we aim

toenhancelocal facilities, providing investment in local infrastructure

such as transport, education, retail and recreation facilities.

Our developments provide much needed homes to both private

owneroccupiers and our local housing association partners.

In 2022, we provided 2,694 homes, or £383m of housing, to housing

associations and a further 174 homes, or £23m of housing, to qualifying

customers using aordable discounted open market value homes.

This is housing that is sold at a discount of around 20–30% over 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

£406m

of aordable housing for lower income families in 2022

(2021: £363m).

Living more sustainably

We recognise the role we play in transitioning to a net zero carbon

economy. Our homes are becoming increasingly energy ecient –

andas such are more cost eective for our customers to run.

Our homes are c.30% more energy ecient than existing housing

stock. The average SAP rating of our homes is 84, 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.

1. Based on the Group’s private average selling price of £272,206 for the year to 31 December 2022

compared with the national average selling price for newly built homes sourced from the

UKHouse Price Index, as calculated by the Oce for National Statistics from data provided

byHM Land Registry.

2. Estimated using an economic toolkit.

In 2022, we provided

2,694

homes, or £383m

of housing

We provided

£406m

of affordable housing for

lower income families in 2022

(2021: £363m)

Our homes are

c.30%

more energy efﬁcient than

existing housing stock

Average SAP rating

which is equivalent to

an EPC rating of a B

Persimmon Plc | Annual Report | December 2022

Engaging with our communities

We are a national business with a local presence.

Each of our 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 eciently, with the site design and environmental

mitigations eectively 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 2022, we contributed over c.£100m to local communities

(2021:c.£127m) through planning contributions to local authorities.

Supporting our communities

Through Persimmon’s Community Champions

scheme, our West Scotland oce supported

an all-girls’ football club in North Ayrshire with

a£1,000 donation.

Clark Drive Girls FC runs teams ranging from

under-sevens to women. They play a key role

in the community and provide a welcoming

environment for girls of all ages to train, compete

and develop their skills. The club is based in Irvine,

where Persimmon has been building vibrant and

successful communities.

Persimmon’s donation relieved some of the funding

pressure on the club’s players, friends and families

and was used to provide new equipment to help

support more girls and womento get involved in

the game.

In the last two years, the scheme has donated

+£1.35 million

to over 1,400 charities, sports clubs and local

community groups across the country

The Persimmon Charitable Foundation

Persimmon established the Community Champions scheme in 2015.

In the last two years, the scheme has donated over £1.35m to over

1,400 charities, sports clubs and local community groups across

the country.

The scheme previously donated £2,000 per month per operating

business to a range of local charities, sports clubs and community

groups. As these organisations are increasingly asked to do even

more and are also encountering rising costs, during 2022 the scheme

increased this to £6,000. Each of our 30local operating business now

donates £6,000 every three months to local organisations – at least

£24,000 over the year.

During 2022, Community Champions donated c.£676,000 to

c.700local groups.

During 2022, Community Champions donated

c.£676,000

to c.700 local groups

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

The development of our

people is the key to delivering

our strategy and through our

sustained investment in HR and

training, we have continued

to support our objective to

attract and grow a talented

anddiverseworkforce.

Our people

Persimmon Plc | Annual Report | December 2022

Attracting talent

Post-pandemic, the Group recognised that the employment market

would become more challenging as people re-evaluated their careers

and work-life balance against the backdrop of periods of lockdown

andhaving to adapt to new working practices.

Maximising the quality of our new recruits is a key objective and

we recognised that the full opportunities and beneﬁts of working

for Persimmon could be communicated to potential employees

more eectively.

During the year, we formulated a Talent Acquisition Strategy that

led to the introduction of a streamlined recruitment process, which

includes a revised Employee Value Proposition (EVP) that is consistent

across all recruitment media, and the launch of an Applicant Tracking

System (ATS) to create a professional candidate experience simplifying

recruitment activity. In addition, we now have a central talent acquisition

team who optimise all our recruitment activity, including the use of

social media, and provide support and training to hiring managers

inallaspects of recruitment and selection.

This new approach to attracting talent will result in the recruitment of

better quality people, reduced time to hire, lower recruitment spend,

and above all, a greatly enhanced employer proﬁle for anyone looking

to join Persimmon, regardless of which stage they are at in their career.

Colleague engagement

The results of this year’s YourSay employee engagement survey saw

an increase in all engagement metrics compared to 2021. With an

increased response rate, the overall engagement score rose to 83%,

a 5% increase, whilst 92% (+2%) of people are committed to the Group

and what we are trying to achieve, and 89% (+4%) of our employees

aremotivated to do their best at work.

The previous survey highlighted some areas where the Group still

had work to do, which included improving our internal communication

and wellbeing support to colleagues. In both of these areas, there

were very positive results this year. Regarding communications, 69%

of colleagues feel well informed and communicated to, which is an

increase of 27%, and 62% (+17%) feel the Company communicates

openly, both of which are a direct result of the appointment of an

internal communications team.

In terms of wellbeing, the proportion of colleagues that feel the

Company oers support to deal with mental health or psychological

wellbeing increased by 17% over the prior year. However, at only 56%

(2021: 39%) we recognised that there was still more work required

in this area and, for example, in recognition of the current economic

climate we have undertaken a communication exercise to promote

the support available through our Employee Assistance Programme

to help employees manage their wellbeing. We have also made

over 45 e-learning modules available to all our employees through

our Learning Management System (LMS) covering a wide range of

wellbeing topics. Going forward, and to provide additional focus, the

Group Health, Safety and Environment department will be developing

a comprehensive wellbeing strategy during 2023, to ensure our

colleagues are supported in this important area.

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-eciency to drive industry-leading

performance and competitive and sustainable returns

for shareholders.

Teamwork

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-ecient manner, delivering

for customers, communities and stakeholders alike.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Our people continued

The Persimmon Academy at Pontyclun

In partnership with Bridgend College, we have developed a

Persimmon Academy, which is an on-site education and training

facility in our West Wales region. Opened in January 2022, it allows

us to train apprentices in an environment that closely replicates what

they will experience on-site, using familiar materials and methods

that will allow them to develop their skills and improve the quality

oftheir work in a realistic setting. Currently used to train bricklayers,

joiners and site managers and with over 50 apprentices on their

programmes, the facility will be expanded this year to encompass

training for ground workers and roofers.

The Group has received external recognition for the success of

this venture. As well as receiving the Bridgend College Partnership

Award, it was a ﬁnalist in the Apprenticeship Awards Cymru, as

well as being shortlisted for the National Federation of Builders’

Construction Excellence Awards, to be announced in 2023.

City & Guilds are also promoting it as a best-practice example

of an employer partnership. Following this success, the Group

will be replicating this academy model elsewhere in the country,

beginningin Castle Bromwich in the West Midlands during 2023.

The Employee Engagement Panel meets on a quarterly basis and

thesemeetings always include at least one member of the Board

with both the Chairman and Group Chief Executive having attended

previously. Some of the changes introduced in 2022 following

issues raised by the Panel, include improvements to the quality

of PPE together with a range of garments for female employees,

enhancements to paternity pay that will become eective in early

2023,and the involvement of Panel members in the selection of

suitable IT hardware for use on our developments.

Supporting colleagues with the cost of living

A key component of our HR Strategy is to ensure we oer competitive

pay and conditions to our employees and the Group recognised

that 2022 was a dicult year for many of our colleagues who were

aectedby the rising cost of living.

At the annual pay review in July, we introduced a tiered approach

thatawarded the lowest paid employees the highest increase, with

a 7% uplift on their basic pay. All colleagues received an increase

that was above that which has been awarded in previous years.

This approach was competitive when benchmarked against other

employers. The uplift for our lowest paid colleagues was in addition

tothe adjustments that some received in January as we ensured we

met ourobligations to minimum pay rates as a Living Wage Employer.

Additionally, various changes to bonus schemes were introduced

thatincreased the potential awards available, including a new

schemespeciﬁcally for site management that focused on service

andquality ontheir sites (see page 23).

Pioneering development

In the light of the skills shortage facing the home building sector the

Group has launched a number of initiatives to encourage people to

join the industry, together with innovative programmes to ensure our

employees are equipped with the necessary skills and knowledge.

These are compelling reasons why people of all ages and regardless

as to whether or not they are at the start of their career or have many

years’ experience, can enjoy rewarding careers with Persimmon.

Persimmon Plc | Annual Report | December 2022

Getting the best from our talent

Following the conclusion of a Group-wide talent review, during

which c.3,000 colleagues were assessed and discussed by their

relevant management teams, a range of actions have arisen

that willsupport succession planning and the development

andretentionofour colleagues.

At a simple level, these actions have included revising job content

to provide greater stretch or responsibility, supporting professional

qualiﬁcations or arranging additional training and development.

However, some key initiatives have emerged that support the overall

HR Strategy and at the centre of this are Programmes to support

colleagues to make their next moves. Twenty-ﬁve high performing

Directors were selected for the ‘Future Leader Programme’ to equip

them to progress to becoming an Operating Business Managing

Director or a Group Director. At a lower level, a High Potential

Programme will see upwards of 40 colleagues receive formal

supportand broaden their outlook and experience in preparation for

more senior roles such as department heads or functional directors.

To support the formalisation of our talent management, revised

Personal Development Reviews will be introduced across the

Groupin2023, which will be mandatory and replace our existing

andmore informal performance reviews.

Training delivery

In addition to the various initiatives outlined above, our on-going

training and development continues to expand, both in the volume

of training delivered by our in-house training team and the range

ofcourses available to all employees.

Key to this progress was the launch of our Learning Management

System (LMS) during 2022. The LMS allows us to record and

report on employees’ training and qualiﬁcations and is the vehicle

through which our e-learning courses will be developed. From an

employee’s perspective, they will be able to book formal training

courses, completee-learning modules at a time to suit their schedule,

andhaveaccess to a host of additional learning materials.

Sales excellence

Through our partnership with the Institute of Sales Professionals

(ISP), the Company has this year received their Investor in Sales

award. This follows the success of our Sales Excellence programme,

which is integrated with the ISP’s Continued Professional

Development, which sees our sales teams engaged on their

fair ethics programme. Our individual sales advisors receive

accreditation from the ISP at the end of their training and during

the year, 66 people received this recognition, bringing our total

of accredited sales advisors to 122, with a further 33 engaged

onthe programme.

This external accreditation is an important demonstration of the

emphasis we are placing on providing excellent service to our

customers, from the very start of their journey with us.

Build quality

Following the successful programme to ensure our site managers

are qualiﬁed to the appropriate level of NVQ/SNVQ, we have

introduced a Technical Assessment to help them to maximise their

technical knowledge and understanding of the building regulations.

This assessment, in the form of a technical test, is in itself a learning

experience but the objective is to ensure managers engage with

therelevant standards, which will help us to meet the requirements

of the forthcoming Building a Safer Future scheme. We will

identify any resulting knowledge gaps and support site managers’

development plans through this year, as part of the Persimmon

Construction Pathway, providing further conﬁdence for customers

inour build quality across the country.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Our people continued

Social mobility and community engagement

We have a proud track-record of providing young people with new

skills and experience to enable them to enjoy a rewarding career with

the Group, which is particularly pleasing when they join us after facing

challenges in their early years, be that diculties at school or because

they come from a disadvantaged area. This led us to sign the Social

Mobility Pledge and we remain supporters of The Purpose Coalition

and its aims.

During this year we continued our partnership with Volunteer it

Yourself (VIY), which is an organisation dedicated to making a

dierence to young people disenfranchised from mainstream

education. In Liverpool, where we have two active developments,

we worked with VIY and Liverpool City Council’s Legacy programme

to support local sports facilities ahead of the World Gymnastics

Championships that were held in the city. The ﬁrst project was the

refurbishment of the Liverpool Gymnastics Club, where Olympic

medallist Beth Tweddle started her career. Twenty-ﬁve young people

were involved in the renovation work and had the opportunity to work

alongside some of Persimmon’s apprentices, together with the Mayor

of Liverpool City Region Steve Rotherham, a former bricklayer himself.

Over the course of the project, City & Guilds accredited 10 of the

volunteers with Entry Level 3 in Painting and Decorating, which would

not have been possible without this project. A further project with VIY

and Liverpool City Council in 2023 will see the refurbishment of the

Tuebrook Hope Centre, which is a community centre in the heart of

one of the communities in which we are building new homes.

Over the course of the project, City & Guilds

accredited 10 of the volunteers with Entry Level

3 in Painting and Decorating, which would not

have been possible without this project.

Training days

delivered

c.13,800

2021: c.13,200

Remote training

days delivered

c.3,700

2021: c.3,500

Trainees and

apprentices

over 700

2021: c.650

The Persimmon Pathways, a series of comprehensive functional

development programmes, which allow colleagues to tailor their

training to their individual needs, has expanded during the year.

In addition to Sales, Construction and Customer Service, there

arenowPathways in Sales Management, Marketing and Internal

Quality, with more in development during 2023.

A portfolio of new courses was introduced during the year to

supportthe requirements of the New Homes Quality Board (‘NHQB’).

Some of these courses are mandatory for employees in certain roles

and form part of our compliance with the New Homes Quality Code.

The delivery of additional NHQB training will remain a focus of the

training team during 2023.

Whilst we have retained a high proportion of remote training, which

wasvery popular and eective when people could not attend their

normal work location, we have gradually increased face-to-face

delivery, resulting in a blended training approach providing employees

with a variety of dierent ways in which they can access learning.

During the year the Group Training Department was responsible for

c.13,800 training days (2021: c.13,200) with c.3,700 (2021: c.3,500)

ofthose delivered remotely.

We have just over 700 trainees and apprentices (2021: c.650), of

whom c.400 are engaged on formal apprenticeships (2021: c.350).

Our commitment to introducing new talent to the industry has been

recognised through our Gold Membership of the 5% Club, which is an

employers’ group committed to at least 5% of their members’ workforce

being engaged on an apprenticeship or formalised training scheme.

In addition, the Department for Education named the Company in

theirlist of the “Top 100 Apprenticeship Employers” in England.

Persimmon Plc | Annual Report | December 2022

Human rights

The Group is committed to a fundamental respect for human rights

in allaspects of its activities, and expects high standards of ethical

behaviour and integrity from all employees and stakeholders involved

within our operations. This commitment is reﬂected in our suite

of policies and procedures, such as our Code of Ethics, Modern

Slavery,Human Rights and Anti-Bribery and Corruption policies.

As a housebuilder operating solely within the UK, and with the vast

majority of our ﬁrst tier 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.

Our assessment of the most signiﬁcant potential human rights impact

areas within our operations remains unchanged from prior years.

These impact areas include the labour and employment rights of our

employees, subcontractors and those working within our supply chain;

the health and safety of our workforce; and rights of communities in

which we operate. In particular, as part of the construction industry,

the Group takes its role in addressing modern slavery and human

tracking risks seriously, and aims for continuous improvements in

this key area. In 2022, the Group’s 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. The Group has also engaged proactively

with the CCLA-led ‘Find it, Fix it, Prevent it’ initiative, to benchmark

its processes and understand stakeholder concerns for our sector.

Informed by these inputs, a comprehensive suite of controls has

been established. This includes regular audits on supply chain

controls and awareness, led by our Group Internal Audit department.

Awareness posters are also in place at all sites, encouraging the

reporting of potential concerns to our whistleblowing provision.

Routine inspections and worker interviews are carried out by the

Group Health, Safety and Environment department, and tailored

training is in place for employees in Commercial, Procurement and

Construction functions, in addition to the annual delivery of a GLAA

developed ‘Toolbox Talk’ for all site-based workers. Within 2022, one

report of potential modern slavery and labour abuse was reported

via whistleblowing, but following investigation and with input from the

GLAA, this could not be substantiated. Further details on the Group’s

measures to combat modern slavery are set out within our most

recent Modern Slavery Statement, which is 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 oces 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 sta.

As a further safeguard on human rights and ethical behaviour,

the Group maintains a comprehensive whistleblowing provision.

This provides a range of mechanisms through which employees and

others can raise concerns in conﬁdence, and anonymously if needed.

All whistleblowing reports are investigated independently by our

Group Internal Audit department, with summary reporting provided

to the Audit & Risk Committee. Within 2022, the Group entered into

a partnership with the whistleblowing charity Protect. Through this

partnership, the Group has further strengthened its whistleblowing

provision through additional training and a benchmarking exercise

against best practices.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Sustainability

Sustainability is integral tohow wedo business

Our sustainability pillars Sustainability highlights

Charitable Foundation

donations

c.£692k

2021: c.£1.8m

HBF customer

satisfaction score

Tonnes of greenhouse gas

emissions per home sold

1.68

2021: 1.82

Affordable

homes

2,868

2021: 2,759

Public open spaces

andgardens provided

forfamilies

674 acres

2021: 662 acres

Trees planted on

our developments

c.147,000

2021: c.143,000

Operational

waste recycled

96%

2021: 94%

Average SAP rating

of our homes

2021: 87

Investment in

local communities

£506m

2021: £490m

Our sustainability strategy comprises three

key pillars to drive our performance and

focus. The pillars reflect our material issues

and are aligned to the Group’s five key

priorities, ensuring that sustainability is

acorepart of the Group’soperations.

Building for

tomorrow

Transforming

communities

Safe and

inclusive

Read more on pages 44 to 51.

Read more about our approach tosustainabilityonline

at www.persimmonhomes/corporate/sustainability

1. Homes provided to our housing association partners and discounted

open market value homes.

2. Estimated using an economic tool kit.

Persimmon Plc | Annual Report | December 2022

Our sustainability approach

Building for

tomorrow

Transforming

communities

Safe and

inclusive

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.

We have a key role to play in 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. Reducing our impact makes sense not only from an

environmental perspective, but it also ensures greater eciencies

throughout our supply chain and operations.

Creating sustainable places for our customers is at the heart of what

we do. Our Placemaking Framework guides all our developments

and ensures we create lasting sustainable communities with great

design, the right house types, and valued green open spaces. It is

essential we make a positive impact when building new homes,

meeting stakeholder expectations and engaging local residents.

Recruiting and retaining the right people means we deliver

ourﬁvekey priorities and provide excellent customer service.

It isapriority that our processes meet stringent standards to

ensuresafety and wellbeing.

Link to priorities SDG alignment Link to priorities SDG alignment Link to priorities SDG alignment

Key targets and achievements Key targets and achievements 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 44 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 44), and have established carbon

reduction glide paths to achieve our targets.

We aim to have 50% of our homes built using timber frames from

ouro-site manufacturing facilities by 2025.

We were delighted to be awarded an HBF ﬁve-star rating for the

ﬁrst time in our history in 2022. We aim to maintain this rating

going forward.

We will deliver at least 10% Biodiversity Net Gain on our

developments from November 2023.

Our NHBC Reportable Items have improved by 25.8% since

theintroduction of The Persimmon Way in 2020.

In 2023 we are targeting to further improve our NHBC Reportable

Items by 25%.

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. (See page 52 for progress to date).

The Group will maintain being a Living Wage Foundation

accredited employer.

Sustainability pillars and targets

Build quality

& safety

Reinforcing trust:

customers at the

hertofour business

Disciplined growth:

highquality land

investment

Industry-leading

ﬁnancial

performance

Supporting

sustainable

communities

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

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

Sustainability

Building for tomorrow

Working responsibly

We recognise the important role that we play in the UK’s ambition to

achieve a net zero carbon economy, and we have in place 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 pathways to net zero

We have ambitious targets to be net zero in our homes in use

by2030 and net zero carbon 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

completed ﬂoor area by 2030

(2019 baseline). These are challenging targets requiring product

innovation, supply chain engagement and changes to current

operational processes.

We continue to evolve our understanding of the carbon within

oursupply chain, and report our Scope 3 emissions. (See table

onpage 47). As a home builder, the majority (c.99%) of the

emissionsthatwe generate come from our Scope 3 emissions.

Placing customers at the centre of our business

Our customers are becoming increasingly aware of climate change

and sustainability and require high quality homes with ecient and

lowcarbon heating systems. Our new homes are already around

30%more ecient than the existing national housing stock, which

hasan average SAP rating of c.66, or an EPC rating of C. The average

Standard Assessment Procedure (SAP) rating of our new homes is

84,which equates to an average ‘B’ rating.

Transitioning to low carbon energy heating solutions, and leading with

a ‘fabric ﬁrst’ approach will ensure we deliver energy ecient homes

for our customers, and homes ﬁt for the future as an integral part of

creating sustainable communities.

2030 Net Zero Homes in use

Transitioning to low carbon energy solutions

forourdevelopments

We have been carefully planning our transition to low carbon design

and heating solutions and how best to improve energy eciency in

ourhomes, with our customer experience being a key consideration.

Innovative products and new solutions are emerging rapidly onto the

market, and our technical teams are constantly analysing options and

creating optimised solutions.

We have a signiﬁcant advantage through our Space4 timber frame

products to provide an eective ‘fabric ﬁrst’ approach and deliver

increased insulation and thermal eciency which will be a key

contributor to achieving the requirements.

To achieve the recently introduced Part L building regulations for

energy eciency improvements, we will be taking the following

design route:

1. A ‘fabric ﬁrst’ approach – improving the thermal eciency of our

homes with increased insulation in walls and ﬂoors – minimising

theamount of energy our customers will need to use and making

thehome cheaper to run.

2. Providing more ecient gas boilers and control systems, so

that ourcustomers can heat their homes and water eectively

and controlwith smart technology, for example waste water

heat recovery.

3. Some of our homes will have solar panels, providing renewable

energy for our customers and reducing the need to use electricity

from the grid.

Persimmon Plc | Annual Report | December 2022

The future heating systems are dierent. We have been undertaking

a number of new technology tests and detailed trials to best optimise

energy eciency solutions and understand what works for our

customers; examples include:

1. Zero carbon house – Germany Beck, York

We built a zero carbon home at one of our new developments

inYork toevaluate how we could achieve the FHS when it comes

intolegislation, in a practical, repeatable and cost eective way.

The house is a traditional 3-bed home built in traditional methods

ofbrick and block, to provide a true test of labour and supply

capabilities, options and technologies. The following energy

eciencysteps were taken:

• Increase the insulation in the walls, ﬂoors and loft;

• Provide a higher degree of air tightness to retain heat

andavoid drafts;

• Solar PV panels ﬁtted on the roof which provide electricity

toabattery in the garage for storage;

• An ASHP for the heating system, plus a hot water cylinder;

• Two waste water heat recovery systems installed to gather

heatfromshowers and baths;

• Installed a MVHR (mechanical, ventilation, heat recovery) system

toprovide fresh air and capture waste heat for re-use; and

• EV charging system, connected to the battery storage system,

and PV.

We partnered with the University of Salford early in the project

toprovide guidance on the technologies and understand how the

homefunctions under real life living conditions. In March 2022

afamilymoved in for 12 month period as a living trial and the

Universityof Salford are monitoring the performance of the house

indetail. This will signiﬁcantly assist us with planning our future

homes,andunderstanding our customer expectations.

Building the zero carbon home has been a hugely valuable

experience,both in terms of trialling new technologies, advanced

smart home control systems, integration of technologies and,

equally importantly, the build process. It has also identiﬁed new

skillsets whichare required and these are being integrated into

ourPersimmonWay of working to ensure quality outputs for

our customers.

The planned introduction of the Future Homes Standard (‘FHS’)

(Scotland 2024, England from 2025) requires a signiﬁcant step

change in energyeciency and carbon reduction, having to achieve

a 75-80% carbon emissions reduction. The legislation is still going

through consultation, and whilst some elements of the design will

be core, such as increased thermal eciency, there will be a number

of optionsavailable, especially around heating systems, which will

needtobe considered as part of each site design to achieve the

carbon reductionsrequired, including;

1. Further increased thermal eciency through the fabric such as

additional insulation in the ﬂoors, walls, roofs will be required,

andthepotential increased use of panellised walls systems.

2. Gas heating will be banned from new homes when the FHS

comesinto force during 2025, and therefore alternative heating

systems will be required such as all electric heating or air source

heatpumps (ASHPs).

3. Options for localised heating systems such as ground source

heat pumps, or small scale district heating systems will need to

beexplored, and will be region and location dependant. We will

conduct detailed studies to ensure the most optimised heating

solutions are provided.

4. Waste water heat recover systems, and mechanical heat and

ventilation systems may be required, which capture and re-use

heatwhich would otherwise be wasted.

5. Increased air tightness of the homes, and improved glazing

speciﬁcations such as triple glazing.

6. Solar PV and battery storage systems may be required where

localauthorities have renewable energy strategies.

All of the above options are being carefully considered for each

sitetoensure the best option for our customers and our business.

At the forefront of technology

Our homes have been heated by gas central heating systems, and

some electric systems for many years, and these are tried and tested

methods. Our customers have become very familiar with the beneﬁts

ofnear instant heating and domestic hot water systems that come

froma gas central heating system.

2. Infra-red integrated heating system trial –

Whittlesey Cambridge

Two properties have been developed with the Project Better

Energy Curv range of products. This method of infra-red heating is

exceptionally ecient, heating objects and surfaces much like the

sun, rather than volumes of air. These two homes are EPC A rated.

We have installed an integrated system with infra-red panel heaters,

complemented with zero carbon technologies comprising an air

sourcecylinder to heat hot water, integrated solar PV tiles, battery

storage and EV charging points. The properties have recently been

sold and we will be tracking the building performance and our

customers’ experience, to provide valuable feedback on liveability.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

The business has developed and will continue

to undertake a number of trials to evaluate the

most effective method of transitioning to the

Future Homes Standard and beyond to zero

carbon. The trials consider cost- both initial and

lifecycle, the anticipated customer experience

as well as the impact of introducing new

methods of construction that will affect both our

operational teams but also our supply chain

partners. Our Space4 facility, and in particular

the new technological efﬁcient factory under

development provides us with the unique

ability to implement amongst other initiatives

innovative ‘fabric ﬁrst’ solutions to enhance

thefuture efﬁciency of our homes.

Martyn Clark

Chief Commercial Officer

Changing our fleet andalternative fuel use

We have introduced electric vehicle options into our car ﬂeet

acrossall band levels, to provide more choice for colleagues,

andaretrialling the use of alternative low carbon fuels to replace

diesel forour construction and plant equipment.

2040: net zero carbon operations

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 1.68 tonnes

e (2021: 1.82 tonnes CO

e). We have updated our Scope 1

and two modelling and created our carbon reduction glidepath

withannualtargets.

A number of energy eciency actions have been undertaken

during2022. 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. Site cabinsare being trialled with solar panels, and

morerigorous reporting requirements have been put in place.

The Group has introduced energy awareness training modules to

improve on-site energy eciency 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.

The Group continues to purchase 100% renewable energy for

itsoces 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B in this year’s survey.

3. Trial of ASHP – Lawrence Weston, Bristol

We have undertaken a large scale trial at our Lawrence Weston

development in Bristol using ASHP and a higher grade of insulation

within the Space4 panel system. This will provide us with valuable

practical insights into the use of timber frame and ASHP against the

FHS expected carbon emissions reduction. The use of ASHPs requires

larger radiators and matching this with our customer expectations and

needs for usable wall space will be an important design consideration.

Alternatives such as ASHPs with underﬂoor heating systems are also

under consideration and are typically a more eective system.

4. Zero Carbon Homes Trial – Backbridge, Malmesbury

Following on from our Germany Beck trial we are constructing a

highly thermally ecient timber frame zero carbon home utilising

our new FHS standard wall cassettes from Space4, together with

zero carbon heating from air source heat pumps, to achieve the FHS.

Additional technologies such as PV and waste water heat recovery

arealso being evaluated as opportunities to deliver zero carbon

homesin operation for our customers.

These trials will help inform our low carbon energy transition planning.

Greenhouse gas emissions per home sold

1.68 tonnes CO

2021: 1.82 tonnes CO

Sustainability

Building for tomorrow continued

Persimmon Plc | Annual Report | December 2022

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and Scotland, and emissions are reported in line with the ﬁnancial control of the Group.

Greenhouse Gas Emissions and Energy Consumption Reporting

(Scope 1, 2 and 3)

Greenhouse gas emissions

2022 2021 2020

Scope 1 emissions from gas, travel

and construction site fueluse

tCO

25,005* 25,298 25,887

Scope 2 emissions from

electricity use

Location based tCO

2,151* 2,380 3,480

Market based tCO

12* 1,149 1,656

Total Scope 1 & 2 greenhouse

gas emissions

Location based tCO

27,156 27,678 29,367

Market based tCO

25,017 26,447 27,5 43

Scope 1 energy consumption MWh

99,980 96,508 95,110

Scope 2 energy consumption MWh

11,140 11,208 14,925

Carbon intensity Scope 1 & 2

emissions (per home sold)

Location based tCO

per home sold

1.82 1.90 2.16

Market based tCO

per home sold

1.68 1.82 2.02

Scope 3 emissions: Category 1: Purchased Services & Goods tCO

1,288,322* 1,254,243 N/A

Scope 3 emissions: Category 11: Use of Sold Products tCO

1,394,740* 1,193,835 N/A

Scope 3 emissions: Employee commuting tCO

11,067 14,537 N/A

Total Scope 3 emissions tCO

2,694,129 2,462,615 N/A

* The Scope 1, 2, 3 (category 1 & 11) greenhouse gas emissions data for 2022 has been externally veriﬁed to a limited level of assurance by Ernst & Young LLP (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 2022; diesel fuel usage on sites has been recorded directly in litres, which has improved

accuracy and a high proportion of our regional oces are now on smart meters. As part of the Group’s sustainability commitments, from August 2021 all purchased electricity is now backed by

Renewable Energy Guarantee of Origins (REGOs) certiﬁcates, which are provided to the Group.

This year the Group is again 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 travel survey data).

Greenhouse gas emissions

The Group’s GHG Scope 1 and 2 emissions (market based) decreased

in 2022 whilst the number of homes built increased. Data capture and

reporting have continued to improve, allowing the eects of eciency

measures to be more visible. Eciency measures have taken place in

a number of oces as part of refurbishments and actions will continue

through 2023.

Scope 3 emissions make up the majority of our total GHG footprint.

A slight increase has occurred in category 1 (Purchased goods and

services), however as this is currently calculated on a spend basis, there

could be a number of factors which have aected this, for example the

cost inﬂation has caused an increase in the prices of a large proportion

of the materials that we buy.

In 2022 we undertook a detailed embodied and whole life carbon

study of a representative sample of our house types. This data will be

used for the category 1 calculations going forwards and greatly improve

the accuracy of reporting.

Scope 3 category 11 emissions (use of sold products) have increased

reﬂecting the increased number of homes built. We have improved our

methodology this year with using real SAP data for a larger proportion

of the homes we delivered. The calculation methodology for this

category requires a 60 year timeframe to be used.

Carbon intensity Scope 1 & 2 per home sold

1.68

2021: 1.82

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

The average Standard Assessment Procedure

(SAP) rating of our new homes

equating to a ‘B’ EPC rating

Our new homes are already around

30%

more efﬁcient than the existing national

housing stock, which has an average SAP

rating of c.66, or an EPC rating of C

Responsible sourcing of 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.

Our supply chain

Our Scope 3 emissions arise from indirect activities through our

supplychain, and make up the vast majority of our overall carbon

footprint. Throughout 2022 we have been evaluating the embodied

carbon of a number of our house types including comparisons of timber

frame build. This information enables us to understand the materials

within our homes which have the most carbon impact, and in 2023

wewill be engaging with those core suppliers to seek opportunities

and options for lower carbon alternatives.

This is a whole industry challenge and we are part of the Future

Homes Hub Embodied Carbon Task Force which has undertaken

detailed analysis of available embodied carbon footprints to create

anunderstanding of where interventions can best be made and

createa delivery roadmap over the next 5 years.

We are partners to the Supply Chain Sustainability School to

assist in the delivery of a consistent approach to sustainability

andresponsible sourcing.

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.

Reducing our operational waste

Reducing waste generation is a key enabler for site eciency and

throughout 2022 we have focused on improving waste data capture

andsharing best practice. In 2022, 96% of waste was recycled

or reprocessed from our sites and o-site manufacturing facilities

(2021: 94%), with 7.1 tonnes of waste generated per home sold

(2021: 8.6 tonnes).

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 scaold bases. This not only reduces the amount

ofwaste we send to landﬁll, but also reduces our requirement

forthirdparty aggregates.

Clean site soil and sub-soil were identiﬁed as an opportunity where

theGroup could share information and manage any material deﬁcits

and surplus internally, thereby reducing waste costs and material

importcosts. An internal soil management platform has been

established where excess and deﬁcits soils needs can be registered.

In addition, one of our regions has engaged with the National Farmers

Union to promote the availability of clean soils and subsoils ensuring

they are treated as a valuable resource and avoid landﬁll. In 2023

wewill be establishing waste reduction targets to further reduce

wasteandpromote innovation.

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.

The Group Procurement department actively track compliance

withthispolicy.

Sustainability

Building for tomorrow continued

Persimmon Plc | Annual Report | December 2022

Transforming communities

As noted on pages 33 to 35, supporting sustainable communities

is a key priority for the business which is complemented by our

‘transforming communities’ sustainability pillar. Transforming our

communities is at the very heart of what we aim to deliver – we are

pleased to provide high quality homes for local people and support

communities through providing local jobs and supporting local

good causes.

This core sustainability pillar links our approach to:

• our customers;

• the quality of the homes we provide; and

• our communities.

We are determined to leave a positive legacy for the communities

we develop and support the communities that we operate within.

We continue to make positive strides on both the quality

of the homes that we deliver, through the implementation

of ThePersimmon Way (see page 22) and are proud to

provide attractively priced andenergy ecient homes for

ourcustomers(seepage 26).

Our Placemaking Framework guides each of our developments

ensuring that we design attractive communities providing

infrastructure and housing that meet local needs, see page 34

formore details.

Our customers

We place customers at the heart of our business. We are pleased

to provided attractively priced homes that allow customers to have

access to the UK housing market where otherwise they may not have

been able to aord to. Our private average selling price of £272,206

is over 20% below the UK national average.

We are delighted to be awarded an HBF ﬁve-star rating for the ﬁrst

time in our history in 2022.

Build quality

Our build quality ambition has grown from ‘build right, ﬁrst time, every

time’ to ‘trusted to deliver ﬁve-star homes consistently’.

The Persimmon Way was initially rolled out during 2020 and since

itsimplementation we have made improvements across all measures

– including a 25.8% improvement in NHBC Reportable Items (the

number of items reporting on by the NHBC on inspection of our

homes) since its introduction.

Our communities

Supporting sustainable communities is one of the Group’s key

priorities and complements the ‘Transforming communities’

sustainability pillar.

We have introduced a new Placemaking Framework that ensures that

all our developments create a sense of place for our customers and

put communities at the heart of our developments. Whilst we are a

national business, we have a local presence and are proud to support

our local communities.

See pages 25 to 27 for more details.

See pages 21 to 24 for more details.

See pages 33 to 35 for more details.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Bio-diversity

We are committed to demonstrating Biodiversity Net Gain (‘BNG’)

across our developments. Complementing our sustainability pillars,

biodiversity plays an integral role in our sustainability strategy.

The appointment of a dedicated Group Biodiversity Manager in 2022,

as part of our Sustainability team, demonstrates our commitment and

brings in-house expertise to support our teams, strengthening our

habitat designs and contributing to our sustainability targets. The role

will develop Group approaches to further enhance biodiversity within

our developments and further embed biodiversity net gain principles

into operations and decision making.

We continue to be proactive to ensure compliance with biodiversity

net gain, supporting teams through continuation of comprehensive

BNG training, issuing an internal guidance series and promoting

inter-disciplinary collaboration, well in advance of the mandatory

timeframe (November 2023). We are part way through reviewing our

land assets, identifying areas to improve biodiversity and developing

Group landscape design guides further embedding BNG into our

design processes. We run sustainability and biodiversity award

schemes for our teams which recognises and promotes well-designed

schemes, in line with our placemaking and sustainability principles.

We will beengaging more with our customers, promoting connectivity

with nature and developing guides on wildlife friendly gardening and

positively promoting the importance of biodiversity.

Case Study – Pond Hall Farm,

Harwich, Essex

Site Character

Harwich has a rich maritime history,

reﬂectedin the character of the port

and localbuildings. A number of local

architectural characteristics have been

drawnon for our housing designs.

The site lies alongside an existing urban

area, known locally as Dovercourt. As well

as residential use, Dovercourt boasts

employment areas and community

facilities. The development site has been in

agricultural use for some time and working

with the community, one objective of the

development was to provide accessible

green space.

Biodiverse Habitats and

Accessible Green Space

A spacious green corridor will run through the

site, along the northern aspect and remaining

site parameters. These greenspaces will be

full of wildﬂower meadows, over 420 trees

and winding, interconnecting pathways

for the community to enjoy and enhance

wellbeing. In addition to creating new habitat,

retention of existing features were equally

as important. Our design teams integrated

existing trees and hedgerows into the design

which will be enhanced and strengthened to

create optimal habitats for local wildlife and

form landscape character.

Hedgehog friendly fencing, bat and bird

boxes and areas for insects, reptiles and

amphibians also form part of the residential

design, linking gardens to the biodiverse

open spaces and creating signiﬁcant

opportunity and space for local wildlife.

This forms part of Persimmon’s wider plans

toenhance biodiversity on our sites.

Sustainability

Renewable energy was another development

objective and working with our sustainability

pillars, the development will deliver 20% of

the energy requirements through renewable

energy and EV charging points will be

provided to each of the 256 homes. This forms

part of Persimmon’s broader plans to achieve

net zero for new homes by 2030.

In addition to EV charging points, alternative

modes of sustainable transport will be

encouraged with the provision of cycle

and pathways, enabling access to wider

commercial and retail areas. Two new bus

stops, within walking distance, are also

being provided, enabling safe access to

thewider district.

Another focus was biodiverse, sustainable

drainage, utilising a combination of

permeable paving, swales and ﬁlter areas.

Ponds and reed beds aid on-site water

treatment and creates valuable places for

wildlife. To strengthen their attractiveness

for biodiversity, thoughtful management

techniques will be adopted which are

sensitive to wildlife life-cycles and allowing

seed to be fed back into the soil.

In a changing climate, as well as providing

habitat for local wildlife, the level of tree

planting within the greenspaces and inter-

twined with dwellings across the entire

development, will work towards capturing

carbon and help cool the community during

heatwaves, contributing towards our ﬁve

key priorities.

Community Focus

Delivering local needs is a fundamental

aspect of designing our developments.

By engaging early with ecologists,

landscapers and Council ocers, we have

worked in partnership delivering sustainable

local needs and biodiversity beneﬁts.

Cllr Je Bray, Cabinet Member for Planning

at Tendring District Council said “This is

a hugely exciting new development that

will deliver much needed homes for local

peoplein Tendring. The site reﬂects our

commitment to creating sustainable and

biodiverse new communities while also

supporting local wildlife. We’re very excited

to see over 400 trees being planted on-site

and look forward to working with Persimmon

and other organisations to deliver on these

priorities across Tendring.”

Sustainability

Transforming communities continued

Persimmon Plc | Annual Report | December 2022

Safe and inclusive

The health and safety of our customers,

workforce and all those visiting our

sites is paramount. We have performed

a comprehensive review of our HS&E

strategy and are rolling out a set of

fullydigitalised standards.

Abigail Bainbridge

Group Health, Safety and Environment Director

Pro-active site inspections undertaken

6,231

Read more on our Chief Executive’s

reviewonpages 14 to 20.

Our health, safety and

environment (HS&E) approach

• Following a comprehensive review of its health, safety and

environment strategy the HS&E department are continuing

torollout a set of fully digitalised HS&E standards, making

themmore accessible and interactive for our workforce.

• We have launched our improved Environmental Management

System (EMS), which provides a comprehensive set of

environmental standards. The EMS has been supplemented

byafull programme of training for all relevant roles in the

business. All sites going forward will receive an enhanced

speciﬁcperiodic environmental inspection.

• Once all 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).

• In 2022 we have recognised good HS&E performance through

our internal ‘HS&E Excellence Awards’ by rewarding site teams

that had demonstrated a passion and commitment to HS&E

initiatives above and beyond policy requirements.

• The Group will be implementing a digitalised site induction

andsign process via a new internally developed and

bespoke App to ensure site personnel and our supply chain

workforce aregiven a consistent induction in relation to

HS&E risks. The Appwill also enable us to keep enhanced

records ofpersonnel on-site and tocommunicate with our

siteworkforcemore eectively.

• We are partnering with the British Safety Council and leading

UKcharity ‘Mates in Mind’ to develop and implement a

wellbeingstrategy to ensure that all our workforce feel

supportedin the challenging times ahead for everyone

in the UK.

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 oces.

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.

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 2022, the HS&E department undertook 6,231 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 2022, 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 29 (2021: 32).

Injuries per one thousand workers, which includes injuries sustained

by our contract workforce, has decreased to 3.6 per one thousand

workers (2021: 4.0). The level of build per injury, including contractor

injuries, was 265 legal completions per injury which was broadly in

linewith 2021 (2021: 296).

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

In the ﬁrst half of 2022 we continued to respond to the restrictions

imposed as a result of the pandemic, keeping our own Covid-19

policies and procedures in place until July. From July we introduced

new standards for all our workplaces on preventing respiratory

infections which included providing guidance to everyone on what

they can do in their daily life to help reduce the spread of Covid-19

and respiratory infections to help protect those at highest risk.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Our Group Annual Incidence Injury Rate (AIIR) for 2022 was

1.8per1,000 workers (2021: 2.5), lower than the ‘Home Builder’

averageAIIR(2.3). In our manufacturing operations, we reported

3RIDDORs in2022 (2021: 2).

Building Safety

We are one of only ten companies to have been awarded a Certiﬁcate

of Commitment and Progress as the ﬁrst stage to achieving Building

a Safer Future Champion status. Dame Judith Hackitt has publicly

applauded those who have achieved this award as an example to

drivecultural change for the right reasons rather than waiting for

regulators to drive the change.

The foundation for adiverseworkforce

Early 2022 saw the conclusion of an external Diversity & Inclusion

Review across the Group, leading to the establishment of our D&I

strategy. To support the implementation of this strategy we have

commenced a programme of diversity training that, following

presentation to the Board and the Senior Executive Team, is being

delivered throughout the Group. This includes ‘Inclusive Leadership’

formanagers as well as ‘Positive Workplace’ aimed primarily at site-

based colleagues, covering bullying, banter and harassment as well

as mental health and inclusion. To further support the introduction

of the strategy, we have established a Diversity & Inclusion Working

Group, consisting of colleagues with diverse backgrounds from across

the organisation. Rather than just a ‘talking shop’, the Group has

received training on their role and each member has responsibility

for a work-stream aligned to the strategy. They are working actively

with their wider colleagues in the Company, in conjunction with the

Director of Talent and Diversity and the Diversity & Inclusion Council,

which comprises senior leaders and is responsible for ensuring

implementation of the strategy.

The Company also recognises a selection of events in the D&I

calendarand amongst others during the year, marked International

Women’s Day, Pride and the International Day of Persons

with Disabilities.

In March 2021, the Group set some stretching diversity targets with

thespeciﬁc objective of increasing the representation of women

acrossthe Group by the end of 2025. After two years, our progress

against these targets is as follows:

Our Gender Data 2022 2021

Board Male

6 (66%) 6 (66%)

Female

3 (33%) 3 (33%)

Senior Executive Committee

and direct reports

Male

35 (66%) 51 (72%)

Female

18 (34%) 20 (28%)

All Colleagues Male

4,045 (73%) 3,793 (73%)

Female

1,509 (27%) 1,403 (27%)

Median gender pay gap

13.5% 18.1%

• The percentage of females in the senior management team

iscurrently 34%, against a target of 35%.

• Of all our management roles in the Company, the female

percentageis 32%, against a target of 45%.

• The percentage of female employees in the Group is 27%,

againstatarget of 40%.

The Group has made good progress in increasing diversity at senior

levels and the overall proportion of women in management roles

is increasing. The proportion of females employed in the Group as

a whole, has only moved very slowly and reﬂects the fact that site-

based roles for skilled tradespeople, operatives and labourers, are

stillfavoured by men, despite Company and national initiatives to

promote site skill-based roles and apprenticeships to women.

An additional measure of progress is the percentage of salaried

employees who are women, which includes site management and

currently stands at 39%, comparing favourably to our proposal that by

the end of 2025 this will be 45%. To help with further progress against

these targets, the Group will be establishing a Women’s Network

during 2023, which will be launched by the Group Chief Executive

at a conference, with the objective of determining the appropriate

strategies to promote positive experiences for women who are, or

areconsidering, working for Persimmon at any level across the Group.

Sustainability

Safe and inclusive continued

Persimmon Plc | Annual Report | December 2022

Financial review

How we performed in 2022

Trading through the ﬁrst half of the

year was strong with good levels

of customer demand and average

private weekly sales rate in line

withthe prior year at 0.91.

The summer months showed the “normal seasonal”

expected slow-down, with sales rates in Q3

decreasing to 0.63 (Q3 2021: 0.63). In the second

half, pricing remained ﬁrm whilst cancellation rates

stepped upwards as the ongoing war in Ukraine,

along with the UK Government changes and

the increased cost of living, created signiﬁcant

uncertainty in the UK economy. The change

in market conditions gathered pace in Q4 with

weaker consumer conﬁdence impacting on

customer behaviour across the housing market.

This weakening was reﬂected in the Group’s

private weekly sales rate that fell to 0.30 in Q4

(Q42021: 0.77) and to 0.19 for last seven weeks

ofthe year (2021: 0.61).

The strong forward sales position at the start of

the 2022 ﬁnancial year supported the excellent

ﬁnancial performance for the year. As a result of

the lower sales rate and elevated cancellations in

the second half of the year, the Group’s forward

sales position reduced signiﬁcantly year on year

to£1.0bn(2021: £1.6bn) at 31 December 2022.

For 2022, the Group generated total revenues of

£3.82bn (2021: £3.61bn), with new housing revenue

7% higher than 2021 at £3.70bn (2021: £3.45bn).

The Group delivered 2% more new homes in 2022

when compared to the prior year (2022: 14,868;

2021: 14,551) at an average selling price of £248,616

(2021: £237,078), 5% higher.

The Group delivered 12,174, new homes to private

customers, an increase of 1% on 2021 (2021: 12,018).

The private average selling price of £272,206

(2021: £259,231) was up 5% year on year largely

reﬂecting improvements in achieved selling

prices and the mix of new homes sold. The Group

delivered a further 2,694 new homes to its housing

association partners (2021: 2,533) at an average

selling price up 8% at £142,017 (2021: £131,976).

The Group’s underlying gross proﬁt

for the

yearwas£1,142.5m (2021: £1,083.8m) with a new

housing gross margin of 30.9%

(2021: 31.4%).

The Group’s well established land replacement

strategy, the improved selling prices achieved

and agile management of the high cost inﬂation

environment we experienced during the year

continued to deliverindustry-leading margins.

Underlying operating proﬁt

for the Group

was £1,006.5m (2021: £966.7m), generating

anunderlying new housing operating margin

of27.2%(2021: 28.0%).

The strong forward sales position at the

start of the 2022 financial year supported

the excellent financial performance for

the year. As a result of the lower sales rate

and elevated cancellations in the second

half of the year, the Group’s forward

salesposition reduced significantly

yearon year to£1.0bn(2021: £1.6bn)

at31 December 2022.

Jason Windsor

Chief Financial Officer

Underlying operating profit

£1,006.5m

2021: £966.7m

Underlying return on

average capital employed

30.4%

2021: 35.8%

Land creditors

£472.8m

2 021: £ 4 07. 6 m

1. Stated before legacy buildings provision charge of £275.0m (2021: £nil).

2. Stated before legacy buildings provision charge (2022: £275.0m, 2021: £nil)

and based on new housing revenue (2022: £3,696.4m, 2021: £3,449.7m).

3. Stated before legacy buildings provision charge of £275.0m (2021: £nil)

andgoodwill impairment (2022: £6.6m, 2021: £6.2m).

4. Stated before legacy buildings provision charge (2022: £275.0m, 2021: £nil)

and goodwill impairment (2022: £6.6m, 2021: £6.2m) and based on new

housing revenue (2022: £3,696.4m, 2021: £3,449.7m).

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

On 8 November 2022 we announced that we

expected to increase our legacy buildings safety

provision to approximately £350.0m from £75.0m.

This increase has been ﬁnalised and has resulted

in a £275.0m exceptional charge to the Income

Statement in 2022.

After the exceptional charge the Group’s reported

gross proﬁt was £867.5m (2021: £1,083.8m)

and its reported operating proﬁt was £724.9m

(2021: £960.5m).

The Group generated a proﬁt before tax of

£730.7min the year (2021: £966.8m).

Taxation

The Finance Act 2022 received Royal Ascent on

24 February 2022 introducing a new residential

property developer tax (RPDT) which was eective

from 1 April 2022 and is chargeable at 4% of proﬁts

generated from residential property development in

excess of an annual threshold. RPDT was introduced

by HM Treasury to obtain further contributions from

the UK’s largest residential property developers

towards the cost of remediating defective cladding

and ﬁre safety in the UK’s “orphaned” high-rise

housing stock developed by third-parties.

As a result the Group has an overall tax charge of

£169.7m for the year (2021: £179.6m) and an eective

tax rate of 23.2% (2021: 18.6%), marginally higher

than the mainstream rate of 22.0% (2021: 19.0%).

Factors that may aect 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.

A further 16,422 plots are under the Group’s

control(2021: 20,954), being plots where the

Grouphas exchanged contracts to acquire the

site but has yet to complete the contract due

to outstanding planning conditions remaining

unfulﬁlled. Cash outﬂows with regard to these

undercontrol plots will be limited to deposits

paid onthe exchange of contracts and fees

associated with progressing the sites through

the planning system. During the year the Group’s

progressed c.18,500 under controlplots through

theplanningsystem, transferring them into the

Group’s owned land holdings.

The Group incurred £663.8m of cash land spend

during 2022, including £206.7m relating to the

satisfaction of deferred land commitments as well

asthe associated cash spend on the acquisition

ofsites previously held as under control sites

and their movement into the Group’s owned

land holdings.

In 2022, the Group acquired interests in a

further450 acres of strategic land, securing

a totalofc.13,100 acres at 31 December 2022

(2021:c.13,700 acres). This will provide a

long-termsupply of forward plots for future

developmentby the Group.

Work in progress

We entered 2022 with c.4,100 equivalent units of

new homes under construction. Execution of our

build programmes was strong throughout 2022.

Overall build rates tracked c.8% ahead of 2021,

with an average of 276 equivalent units of build

per week, compared to 255 per week in 2021.

When allowing for the strong delivery of new

homesin 2022, we start 2023 with a signiﬁcant

levelof work in progress, with c.3,900 equivalent

units of build on the balance sheet.

Underlying return on average capital employed

(‘ROACE’) including land creditors remained strong at

30.4%

, albeit lower than the prior year (2021: 35.8%).

The reduction on the prior year reﬂects the increased

investment in land and work in progress during the

year leading to a 22% increase in average capital

employed, partially oset by the 4% increase in

underlying operating proﬁt

. ROACE excluding

land creditors was 35.6%

compared with 40.9%

at 31 December 2021. On a statutory basis ROACE

including land creditors was 21.9% (2021: 35.6%).

Return on Equity based on underlying proﬁt after tax

was in line with the prior year at 22.0% (2021: 20.1%).

Balance sheet

The Group has maintained its robust balance sheet

with net assets of £3,439.3m at 31 December 2022

(2021: £3,625.2m), equivalent to 1,077p net assets

per share (2021: 1,136p). This was after returning

£750.1m of surplus capital to shareholders under the

previous capital allocation plan. Retained earnings

were £2,868.5m (2021: £3,055.1m). Underlying basic

earnings per share³ for the year was 247.3p, 0.6%

lower than the prior year (2021: 248.7p).

The Group’s deﬁned beneﬁt pension asset has

increased to £155.9m at 31 December 2022

(2021: £148.8m). The increase being due to an

increase in discount rates and a decrease in

inﬂationassumptions which have reduced the

valueplaced on the liabilities oset by falling asset

values resulting from weak asset performance.

As noted above we have increased the legacy

buildings safety provision by £275.0m in the year.

Financial review continued

At 31 December 2021, the provision stood at £72.7m

and during the year works have continued across

anumber of aected developments resulting

in spend of £14.4m. At 31 December 2022, the

provision stands at £333.3m and is management’s

best estimate of the costs of completing works

to ensure ﬁre safety on the remaining aected

buildings that we are responsible for.

The Group’s land holdings

At 31 December 2022, the carrying value of the

Group’s land assets increased by c.16% to £2,091.7m

(2021: £1,798.2m), reﬂecting the continuation of

the Group’s disciplined land replacement strategy

and its investment in its future. During 2022, the

Group made investments totalling £735.8m in

new land (2021: £531.2m). The Group’s land cost

recoveries for the year of 12.0%

of new housing

revenue (2021: 13.2%) reﬂect the attractive margin

embeddedin the Group’s land holdings.

During the year the Group brought 14,670 plots

intoits owned and under control land holdings

across 66 locations, of which 5,348 (36%) of the

plots added were converted from our strategic

land portfolio.

The owned and under control land holdings

of 87,190at 31 December 2022 (2021: 88,043)

represents 5.9 years of forward supply at

2022 volumes. 70,768 plot are owned of which

35,860 have a detailed implementable planning

consent,providing excellent visibility of the

near to medium term. The Group’s owned land

holdingsrepresents4.8 years of forward supply

at 2022 volumes, with anoverall pro-forma

grossmargin

of c.32% and acost to revenue

ratioof11.4%

(2021: 11.4%).

5. 12 month rolling average calculated on operating proﬁt before legacy

buildings provision charge (2022: £275.0m, 2021: £nil) and goodwill

impairment (2022: £6.6m, 2021: £6.2m) and total capital employed.

Capital employed being the Group’s net assets less cash and cash

equivalents plus land creditors. ROACE excluding land creditors is

calculated on capital employed being the Group’s net assets less

cashand cash equivalents excluding land creditors.

6. 12 month rolling proﬁt after tax pre legacy buildings provision charge

generated from the average of the opening and closing total equity

forthe 12 month period.

7. Land cost value for the plot divided by the anticipated future

revenueofthe new home sold.

8. Estimated weighted average gross margin based on assumed

revenues and costs at 31 December 2022 and normalised

output levels.

9. Land cost value for the plot divided by the anticipated future

revenueofthe new home sold.

Persimmon Plc | Annual Report | December 2022

The Group increased its outlet position by 16%

inthe year and continued to support investment

ina number of large sites which require high

levels of infrastructure and enabling works.

In addition, we have seen higher rates of cost

inﬂation. This hasresulted in our work in progress

investmentat 31 December 2022 of £1,263.9m

being20% higher than the level of investment

withwhich we entered 2022 (2021: £1,054.1m).

We remain focused on build levels throughout

2023, managing appropriate levels of build

againstcustomer demand, facing into the

continuingoperational challenges within the

industryand whilst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. All of this whilst delivering high levels

ofcustomer satisfactionand build quality.

Cash generation and liquidity

At 31 December 2022 the Group had a cash

balanceof £861.6m (2021: £1,246.6m) with the

Grouphaving generated £1,002.7m (2021: £1,209.8m)

of cash before returning £750.1m of surplus capital

to shareholders in relation to the 2021 ﬁnancial

year under the previous capital return programme

and net land spend of £637.6m. Resulting from the

Group’s increased activity in the land market during

2022 the Group’s deferred land commitments have

increased by £65.2m to £472.8m from £407.6m at

31 December 2021. Cash generated from operations

was £566.3m (2021: £972.8m).

Operational cash generated, being cash generated

before returns to shareholders and after land

investment, was £266.9m (2021: £678.6m).

The Group has an undrawn £300m Revolving

CreditFacility which extends out to 31 March 2026.

As at 31 December 2022, we had 286 part

exchangeproperties (2021: 130) on the balance

sheet at a value of £62.5m (2021: £25.9m).

The Group’s shared equity loans have generated

£13.3m of cash in the year (2021: £18.9m).

The carrying value of these outstanding shared

equity loans, reported as “Shared equity loan

receivables”, is £36.0m at 31 December 2022

(2021: £45.6m).

Net ﬁnance income for the year was £5.8m

(2021: £6.3m) and includes £3.9m of gains

generatedon the Group’s shared equity loan

receivables (2021: £7.9m) and £1.8m of imputed

interest payable on land creditors (2021: £1.8m).

Capital allocation policy,

treasuryand related risks

A key feature of the Group’s strategy is the

commitment to minimise ﬁnancial risk, retain

ﬂexibility and maintain capital discipline over

thelong-term through the housing cycle.

In November 2022, we announced the conclusion

of the capital return programme that was ﬁrst

introduced in 2012, and the move to a new capital

allocation policy that takes into account political

andeconomic uncertainty and the sector’s

increased taxation rates.

The Group has a long track record of delivering

returns for shareholders and the Board will

continueto prioritise value creation from a strong

and sustainable return on capital by investing

inlandand other opportunities as they arise.

For 2022, the Board proposes a ﬁnal dividend

of 60p per share to be paid on 5 May 2023 to

shareholders on the register on 14 April 2023,

following shareholder approval at the AGM.

This dividend is the ﬁnal and only dividend

inrespectof ﬁnancial year 2022.

For 2023, the Board’s intention is to at least

maintainthe 2022 dividend per share with a view

to growing this over time whilst maintaining an

average payout that is well covered by earnings

over the housing cycle. This approach will balance

shareholder payouts with the company’s objective

to retain capital to invest sustainably and proﬁtably

for growth.

Any dividend proposal in future years is subject

tothe company’s ﬁnancial performance and

positionat that time.

In periods of higher proﬁtability, any excess capital

will be returned to shareholders through a share

buyback or special dividends.

As previously announced, capital allocation

payments will be paid semi-annually and the

Boardintends to pay an interim dividend in

relationto 2023, in the second half of this year.

The business maintains a robust balance sheet

withan ecient capital structure and controls

aroundits working capital management. The Group’s

£300m Revolving Credit Facility provides further

ﬂexibility to the Group’s working capital resource.

These facilities are available to support the working

capital needs of the business.

The Group will continue to eectively manage its

liquidity and working capital investment needs,

whilst ensuring they are aligned with the Group’s

focus on outlet growth, high levels of build quality

and excellent customer service. 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.

Jason Windsor

Chief Financial Officer

28 February 2023

Cash

£861.6m

2021: £1,246.6m

Cash generation

prelandspend

£1,002.7m

2021: £1,209.8m

Net asset value per share

1,077p

2021: 1,136p

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

How we manage risk

Protecting long-term value creation

In common with all businesses, Persimmon

isexposed to various risks and uncertainties

inthe course of delivering its strategy.

In particular, the UK housing market is sensitive

to both changes ineconomic conditions

and thepolitical, regulatory and legislative

environment. To manage these challenges,

the Group has a well-established and robust

framework in place for the management of risk,

designed to ensure the eective and timely

identiﬁcation and evaluation of risks and their

ongoing mitigation. This risk management

framework is critical to the Group’s ability

tocreate value over the long-term.

The Board has overall responsibility for the assessment and eective

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 &

Risk Committee, Group Internal Audit department and operational

management teams. This includes a wide-ranging annual survey of

Board and senior management in order to assess key risk issues and

emerging risks. Collectively, these processes provide the Board with

visibility of the Group’s full risk landscape, while remaining focused

on the most signiﬁcant threats and trends. While these processes

assist in the eective identiﬁcation, evaluation and management of

risk, the Board recognises that they can provide only reasonable

andnotabsolute assurance, and cannot eliminate risk altogether.

Risk identification and evaluation

The Group’s risk management framework includes detailed risk

registers at various levels, from our principal risks at Group level

through to detailed operational and functional risks. The risk registers

are subject to continual update in order to reﬂect changes in the

environment in which the Group operates, the results of internal audit

work, and other factors such as the Group’s previous assessment of the

material issues of our stakeholders. In addition, a formal review of the

risk registers is conducted on an annual basis, facilitated by the Group

Internal Audit department. Standardised guidance is in place to support

risk owners in their assessment of risks, in respect of both probability

and impact. The resulting rating of risks considers both the inherent,

untreated risk and the residual risk, taking into consideration the

eectiveness of our mitigating controls. On an annual basis, an analysis

of the overall risk environment is presented to the Board through the

Audit & Risk Committee, including an assessment of new and removed

risks, and any material changes in risk assessments to aid the Board

intheir review.

The process for the formal identiﬁcation of our principal and emerging

risks, is informed by a comprehensive annual survey of Board and

senior management, carried out with the support of the Group Internal

Audit department. This reappraises the Group’s previously reported

principal risks, as well as key risk areas identiﬁed from the review of

the Group’s wider risk environment. Commentary on emerging risks is

analysed, with key themes consolidated for review. The Board, through

the Audit & Risk Committee, reviews the detailed reporting on the

results of the survey and determines the overall assessment.

Managing risks

Each of the Group’s risk registers has a deﬁned owner, generally at

the level of the Executive Committee. Risk owners are responsible

for reviewing the eectiveness of the internal controls to mitigate

risks within their area, and developing appropriate action plans

where necessary. Risk owners are challenged on the design and

eectiveness of mitigating controls as part of the annual review

oftherisk registers.

Monitoring of the Group’s principal risks takes place through the

routine work of the Executive Committee and the Board. The Board

receives reporting on lead indicators for each principal risk, considering

both internal and external data sources and detailed management

commentary on the performance of mitigating controls.

Persimmon Plc | Annual Report | December 2022

Risk management framework

Board ownership and oversight

The Board determines Group strategy and has overall

responsibility for the identiﬁcation and management

of risks that could disrupt the delivery of the strategy,

including the Group’s ﬁve key priorities. To do so,

theBoard:

• Conducts reviews of principal and emerging risks.

• Monitors indicators of risk performance in order to inform strategic decision making.

• Periodically reviews the Group’s risk registers in their entirety.

• Ensures an eective system of internal controls is in place to manage risks to

acceptablelevels.

• Obtains assurance on the performance of internal controls and risk management

processes.

Principal risks and material issues

Risk identification, mitigation and monitoring

Audit & Risk Committee

Management oversight

Group Internal

Audit department

Group functions Operational management

First line of defence Second line of defence Third line of defence

• Monitors the integrity of the

Group’s corporate reporting

processes.

• Approves the Group Internal

Audit Manager’s risk-based

annual audit plan and monitors

the eectiveness of internal audit.

• Monitors the external audit and

reviews its eectiveness.

• Receives reporting from

management and external

providers of assurance on the

eectiveness of risk management

and internal control.

• Responsible for managing

operational performance and

identifying changes in key risks

aecting the business.

• Ensures the implementation

ofinternal controls set by the

Board and Group functions

withinthe business.

• Routinely interacts with

management at regional and

Group levels and the Board.

• Contributes to the formulation

ofGroup policies, procedures

andcontrol mechanisms.

• Monitors the implementation

of Group risk management and

internal control processes.

• Has ownership of individual

operational-level risk registers

foreach function.

• Support steering groups on

keyrisk areas including General

Data Protection Regulation

(GDPR), Information Security,

andInternal Controls over

Financial Reporting.

• Provides monitoring and

assurance on the implementation

of controls at operational level.

• Delivers a risk-based annual

internal audit plan.

• Performs testing on key areas

ofcompliance and assurance.

• Produces lead indicator reporting

on the Group’s principal risks.

• Maintains the Group’s risk

registers and oversees the annual

review process with risk owners.

• Facilitates the annual principal

and emerging risk survey of the

Board and senior management.

• Provides an annual summary

report on the eectiveness of risk

management and internal control.

Principal and emerging risks overview

In line with the UK Corporate Governance Code 2018, 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 has

deﬁned emerging risks as risks that are evolving in ways that are not

yet clear, and where the impact and potential timing of risk realisation

remain uncertain. The results of the Board’s assessment of the

Group’sprincipal and emerging risks are outlined below.

Principal risks

The Group has identiﬁed 11 risk areas that meet its criteria for

consideration as principal risks. These risks are detailed further on

pages 59-63. The 2022 assessment has identiﬁed a new principal

risk concerning legacy buildings. This reﬂects the potential for

further legacy properties to be brought into the scope of cladding

and life-critical ﬁre safety remediation works, for costs to be greater

thananticipated, or other regulatory changes to occur in this area.

The assessment has also noted movements in our rating of the

risksinrespect of UK economic conditions, mortgage availability

andcyber and data risk. These movements are illustrated on the

heatmap on page 58.

The Group no longer considers the previously reported pandemic

and strategy risks as meeting the criteria of principal risks. This reﬂects

the Group’s comprehensive suite of controls deployed during the

Covid-19 pandemic, which could be swiftly adapted and redeployed

asnecessary, and that the likely eects of a future pandemic are

included within the Group’s other principal risks, such as those

concerning UK economic conditions and Government policy.

Emerging risk areas

Following the Board’s review of the comprehensive risk survey

exercise, planning uncertainty has been recognised as an emerging

risk area. This reﬂects uncertainty as to how various aspects of planning

legislation and regulation may develop over the medium-term, and how

this could aect land purchase decisions and the ability of the Group

to bring sites through to development. The Board considers that this

uncertainty could evolve over time to meet the criteria of a principal risk.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

How we manage risk

Principal risks and material issues continued

Material issues Principal risk

Strategy

UK economic conditions

Social value/enhancing communities

Government policy and political risk

Health and safety

Health, safety and environment

Talent attraction, development,

diversity and engagement

Skilled workforce, retention

andsuccession

Helping customers live sustainably

Materials and land purchasing

Climate change action and resilience

Climate change

Build quality and safety

Reputation

Governance

Regulatory compliance

Customer satisfaction

Cyber and data risk

Cyber security and protection

Mortgage availability

Legacy buildings

Principal risks – heat map

Residual (mitigated) risk impact

Residual (mitigated) risk likelihood

Less likely More likely

Low Medium High

sustainable value

for all stakeholders

which delivers

Principal

risks

is protected by a

risk management framework

which is enhanced by

Our purpose, strategy

and business model

Material issues

The Board continues to recognise the value of stakeholder

engagement in ensuring the Group’s ability to create and protect

valueover the long-term. A materiality assessment has previously

beenperformed to identify the most important issues for our

stakeholders. The results of this assessment are closely linked

totheGroup’s principal risks, as detailed within the principal

risksheatmap and table.

Overall assessment

The Board has completed its assessment of the Group’s principal

andemerging risks. This assessment, along with a range of

sensitivityanalyses against various risk scenarios materialising

together,and the likely responses of the Board, have contributed

tothebroader assessment of the resilience of the Group’s business

model. The results of this assessment are detailed further within

theViability Statement (see pages 75-77).

Current year Movement from year prior

Persimmon Plc | Annual Report | December 2022

UK economic conditions

Residual risk rating: Very High

Risk trend assessment

Overall: Increase

Impact: No change

Likelihood: Increase

Link to priorities:

Government policy and political risk

Residual risk rating: High

Risk trend assessment

Overall: No change

Impact: No change

Likelihood: No change

Link to priorities:

Health, safety and environment

Residual risk rating: High

Risk trend assessment

Overall: No change

Impact: No change

Likelihood: No change

Link to priorities:

Risk description

The housebuilding industry is sensitive to changes in the economic

environment, including unemployment levels, interest rates and consumer

conﬁdence. A deterioration in economic conditions could adversely aect

demand and pricing for new homes, which could in turn impact upon our

revenues, margins, proﬁts and cash ﬂows and potential impairment of

asset values.

Economic conditions in the land market may adversely aect the availability

of a sustainable supply of land at appropriate levels of return.

Approach to risk mitigation

In order to minimise risk and maintain ﬁnancial ﬂexibility, the Group pursues

a highly disciplined approach to investments in land and work in progress,

ensuring these are appropriate and reﬂective of current and anticipated

levels of demand.

Pricing structures are regularly reviewed to reﬂect local market conditions.

The Group beneﬁts from a UK-wide network (with no signiﬁcant presence

inLondon), mitigating the eects of regional economic ﬂuctuations.

How we monitor the risk

• The Board closely monitors sales activity and UK economic

trends closely.

• The Principal Risk Lead Indicator reports issued to each meeting of the

Board includes analysis of economic indicators, using both internal and

external sources.

Risk description

Changes to Government policy have the potential to impact on several

aspects of our strategy and operational performance. Recent examples

include the impacts of the withdrawal of the Help to Buy scheme, the

introduction of the Residential Property Developer Tax (RPDT), and

proposed changes in planning regulations. Further policy changes

may arise in response to the anticipated CMA market study into the

housebuilding sector. Such changes have the potential to adversely

aectrevenues, margins, tax charges and asset values, and potentially

impact onthe viability of land investments.

Approach to risk mitigation

Our mission and our ﬁve key priorities (see pages 21-35), are aligned

withthe Government’s stated ambition to increase housing stock.

Investment decisions in land and work in progress are tightly controlled

in order to mitigate exposure to external inﬂuences, including potential

changes in Government policy.

The Group has experienced teams with expertise in managing and

responding to relevant areas subject to Government involvement, including

our Group Planning, Technical and External Aairs departments.

How we monitor the risk

• Likely evolutions in Government policy in relation to the housing market

are monitored closely by our External Aairs, Technical and Land

and Planning departments, with regular feedback to the Executive

Committee and Board.

• We routinely engage with industry bodies to review the impact

ofanyanticipated legislative or regulatory changes.

Risk description

In addition to the human impacts of any health, safety or environmental

breach or incident, there is the potential for reputational damage,

construction delays and ﬁnancial penalties.

Approach to risk mitigation

The Board retains a very strong commitment to health and safety and

managing the risks in this area eectively. Operationally, this commitment

isimplemented by a range of measures, including:

• Comprehensive policies and procedures to manage construction

activities safely.

• Training programmes to embed the Group’s policies eectively.

• Inspection regime led by our Group Health, Safety and

Environment department.

• Engagement with industry forums and best practice groups.

How we monitor the risk

• Data from inspections by the Group Health, Safety and Environment

department feed into management reports at all levels of the Group.

• The Principal Risk Lead Indicator reports issued to each meeting of the

Board includes analysis of inspection metrics provided by the Group

Health, Safety and Environment department.

• The Group Health, Safety and Environment Director is a member of the

Group Executive Committee, and provides additional periodic reports

and updates to both the Board and the Audit & Risk Committee.

Build quality

& safety

Reinforcing trust:

customers at the

hertofour business

Disciplined growth:

highquality land

investment

Industry-leading

ﬁnancial

performance

Supporting

sustainable

communities

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

How we manage risk

Principal risks and material issues continued

Risk description

Recruiting and retaining a highly skilled workforce and supporting

management teams is essential to the delivery of the Group’s strategy.

Heightened competition for skilled labour creates risks of increased

costs,operational disruption and potential delays to build programmes.

Approach to risk mitigation

The Group has deployed a range of measures to maintain an appropriately

skilled workforce, including:

• Comprehensive range of training programmes managed by the Group

Training department, including apprenticeships, graduate scheme and

the Persimmon Pathways in core disciplines.

• Talent management and succession planning programmes.

• Remuneration benchmarking to ensure reward is appropriate to attract

and retain talent at all levels.

• Utilisation of our Space4 products, which improve build eciency

andrequire less on-site labour than traditional construction.

• Increased focus on employee engagement measures (see pages 36-41).

• Deployment of hybrid working practices, where appropriate.

How we monitor the risk

• The Group HR department provides reporting, including metrics such

astraining hours, to management at all levels of the Group.

• The Group HR Director is a member of the Group Executive Committee,

and provides additional periodic reports and updates to the Board on

employment trends.

• Feedback from the Employee Engagement Panel is reviewed by the Board.

• The Principal Risk Lead Indicator reports issued to each meeting

of theBoard includes sta turnover data and commentary from the

GroupHR department.

Risk description

Availability of materials

Ensuring access to materials of the requisite quantity and speciﬁcations

is critical in delivering high quality homes. Heightened levels of demand

for materials may cause availability constraints and increase cost

pressures. Build quality may be compromised if unsuitable materials

are procured leading to damage to the Group’s reputation and overall

customer experience.

Land purchasing

Maintaining an appropriate supply of suitable land is crucial to the Group’s

strategy. Failure to maintain a sucient supply of land at the appropriate

levels of return could adversely aect sales, margins and return on

capital employed.

Approach to risk mitigation

Availability of materials

Various mitigations are in place to ensure consistent sourcing of materials

and cost eciency:

• Vertical integration through the Brickworks, Tileworks and Space4.

• Strategic approach to procurement, led by our Group Procurement team.

• Supply chain engagement, including robust processes for appointing

suppliers and reviewing their performance thereafter.

• Detailed forecasting and planning of materials requirements to inform

supplier negotiations.

• Support for our supply chain through adherence to the Prompt Payment

Code (PPC).

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.

How we monitor the risk

Availability of materials

• The Group Procurement department provides routine monitoring

oftrends and supplier performance.

• Site budgets and performance, including availability and pricing of

materials, are assessed through the bi-monthly valuation process.

• The Principal Risk Lead Indicator reports issued to each meeting

oftheBoard include commentary from the Group Commercial

Directoron materials purchasing trends and issues.

Land purchasing

The Group’s Land Committee meets regularly to review the Group’s current

land holdings and future needs, and to assess potential land transactions.

Materials and land purchasing

Residual risk rating: High

Risk trend assessment

Overall: No change

Impact: No change

Likelihood: Decrease

Link to priorities:

Skilled workforce, retention and succession

Residual risk rating: High

Risk trend assessment

Overall: No change

Impact: No change

Likelihood: No change

Link to priorities:

Persimmon Plc | Annual Report | December 2022

Risk description

The eects 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 FHS. 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 of climate change.

Approach to risk mitigation

The potential impacts of climate change are considered systematically

inkey business decisions, from land acquisition through to planning

and build processes. In response, the Group has established a

range ofmeasures to improve its operational eciency and direct

environmentalimpact, including:

• Maintaining a detailed climate change risk register.

• Setting science based carbon reduction targets, accredited

bytheScience Based Targets initiative (‘SBTi’).

• Targets to deliver ‘net zero’ homes in use to our customers

by2030andbecome ‘net zero’ in our operations by 2040.

• Regular meetings of the low carbon homes working group,

comprisingsenior employees from various disciplines,

includingpreparation for theimplementation of the FHS.

• Introduction of EV options into the Group’s ﬂeet.

• Procurement of 100% renewable energy for our oces

andmanufacturing facilities.

For more detail please see pages 64-74.

How we monitor the risk

• The Sustainability Committee meets regularly to review progress

ontheGroup’s climate-related initiatives.

• Key indicators including CO

emissions and waste generation

aremonitored and reported on.

• We undertake an external review of our Scope 1, Scope 2,

Scope3Category 1 (Purchased goods and services) and Scope 3

Category 11 (Use of sold products) emissions.

For more details see pages 64-74.

Risk description

Failure to live up to our expected high standards in governance, build

quality (including remediation of legacy issues), customer experiences,

operational performance, management of health and safety or local

planning concerns could damage stakeholder relationships and have

adetrimental impact on ﬁnancial performance.

Approach to risk mitigation

The Group is committed to ensuring an appropriate culture and maintaining

high quality in all aspects of its operations. This is subject to oversight from

the Board. We have made signiﬁcant investments in build quality, through

The Persimmon Way and the supporting Independent Quality Controller

(IQC) regime, and in addressing legacy issues (see page 98).

We formally commenced the registration process for the New Homes

Quality Code (NHQC) within 2022. The Group supports the NHQC’s focus

on driving quality and customer service improvement across the industry.

The Group also proactively works to build positive relationships with all

of our stakeholders. This includes supporting communities in addressing

housing needs, creating attractive neighbourhoods and employing

local people, both on our sites and in the supply chain. We make

signiﬁcant contributions to local infrastructure and good causes within

thecommunities in which the Group operates.

How we monitor the risk

• Operational performance, including build quality and customer experience,

are subject to routine management oversight, with reporting to the

Executive Committee and Board.

• The Board also oversees stakeholder engagement, including monitoring

feedback from shareholders, and the results of our employee engagement

surveys and the Employee Engagement Panel.

• The Principal Risk Lead Indicator reports issued to each meeting of the

Board includes analysis of media coverage and trends that could be

indicative of the Group’s overall reputation.

Climate change

Residual risk rating: Medium

Risk trend assessment

Overall: No change

Impact: No change

Likelihood: No change

Link to priorities:

Reputation

Residual risk rating: Medium

Risk trend assessment

Overall: No change

Impact: No change

Likelihood: No change

Link to priorities:

Build quality

& safety

Reinforcing trust:

customers at the

hertofour business

Disciplined growth:

highquality land

investment

Industry-leading

ﬁnancial

performance

Supporting

sustainable

communities

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

How we manage risk

Principal risks and material issues continued

Risk description

The housebuilding industry is subject to increasingly complex regulations,

particularly in areas such as land acquisition, planning, Building Regulations

and the environment. Further regulatory evolutions are expected in the

short-term, such as the introduction of the NHQC, and measures on audit

and corporate governance reform, which will aect many of our processes.

Failure to comply with regulations could result in imposition of ﬁnancial

penalties and potential damage to the Group’s reputation.

Approach to risk mitigation

The Group maintains comprehensive management systems to ensure

regulatory and legal compliance, including policies and procedures

forkeyareas of regulation. Additional oversight is in place through

theGroup-level functions and cross-functional steering groups for

keyareas, such asGDPR compliance.

In respect of land and planning, experienced management teams are in

place at Group and local levels. These enable eective engagement with

planning authorities and other stakeholders to reduce the likelihood and

impact of any delays or disruption.

How we monitor the risk

The Board and Audit & Risk Committee are provided with regular updates

on core areas of regulatory compliance and preparation for upcoming

regulatory change.

Risk description

In common with most modern businesses, the Group is reliant on the

consistent availability and security of its IT systems. Failure or signiﬁcant

disruption to 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.

As the Group’s use of technology to support operational processes

continues to develop, cyber and data risks have become an area of

increased focus for the Group. This is reﬂected in the elevation of this

riskfrom ‘medium’ to ‘high’.

Approach to risk mitigation

The Group has dedicated cyber security resource, led by the

Chief Information Security Ocer, in order to manage and oversee

security controls. This includes use of third party expertise to ensure

implementationof good practice controls.

External partners are used to support the Group, both through

cybersecurity assessments and periodic penetration testing.

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.

How we monitor the risk

• In recognition of the serious nature of cyber risk to modern businesses,

the Board receives reports from the Group’s Chief Information Ocer

(CIO) at each of its meetings. The CIO also serves as a member of

the GroupExecutive Committee, ensuring IT and cyber risks are

aconsideration in all key business decision making.

• Routine reporting on cyber security and IT developments is presented

tothe Audit & Risk Committee.

• The Principal Risk Lead Indicator reports issued to each meeting

oftheBoard include a section on IT developments.

• The Group has an internal GDPR Steering Group to monitor all

processes,risks and controls associated with personal data.

Cyber and data risk

Residual risk rating: High

Risk trend assessment

Overall: Increase

Impact: Increase

Likelihood: No change

Link to priorities:

Regulatory compliance

Residual risk rating: Medium

Risk trend assessment

Overall: No change

Impact: No change

Likelihood: No change

Link to priorities:

Persimmon Plc | Annual Report | December 2022

Risk description

Higher interest rates or tightening of bank lending criteria could reduce

boththe aordability and availability of mortgages for our customers.

This could reduce demand for new homes and aect sales prices,

revenues, proﬁts, cash ﬂows, and asset values.

Approach to risk mitigation

The Group closely monitors the economic outlook for the UK, including

indicators on mortgage availability and aordability. Investments in land

and work in progress are moderated to align with our level of sales and

expectations of the current market conditions.

Incentive schemes to support sales are kept under review by management,

and can be ﬂexed according to underlying market conditions.

How we monitor the risk

• The Board closely monitors sales activity and UK economic trends

closely, including Bank of England commentary on credit conditions,

lenders’ announcements and reports from UK Finance.

• The Principal Risk Lead Indicator reports issued to each meeting of the

Board includes analysis of lending trends and mortgage approval rates.

Risk description

In line with our commitments under the Developer Pledge, the Group

remains committed to undertaking any cladding or life-critical ﬁre safety

remediation works for buildings it has constructed, and to protecting

leaseholders. Provisions have been made to cover the anticipated costs

of these works; however, the works are complex and could be protracted

in nature. As such, the value may be subject to revision if legislation

orregulation evolve, further properties are identiﬁed, or costs prove

tobegreater than anticipated.

Approach to risk mitigation

The Group has a dedicated Special Projects team, responsible for the

identiﬁcation of aected buildings, assessment of any remediation required,

and ensuring that the work is completed as quickly as practicable.

Detailed investigations are undertaken on all identiﬁed buildings and

independent ﬁre risk assessments completed.

The Group’s assumptions on the estimated ﬁnancial costs associated with

the remediation works have been subject to comprehensive challenge.

How we monitor the risk

• A report on the progress of the works is provided to every

Board meeting.

• All identiﬁed buildings are assessed and, where necessary, interim

measures carried out to ensure resident safety until remedial works

arecarried out.

• The Finance team monitors costs incurred and provides assurance

onthe utilisation and appropriateness of the Group’s provision.

Legacy buildings

Residual risk rating: High

Risk trend assessment

Overall: NEW

Impact: NEW

Likelihood: NEW

Link to priorities:

Mortgage availability

Residual risk rating: Very High

Risk trend assessment

Overall: Increase

Impact: Increase

Likelihood: Increase

Link to priorities:

Build quality

& safety

Reinforcing trust:

customers at the

hertofour business

Disciplined growth:

highquality land

investment

Industry-leading

ﬁnancial

performance

Supporting

sustainable

communities

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

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, as in prior years, 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.

This year we have further evolved our TCFD reporting to include

detailed analysis of identiﬁed transition risks and potential ﬁnancial

impacts, and physical risk modelling at a regional level with

identiﬁcation of potential ﬁnancial impacts.

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.

1. Governance

Climate change is considered 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 57 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 Group-wide review which includes consideration

of 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 eectively considered and

managed, and reports its ﬁndings and recommendations to the Board.

During 2022, for example, the Committee reviewed the progress of

thedevelopment of the carbon transition plans to ensure the Group

is on track to deliver its net zero and science based target carbon

emissions reduction commitments, and climate risk and resilience

aligned with TCFD reporting requirements.

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.

When considering our land investment opportunities, 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 2022

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,

and any major business change 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

We have 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.

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 three dierent

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.

Output from the climate scenario analysis

andquantification

The Group already has a good understanding of its climate related

risks and opportunities, and the tables on pages 66 to 69 provide a

high level summary of the types of risks, their potential impact, the time

horizons which have been considered, and the Group’s response.

In 2022 the Group has further evolved its climate scenario

understanding through undertaking a detailed evaluation and ﬁnancial

analysis of potential material climate risks and opportunities, with the

support of an external specialist risk consultancy.

2. 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 carbon emissions reduction targets

of 46% for our Scope 1 & 2 absolute emissions and a target of 22%

reduction per m

completed ﬂoor area of Scope 3 emissions by 2030,

which have been approved by the Science Based Target initiative

(SBTi). 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 ecient.

• Readiness plans are in place for Part L of the Buildings Regulations

and Future Home Standard.

• Understand performance and customer experience: gather

reallifein-use data from our low carbon home trials.

• 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 o-site manufacturing facilities.

Deliver low carbon site operations

• Reduce our use of diesel across our sites through, for example

drivertraining or use of low carbon fuels.

• Trial new technologies such as electric and hybrid plant when

available and appropriate.

• Set standards and benchmarks for energy reduction and

management on-site.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Task force on climate related

ﬁnancial 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°C scenario,

pricing of GHG emissions could be $155-$454 per tonne by 2030, and $54-$97 per tonne under the 2°C. Carbon

pricing could be felt through the supply chain and material costs.

High Short Evaluated as part

of2022 in depth

risk analysis

Increasing national

regulation relating to more

stringent environmental

standards

Increasing stringency of building, planning regulations and design requirements to enable the UK Government to

meet its 2050 Net Zero Carbon Target; inc Part L of the 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. Further

informed by 2022

in depth climate

riskanalysis

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. Sucient 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 aect

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 eciency. Inecient properties could also fall in value which could impact the market.

High Short Further informed

by 2022 in-depth

climate risk analysis

3. Transition risk analysis

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 eciency in homes coming into force,

withthechanges to Part L of the Building Regulations 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 2022

Summary description

of transition risks

Potential

impact ranking

Time-frame

ofimpact

Business

readiness

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 Evaluated as part

of 2022 in depth

climate risk analysis.

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 dierent 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 dicult to attract and retain talent.

Low – Medium Short – Medium Included in

employee survey

Quantification of transition risk

For the purposes of transition risk quantiﬁcation the Group, with

the assistance of an external consultancy, selected four risks and

opportunities which presented the most likely material impact.

The three transition risks and one opportunity were assessed on short

(2025) and medium (2030) time horizons. The assessment focused

on aLow Carbon World (1.5°C) scenario, associated with the most

signiﬁcant level of transition risk. The ﬁnancial impact quantiﬁcation

relied on assumptions sourced from climate scenarios published by

sources including IEA and NGFS, as well as public domain research.

It also built in assumptions agreed with a selection of Group’s internal

subject matter experts for aspects such as expected volume delivery

and Group’s ‘uplift costs’ to meet regulatory requirements. The table

below summarises the scope of the four transition risks/opportunity,

the impact assumptions, the Group’s key mitigations and the residual

risk exposure.

Risk was evaluated in terms of Gross Risk Score (i.e. likelihood multiplied

by impact). A score is attributed to inherent risk (i.e. without considering

Persimmon’s risk mitigations) and to residual risk (i.e. after factoring

in mitigations). In other words, residual risk takes into account the risk

mitigation/adaptation strategies and controls that Persimmon have

inplace to minimise the impact of the climate risk.

Transition risks are well understood by the business, and plans are

already in place to mitigate the risks, and levels of potential residual

risk are very low. This is based on the most up to date data and

assumptions available. The Group will continue to track and monitor

transition risks.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Task force on climate related

ﬁnancial disclosures (TCFD)continued

Transition risk Risk name

Low carbon world

scenario (1.5

1 Increasing cost of raw materials S M L

Description:

There is a risk of increasing cost of raw materials used

in construction driven by the transition to a Low Carbon

Economy. Persimmon’s suppliers could pass on the impact

of carbon pricing for high carbon building materials such

assteel and cement onto Persimmon, consequently

impacting on development costs.

Impact assumptions:

Carbon Prices based on IEA and NGFS forecasts; volume of homes and build-type based on internal Persimmon projections;

embodied carbon estimated based on current levels and assumptions on future carbon intensity of input materials.

2 2

Controls/mitigation:

Costs ultimately recovered through land valuation; risk internally monitored by the Group’s Procurement department;

Scope 3/embodied carbon reduction targets; Supplier initiatives; Increasing timber frame construction oers opportunity

toreduce embodied carbon.

Max ﬁnancial impact:

<£2 million

(Very low impact)

2 Pricing of greenhouse gas emissions S M L

Description:

Under a Low Carbon World scenario, pricing of GHG

emissions in the UK is expected to increase. This could

impact Persimmon’s operating costs. Uncertainty around UK

pricing and regulations (e.g. cap and trade schemes) could

make planning of future Persimmon operations dicult.

Impact assumptions:

Carbon Prices based on IEA and NGFS forecasts; emissions based on current Scope 1 and 2 (location-based), factoring

intheachievement of emission reduction target of 46.2% by 2030.

1 2

Controls/mitigation:

Persimmon’s sustainability strategy which includes a core focus on climate action and resilience; on-site energy eciency

initiatives to reduce emissions from construction; more ecient build methods; sta education around energy use.

Max ﬁnancial impact:

<£2 million

(Very low impact)

3 Climate-related regulations impacting products and services S M L

Description:

The UK may need to increase the stringency of building

regulatory requirements as part of its eorts to meet its

Net Zero 2050 target. This could aect Persimmon’s

developments in the form of increasing development costs

to ensure all new buildings are zero carbon-ready by 2030.

Impact assumptions:

Volume of homes and build-type based on internal Persimmon projections; uplift costs to meet Future Homes Standard

based on internal Persimmon calculations; assumptions on cost of air source heat pumps are linked to the UK’s Low

CarbonHeatScheme.

2 2

Controls/mitigation:

Costs ultimately recovered through land valuation; Persimmon’s sustainability strategy includes the strategic focus area of

‘Create Low Carbon Homes’; innovation e.g. technology trials, investment in manufacturing facilities and building strategic

relationships; active role taken by the Board in managing regulatory risk.

Max ﬁnancial impact:

<£2 million

(Very low impact)

4 Changing consumer preferences S M L

Description:

There is a risk that by 2030 property buyers will want lower

carbon homes as they try to harness the opportunity of

green mortgages and greater operational energy eciency.

If Persimmon is able to deliver low carbon homes by 2030,

this could create opportunity for increased revenue by taking

advantage of ‘green premiums’ on new build properties.

Impact assumptions:

Consumer research is indicating a premium for more energy ecient homes, and a willingness to pay more for cost

eectiveenergy ecient homes. Green mortgages also have an opportunity to support the transition to sustainable homes.

However the market is still evolving and ﬁnancial valuation for green products is maturing.

1 2

Controls/mitigation:

Persimmon has clear plans in place to deliver low carbon homes, ensuring they are aordable and cost eective to run

forcustomers. Monitoring of consumer trends will continue to ensure opportunities are maximized.

Max ﬁnancial impact:

Under review

Gross risk score (Impact x Likelihood) Residual Risk/Opp S – Short-term (2025)

M – Medium-term (2030)

L – Long-term (2050+)

Risk

1 2 3 4 5

Opp

1 2 3 4 5

Lower Higher Not assessed

Persimmon Plc | Annual Report | December 2022

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 aect 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 eects will also become more prevalent in urban and built up areas.

High Medium – Long Included in detailed

2022 climate risk

analysis

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 Included in detailed

2022 climate risk

analysis

Precipitation

Greater chance of more rainfall in the winter and less in the summer. Seasonal and regional dierences.

Impact on site construction activities, customer gardens and supply chain.

High Medium – Long Included in detailed

2022 climate risk

analysis

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, and

further informed

by detailed 2022

climate risk analysis

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, and

further informed

by detailed 2022

climate risk analysis

Sea level rise

Expected between 0.2m – 0.6m under the Net Zero scenario and up to 1.1m in the Hot House scenario.

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

Physical risk analysis

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

included as part of the detailed climate analysis undertaken in 2022.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Task force on climate related

ﬁnancial disclosures (TCFD)continued

Quantification of physical risk

For the purposes of physical risk quantiﬁcation, the Group, with the

assistance of a specialist consultancy, undertook detailed climatic

modelling. For physical risk, the risk to the Group’s portfolio of

owned assets was explored in relation to eight physical climate

perils: chronic heat stress, chronic drought stress, sea level rise,

extratropical cyclone, ﬁre weather, river ﬂood, precipitation/ﬂash

ﬂoods and subsidence.

The exposure to these climate perils (hazard exposure) was

modelled by taking the regional view of the UK, weighted by the

average volume delivery where Persimmon has operated in over

the past four years. The models assess the climate hazards under

a range of GHG emission trajectories (1.5°C – 2°C, and 4°C global

warming) and the 2030 and 2040+ time horizons. This information

was then used to assess the potential consequences to the Group’s

business and explore with the Group’s internal subject matter

experts what controls and strategies exist in place to address

the possible consequences and how those will ﬂow through

thevalue chain.

The Group beneﬁts from having a wide range of developments

across all regions of the UK, which mitigates the range and variety

of physical risks that it is exposed to. This also informs where risk

maybe become more predominant and avoidance and mitigation

strategies can be put in place. The Group has a robust land

investment appraisal and planning process where all potential

sites are evaluated for climate risk, thereby mitigating potential

business impacts.

By 2030 assuming 1.5°C – 2°C global warming By 2050 assuming 4°C global warming

Hazard

exposure

Residual

risk

Chronic

risks

Hazard

exposure

Residual

risk

Chronic

risks

Heat stress

Very low Very low

Currently the UK is exposed to very low heat stress meaning

onaverage, there are less than 5 heatwave days in a year.

Changes in regulations and design with regards to overheating

and energy eciency are likely for the short-term (2025-2030),

but the additional costs to the business to implement them

would not be signiﬁcant, as those could be factored in the

land valuation process. No other impacts or vulnerabilities are

foreseen and therefore Persimmon’s residual risk is very low.

High Low

Under this scenario, some regions of the UK, mainly London and the south, will

be exposed to a higher heat stress, seeing an average of 5-20 heatwave days

in a year. Those conditions could be relevant to ~40% of the average homes

built by Persimmon, primarily in the south east of England. However Persimmon

currently factors in conservative temperature and heat stress forecasts in its

design to address overheating. Heat minimising solutions could be factored into

building design and planning. Future regulation could require further adaption/

design measures that are typically considered in any land valuation exercise.

More frequent interruptions to construction operations and supply chain are

likelyinthesummer periods.

Drought

Low Very low

Around 50% of the volume delivery in the regions where

Persimmon operate have some level of drought stress potential,

meaning on average ranging from less than a month to over

two months of drought duration per year, in particular Midlands

and the south of the UK, whilst the remaining 50% have a lower

drought stress potential. Persimmon takes measures for their

current homes with regards to keeping water usage lower

than average. Any additional development costs are typically

recovered through land valuation. There has been no signiﬁcant

ﬁnancial impact to the business so far, and the residual risk is

therefore considered very low.

High Low

The risk increases. A third of Persimmon’s typical operating regions/homes

could face 3-4 months of drought duration per year, in particular in the south of

the UK. There could be further regulations with regards to water (re)usage that

could put additional costs on developments in the south east. Persimmon would

consider this issue on a site by site basis and currently undertakes water usage

calculations for its developments. Any additional costs would be considered in

the land valuation process. Operationally, water scarcity could cause delays in

construction or supply and cost issues for water-based construction materials.

Persimmon Plc | Annual Report | December 2022

By 2030 assuming 1.5°C – 2°C global warming By 2050 assuming 4°C global warming

Hazard

exposure

Residual

risk

Chronic

risks

Hazard

exposure

Residual

risk

Chronic

risks

Sea level rise

Very low Very low

Some regions of the UK where Persimmon operates are

exposed to coastal ﬂooding and storm surges. Typically only a

small fraction of plots and volumes could be exposed, however

the robust land investment appraisal process today considers

such localised high risk areas, and minimises the possible

business impacts.

Low Low

Although the sea level is projected to rise and increase the frequency

andseverity of storm surges to those coastal regions already exposed, the

fraction of land and possible future developments in the regions Persimmon

operates in is likely not to increase signiﬁcantly. The risk is minimised through

theGroup’s robust land investment valuation process.

Subsidence

Low Very low

No signiﬁcant changes in subsidence conditions today and in

theshort-term. Typically Persimmon operates outside London

where higher concentration of susceptible clay soils is found.

Current design regulations mitigate the risk.

High Low

Possible increased risk for future development and some exposure in the

southeast. More conservative regulations could be introduced for foundation

design and ground works. Any additional costs would typically be mitigated

vialand procurement.

Hazard

exposure

Residual

risk

Acute

risks

Hazard

exposure

Residual

risk

Acute

risks

Windstorm

High Low

All of the UK is in stormy regions, with 1% annual chance of

havingsevere wind gusts of over 121km/h, and approximately

halfof the typical regions and homes Persimmon delivers, could

see higher wind gusts of 161-200km/h. Persimmon currently

complies with all up to date regulations with regards to wind

design for their developments which mitigates the risk.

Operational disruptions in construction, supply chain and utilities

are however possible. Direct and indirect physical damage from

extreme storms could create ﬁnancial impacts and delays to

construction programmes.

High Low

There is no scientiﬁc evidence that extratropical cyclone intensities and

frequencies will increase signiﬁcantly, therefore the risk proﬁle could be broadly

similar to current conditions. Although the risk is not changing signiﬁcantly and

adaptation is likely not required, we will consider a strict level of wind protection

indesign and risk management for operations on site.

Risk scale

Very high High Moderate Low Very low

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Task force on climate related

ﬁnancial disclosures (TCFD)continued

By 2030 assuming 1.5°C – 2°C global warming By 2050 assuming 4°C global warming

Hazard

exposure

Residual

risk

Acute

risks

Hazard

exposure

Residual

risk

Acute

risks

Fire

Very low Very low

Currently 25% of the typical volumes and regions are exposed to

low ﬁre weather stress, with 5-20 days of ﬁre weather conditions

per year. Other regions have a very low exposure to ﬁre weather

conditions, equal to less than 5 days annually. As a consequence

ﬁre weather is not considered a material risk. There is potential

for indirect risks with regards to supply chain and sourcing of

timber material from overseas. No ﬁnancial impacts have been

reported at present.

Low Low

Under the high emissions scenario by 2050, the ﬁre weather conditions increase

for some regions Persimmon operates in, but is still considered relatively low

and as a consequence ﬁre weather is not considered a direct material risk to

thebusiness.

There is a potential that timber raw materials could be disrupted due to wildﬁres

elsewhere however that risk is not projected to increase for key regions like

Scandinavia that Persimmon relies on.

Flooding

Low Very low

Some regions of the UK where Persimmon operates are

exposedto river ﬂooding. However this is a very localised risk.

Typically only a small fraction (~5%) of plots is in zones with

1% probability of signiﬁcant ﬂooding in a year. The robust land

selection process in place today, together with extra ﬂood

designconsiderations and loading factors for future changes

minimise key impacts to current and future homes.

High Low

Although the percentage of plots in ﬂood zones does not increase signiﬁcantly,

projected changes indicate that the frequency of ﬂood events could increase

inthe UK. Persimmon could be impacted by additional ﬂood regulations and

higher adaption/mitigation costs for developments, as well as potentially

morefrequent interruptions to operations. Restrictions on land supply are

alsopossible. Persimmon carry out due diligence prior to land investment,

andfactors in increased river ﬂows in ﬂood design and planning, minimising

impacts. Any additional costs are normally considered in the land investment

appraisal process.

Precipitation

Very low Very low

A small proportion of regions (3%) is exposed to moderate or

higher risk of precipitation, meaning 2-7 days with more than

30mm of rainfall. Persimmon considers rainfall parameters

indrainage design which minimises this risk.

Very low Very low

There is a small projected increase in heavy rainfall compared to the present

day. Current design considerations could be sucient for future changes but

additional regulation could emerge creating additional costs.

Risk scale

Very high High Moderate Low Very low

Persimmon Plc | Annual Report | December 2022

Resilience of the Group’s business strategy

andbusiness model

The Group has in place a number of climate change mitigation

strategies and identiﬁed opportunities as part of its business model.

These have been further informed by the detailed 2022 climate risk

analysis which has considered the potential risks and opportunities

atamore granular level and assessed potential ﬁnancial implications.

The Group, as is standard in the industry, reﬂects development

costs when performing land valuations and potential climate risks

are considered in the same manner. Land values will be reﬂective

ofpotential mitigation costs, however there may be challenges in

the future where land in certain locations is in scare supply, or where

land values are regionally low and will not support potential additional

reductions from climate mitigation costs.

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 eectively and consistently applied across

the Group.

• The Group delivers more energy ecient homes than the second

hand property market with homes that are increasingly energy

ecient, thereby attracting a strong customer base.

• The Group has developed its strategy for delivering to the new

PartLof the Building Regulations which come into in June 2023

requiring new build homes to produce c.30% less carbon emissions

compared to current standards. Homes have improved insulation,

improved ventilation, more ecient boilers and some may have

solar panels to achieve this improved eciency. The Future Homes

Standard (FHS), expected 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

isalready well placed to deliver this.

• The Group has a number of pilot projects to assess the most

eective 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 eective build methods of achieving

theimproved eciency required using a ‘fabric ﬁrst’ approach; and,

to gain feedback from customers on the ‘liveability’ of the homes.

• The improved eciency of new homes is also a signiﬁcant

opportunity for the Group as we develop homes which will have

a lower impact on the environment, are currently cheaper to

run 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

willassist in building low carbon homes, with a reduced build time.

• The Group has gained a more detailed understanding of the

embodied carbon risk of its house types, and the detailed climate

risk analysis performed this year, has highlighted the potential

carbonpricing and subsequent raw material cost increase

risks. The Group Procurement team are increasing supply

chainengagement on high carbon materials.

• The Group’s UK-wide and diverse high quality land holdings

supportits strong network of outlets and ensures the business

is wellpositioned to invest in land at the right time in the cycle.

The strong gross margins embedded in the Group’s existing

landholdings help to absorb potential volatility caused by

increasingbuilding 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 mitigations and opportunities

The Group already manages a number of potential physical risks

such as ﬂooding as part of its planning activities. These have been

further informed by the detailed 2022 climate risk analysis which has

considered the potential risks and opportunities at a more granular

level and identiﬁed potential ﬁnancial implications.

• The Group undertakes comprehensive environmental and ﬂood

riskassessment for each potential land acquisition that it makes,

andfor strategic land considerations.

• Planning requirements principally inﬂuence the requirements for

any ﬂood mitigation, drainage requirements, and there is increasing

consideration for use of blue and green infrastructure.

• The detailed climate risk analysis undertaken this year has further

informed potential physical climate risks, and the impact they could

have on the business over the medium to long-term horizons.

This information has informed the Group Land and Planning team

when considering future site locations and land viability costs.

• The Group has a UK-wide network of sites and therefore has

signiﬁcantly reduced exposure to potential regional climatic risks,

andis able to strategically consider potential development locations.

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 57.

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 eectively tracked and considered to include;

climate insights & trends, emerging legislation and government policies,

consultations, local authorities positions, and industry body resources.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Task force on climate related

ﬁnancial disclosures (TCFD)continued

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 eciency

Maintain 100% carbon neutral electricity purchased – green/REGO backed

Zero CO

from Scope 2 sources

Undertake embodied carbon assessments, set reduction targets

Tonne CO

completed ﬂoor area

Supply chain engagement on embodied carbon

Action plans in place to reduce carbon

content of top CO

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

againsta2019 baseline

Reduce Scope 3 Purchased goods and services, and use of sold products

by22% per m

completed ﬂoor area

Tonnes/CO

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 osets

Priorities for 2023

The detailed climate risk analysis undertaken this year has provided

the Group with further insights into potential climate related risks

and ﬁnancial implications.

Key areas of focus for 2023 are:

• Climate risk health check: whilst the level of risk is overall

quantiﬁed as very low to low, this is based on mitigation measures

remaining in place, and the Group will ensure there is no loss

of focus and rigour in its approach. An annual “climate risk

health check” will be undertaken as part of the Group’s risk

management strategy.

• Water eciency & scarcity: the climate analysis has highlighted

the risk of drought stress occurring in the southern areas of the

UK. It is likely that planning requirements will increasingly consider

water eciency and scarcity in identiﬁed drought stress areas.

The Group will evaluate water eciency and integration of blue

and green infrastructure into developments.

• New energy eciency opportunities: the Group undertook

detailed customer research in 2022 on energy eciency and low

carbon energy transition. This research will be further considered

and support maximising the transition opportunity.

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 and detailed climate risk analysis

andmodelling 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 the Group will continue to embed the ﬁndings into its

climaterisk and opportunities management.

4. 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 Edition). Detailed GHG

emissions information is located on page 47 in accordance with

the requirements of the Streamlined 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 eort

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

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, an environmental target makes up 5% of the Executive annual

bonus focused on steps taken to support achievement of our Scope 1

and 2 science based targets (see page 65). 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, and

the Remuneration Committee will incorporate speciﬁc environmental

targets in the 2023 PSP award (see page 129).

Persimmon Plc | Annual Report | December 2022

Viability statement

Persimmon’s prospects and viability

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

cost of living crisis and war in Ukraine), 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 inherently 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 caused by the ongoing cost of living crisis

and war in Ukraine. The future impacts of the cost of living crisis

and other factors creating uncertainty within the UK economy on

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;

• Long-term healthy supplier engagement; and

• Vertical integration ensuring internalised supply ofkey materials.

By continuing to build on these solid foundations through, for example,

The Persimmon Way and our ongoing investments in the customer

experience, its land, development sites and in its supply chain, the

Group aims to create enduring value for the communities weserve

andour wider stakeholders. This is reﬂected within the Group’s

materiality assessment (see page 58), which ensures a thorough

reviewof stakeholder interests is 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 30 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 12 month budgets

areestablished for each business annually.

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

ﬁve key priorities and overall 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.

• 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.

* The Directors have assessed the longer-term prospects of the Group in accordance

withprovision 31 of the UK Corporate Governance Code 2018.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Viability statement

Persimmon’s prospects and viability continued

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 sta 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.

• Dierentiation 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 adversely aecting demand for

andpricing of new homes, or contributing to inﬂationary pressures.

• Changes in government policy aecting the housebuilding

sector, such as those relating to taxation, planning conditions

ormarket support.

• Changes in market conditions aecting the availability

andpricingofland and/or construction materials.

• Reduction in mortgage availability and/or aordability arising

from, for example, reduced risk appetite of lenders or signiﬁcant

regulatory change.

• Climate change risk, comprising both transition (legal and

regulatorychanges aecting the housebuilding sector) and

physical(operational disruption through more frequent and

prolonged adverse weather) elements.

• Adverse market competition and construction workforce trends,

resulting in an inability to attract and retain high quality workers

andan appropriately experienced management team.

• Cyber and data risk, including potential for signiﬁcant or

prolongedoperational disruption arising from cyber-attack

orfailureof critical IT systems.

See pages 57 to 63 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 objectives of

the Group including our ﬁve key priorities (see page 95). 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. 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,

funding projections, reviews of the Group’s liquidity and capital

structure, and for the identiﬁcation of surplus capital available for

returnto shareholders via the Group’s Capital Allocation Policy,

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, such as the resilience statement criteria referenced within

thegovernment’s response to the BEIS consultation ‘restoring trust

inaudit and corporate governance’.

A key feature of the Group’s strategy, as 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 introduction of the Group’s Capital Allocation Policy (“CAP”).

Following a comprehensive review and reﬂecting the increased

uncertainty in the political and macro-economic environment,

alongsideincreased corporation tax and the residential property

tax,the Board decided to conclude the previous Capital Return

Programme, which was introduced in 2012.

On 8 November 2022, the Directors announced the implementation

ofthe new CAP with the following key principles:

• Invest in the long-term performance of Persimmon by ensuring

thebusiness retains sucient capital to continue our disciplined

andappropriately timed approach to land acquisition;

• Operate prudently, with low balance sheet risk, and a continued

focus on achieving a superior return on capital;

• Ordinary dividends will be set at a level that is well covered by post-

tax proﬁts, thereby balancing capital retained for investment in the

business with those dividends; and

• Any excess capital will be distributed to shareholders from time

totime, through a share buyback or special dividend.

Persimmon Plc | Annual Report | December 2022

On 1 March 2023, the Directors announced the scheduled CAP

payment in respect of the ﬁnancial year ended 31 December 2022,

to be paid in May 2023. Further details can be found in the Chief

Executive’s statement on page 19.

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 CAP.

The Directors have made the assumption that the Group’s revolving

credit facility is renewed during the period, having extended the

maturity of the facility out to 31 March 2026 during 2021.

The Directors have also carried out a robust assessment of the

principaland emerging risks facing the Group (as set out on pages

57 to 63), 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 58), and through a

comprehensive survey to incorporate input from the Board and senior

management from across the Group. 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 eectiveness

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 eect of economic

disruption from the cost of living crisis and the war in Ukraine 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 o-site manufacturing facilities.

In the ﬁrst scenario modelled, the combined impact is assumed to

cause, when compared to the 2022 outturn, a c.59% reduction in

volumes and a c.15% reduction in average selling price in2023. As a

result of these factors, the Group’s housing revenues were assumed

tofall by c.65% during this period. The scenario assumes a subsequent

recovery to current volume levels within aseven year time period.

A second, even more extreme, scenario assumes a signiﬁcant

andenduring depression of the UK economy and housing market

in2023, consistent with the above scenario, causing a reduction

ofc.59% in new home sales volumes, a c.15% reduction in average

selling price and a c.65% fall in the Group’s housing revenue in 2023.

The scenario then assumes that neither volumes nor average selling

prices recover from this point through to 2027.

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.

Each scenario fully reﬂects the current estimate of cash outﬂows,

valueand timing associated with the legacy buildings provision.

The Directors assumed they would continue to make well-judged

decisions in respect of capital allocation 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 2027.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Section 172 statement

Culture and engaging with our stakeholders

To implement our ﬁve key priorities and to

promote the success of the Company, we aim to

build strong business relationships. We regularly

engage with our key stakeholders to understand

what matters most to them, how we can meet

their interests and the likely impact of Board

andmanagement decisions.

The Board receives regular updates on stakeholder engagement

atBoard meetings. There are standing agenda items in order that the

Board can review progress against our ﬁve priorities and their impact

on our key stakeholders. The Board also engages directly with key

stakeholders, particularly shareholders and employees.

Our key stakeholders, how we engaged with them and the results

ofthat engagement are set out on the following pages. The following

disclosure forms the Directors’ statement required under Section

414CZA of the Companies Act 2006.

Customers

Relevant material issues

• Build quality and safety

• Reinforcing trust: customers at the heart of our business

• Supporting sustainable communities

Why do we engage?

Engaging with our customers helps us to identify their changing

needs,and ensure of homes are well positioned in the market.

It alsoenables us to measure how we are achieving our aim 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 aordable homes to meet

theneedsof local communities.

Maintaining positive relationships with our customers minimises

reputational risk for the Group and will help to increase long-term

demand for our homes.

How do we engage?

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 sta 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: both before and after their moving in date.

• We participate in a national new homes survey run by the

HomeBuilders Federation to obtain independent feedback

fromour customers.

• We engage with our housing association partners through

regularcontact and meetings.

Further details can be found on page 25 to 27.

What did they tell us?

• Our customers want attractively priced, high quality sustainable

andenergy ecient homes.

• Customers want to be able to communicate with our teams

quicklyand easily, at times and in ways convenient to them.

• Customers value a blend of digital and interpersonal

customer experiences.

• Customers want to be connected to the internet as soon

aspossible following their move in date.

How do we measure the effectiveness

ofourengagement?

The following metrics are regularly reviewed by the Board when

considering progress against our ﬁve priorities:

• HBF 8 week and 9 month customer satisfaction survey scores.

• Trust Pilot scores.

• Speed of resolution of any customer issues.

• Number of visitors to sites and levels of website trac.

• Volume of sales.

• FibreNest’s achievement of timely connections.

Outcomes and effects on Board decisions

• Our build quality ambition has grown from ‘build right, ﬁrst time,

every time’ to ‘trusted to deliver ﬁve-star homes consistently’.

• We have 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.

• Increased investment in our customer experience function,

indigitaltechnology and in training.

Persimmon Plc | Annual Report | December 2022

Employees

Relevant material issues

• Supporting sustainable communities

• Build quality and safety

• Talent attraction, development and diversity

Why do we engage?

We aim to attract and grow a talented and diverse

workforce, believing this to be fundamental to the long-term

successofthe business.

We recognised that post-pandemic, the employment market would

become more challenging as people re-evaluated their careers

andwork-life balance.

Engaging with our employees helps ensure they understand

andalignwith the Group’s strategy and desired culture and helps

usto understand the changing needs of our workforce, to better

attract and retain employees.

How do we engage?

• Through our Employee Engagement Panel, which meets regularly

throughout the year. Each meeting is attended by the Group’s

designated Workforce Non-Executive Director and is chaired by

the Group’s HR Director. In addition the Group Chief Executive

andRemuneration Committee Chair attended meetings in 2022.

• Through annual employee engagement surveys.

• Through our Health, Safety and Environment department and

increased online training procedures.

• Through improved internal communications to all employees

on matters such as our business activities and priorities, the

achievements of our business and our employees and our

workinlocal communities.

Further details can be found on page 36 to 41

and pages 51 to 52.

What did they tell us?

• Our 2022 engagement survey had an 83% employee

engagementscore, with 92% committed to the Group and

whatweare trying to achieve.

• Recognition is important and employees want to feel valued

and appreciated.

• 2022 was a dicult year for many of our colleagues who were

aected by the rising cost of living.

• Our employees are supportive of the improvements to customer

care and quality.

• They would like continued focus on training and development.

How do we measure the effectiveness

ofourengagement?

• Feedback from the Employee Engagement Panel.

• Through the results of our annual employee engagement survey.

• Changes to our employee turnover.

Outcomes and effects on Board decisions

• Feedback from the Panel led to improvements to the quality

ofPPEand a range of garments for female employees,

enhancements to paternity pay and the involvement of

Panel members in the selection of IT hardware for use

onour developments.

• We formulated a Talent Acquisition Strategy and introduced

astreamlined recruitment process.

• We implemented a tiered salary increase, that awarded the

lowestpaid employees the highest increase, with a 7% increase

ontheirbasic pay.

• Continued to be an accredited Real Living Wage Employer.

• Launched our Learning Management System to better record

employees training and enable further development of our

e-learning courses.

• Continued to improved our internal communications strategy.

• Undertook a communication exercise to promote the support

available through our Employee Assistance Programme.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Section 172 statement

Culture and engaging with our stakeholders continued

Communities

Relevant material issues

• Supporting sustainable communities

• Reinforcing trust: customers at the heart of our business

• Social impact

Why do we engage?

Engaging with our local communities, throughout all phases

ofadevelopment, more accurately identiﬁes their needs and

helpsustomeet those needs.

During this collaboration, we aim to address and minimise the impact

of our activities during the construction phase of our developments

through planning and environmental risk assessments.

How do we engage?

• Proactive engagement and consultation throughout the planning

and development process of each of our developments.

• Feedback from our local pre-launch marketing campaigns.

• Regular engagement with planning authorities.

• Being actively involved in the communities in which we operate,

through employing local people and supporting local charities

andcommunity groups through our Community Champions

Initiative and the Persimmon Charitable Foundation.

• Through our External Aairs Team.

Further details can be found on pages 33 to 35

and pages 49 to 50.

What did they tell us?

• Demand for homes in communities with high amenity value

is strong.

• Local infrastructure investment is important in improving

community environments.

• To be an active part of the community through supporting

localcharitiesand community groups.

• To be positive and responsive to the views of local people.

• Leaseholders and occupants of high rise buildings have

beenconcerned with ﬁre safety issues.

How do we measure the effectiveness

ofourengagement?

• Speed of achieving planning consents and ability to unlock

blocked consents.

• Through the impact of our Community Champions initiative.

• Reports from the Group Director of Policy and External Aairs.

Outcomes and effects on Board decisions

• Developed a Placemaking Framework, to improve the tools our

site design teams need to create attractive developments, which

promote well-being, through for example, the provision of public

open spaces.

• The Group signed the Developer Pledge to protect leaseholders

from having to pay towards cladding removal or ﬁre related safety

issues on buildings the Group constructed. We have signalled our

intent to sign the UK government’s developer remediation contract.

We continue to work positively with the Welsh and Scottish

governments on similar agreements.

• Increased our legacy buildings safety provision by £275.0m

fortheyear ended 31 December 2022.

• Contributed c.£100m to local communities through planning

contributions to local authorities.

• Continued to support Community Champions and the

PersimmonCharitable Foundation.

Persimmon Plc | Annual Report | December 2022

Suppliers and subcontractors

Relevant material issues

• Climate change action and resilience

• Build quality and safety

• Supporting sustainable communities

Why do we engage?

The Group beneﬁts from 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 eectively.

We engage with suppliers and subcontractors 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 and subcontractors assists us in

continuing to improve thelong-term sustainability of our supply chain.

How do we engage?

• 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 our

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.

• We are partners to the Supply Chain Sustainability School

whichencouragesengagement across the supply chain.

• We are part of the Future Homes Hub Embodied Carbon

Task Force.

Further details can be found on page 24.

What did they tell us?

• The Group works in partnership with its suppliers, to provide

materialrequirement forecasts. This ensures continuity of supply,

providing continuity and visibility of future work ﬂows.

• Timely payment of invoices is important.

• They continue to monitor the impact of global supply chain and

pricesensitive impacts to enable continued service delivery.

How do we measure the effectiveness

ofourengagement?

The Group Procurement department provides routine monitoring

oftrends and supplier performance.

Outcomes and effects on Board decisions

• Our tendering processes have been strengthened through greater

central oversight and an expanded use of framework agreements.

• We remain a signatory to The Prompt Payment Code (PPC).

• The department seeks 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.

• Developed trials to evaluate the most eective method of

transitioning to the Future Homes Standard and beyond to

netzero carbon.

• We have also been engaging with our suppliers to assess

theembodied carbon of our house types in order to identify

materials with the most impact (see page 48 for more details).

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Shareholders

Relevant material issues

• Supporting sustainable communities

• Build quality and safety

• Reinforcing trust: customers at the heart of our business

• Disciplined growth: high quality land investment

• Industry leading ﬁnancial performance

Why do we engage?

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.

How do we engage?

• The Chief Financial Ocer, Chief Executive and IR Director hold

regular meetings with analysts and investors as part of the Group’s

reporting cycle.

• We hold shareholder roadshows.

• We obtain feedback from the Company’s brokers, market analysts

and shareholder groups.

• There is a regular report from the IR Director to the Board.

• All Board members attend the Company’s Annual General Meeting

and we conduct the vote on resolutions by poll.

• The Chairman and the Non-Executive Directors are also

available to attend meetings with major shareholders to gain

anunderstanding of any issues and concerns.

• During the year the Remuneration Committee Chair engaged

withmajor shareholders on the proposed remuneration policy

andimplementation of the policy for 2023.

What did they tell us?

• Fair pay for the whole workforce.

• They would like an environmental metric for incentive awards.

• Requirement of a diverse Board and pipeline of talent for

succession toexecutive positions.

• Preference for a sustainable dividend.

How do we measure the effectiveness

ofourengagement?

• Reports from the Group’s IR Director.

• Feedback from analysts and investors.

• Movements on the share register.

Outcomes and effects on Board decisions

• The Group continued to be an accredited Living Wage

Foundation employer.

• Maintained a rigorous process for each Board appointment,

ledbythe Nomination Committee.

• Inclusion of an environmental metric in the performance condition

for 2023 share awards.

• New capital allocation policy announced in November 2022.

Section 172 statement

Culture and engaging with our stakeholders continued

Persimmon Plc | Annual Report | December 2022

Government, regulators and industry bodies

Relevant material issues

• Supporting sustainable communities

• Build quality and safety

• Reinforcing trust: customers at the heart of our business

Why do we engage?

We engage with national government regarding government policy

that could aectthe Group.

We meet with local authority planning departments to ensure

we areable to create 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.

How do we engage?

• We are a member of the Home Builders Federation.

• We engage with government departments directly, and working

withthe Home Builders Federation and Homes for Scotland,

toexplain industry opportunitiesand challenges.

• By participating in industry meetings with Ministers.

• Regular dialogue with the Health and Safety Executive.

• Engaging with local planning authorities.

• Engaged with Home Building Skills Partnership.

• Dean Finch, Group Chief Executive, is a member of the

government’sNet Zero Buildings Council, a partnership between

the government, industry and third sector which focuses on the

delivery and implementation of key objectives within the Heat

andBuildings and Net Zero Strategies.

What did they tell us?

• 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.

• It is essential to maintain a skilled and well resourced Health

andSafety Department.

• In December 2022, the government launched a consultation

into the Levelling Up and Regeneration Bill which seeks views

on the proposed approach to updating to the National Planning

Policy Framework.

How do we measure the effectiveness

ofourengagement?

• The Board receives updates from the Group Chief Executive

regarding direct engagement with government, HomesEngland

and the Home Builders Federation.

Outcomes and effects on Board decisions

• To protect leaseholders, we signed the Developer Pledge

and have worked positively with the Department for Levelling

Up, Housing and Communities to agree a ﬁnal developer

remediation contract.

• Introduced a Placemaking Framework which considers social

valueand the well-being of our communities within our site design,

for example providing public open spaces, walkways, play areas

and enhancing bio-diversity.

• We become one of only 10 companies to be awarded a Certiﬁcate

of Commitment and Progress – Building Safety Stage 1, as part of

the Building a Safer Future Charter Champion application process.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Section 172 statement continued

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 outcomes

from its stakeholder engagement (pages

78 to83), 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.

A description of the Principal Decisions made by the Board during

2022is provided below. Themain activities of the Board is set out

onpage 91.

Capital Allocation Policy

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.

The Board recognises the importance of sustainable dividends

forshareholders and will continue to prioritise value creation

from astrong return on capital. Following a review and

reﬂecting the increased uncertainty in the political and macro-

economic environment,alongside increased corporation tax

and the residentialproperty developer tax, the Board decided

to concludetheprevious capital return programme, which

wasintroducedin 2012.

The Board decided to implement a new Capital Allocation

Policywiththe following key principles:

• Invest in the long-term performance of Persimmon by

ensuringthebusiness retains sucient capital to continue

ourdisciplined andappropriately timed approach to

land acquisition.

• Operate prudently, with low balance sheet risk, and a

continuedfocus on achieving a superior return on capital.

• Ordinary dividends will be set at a level that is well covered

by post-tax proﬁts, thereby balancing capital retained for

investmentinthe business with those dividends.

• Any excess capital will be distributed to shareholders from

timetotime, through a share buyback or special dividend.

As detailed on page 3, the Board has recommended the

paymentofaﬁnal dividend of 60p per ordinary share for the

yearended31 December 2022.

Building safety

Developer Pledge and Developer Contract

withUKGovernment

Following constructive discussions with the Department for Levelling

Up, Housing and Communities (“DLUHC”), in April 2022, and after

taking legal advice, the Board concluded that it would be in the

best interests of the Company to sign DLUHC’s Developer Pledge,

which sets out the industry’s commitments to removing cladding and

remediating ﬁre safety issues in buildings in England over 11 metres.

Since signing the Developer Pledge, we have worked constructively

with the Government to agree the developer remediation contract that

turns thepledge into a legal agreement. The Board has concluded

that it would be in the best interests of the Company to sign the

contract. We continue to work positively with the Welsh and Scottish

governments on similar agreements.

The Developer Pledge’s commitments and subsequent contract are

consistent with the approach already announced by the Company in

February 2021. We led the industry when we announced our original

commitment to protect leaseholders from the costs of cladding removal

and the remediation of ﬁre related safety issues on developments we

constructed. The Board particularly considered the improvements

to ﬁre safety for residents of the developments built by the Group,

whenconsidering whether to commit to the Pledge. The Board

also considered the potential consequences of not committing

to the Pledge,noting the potential for developers to be deemed

to be non-responsible developers and face sanctions under new

legislative provisions.

Building Safety Provision

As set out on pages 3 and 16, we continue to make good progress

on ourcommitment to protect leaseholders from the cost of

cladding removal and life-critical ﬁre-safety work on any multi-

storey developments built by Persimmon. As the Group worked

through this process and accommodated the expanded scope, the

number of eligible multi-storey developments we are responsible

for has increased and currently stands at 73. This work led to a more

detailed understanding of costs, which now include non-cladding

ﬁrerelated build defects. Combined with the broader scope required

by Government, which has resulted both in an increase in the amount

of work required and in the number of eligible buildings, andagainst

abackground of signiﬁcant build cost inﬂation, weannounced

inNovember 2022 that we expected to increase our provision for

thismulti-year programme. This increase has been ﬁnalised and

resulted in a £275m exceptional charge to the income statement.

The Directors believe that maintaining a reputation for good build

quality andhigh safety standards, and to be a business with a long-

term, responsibleand sustainable future is beneﬁcial for all of our

stakeholders but particularly, local communities, previous customers,

new customers, employees and shareholders.

Persimmon Plc | Annual Report | December 2022

Non-ﬁnancial information statement

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.

Reporting

requirement

Where to read more in this report to

understandtheimpact on the business

Relevant

policies

Environmental Matters

See pages 43 to 50 and 64.

Climate Change Position Statement

Environment Policy

Sustainability Policy

Employees

See pages 36 and 51 to 52.

Health & Safety Policy

Equality, Diversity and Inclusion Policy

Social Matters

See pages 33, 43 and 49.

Sustainability Policy

Anti-Bribery Policy

Code of Ethics

Prevention of Criminal Facilitation ofTaxEvasionPolicy

Human Rights

See page 41.

Human Rights Policy

Modern Slavery Statement

Suppliers

See pages 24 and 48.

Supplier Principles

Business Model

See page 10.

Principal Risks

See page 57.

Non-ﬁnancial KPIs

See page 13.

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

28 February 2023

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Chairman’s introduction

to Corporate Governance

The Group delivered a strong

performance in 2022, despite

headwinds from material and labour

shortages, signiﬁcant build cost

inﬂation and a more challenging

sales environment in the fourth

quarter of the year.

We delivered 14,868 new homes to customers

in the year and achieved underlying pre-tax

proﬁts in excess of £1 billion

, while maintaining

ﬁve-star quality. Customers remain at the heart

ofourbusiness with our continued focus on

qualityand aordability.

Good corporate governance is an essential

ingredient to the long-term success of the Group

and the generation of sustainable value for all our

stakeholders. Guided by our Mission, Vision and

Values, the Board continues to set the strategic

direction and standards of the Group andexercises

diligent oversight of the Group’s activities.

Building safety

Safety is a top priority for the Board and we

continued to make good progress during the year

on our commitment to protect leaseholders from the

cost of cladding removal and life-critical ﬁre safety

work on any multi-storey developments built by the

Group. On 8 November 2022 the Board announced

that the Group’s building safety provision was

expected to be increased, reﬂecting the broader

scope demanded by Government, additional

developments becoming eligible and clearer

costings from the Group’s proactive engagement.

This increase has been ﬁnalised and resulted in a

£275m exceptional charge to the income statement.

In April 2022 the Group signed the Developer

Pledge and during the year the Group worked

constructively with the Department for Levelling

Up, Housing & Communities (“DLUHC”) to agree

the contract that turns the Pledge into a legal

agreement. We have signalled our intention to sign

the contract ahead of the 13 March 2023 deadline

set by DLUHC.

Board changes

On 13 January 2022 the Group announced that

Jason Windsor would be appointed as the Group’s

new Chief Financial Ocer following the retirement

of Mike Killoran. Jason joined the Group on 11 July

2022 and we warmly welcome him to the business.

Customers remain at the

heart of ourbusiness with our

continued focus on quality

and affordability.

Roger Devlin

Chairman

Capital Allocation Policy

The Board recognises the importance of sustainable

dividends for shareholders and will continue to

prioritise value creation from a strong return on capital.

Following a review, and reﬂecting the increased

uncertainty in the political and macroeconomic

environment, alongside increased corporation tax

and the residential property developer tax, during

the year the Board agreed to conclude the previous

capital return programme, which was introduced

in 2012, and replace it with a new, forward looking

Capital Allocation Policy which balances sustainable

returns for shareholders with the need to invest

intheGroup’sfuture success.

Employees

The inﬂationary environment, and the challenge

itposed to the Group and its stakeholders, was

animportant consideration for the Board during the

year. To support our employees through the cost

ofliving crisis, the Group’s annual pay review in July

2022 was tiered, with the lowest paid employees

receiving the highest increase (a 7% uplift on their

base pay). The tiered approach also allowed many

of our colleagues to receive a pay rise that was

above the usual inﬂationary increase awarded

inprevious years.

We are proud to remain a Living Wage Foundation

accredited employer. This year’s increase was

implemented in January 2023, aheadof the

requiredMay 2023 timeframe.

1. Stated before legacy buildings provision charge (2022: £275.0m,

2021: £nil) and goodwill impairment (2022: £6.6m, 2021: £6.2m).

Persimmon Plc | Annual Report | December 2022

Executive remuneration

As disclosed in our 2021 Annual Report, Dean

Finch, Group Chief Executive, received a 3%

salary increase in January 2022, in line with the

increase given to salaried employees in July 2021.

Jason Windsor, Chief Financial Ocer, joined

the Group on the same salary he receivedat his

previous employer. The Executive Directors’ salaries

will next be reviewed in July 2023 and any increase

they receive will be in line with or below the wider

workforce. When ﬁnalising our approach, the

Remuneration Committee will have regard to all of

the circumstances, including the impact of any salary

increases on the totalremuneration opportunities

ofthe Executive Directors.

At the AGM to be held in 2023 shareholders will

be asked to vote on the Group’s proposed new

Remuneration Policy. In preparation for this, during

the year the Remuneration Committee reviewed

the current Remuneration Policy and engaged

with stakeholders as appropriate. The Committee

concluded that the current policy functions well

and appropriately supports the Group’s strategy.

Therefore, the proposed new policy will retain

the framework of the current policy, along with

changes to the annual bonus opportunity of the

Chief Financial Ocer (as previously notiﬁed to

shareholders) and minor changes to introduce

ﬂexibility to aid the operation of the policy and

tofurther alignwith best practice.

To support the achievement of our long-term

sustainability targets and reﬂect the importance

of sustainability to the Group, during the year the

Remuneration Committee agreed to incorporate

a robust and meaningful long-term environmental

measure into Performance Share Plan awards to be

granted in 2023. Further details regarding executive

remuneration can be found on pages 126 to 153.

Sustainability

Sustainability is integral to how the Group operates

and, 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. During the year

the Group has focused on developing low carbon

energy transition plans to ensure Future Homes

Standard readiness, developing carbon reduction

glidepaths for Scope 1 and 2 emissions aligned to

the Group’s Science Based Targets, continued to

build knowledge regarding embodied carbon in

materials and engaged withthe Group’s supply

chain. See pages 42 to 50 for further details.

Diversity and inclusion

Diversity and inclusion has been an important area

of focus for the Board, the Nomination Committee

and the Group during the year. In line with the Parker

Review and the Hampton Alexander Review (which

was succeeded by the FTSE Women Leaders

Review during the year), as at 31 December 2022

the Board had one Director from aminority ethnic

group and was 33.3% female.

During the year the Nomination Committee

considered the new diversity targets of the FTSE

Women Leaders Review, and the updatedFCA

Listing Rules, which the Group has decided to

report against early (see page 111). In light of the

new diversity requirements, and the relatively

recent appointments of the Group Chief Executive

and Chief Financial Ocer, during the year the

Nomination Committee agreed its ﬁrm intent that

a woman be appointed as the Group’s next Senior

Independent Director.

Building a diverse pipeline of talent for succession

to senior management positions is also an

important matter for the Board and the Group, and

considerable eorts were made during the year

to drive forward the Group’s diversity and talent

agendas, such as the comprehensive Talent Review.

Progress was made during the year, for example

the proportion of women in the Group’s senior

management team increased from 28% to 34%,

however we know there is more to do. For further

details, please see the Nomination Committee

report onpages 106 to 115.

Engaging with stakeholders

Eective stakeholder engagement is essential to

the Group’s long-term success, and maintaining

good relationships with stakeholders isimportant

tothe Board.

The Group’s Employee Engagement Panel

continued to hold its quarterly meetings in 2022,

helping to facilitate valuable two-way communication

between employees and the Board. All Panel

meetings were attended by the Group’s designated

Workforce Independent Non-Executive Director,

and additional attendees during the year included

the Group Chief Executive and the Chair of the

Remuneration Committee. Matters raised by

Panel members were carefully considered and

appropriately escalated to the Group’s senior

managers. The Panel’s constructive discussions

and feedback continue to provide the Board with

valuable insights, and contribute towards the Board’s

oversight of the Group’s practices, behaviours and

culture as we further embed our Mission, Vision

and Values. Further details regarding the Panel can

be found on pages 38 and 96, and details of the

Group’s engagement with its various stakeholders

can be found in theSection 172 Statement on

pages78 to 83.

Assurance

As in previous years, the Audit & Risk Committee

has maintained its focus on the integrity and quality

of ﬁnancial reporting, ensuring an eective external

audit, reviewing the work of the Group Internal

Audit department, and ensuring the eectiveness

of the Group’s risk management processes and

internal control environment. Given the signiﬁcant

uncertainties in the Group’s external environment,

a particular focus of the Committee has been

the Group’s estimates and areas of accounting

judgement. The Committee’s work during the year

also included oversight of the Group’s cyber security

activities and the Group’s preparations for audit and

corporate governance reforms.

The UK Corporate Governance Code 2018 was

applicable to the ﬁnancial year ending 31 December

2022. I am pleased to report that theCompany

has complied with the UK Corporate Governance

Code 2018.

Roger Devlin

Chairman

28 February 2023

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Board leadership

Board of Directors

The Board consists of our Chairman, Roger Devlin;

two Executive Directors, Dean Finch and Jason

Windsor; 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.

Board meeting

attendance 2022

Member

Scheduled

Meetings

attended

Percentage

of meetings

attended

Roger Devlin 7/7 100%

Dean Finch 7/7 100%

Jason Windsor* 3/3 100%

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 7/7 100%

Mike Killoran** N/A N/A

* Jason Windsor joined the Board on 11 July 2022.

** Mike Killoran retired from the Board 14 January 2022.

Dean Finch

Group Chief Executive (age 56)

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 Ocer 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 Ocer 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. While 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 leading homebuilder;

delivering for all stakeholders in the business while continuing to deliver strong ﬁnancial returns

to investors.

Roger Devlin

Chairman (age 65)

Date of appointment: 1 June 2018

Experience and external appointments: Roger 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.

In May 2022 Roger was appointed to the Board of The Sutton Trust.

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 eectively 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 eectively by facilitating open and

productive debate, providing constructive challenge and by demonstrating objective judgement.

Nigel Mills

Senior Independent Director (age 67)

Date of appointment: 4 April 2016

Experience and external appointments: Nigel 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.

Jason Windsor

Chief Financial Ofﬁcer (age 50)

Date of appointment: 11 July 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 27 years.

He was Group Chief Financial Ocer of Aviva PLC from 2019 to 2022, having previously been

Chief Financial Ocer of both its UK Insurance and UK Life businesses, after originally joining the

business in 2010. Prior to Aviva, Jason spent 15 years at Morgan Stanley, in London and Singapore,

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 Ocer to complement

our strong management team. In his previous role Jason demonstrated an ability to deliver

sustained ﬁnancial and strategic progress while working in a large consumer-facing business.

These skills are highly relevant and transferable to Persimmon as we continue our drive to

becomethe leading homebuilder of the best value, quality homes in the UK.

Persimmon Plc | Annual Report | December 2022

Committee Chair

Nomination Committee

Sustainability Committee

Audit & Risk Committee

Remuneration Committee

Workforce Non-Executive Director

Trustee of the Persimmon Charitable Foundation

Andrew Wyllie CBE

Independent Non-Executive Director (age 60)

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 UK.

Andrew currently serves as a Senior Independent Director of Yorkshire Water and Non-Executive

Director of 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 are valuable to the Board as the Group continues

tobuildasustainable business.

Annemarie Durbin

Independent Non-Executive Director (age 59)

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. Annemarie 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.

Joanna Place

Independent Non-Executive Director (age 60)

Date of appointment: 1 April 2020

Experience and external appointments: From 2017 to January 2022 Joanna was the Chief

Operating Ocer 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.

In November 2022 Jo was appointed as a Director of Cash Access UK Limited.

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 are 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 a minimum of four times per year, and facilitates eective two-way

communication and engagement between the Board, the Panel and the Group’s employees.

Simon Litherland

Independent Non-Executive Director (age58)

Date of appointment: 3 April 2017

Experience and external appointments: Simon is the Chief Executive of Britvic plc. He qualiﬁed as

a chartered accountant with Deloitte and has over 30 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.

Shirine Khoury-Haq

Independent Non-Executive Director (age 51)

Date of appointment: 1 July 2021

Experience and external appointments: Shirine is the Chief Executive Ocer of The Co-operative

Group, having been appointed in August 2022. Prior to this, Shirine was the Chief Financial Ocer

of The Co-operative Group, where she was responsible for ﬁnance, technology, transformation

and corporate development, and also served as the Chief Executive Ocer of The Co-operative

Group’s Life Services sector, which included the Insurance, Legal Services and Funeral businesses.

Before joining The Co-operative Group, Shirine was Chief Operating Ocer 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 Oce.

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 is a great beneﬁt as the Group continues to build a sustainable

business in every sense.

Executive Directors 25%

Independent Non-Executive

Directors 75%

Board independence (excluding Chairman)

asat 31 December 2022

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Board leadership continued

Director duties

Role Responsibilities

Chairman

Roger Devlin

• Leading the Board and responsible for its overall eectiveness in directing

theCompany;

• Upholding high standards of integrity and probity and supporting the Directors

in instilling the appropriate culture, values and behaviours in the boardroom

andthroughout the Group;

• Setting the agenda for Board meetings and setting the style and tone of all

discussions to promote eective decision making, constructive debate and

participation by all Directors;

• Promoting an eective Board and having a prime role, with the Nomination

Committee in succession planning;

• Promoting eective relationships and open communication, both inside and

outside the boardroom between Non-Executive Directors and the Executive team;

• Promoting high standards of corporate governance;

• Constructively challenging the Executive Directors and helping to develop

proposalson strategy;

• Scrutinising the performance of management in meeting agreed goals and

objectives and monitoring the reporting of performance;

• Satisfying himself on the integrity of ﬁnancial information and that ﬁnancial

controlsand systems of risk management are robust and defensible;

• Devoting time to developing and refreshing knowledge and skills;

• Ensuring that all Directors receive high-quality information suciently

inadvanceofBoard meetings; and

• Leading the annual evaluation of the Board.

Group Chief Executive

Dean Finch

• Leading the Executive team in running of the Group’s business;

• Leading the development of the Group’s strategy and implementing the

strategyasagreedby the Board;

• Working closely with the Chairman to support the eectiveness of the Board;

• Leading by example, ensuring eective communication of the agreed strategy

andculture to the Group’s management and workforce;

• Supporting the Chairman to ensure that appropriate standards of governance

permeate throughout the Group;

• Communicating the views of senior management to the Board so as to aid

eective decision making;

• Ensuring that the Board receives accurate high-quality information from

management in a timely manner; and

• Listening to the constructive challenge of the Non-Executive Directors,

andencouraging Non-Executive Directors to test proposals in light of their

external experience and knowledge.

• The Group Chief Executive’s report can be located on pages 14 to 20.

Role Responsibilities

Chief Financial Ofﬁcer

Jason Windsor

• Supporting the Group Chief Executive in developing and implementing strategy

andalignment to ﬁnancial objectives;

• Leading the Group’s relationship with the auditors, banks and shareholders;

• Stewardship of the Group’s ﬁnancial resources and risk management; and

• Ensuring that ﬁnancial information and that ﬁnancial controls and systems of

riskmanagement are robust and defensible, and reporting this to the Board.

• The Financial Review can be located on pages 53 to 55.

Senior Independent

Director

Nigel Mills

• In addition to his role as a Non-Executive Director, acting as a sounding board

forthe Chairman and an intermediary for other Directors;

• Leading the annual performance appraisal of the Chairman;

• Being available to shareholders for them to raise any concerns they may have

outside of the usual channels of communication; and

• Being available to play a key role in resolving issues which may arise during

periodsof Board or Company stress.

Non-Executive

Directors

Simon Litherland

Annemarie Durbin

Andrew Wyllie

Shirine Khoury-Haq

• Supporting and constructively challenging the Executive Directors in determining

and implementing strategy;

• Bringing independent judgement and scrutiny to decisions recommended

bytheExecutive Directors and monitoring the reporting of performance;

• Approving decisions reserved for the Board as a whole;

• Contributing a broad range of views, skills and experience. Devoting time

todeveloping and refreshing knowledge and skills;

• Monitoring delivery of agreed strategy within the risk and control framework

setbythe Board; and

• Reviewing the integrity of ﬁnancial information and risk management systems

arerobust and defensible.

Designated

WorkforceNED

Joanna Place

• In addition to her role as a Non-Executive Director, facilitating eective two-way

communication, and meaningful dialogue andengagement between the Board

and the Group’s workforce; and

• Acting as a direct link between the Employee Engagement Panel and the Board.

Company Secretary

Tracy Davison

• Advising the Board and supporting the Chair on corporate governance matters;

• Ensuring a good ﬂow of information to the Board, its Committees and

seniormanagement;

• Promoting compliance with statutory and regulatory requirements and Board

procedures, and ensuring that regular updates are provided to the Board

whennecessary;

• With the assistance of the Chair, organising the Board’s annual Evaluation;

• Providing guidance and support to Directors, individually and collectively; and

• Ensuring that all new Directors receive thorough inductions which are adapted

tomeet their needs and requirements.

Persimmon Plc | Annual Report | December 2022

Customer care and build quality

The Group continued to drive standards to ensure high

levels of build quality and customer satisfaction. The Board

measured progress by reviewing customer satisfaction

scores and internal IQC build quality scores and external

warranty provider scores. They received presentations from

the Chief Customer Experience Ocer, noting the changes

in processes, additional resources invested in this function

and the additional training. This additional training assists

our teams to understand the required cultural changes and

equips them with the skills required to place customers

atthe heart of our business with a compelling brand.

See pages 21 to 27.

Building safety provision

In November 2022, the Board announced a management

update in respect of the Group’s building safety provision.

The provision has been increased by £275m reﬂecting

the broader scope required by government, additional

developments becoming eligible and clearer costings

from proactive engagement.

See pages 3, 16 and 84.

Board activities

During 2022 the Board held seven scheduled meetings.

Additional Board meetings and calls were held to consider the

appointment of Jason Windsor as Chief Financial Ocer, consider

theGroup’s commitment to the Fire Safety Developer Pledge,

thelegacy building safety provision and the Group’s Capital Allocation

Policy. 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the Non-Executive Directors.

All Directors attended the scheduled Board and Committee

meetingsin2022. 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following table.

Developer pledge and contract

withUK Government

In April 2022, the Group signed the Developer Pledge,

committing to address life-critical ﬁre safety issues

on allbuildings of 11 metres and above in England,

developedby the Group in the 30 years prior to

5 April2022, and not to claim any funds from the

Government’s Building Safety Fund.

We have worked constructively with the government to

agree the developer remediation contract that turns the

Pledge into a legal agreement. We have signalled our

intent to sign this contract ahead of the 13 March 2023.

See pages 16 and 84.

Culture

The Group made important headway in instilling its

Mission, Vision and Values. The Board monitored progress

against our ﬁve key priorities, reviewed the results of

the Group’s employee engagement survey. They noted

feedback from the 2021 external board evaluation

on the Group’s evolving culture and how this can be

collectively supported.

The Group welcomed the introduction of the New

HomesQuality Code and registered during the year.

The Board received updates on the application for

Champion status in the Building a Safer Future Charter.

See pages 23, 92 to 94 and 96 to 98.

Diversity & Inclusion

The Board received a presentation on the results of the

Group’s Diversity & Inclusion Review in February 2022.

The three main focus areas following the review are

communication, education and a resource programme.

Actions taken in 2022 included creating a Diversity and

Inclusion Working Group and the roll-out of mandatory

Diversity and Inclusion training for senior managers

andsite based employees.

See pages 52 and 109 to 112.

Capital allocation policy

The Board announced a new capital allocation policy

in November 2022 to deliver sustainable returns to

shareholders while investing in future growth through

disciplined expansion of our industry-leading land

portfolio and enhancing our quality and service

capabilities. Alongside this the board considers our

current assessment of prevailing market conditions,

andthe sector’s increased tax contribution and

buildingsafety remediation costs.

See pages 3, 19, 55 and 84.

Board composition

The Nomination Committee considers it would be

beneﬁcial to appoint a Non-Executive Director with

industry experience and has initiated a search for a

suitable candidate. The FCA Listing Rules diversity targets

were considered and it is the intention of the Nomination

Committee to have 40% women on the Boardwithin a

reasonable timeframe. It isthe ﬁrm intent that the next

Senior Independent Director will be female.

See pages 106 to 115.

Governance and Strategy

The Board received regular updates from Executive

Committee members covering matters including Health,

Safety & Environment, Sustainability, HR, IT, FibreNest

andCustomer Care.

The Board held its annual Strategy Day to assess

progress and performance to date, as well as future

plansand priorities.

See page 95.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Corporate governance statement

The Group’s purpose and mission is to build

homes with quality our customers can rely

onataprice they can aord.

Mission, Vision and Values

During the year, the Group launched a new Mission, Vision and

Valuesto guide the next stage of its development. These enhanced

ambitions and renewed priorities recognise that the Group has an

important role to play in society, including as a responsible business

and employer. It isby strengthening its abilitytoconsistently deliver

high quality homesand good customer service that Persimmon

will sustain industry-leading ﬁnancial performance. The newly

implementedMission, Vision and Values area step towards

culturalchange and will be central totheGroup’s evolution.

The Mission is to build homes customers can rely on at a price

they canaord. To achieve this, the 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. The Group 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 Persimmon build. The Values set out the behaviours

that will help achieve the Missionand Vision: customer focused,

value driven, team work, socialimpact, and excellence always.

For furtherdetailsseepages7and 37 of the Strategic Report.

The Persimmon Way supports the Group’s Mission to build homes

customers can rely on at a price they can aord. Since its introduction

andimplementation during 2020, The Persimmon Way has set the

buildquality standards to ensure the Group can consistently deliver

good quality homes for customers. In pursuing The Persimmon Way,

theGroup has invested further resource in build quality and customer

care, including digital technology and training. Structured training

modules, such as the Persimmon Pathways, have also been

devisedand rolled out to our employees.

These changes have allowed the Group to work towards

improvementsin build quality and customer care service levels

and createdan improved customer experience. Progress is

regularlymonitored by the Board.

In March 2022 the Group became a ﬁve-star homebuilder for the

ﬁrsttime in its history. Our current eight-week customer satisfaction

scorecontinues to exceed the threshold required to achieve

the HBFﬁve-star rating. During the year the Group continued

its work withwarranty providers, with NHBC Reportable Items

having improvedsince the introduction of The Persimmon Way

in 2020. Progress to date, as a result of The Persimmon Way, has

been encouraging, although there remains work to do. We were

pleased to be commended for The Persimmon Way in the Best

Customer Satisfaction Initiative at the Housebuilder Awards in

2022. The Group’sTrustpilot score has improved signiﬁcantly

during the year. We will build upon the results to date to deliver

our Vision tobeBritain’sleading homebuilder. Further details

onThePersimmonWay can be found on page 22.

In 2022 the Group became

a ﬁve-star homebuilder for

the ﬁrst time in its history.

UK Corporate Governance Code 2018

statement of compliance

This Corporate Governance Statement, together with the Audit & Risk

Committee Report on pages 116 to 122, the Nomination Committee Report

on pages 106 to 115 and the Directors’ Remuneration Report on pages 126

to 153, provides a description of how the Principles of the UK Corporate

Governance Code 2018 have been applied. 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.

Our diverse and balanced Board consists of our Chairman, Roger Devlin,

two Executive Directors and six Independent Non-Executive Directors.

In line with the UK Corporate Governance Code 2018, the Board leads

and directs the Group. It sets and deﬁnes the Group’s purpose/mission,

vision and 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 2022. 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 Capital Allocation Policy; 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.

Persimmon Plc | Annual Report | December 2022

Our Values

Our Values act as our cultural behaviours to

ensure that our Mission and Vision succeed.

During the year we have continued to ensure

thatour Values are further embedded across

the business.

Customer

focused

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. One of the measures

the Board uses to monitor customer service and build quality is the

HBF National New Homes Customer Satisfaction Survey. The HBF

8-week ‘Would you recommend your builder to a friend’ score and the

HBF build quality score are two non-ﬁnancial KPIs. The Group Training

department has developed structured training modules for customer

care teams, to drive improvements in the service that the Group

provides and enhance customer satisfaction to meet the aim of being

trusted to deliverﬁve-star homes consistently. We have made great

strides since the introduction of The Persimmon Way. Further details

onthe KPIs can be found on page 13.

Value

driven

We are Value driven. We aim to deliver the best value, high quality

homes to customers by encouraging entrepreneurship, innovation and

cost eciency to drive industry-leading performance, and competitive

and sustainable returns for shareholders. The Group’s ﬁnancial KPIs

include revenue measures, proﬁt measures, cash and cash ﬂow

measures, and return measure (see page 12).

The Group’s strategy of minimising ﬁnancial risk and investing

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. During the year the Board reviewed the existing Capital

Return Programme and agreed that this should be replaced with

anew Capital Allocation Policy that takes into account political and

economicuncertainty and the sector’s increased taxation rates.

Team

work

Team work means working in an open and collaborative manner

todeliver for customers and communities. The Board recognises

theimportance of a diverse and inclusive workforce and the value to

employees of a rewarding career. We commissioned an independent

Inclusion Review and in early 2022 the Board received a presentation

on the results of that Review (see pages 52 and 112). The Board and

Executive Committee subsequently received D&I training during 2022.

During the year, we formulated a new Talent Acquisition Strategy

(see page 37) and a Group-wide Talent Review was conducted

(seepage 39).

The fair treatment of all of the Group’s workforce is fundamental.

This isdemonstrated by the Group’s continued accreditation as a

Living Wage Foundation employer. This voluntary commitment goes

further than Government mandated minimum wage levels beneﬁting

both directly employed and sub-contracted labour. During the year

consideration was given to the pay of the Group’s employees, and

how inﬂationary increases were impacting them. As a result, a tiered

pay review was implemented which awarded increases of up to 7%

of basic pay, with the highest increase for our lowest paid employees.

The remuneration framework of the workforce is considered when

determining executive pay. To align our employees with our desired

culture, we have an awards scheme and bonus structure aligned

tobuild quality and customer care (see page 23).

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Corporate governance statement continued

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.

Throughout the year a number of energy awareness training modules

have been rolled out to improve site energy eciency. The Group

has continued to purchase 100% renewable energy for its oces and

manufacturing facilities, and all electricity for Persimmon’s newly built

homes, while under Group ownership, is backed by The Renewable

Energy Guarantee. This focus not only applies to Group homes and

facilities but also to the ﬂeet with the Group having introduced electric

vehicle options for Company cars and vehicles. One way in which

Social Impact is monitored and reviewed by the Board is via the

Percentage of waste recycled KPI. The KPI monitors our operational

and environmental eciency, collecting data on the amount of waste

the Group generates and recycles for each home sold. During 2022

the Group has focused on improving waste data capture and sharing

best practice.

The Board believes in the importance of ESG and cultural metrics and

this is reﬂected in our use of customer care and quality in the annual

bonus and PSP, and the incorporation of a clear and measurable

environmental target in the PSP (see page 129).

Excellence

always

Excellence always means that 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 ecient manner, delivering for customers, communities

and stakeholders alike. To support this, several Persimmon Pathway

schemes have been developed to provide structured training

programmes across core operational disciplines.

During 2022 a Quality Site Inspection Audit of The Persimmon Way

took place to ensure that sites were delivering the high standards

set. The outcome of the audit provided recommendations which will

be implemented in early 2023. Quality and eciency continue to be

a focus with the continuing embedding of more exacting building

tolerances and the developmentof our ‘Good Practice Guide’ which

shares best practice.

The Board receives a variety of reports and updates from the senior

management team, including the Director of Talent and Diversity, the

Chief Customer Experience Ocer, the Group Construction Director,

the Group Health, Safety and Environment Director, theManaging

Director of FibreNest and the HR Director. This data is then utilised

to monitor behaviours across the Group and how they align with the

desired culture. Data reviewed includes the Group’s HBF scores, The

Persimmon Way internal scores (assessed by the Group’s Independent

Quality Controllers), external warranty provider scores, feedback from

the employee engagement survey, labour turnover reports and health

& safety data, plus media coverage received by the Group.

Persimmon Plc | Annual Report | December 2022

The Group’s strategy has a clear focus of putting customers ﬁrst.

The Group’s ﬁve key priorities support the delivery of this strategy.

The strategy is set by the Board and regularly reviewed at Board and

strategy meetings. The Board held its most recent annual strategy

meeting during October 2022, where senior executives from across

the Group delivered presentations on various strategic matters.

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

teams, employees and the wider workforce. 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. During the year the improvements made to internal

communications has enabled better engagement with all of our

employees in order that they know, understand and adhere to the

Group’s strategy, including its potential beneﬁts and risks.

The Executive Committee continues to meet bi-monthly to consider

performance in all areas, including operational, customer care,

sales, HR, IT, FibreNest, land management and regulatory matters.

The Executive Committee is made up of senior operational and Group

management. With the support of the operating business Managing

Directors and leadership teams, the Executive Committee are tasked

with implementing andcommunicating the Group’s strategy to the

operating businesses and wider workforce as a whole.

The Group’s 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position for continued future success.

Strategy

As part of our strategy to build an even stronger business,

the Board has agreed the ﬁve key priorities, being:

• Build quality: our ambition has grown from ‘build right, ﬁrst time,

everytime’ to ‘trusted to deliver ﬁve-star homes consistently’.

• Reinforcing trust: in seeking to build a compelling brand we will

placecustomers at the heart of our business, trusted to deliver

thebest value homes customers can be proud of.

• Disciplined growth: maintain our stringent appraisal, investing

inhighquality land in the right areas.

• Industry-leading ﬁnancial performance: sustain our industry-leading

margins and returns and drive healthy proﬁt and cash.

• Supporting sustainable communities: actively part of the net zero

carbon economy transition, the communities we operate in and

eorts to widen opportunity.

The Board acknowledge the importance of Persimmon’s role in society,

including its responsibilities to its workforce, customers, suppliers and

communities. It is by strengthening the Group’s ability to consistently

deliver high quality and service that it will sustain industry-leading

ﬁnancial performance.

Further information on our key priorities can

be found on pages 21 to 41.

Our people

and values

Our five

key priorities

Build quality

and safety

Supporting

sustainable

communities

Reinforcing

trust: customers

at the heart of

our business

Industry-leading

financial

performance

Disciplined growth:

high quality

land investment

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Corporate governance statement continued

The health and safety of our customers, workforce and all those

visiting our sites is paramount. The Board receives regular updates

from the Group’s Health, Safety & Environment Director, to enable it

tomonitor changes to the Group’s culture. The number of construction

work related incidents (RIDDORs) is a KPI (see page 13). Following a

comprehensive review of its Health, Safety & Environment Strategy,

digitalised HS&E Standards are being rolled out,to make these more

accessible and interactive for our workforce. The Group has been

awarded a Certiﬁcate of Commitment and Progress as the ﬁrst stage

to achieving Building a Safer Future Champion status. Dame Judith

Hackitt has publicly applauded those who have achieved this award

as an example to drive cultural change for the right reasons rather

thanwaiting for regulators to drive the change.

During March 2022 the Group held its ﬁrst ever Persimmon

Excellence Always Awards. The event celebrated excellence

across the Group, with awards for Construction Excellence, Health,

Safety andEnvironmental Excellence, alongside the Achievers

Awards. Our Persimmon Academy has been shortlisted for

the 2023NationalFederation of Builders Construction Awards

of Excellence.

The Board has overall responsibility

forframing,embedding, monitoring and

measuringthe Group’s culture, setting

thetonefrom the topandensuring

itiscommunicated to the workforce.

Culture

One method used by the Board to monitor and assess culture is

viatheannual employee engagement survey, which monitors the

cultural health of the organisation and ensures that the strategy is

understood and implemented. Administered by an independent

company, an employee engagement survey took place during the

yearwith the results presented to and considered by the Board.

The Survey serves many purposes, including benchmarking the

Company’s existing culture against targetculture, and receiving

valuable employee feedback. The resultsof the Survey, including

areport which explained an overview of the results, were circulated

to all employees in May 2022. The 2022 Survey demonstrated

an overall engagement score of 83%, an increase of 5 points from

the previous survey. In addition tobeing more engaged, 82% of

participants agreed that the Group has a clear strategy for the future,

with over 90%committed to achieving this and understanding how

their workcontributed to the Group’s shared goals. The 2022 survey

highlighted increases in employees feeling better informed, better

supported and listened to when sharing ideas. Further information

onthe survey can be found on page 37.

Jo offers a direct link between

the workforce and the Board.

Our designated Workforce Independent Non-Executive Director,

Joanna Place, attends each meeting of the Employee Engagement

Panel. During the meetings, Jo has updated members on Board

activities and initiatives, received feedback from the Panel and

acted as a direct link between the Panel and the Board. Jo’s position

adds value to the Group by enabling meaningful engagement

between the workforce and the Board. We recognise that the

Group’s whole workforce has a voice which needs to be heard and

the Employee Engagement Panel enables opens communication

between the Board and the workforce and also creates a culture

of openness and trust. Following meetings of the Employee

Engagement Panel, Joreportsthe outcomes to the Board.

Persimmon Plc | Annual Report | December 2022

The Group’s internal communications during the year have increased

and become more consistent, celebrating the culture and the diversity

of all employees. Using employee case studies, we have highlighted

and celebrated important events including International Women’s

Day, Pride and the International Day of Persons with Disabilities.

Employees have been encouraged to take part in contributing to

the communications and provide feedback whenever possible.

Communications are issued regularly to improve transparency.

To enable communication to be more easily received by the workforce,

a Persimmon News app was launched to allow employees to receive

Group news on their work or personal mobile devices. The app

enhances the digitalandcommunications experiencefor all employees.

We aim to recognise and reward our employees for the work that they

doand the dierence they make. As part of this we completed the

Talent Review, which evaluated the skills and development needs

of c.3,000 employees from across the Group. The completion of

the Talent Review enabled the Group to create plans which would

meet future requirements for succession and inform additional

training programmes. The Persimmon Future Leaders Programme,

which was launched in 2022, is aimed at developing potential

future managing directors and directors of Group functions, and will

strengthen succession planning in the Group. In addition, an employee

development programme has been created, the High Potential

Programme. Due to be implemented during 2023, theprogramme

will oer relevant support and experiences to preparehigh-potential

colleagues for career progression. Dean Finch, Group Chief Executive,

met with participantsand took part in a question and answer session.

The Groupalso continued to develop operating business managing

directors with the MD Leadership Programme.

Whilst the Group’s NVQ assessment centre remains wellutilised, the

Persimmon Academy, which opened during the year, is set to support

over 150 apprentices for our Welsh businesses over the next ﬁve

years. The Group is a Gold Member of the 5% Club, which provides

young people with training and development to enablestrong

career foundations.

Throughout 2022 the Group has also continued to work with Women

intoConstruction as a Platinum Member. The Group is currently

working on a joint project, which involves the HBF and Women into

Construction, to promote site management as a career choice for

women entering the industry.

The Group’s eorts to train and develop its employees was recognised

during the year as the Group was named in the Department of

Education’s Top 100 apprenticeship employers in England, and was

also awarded the Institute of Sales Professionals ‘Investor in Sales’

award following the success of the Sales Excellence programme.

This is recognition of the fact that the sales teams are engaged

with the Institute’s fair ethics programme and Persimmon is the only

housebuilder to hold this award. The Group has also worked with

Volunteer it Yourself, on projects in Liverpool, which has allowed

Group apprentices to work alongside other young people from local

schools, pupil referral units, and community groups. This provides

aspirational role models for careers in the Industry, as well as leaving

vital community spaces as a legacy. During the year the Group has

continued to oer training provision for non-school attenders as well

assupporting disengaged students to re-engage. The Group has

worked with Team GB to develop school activity resources mapped

with the national curriculum and designed topromote careers in

the industry and also the matched Persimmon and Olympic values

ofexcellence, teamwork, and community.

Awarded the Institute of Sales

Professionals ‘Investor in Sales’

award following the success of the

Sales Excellence programme

Top 100 DfE apprenticeship employers

Further information on training

canbe found on pages 22, 26

and 38 to 40.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

The Graduate Management Training Programme, which launched

inSeptember 2021, provides the opportunity for any graduate,

regardless of degree subject, to undertake a two-year rotational

trainingprogramme, with time spent in a variety of departments.

The ﬁrst yearsees new graduates gain experience in Land, Technical,

Construction, Commercial, Sales and Customer Care. The second

year enables graduates to specialise in one or two of these areas and

there is the opportunity for involvement in projects for them to own

and share, giving the graduates a chance to take on new challenges.

Applications are welcomed by both external and internal applicants

andto date 19 graduates have taken part.

The Group’s customer focus has led to further investmentin resource

ofthe customer experience team. For further information see page 25.

During the year, the Group became one of the ﬁrst homebuilders

toformally commence the registration process for the New Homes

Quality Code (NHQC). The Group welcomes the introduction of the

NHQC, which aims to drive up quality, consistency and customer

service standards across the industry.

Further information on culture can be found

on pages 23 and 92 to 94.

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 key priorities, and that these resources must

operate within an eective system of risk management and internal

control. During the year, there has been an ongoing focus on ensuring

our resourcing levels are appropriate, and that our risks are controlled

eectively through the application of the three lines of defence

model,as detailed further within our Audit & Risk Committee Report

onpages 116 to 122.

To ensure the eective implementation of our Mission, Vision and

Values, the Group’s operations are supported by several Group-

levelfunctions, who provide assurance on their safety, quality,

eectiveness and adherence to Group requirements. These include

theGroup Health, Safety and Environment department, whose role

includes routine inspections to ensure the safety of our operations

and adherence to Group policies, reinforcing the Board’s strong

commitment to safeguarding the health, safety and wellbeing of

ourworkforce and our customers. The Group also has a team of

Independent Quality Controllers (‘IQCs’), who undertake quality

assurance inspections on our developments in support of The

Persimmon Way, including the delivery of on-site coaching where

required. The Group’sbuild standards have improved when

comparedto industry standards, withthe introduction of IQCs

havingassisted in this.

The Group’s risk management framework serves to identify, assess,

and manage risks in a timely manner, enabling the Groupto respond

to changes in its environment eectively. This includes comprehensive

risk management surveys involving the Board and senior management,

and the maintenance of detailed risk registers covering each area

oftheGroup’s operations. The Group’s identiﬁed risks are subject

toarange of controls.

This system of internal control is subject to continuous evolution

inresponse to reviews of its eectiveness by the Group’s Internal Audit

department. During the year, the Group has made further commitments

to the strengthening of internal controls, with the appointment of

specialist roles including a Group Internal Control Manager and Chief

Information Security Ocer. These roles will support the Group in

preparing for anticipated audit and governance reforms and enhance

our cyber security environment respectively. Further details of the

Group’s risk management framework, Principal Risks and material

issues are set out on pages 56 to 63. The report of the Audit &

Risk Committee, which provides oversight of the risk management

framework and the eective operation of the system ofinternal

controls, can be found on pages 116 to 122.

Corporate governance statement continued

Persimmon Plc | Annual Report | December 2022

Workforce policies and practices

The Group has a wide-ranging suite of workforce policies in place

covering matters such as Health & Safety; Human Rights; Anti-Bribery

and Corruption; Equality, Diversity and Inclusion; and both Flexible and

Hybrid Working. Working with the Group HR department, we aim to

ensure that the Group’s workforce policies and associated practices

align with the Group’s values and contribute to its long-term sustainable

success. Workforce policies are available to all sta through the HR

information system, with some policies also available via the Group’s

corporate website. The Board receives regular reports from the Group

HR Director, as part of the Board’s Business Dashboard, which include

an overview on the eective operation of the Group’s workforce

policies. Further details on the implementation of workforce policies

during 2022 can be found on pages 36 to 41 of this report.

The Board recognises the importance of maintaining a culture where

employees can raise concerns freely is crucial. Employees are

encouraged to report concerns, either through their line management

or conﬁdentially through the Group’s comprehensive whistleblowing

provision. This provision includes several mechanisms through which

concerns can be reported, and is actively promoted in all Group oces,

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 (while

respecting anonymity), and the provision of summary reports to the

Board through the Audit & Risk Committee. During the year, the Board

reviewed the Group’s whistleblowing provision, including the results

ofa best practice benchmarking exercise carried out with the support

ofthe whistleblowing charity Protect.

One of the outcomes of the exercise was the decision to appoint

Shirine Khoury-Haq, the Audit & Risk Committee Chair, as Group

Whistleblowing Champion. Shirine will act as a ﬁgurehead for

whistleblowing. The Group’s whistleblowing provision helps to

ensurerobust processes are in place and allows colleagues to

speakup without fear. Following this review, the Board concluded

that the provision remained appropriate and eective. Further details

of theGroup’s whistleblowing provision is on page 121 in the Audit

&RiskCommittee 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 oces

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

andEnvironment department reviews and investigates any concerns

raised through this channel, with matters reported to the appropriate

level of the Group’s management structure.

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 sta through letters

of representation, with detailed reporting on potential conﬂicts of

interest,and mitigation actions and controls, provided to the Audit

&Risk Committee on an annual basis.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

Corporate governance statement continued

Stakeholder engagement

Effective engagement

The Board recognises the importance of eective

engagement with the Group’s stakeholders to

promote the long-term success of the Company.

The Board, senior management and the Group’s

operating businesses regularly undertake

engagement activities, details of which are set

outinthe Section 172 Statement on pages 78to83

and in the Strategic Report on pages21 to 41.

Details of how the interests of the Group’s

stakeholders have been considered in Board

discussions and decision-making during the

yearareset out opposite.

Customers

Reinforcing trust and placing customers at the

heart of our business is one of the Group’s

Key Priorities and an important area of focus

for the Board. At each of its meetings, the

Board receives a Customer Experience report

from the Group’s Chief Customer Experience

Ocer. Information contained within the report

includes the Group’s score in the HBF 8-week

and 9-month customer satisfaction surveys,

the Group’s Trustpilot score and an overview

on the speed of resolution of any complaints,

and the Group’s sales & marketing activities.

A comprehensive business update report

from the Group Chief Executive also provides

insight into the Group’s performance and

engagement with its customers. The information

provided facilitates eective Board oversight

of the Group’sengagement with its customers,

andprogress against our key objectives.

Employees

The Board has continued to eectively engage

with employees, recognising the value of

employee feedback as an aid to good Board

decision making and as means to monitor

organisational culture. The Board receives a

report from the Group HR Director at each of

its meetings, enabling the Board to exercise

oversight of the Group’s HR activities, including

diversity, talent and training initiatives.

The Group’s Employee Engagement Panel,

whose members provide a broad representation

of the Group’s employees, is a highly valuable

method of employee engagement used by the

Board. All Panel meetings are attended by the

Group’s designated Workforce Non-Executive

Director, with additional attendees during the

year including the Group Chief Executive and

the Chair of the Remuneration Committee.

Panel meetings enable two-way communication

between the Board and employees.

Feedback received at Panel meetings is reported

to the Board, leading to valuable insights which

inform the Board’s discussions and decisions.

The Group also conducts an annual employee

engagement survey, the results of which are

considered by, the Board, enabling further

consideration of the Group’s culture and the

eectiveness of the Group’s HR activities.

Communities

The Board remains committed to undertaking

any cladding or life-critical ﬁre safety remediation

works for buildings it has constructed, and to

protecting leaseholders from having to pay

towards these issues. To ensure eective

oversight of this issue, the Board receives

updates on progress with remediation work at

each of its meetings. The Board has signalled

its intent to sign the government’s developer

remediation contract whilst continuing to

work positively with the Welsh and Scottish

governments on similar agreements.

Sustainability is integral to how the Group

operates and, we have 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.

It receivesbi-monthly updates on sustainability

issues and performance via the Group Chief

Executive’s report, and for 2023 a detailed

bi-annual updatewill be provided to the

BoardbytheGroup Sustainability Director.

See pages 25 and 78. See pages 36 and 79. See pages 33 and 80.

Persimmon Plc | Annual Report | December 2022

100

Government, regulators

andindustry bodies

As set out opposite, we constructively engaged

with the government’s Department for Levelling

Up, Housing and Communities and the HBF to

agree the ﬁre safety remediation contract.

The Board received updates on planning

issues from various senior members of the

management team, including the Group Planning

Director. Regular engagement takes place with

local planning authorities. A new Placemaking

Framework has been introduced, providing local

teams with enhanced tools to meet customer

needs and local planning authority requirements.

A more proactive approach to securing planning

permissions is starting to demonstrate success.

Our local teams are focused on securing

planning consents from sites we already own

and work closely with our External Aairs team

to enhance our stakeholder engagement and

presentation to achieve approvals from planning

committees. Recent successes with previously

stalled applications are already demonstrating

thebeneﬁtof this new approach.

We also proactively engage with the housebuilding

industry and regulators to develop industry-wide

solutions to meet the requirements of the Future

Homes Standard and Net Zero homes. This aligns

with the Group’s strategy and key priority:

supporting sustainable communities.

Suppliers and subcontractors

The sustainable success of the Group and

the delivery of ﬁve-star homes is reliant on a

robust supply chain, in respect of both materials

and labour. The Board exercises oversight of

the Group’s engagement with suppliers and

subcontractors by considering the Group Chief

Executive’s business update report at Board

meetings. The Audit & Risk Committee received

an update from the Group Procurement Director

during the year on an updated procurement

framework. In addition, during the year the

Board received updates from the Group Chief

Commercial Ocer and the UK Managing

Director regarding supply chain resilience and

how engagement with suppliers has evolved.

The Group Internal Audit department performed

a review of modern slavery supply chain

assurance, the report from which was reviewed

by the Audit & Risk Committee. This review

contributed to further strengthening of the

Group’s training provision and supply chain due

diligence measures, aligning with the principles

ofthe CCLA-led ‘Find it, Fix it, Prevent it’ initiative.

Shareholders

The Board is committed to maintaining good

relations with the Company’s shareholders.

During the year members of the Board engaged

with major shareholders and leading proxy

advisors. The Chief Financial Ocer, Chief

Executive and IR Director hold regular meetings

with analysts and investors as part of the Group’s

reporting cycle. There is a regular report from

theIR Director to the Board setting out feedback

from investors and analysts any signiﬁcant

changes to the share register.

The Remuneration Committee Chair engaged

onthe remuneration for the newly appointed

Chief Financial Ocer as well as the proposed

2023 Remuneration Policy, which included

information on the proposed environmental

metric for 2023 PSP share awards.

All Board members attend the Company’s

AnnualGeneral Meeting and are available

to answer questions. The Chairman and the

Non-Executive Directors are also available

to attend meetings with shareholders to gain

anunderstanding of any issues and concerns.

See pages 24 and 81. See page 82. See page 83.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

101

Corporate governance statement continued

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.

Terms of reference for the Board Committees were reviewed

during the year are available on the Company’s website

https://www.persimmonhomes.com/corporate/investors/corporate-

governance/board-committees/ or from the Company Secretary

attheCompany’s registered oce.

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.

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 fourteen 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.

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 88 and 89.

Only Non-Executive Directors are members of the Board’s Audit

& Risk, Remuneration and Nomination Committees. The Chairman

regularly holds meetings with the Non-Executive Directors without

theExecutiveDirectors being present.

Governance structure

CULTURE

UK Managing Director and Regional Chairs

Leaders of Group Functions

Operating Businesses

Executive Committee

Audit & Risk

Committee

Nomination

Committee

Remuneration

Committee

Sustainability

Committee

Board of Directors

VALUES

All Directors are required to allocate sucient 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.

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 eectively and eciently.

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.

PURPOSE/MISSION

Persimmon Plc | Annual Report | December 2022

102

Audit & Risk Committee

The members of the Audit & Risk Committee are listed in the table

on page 116. 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 is the

Chief Executive Ocer of The Co-operative Group and prior to this

was theChief Financial Ocer of The Co-operative Group, where

shewasresponsible for ﬁnance, technology, transformation and

corporate development. Shirine was appointed to the Committee

on1 July 2021, and appointed as Chair during the same year.

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eectiveness of the Group’s internal audit

function andmonitoringthe external auditor’s independence

andobjectivityandthe eectiveness of the audit process.

Further information on the role and activities of the Audit & Risk

Committee can be found in the Audit & Risk Committee report

onpages 116 to 122.

Remuneration Committee

The members of the Remuneration Committee are listed in the

tableonpage 126. 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. Annemarie is the Remuneration Committee Chair of

Santander UK plc and Petershill Partners 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, Deputy Managing Director,

Chief Commercial Ocer, Chief Customer Experience Ocer, 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 126 to 153.

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.

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 106 to 115.

Sustainability Committee

The Sustainability Committee is responsible for developing and

overseeing the sustainability strategy, policies and objectives.

Reporting directly to the Board, the Sustainability Committee is chaired

by the Group Chief Executive, Dean Finch, and members include the

Group Strategy and Regulatory Director, the Company Secretary and

Group Sustainability Director. In 2023 the Chief Commercial Ocer

andChiefCustomer Experience Ocer will join the Committee.

The Board receives bi-monthly updates on sustainability issues

andperformance via the Group Chief Executive’s report, and for

2023adetailed bi-annual update will be provided to the Board

bytheGroup Sustainability Director.

Under the remit of the Sustainability Committee, three internal

workinggroups have been established – comprising the Zero

CarbonHomes Steering Group, Supply Chain Emissions Steering

Group, and Operational Emissions Steering Group. The main area

of focus this year has been developing low carbon energy transition

plans to ensure Future Homes Standard readiness, developing

carbonreduction glidepaths for Scope 1 and 2 emissions aligned to

our sciencebased targets, andcontinuing to build knowledge on

embodied carbon in materials and engaging with our supply chain.

The Sustainability Committee formally met three times in 2022,

andcovered the following topics:

• Detailed review of 2021 performance, GHG emissions,

climateriskresilience and TCFD reporting.

• Low carbon transition plans update.

• Modern Slavery review and statement approval.

• Updated policy approvals for Sustainability Policy

andEnvironmental Policy.

• Mid-year progress review against KPIs.

• Health, Safety & Environment update from Group Health,

Safety&Environment Director.

• Sustainability benchmarking and competitive positioning.

The Board received an update from the Group Sustainability

Directorat its annual Strategy Day to provide a detailed update

onthesustainability landscape and insights, progress and

performanceto date, future plansand priorities.

The Sustainability Committee supports the Board’s climate

responsibility, and oversees the Group’s climate change strategy,

to ensure climate issues are being eectively considered and

managed, and reports its ﬁndings and recommendations to

the Board.Further information can be found in the Group’s

SustainabilityReport and Climate-Related Financial Disclosures

(‘TCFD’)report on pages 64 to 74.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

103

Corporate governance statement continued

Composition, succession and evaluation

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 the

yearcanbe found in the Nomination Committee report on pages

106to 115.

Board changes

On 14 January 2022 Mike Killoran stepped down as Group Finance

Director. On 11 July 2022 Jason Windsor joined the Board as Chief

Financial Ocer. Details of the recruitment process were reported

inthe 2022 Annual Report. The Board warmly welcomes Jason

tothebusiness. Further details on Jason’s skills and experience

canbefound on page 88.

Succession

Succession planning for the Board, Senior Management and

theGroup’s Operating Businesses is a key area of focus for the

Nomination Committee. There is also increased focus on employee

engagement. 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 eective succession planning.

Further details can be found in the Nomination Committee Report

found on page 113 and in the Strategic Report on page 39.

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 2022 was 33% female and 66% male

(2021: 33%female and 66% male). The Group is making progress

inimproving female representation in management roles; at

31 December 2022, females comprised 34% of our senior executive

management team and direct reports, with 18 females and 35 males.

We had 1,509 female employees, 27% of our colleagues and

4,045 male employees (2021: 28% of its senior management team

anddirect reports, with 20females and 51 males, and 27% of all

colleagues, with 1,403 femalesand 3,793 males).

Amendments were made to the FCA Listing Rules during the year,

which seek to build on progress achieved under the voluntary UK

diversity initiatives and to improve diversity in the upper tiers of listed

company management. The new rule applies for ﬁnancial years

startingon or after 1 April 2022, on a comply or explain basis. We will

berequired to report whether we meet the following targets:

• at least 40% of the individuals on the Board are women;

• at least one of the senior Board positions (being Chair, CEO,

SIDorCFO) isheld by a woman; and

• at least one member of the Board is from a minority

ethnic background.

We have decided to report on these targets early, our ﬁrst report

isonpage 111.

Increasing workforce diversity continues to be a key objective and in

pursuit of this we set diversity targets set in 2021 to improve the Group’s

gender diversity by the end of 2025. These target females comprising

composing 40% of employees, 35% of our senior management team

and 45% of employees in management roles. The Board has noted the

targets set by the FTSE Women Leaders Review to further increase

gender diversity of boards and senior management teams by 2025,

and board diversity requirements in the updated FCA Listing Rules,

andhas agreed that it is the Committee’s ﬁrm intention to appoint

awoman as the Group’s next Senior Independent Director.

The Group has an Equality, Diversity and Inclusion Policy. The main

objective of the Policy is for the workforce to be truly representative

of all sections of society and the Group’s customers, and for each

employee to feel respected and able to give their best, prohibiting

discrimination in any form, harassment and victimisation.

The policy is available from the Group’s corporate website

www.persimmonhomes.com/corporate/sustainability/policies-and-

statements/. Numerical data in relation to the diversity of the Board

andfurther information on how the Policy has been implemented

canbe located in the Nomination Committee report on pages

106to 115.

Inclusion review

The Group previously commissioned an Inclusion Review which

concluded during the year. The results were presented to the Board,

Group Executive Committee and the Diversity & Inclusion Council.

The results highlighted the Group’s clear intentions to improve diversity

and inclusion, with key recommendations including communication,

education and a resource programme. The Board and the Group

Executive Committee have received diversity and inclusion training.

Training has also commenced throughout the Group.

Diversity & Inclusion Council

In August 2021 a Diversity & Inclusion Council was established,

chaired by the Director of Talent & Diversity, to build on the work

ofthesuperseded Gender Diversity Panel. Comprising of senior

leaders from across the business, who are responsible for overseeing

the Diversity & Inclusion strategy, its implementation, and monitoring

progress, the remit of the Diversity & Inclusion Council is to encompass

all aspects of diversity. The Council meet a minimum of quarterly.

Updates on the Council’s work are provided in the Nomination

Committee report, see page 112.

Diversity & Inclusion Working Group

Established during the year, the Diversity & Inclusion Working Group

is made up of colleagues from across the Group who volunteered

to take part, all of whom were selected after interview and provided

with training. The Diversity & Inclusion Working Group is responsible

for delivering the Diversity & Inclusion strategy, with each member

responsible for a speciﬁc package of work. They are provided with

time aside from their normal role to facilitate this. Some of the areas of

work in which they are involved include training, data, communications

and awareness around diversity and inclusion, diversity and inclusion

focus for customers, customer and social mobility, and recruiting

amorediverse workforce, with a range ofactions taking place

ineacharea to support the strategy.

Persimmon Plc | Annual Report | December 2022

104

While the role of the Diversity & Inclusion Council is around strategic

oversight, the members of the Working Group are moving forward the

detailed action plan and ensuring it recognises where the Group is

now and delivers appropriate and meaningful change. The Diversity

& Inclusion Working Group will meet a minimum of every six weeks

tomonitor progress.

In November 2022 members of the Diversity & Inclusion Working

Group held its ﬁrst joint meeting with the Diversity & Inclusion

Councilofsenior leaders. Updates on the Diversity & Inclusion

WorkingGroup’s work areprovided in the Nomination Committee

report on page 112.

Diversity & Inclusion Strategy

Following the external Inclusion Review, which commenced during

2021, the results were presented to and considered by the Board,

theGroup Executive Committee and the Diversity & Inclusion Council.

The Inclusion Review enabled Group to develop a clear Diversity &

Inclusion strategy and in April 2022 the Group commenced delivery

against this. The review also enabled us to benchmark ourselves

against other organisations of a similar size, scale and sector, and

allow us to identifywhere the Group is on its inclusion journey

andwillprovide atechnique to measure progress through further

re-audits, the ﬁrst ofwhich is scheduled for the autumn.

Board skills, experience and knowledge

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howdiversity can improve business success.

Details on the skills, experience and knowledge of the Board

canbefound on pages 88 to 89.

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 2022

the Board undertook a formal, rigorous internally facilitated evaluation.

The next externally facilitated annual evaluation will occur in 2024.

The 2022 evaluation, which was led by the Chairman and supported

by the Company Secretary utilised BoardClic, a digital board evaluation

platform and comprised completion of a questionnaire by all Board

andCommittee members.

During the year, the Chairman’s performance was formally evaluated

by Nigel Mills, the Company’s Senior Independent Director, holding

private discussions with the Board members excluding the Chairman.

Following the evaluation, it is considered that the Chairman continues

to perform well in his role.

Further details on the 2022 annual evaluation can be found on

page114.

AGM

The AGM will be held at 12 noon on 26 April 2023 at York Racecourse,

Knavesmire Road, York YO23 1EX. Voting at the AGM will be on a poll

whereby every member shall have one vote for every ordinary share

held. 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.

Re-election

Roger Devlin, Dean Finch, Nigel Mills, Simon Litherland, Joanna

Place,Annemarie Durbin, Andrew Wyllie, and Shirine Khoury-Haq

willstand for re-election by shareholders at the forthcoming AGM,

tobeheld on 26 April 2023. Jason Windsor has been appointed

sincethe 2022AGM, and will stand for election by shareholders.

The Board supports the election and re-election of all of the Directors.

It considers that the Directors as a whole work well together, with the

tone set by the Chairman. 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-Executive Directors being re-elected has

individually shown a highlevel of independence and commitment to

their roles and is considered by the Board to be independent.

Jason Windsor was appointed to the Board on 11 July 2022 as Chief

Financial Ocer. Jason is an experienced ﬁnance executive who has

established a strong track record in a variety of senior ﬁnancial roles

over the last 27 years. He was Group Chief Financial Ocer of Aviva

PLC from 2019 to 2022, having previously been Chief Financial Ocer

of both its UK Insurance and UK Life businesses, after originally joining

the business in 2010. Prior to Aviva, Jason spent 15 years at Morgan

Stanley, in London and Singapore, latterly as a Managing Director

within its Investment Banking Division. Jason is a well-respected

andproven FTSE 100 CFO with experience as Chief Financial Ocer

to complement our strong management team. In his previous role

Jason demonstrated an ability to deliver sustained ﬁnancial and

strategic progress while working in a large consumer-facing business.

These skills are highly relevant to Persimmon as we continue our drive

to become the leading homebuilder of the best value, quality homes

inthe UK.

The Directors’ biographies, acknowledging their experience, skills

andcontributions can be found on pages 88 and 89 or on the

corporate website at www.persimmonhomes.com/corporate/about-us/

board-of-directors/.

Use of external search consultants

As reported in the 2021 Annual Report, we used Heidrick &Struggles to

assist with the recruitment of our Chief Financial Ocer, Jason Windsor.

During the year, the Nomination Committee agreed it would be

beneﬁcial to appoint an additional non-executive director with relevant

industry experience. The search for a suitable candidate is ongoing.

The Nomination Committee engaged Egon Zehnder to provide

assistance in relation to this search. Neither ﬁrm has any supplementary

connections to the Company orany Director.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

105

Composition, succession and evaluation

Nomination Committee Chair’s statement

On behalf of the Board, I am

pleased to present the Nomination

Committee’s report for the year

ended 31December 2022.

Appointments

On 13 January 2022 the Group announced

that Jason Windsor would be appointed as the

Group’s new Chief Financial Ocer following

the retirement of Mike Killoran. Full details of

Jason’s appointment process were provided in

the Nomination Committee’s report for the year

ended31 December 2021.

Jason joined the Group on 11 July 2022 and

receiveda comprehensive induction, providing

himwith a solid introduction to the Group, its

strategy, operations, external environment and key

personnel. Please see page 108 for further details.

Nomination Committee

members and meeting

attendance 2022

Scheduled

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 3/3 100%

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.

Diversity & inclusion

Diversity & inclusion forms a key part of the

Group’sstrategy, whichincludes the development

ofadiverse and talented workforce. Diversity &

inclusion has therefore been an important area

offocus fortheBoard, the Committee and the

Groupduring the year.

In line with the Parker Review and the

HamptonAlexander Review (which was succeeded

by the FTSE Women Leaders Review during the year),

as at 31 December 2022 the Boardhadonedirector

from a minority ethnic group and was33.3%female.

During the year the Committee noted and considered

the new diversityrequirements of the FTSE Women

Leaders Review andtheupdated FCA Listing Rules,

including the requirement thatatleastone of the

Board’s senior positions (Chair, Senior Independent

Director, Chief Executive or Finance Director)

beoccupiedby a women by the end of 2025.

Persimmon Plc | Annual Report | December 2022

106

During the year the Committee

agreed its ﬁrm intent that a woman

be appointed as the Group’s next

Senior Independent Director.

Roger Devlin

Chair of the NominationCommittee

The FCA Listing Rules’ diversity reporting

requirements will apply to the Company’s ﬁnancial

year ending 31 December 2023, however, we have

decided to report against the requirements early.

Further details can be found on page 111. In light of

the new diversity requirements, and the relatively

short tenures of the Group Chief Executive and Chief

Financial Ocer, during the year the Committee

agreed its ﬁrm intent that a woman be appointed

asthe Group’s next Senior Independent Director.

During the year the Committee exercised oversight

of the Group’s diversity and inclusion activities,

reviewed the Group’s progress against gender

diversity targets and received regular reports from

the Group HR Director and the Group’s Director of

Talent and Diversity.

A summary of progress made in the year includes:

• The proportion of women in the senior

management team increasedfrom 28% to 34%;

• The Board received a presentation on the results

of the Group’s ﬁrst Inclusion Review;

• Diversity & inclusion training was delivered to the

Board and the Group Executive Committee; and

• ‘Inclusive Leadership’ and ‘Positive Workplace’

training was rolled-out for the Group’s senior

managers and site-based employees,

respectively, to further embed diversity

andinclusion throughout the Group.

Whilst progress was made during 2022, we

acknowledge that there is more to do, both at

Board level and throughout the Group. Given its

importance, the Committee will continue to focus

on improving the Group’s diversity and inclusion

during 2023.

Talent & succession planning

Succession planning for Board, executive and senior

management positions, and the development of a

diverse pipeline of talent for succession, form an

important part of the Committee’s responsibilities.

During the year the Committee considered the

balance of skills and experience of Board members

and agreed that it would be beneﬁcial to appoint

an additional Independent Non-Executive Director

with relevant industry experience. The search for a

suitable candidate is ongoing and the outcome of

the process will be announced in due course.

The development of talent is a signiﬁcant area

of focus for the Group and, during the year the

Committee received regular Talent reports from

the Director of Talent and Diversity regarding the

Group’s succession planning activities to develop

adiverse pipeline of talent.

During the year the Group completed a Talent

Review, which covered c.3,000 employees in middle

and senior management positions, and enabled

the Group’s operating businesses and centralised

functions to develop robust and detailed succession

plans. The Group also continued to develop its

operating business Managing Directors with the MD

Leadership Programme, and two new development

programmes were established during the year for

high-performing employees:

• The Future Leaders Programme, which is

designed to support and develop functional

directors who have the potential to reach

Managing Director level; and

• The High Potential Programme, which supports

talented employees to develop and broaden their

experience, thus enabling them to achieve further

promotion and career development.

Board gender diversity

at 31 December 2022 %

Male 67%

Female 33%

Board ethnic diversity

at 31 December 2022

White 8

Arabic 1

Board tenure at

31 December 2022

0-3 years 67%

3-6 years 22%

6-9 years 11%

The Group’s eorts to develop and maintain a

diverse pipeline of talent for succession to senior

management and executive positions will continue,

as will the Committee’s oversight of these activities.

Whilst progress has been made, there is more to do.

Further details regarding the Committee’s work

during the year are setout on pages 108 to 115.

Roger Devlin

Chair of the Nomination Committee

28 February 2023

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

107

Composition, succession and evaluation

Nomination Committee report

Appointments

Jason Windsor joined the Group as Chief Financial Ocer on 11 July 2022. Jason’s appointment was

announced by the Group in January 2022 and full details of his appointment process were included in the

Nomination Committee’s report for the year ended 31 December 2021. This report therefore covers the

induction that Jason received upon joining the Group.

Summary of the Committee’s work during the year

Matters considered Outcome

Appointment of a new

ChiefFinancialOfﬁcer

In January 2022, following an extensive

search process, the Committee

recommended to the Board that Jason

Windsor be appointed as the Group’s

newChief Financial Ocer.

Following the Board’s acceptance of the

recommendation, Jason joined the Group on11July

2022 and received a comprehensive induction.

Board skills, training and development

Agreed that it would be beneﬁcial to increase

the amount of formal training provided to

Boardmembers.

Also agreed that it would be beneﬁcial to

appoint an additional Non-Executive Director

with relevant industry experience.

An updated schedule of Board training was produced,

with training sessions deliveredduring the year on

topics including diversity & inclusion, health & safety,

climaterisk andreporting, corporate governance and

the housebuilding process.

Commenced the search for a suitable candidate.

Thesearch is ongoing and the outcome of the

processwill beannounced in due course.

Diversity and inclusion

Consideration and oversight of Board

diversity, and diversity throughoutthe

organisation.

Noted the diversity targets set by the FTSE Women

Leaders Review and the new FCAListing Rule on

diversity reporting. Agreed that it is the Committee’s

ﬁrmintentiontoappoint a woman as the Group’s

nextSenior Independent Director.

Noted the results of the Group’s Inclusion Review

andfuture actions to improve diversity.

Received reports from the Group HR Director and

Group Director of Talent and Diversityregarding

diversity & inclusion activities and progress against

gender diversitytargets.

Talent and succession below Board level

Overseeing the development of a more

diverseexecutive pipeline.

Received reports from the Group HR Director and

Group Director of Talent and Diversityregarding

the Group’s Talent Review and talent development

programmes.

Jason Windsor – induction

Jason received a thorough induction upon

joining the Group, covering the Group’s

strategy, operations, external environment and

stakeholders. The induction included meetings

with the Chair and Chief Executive, Chair of the

Audit & Risk Committee and the Company’s

Auditor (Ernst & Young LLP). The induction also

included an extensive programme of meetings

with members of the Group Executive Committee

and senior managers, covering areas such as the

Group’s housebuilding operations (construction,

land & planning, technical, commercial and

customer experience), o-site manufacturing,

ﬁnance, tax, internal audit & risk, IT, FibreNest,

strategy & regulation, sustainability, health &

safety,legal, HR and external aairs.

Visits to a number of the Group’s operating

businesses and construction sites were also

undertaken. Finally, Jason’s induction also

included meetings with some of the Group’s key

stakeholders, including major shareholders.

Persimmon Plc | Annual Report | December 2022

108

Equality, diversity andinclusion

Equality, diversity and inclusion is a key area of focus for the Board, the Committee and the Group’s

executiveteam. The Board supports equality, diversity and inclusion for the Board itself, at senior

management level and throughout the Group’s workforce. The Board believes that a wide range

ofexperience, age, background, skills, knowledge, personal strengths and characteristics combine

tocontribute towards an eective Board and a high performing workforce.

Linkage to strategy

Investing in our people is a key part of the Group’s strategy (see pages 36 to 41). By developing a

diverseand inclusive workforce, we will enhance our corporate culture and grow our talent and skills

base.Increased diversity throughout the Group will have a tangible and positive impact on our business,

ouremployees and our customers. It will increase our creativity and innovation, enable us to better

reﬂectand respond to our customers and will improve employee engagement, productivity and retention.

The Group recognises the importance that shareholders, customers, employees and other stakeholders

place on equality, diversity and inclusion. To attract and retain the best talent the Group continues to

invest in its workforce, its HR and training & development capabilities. The Board leads and oversees

the Group’s commitment to embedding and improving equality, diversity and inclusion throughout the

organisation; a commitment that has been demonstrated by actions taken during the year (see pages 52 and

112forfurther information).

Policy

The Group has an Equality, Diversity and Inclusion Policy, which applies to the Group’s employees

and theBoard. The Group’s objective is to be an Employer of Choice and 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. 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

To improve the diversity of the Group’s workforce

and management teams the Board announced the

following gender diversity targets inMarch 2021:

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; however, due to the

concerted eortsof the Group, progress has been

made during the year in relation to the proportion

of females who make up the Group’s senior

management team.

Females

As at

31 Dec

2022

As at

31 D e c

2021

As at

31 D e c

2020

Employees 27% 27% 28%

Senior management

team*

34% 28% 26%

Employees in

management roles

32% c.31% Not

previously

reported

* Executive Committee and Direct Reports.

The positive trend in the proportion of females

in the senior management team is encouraging.

However, challenges remain, especially in

relation to attracting females into site-based

constructionroles. To tackle this the Group has

developed targetedinitiatives to attract more

women into site-based roles:

• We have partnered with Women into

Construction, an organisationwhich seeks to

increase the number of women entering the

construction and housebuilding industries.

As part of this initiative, we are providing

site visits and work placement opportunities

to women who are interested in pursuing

acareerin construction;

• We are targeting our apprentice recruitment at

students currentlyatcollege, which generally

results in a higher number of female candidates,

and in 2022, resulted in our female trade

apprentices quadrupling in number from

threetotwelve; and

• We have introduced a Housebuilding Basics

programme that aims to promote career

opportunities in construction-related disciplines

to our non-construction employees, such

as Sales Advisors, who are predominantly

female. This has resulted in four females in

sales & customer care roles being identiﬁed

ascandidates for site management roles

and,todate, two non-construction female

employees have transferred to Apprentice

Assistant Site Manager roles.

The Group will continue to work towards these

targets and further details of the signiﬁcant

diversity & inclusion activities undertaken by the

Group during the year can be found on pages 52

and 112.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

109

Ethnic diversity

The Committee remains mindful of the Parker Review, and its target that each FTSE 100 board should

haveat least one director from a minority ethnic group. The Board achieved this target in July 2021 with the

appointment of Shirine Khoury-Haq as an Independent Non-Executive Director, whose ethnicity is Arabic.

The Committee will continue to have regard to the Parker Review and 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. With this in mind,

during the year the Group agreed to work with specialist recruitment partners to target underrepresented

groups. In addition, to improve the quality of the employee diversity data that the Group holds, concerted

eorts will be made to encourage employees to provide and/or update their diversity data using the

Group’snew HR Information software.

During 2022 the Group participated in the Parker Review Survey.

Gender Pay Gap

The Group’s Gender Pay Gap Reports are available on our corporate website at

www.persimmonhomes.com/corporate. The 2022 Report will be published in March 2023, with the

2021report having been published in April 2022. The median Gender Pay Gap for the Group was 13.5%

in 2022 (2021: 18.1%), compared to the Oce for National Statistics ﬁgure for 2022 of 14.9% (2021: 15.1%).

As at31 December 2022, the gender balance of the Group was 27% female and 73% male. The gender

diversity of the Board as at 31 December 2022 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. However, the Group has stretching targets to increase the proportion

of womenin senior and management positions and, as the Group progresses towards achieving these

targets,it is anticipated that our Gender Pay Gap will reduce.

The Group remains committed to ensuring that women have the opportunities to reach their full earning

potential and during the year the Group took a number of important actions in relation to diversity

&inclusion,and talent development, details of which are set out on pages 112 and 113, respectively.

Composition, succession and evaluation

Nomination Committee report continued

Gender diversity – FTSE Women Leaders Review &FCA Listing Rules

Gender diversity has been at the forefront of the minds of Committee members in recent years and the

Committee has noted and considered the new targets set by the FTSE Women Leaders Review and the

reporting requirements of the updated FCA Listing Rules, both of which werepublished during the year.

In February 2022 the FTSE Women Leaders Review, which succeeds and builds upon the success

of theHampton Alexander Review, announced its gender diversity targets for FTSE 350 companies.

Their target is for women to comprise 40% of all FTSE 350 boards and leadership teams. Furthermore,

FTSE 350 companies will be expected to have at least one of their senior board positions (Chair, Senior

Independent Director, Chief Executive or Finance Director) occupied bya women by the end of 2025.

The new FCA Listing Rule sets out reporting requirements on progress against the gender and

ethnic diversity targets set by the FTSE Women Leaders Review and the Parker Review, respectively.

The FCAListing Rule diversity reporting requirements will apply to the Company’s ﬁnancial year ending

31 December 2023, but we have decided to report early. Further details can be found on page 111.

The Group Chief Executive and Chief Financial Ocer were appointed in September 2020 and July

2022respectively. Given the short tenure of both appointments, and in light of the gender diversity

targetsstated above, during the year the Committee agreed its ﬁrm intent that a woman be appointed

astheGroup’s next Senior Independent Director.

As at 31 December 2022 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 35 males (66%)

and18females(34%) (2021: 51 males (72%), 20 females (28%)). The Committee will continue to exercise

oversight and scrutiny of the Group’s diversity & inclusion activities as the Group works towards

becomingamore diverse organisation.

During 2022 the Group participated in the FTSE Women Leaders Review Survey.

Persimmon Plc | Annual Report | December 2022

110

FCA Listing Rules – diversity reporting

The new diversity reporting requirements of the FCA Listing Rules will be applicable to the Company’s year

ending 31 December 2023, however the Company has decided to report early. The Company therefore

reports the following diversity information as at 31 December 2022:

FCA Listing Rule target Outcome Group’s position at31 Dec 2022

At least 40% of Board

Directors arewomen

Target not achieved 33.3% of Board Directors were women

At least one senior Board

position* held bya woman

Target not achieved No senior Board positions were held by women

At least one Board Director

from a minority ethnic

background

Target achieved One Board Director was from a minority

ethnicbackground

* Chair, Chief Executive, Senior Independent Director or Chief Financial Ocer.

Reasons for not achieving targets

The Board, and the entire Group, is on a journey to increase its diversity. In recent years the Group has

improved its diversity andhascomplied with the board diversity targets of the Hampton Alexander and

Parker Reviews.

As at 31 December 2022, women comprised 33.3% of the Board. All appointments to the Board are made

on the basis of merit, havingregard to diversity and the beneﬁts it can bring to Board decision making and

performance. The Committee keeps the composition of the Board, and its diversity, under close review.

Whilst the Board has not achieved the target of having 40% womenon the Board, the Committee is

workingtowards achievingthis target and intends to do so by the end of 2023.

As at 31 December 2022, no senior Board positions were held bywomen, however the Chair of both

the Remuneration and Audit & Risk Committees was held by a woman. Given the recent appointments

of the Group Chief Executive and Chief Financial Ocer(who were appointed in September 2020 and

July2022 respectively), during the year the Committee agreed its ﬁrm intent that a woman be appointed

astheGroup’s next Senior Independent Director.

No changes have occurred to the composition of the Board between31 December 2022 and the date

thisdocument was approved (28 February 2023).

Approach to data collection

The Company has used a consistent approach in collecting the gender and ethnicity data displayed in

thetables below, the source of which is the Group’s HR Information System.

All employees, and Board Directors, are asked to provide the Group with information regarding their gender

and ethnicity when they join the Group. Regarding gender, employees are able to self-identify as either

male, female or “other”. For ethnicity, employees are asked to self-identify based on the Oce for National

Statistics ethnicity categories. If provided, the gender and ethnicity information is entered into the Group’s

HR Information System. Employees can update this information at any time during their employment and are

periodically reminded to provide their gender and ethnicity information, if they have not done so already.

Gender diversity data

Number

of board

members

Percentage

of the

board

Number of senior

positions on the

board (CEO, CFO,

SID and Chair)

Number

in executive

management**

Percentage

of executive

management**

Men 6 66.6% 4 7 70%

Women 3 33.3% 0 3 30%

Not speciﬁed/

prefer not to say

0 0% 0 0 0%

** Executive Committee only.

Ethnic diversity data

Number

of board

members

Percentage

of the

board

Number of senior

positions on the

board (CEO, CFO,

SID and Chair)

Number

in executive

management**

Percentage

of executive

management**

White British or other

White (including minority-

white groups)

8 88.8% 4 9 90%

Mixed/Multiple Ethnic

Groups

0 0% 0 1 10%

Asian/Asian British 0 0% 0 0 0%

Black/African/Caribbean/

Black British

0 0% 0 0 0%

Other ethnic group,

including Arab

1 11.1% 0 0 0%

Not speciﬁed/

prefer not to say

0 0% 0 0 0%

** Executive Committee only.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

111

Composition, succession andevaluation

Nomination Committee report continued

D&I activity Detail

Board

diversity

In light of the FTSE Women Leaders Review and the updated FCA Listing

Rules,the Nomination Committee agreed its ﬁrm intent to appoint a woman

asthe Company’s next Senior Independent Director.

Gender diversity

targets

During the year the Group continued to work towards stretching gender

diversity targets that were set by the Boardin March 2021. The Committee

received a progress report fromthe Director of Talent & Diversity in

December 2022, highlighting the success in increasing the proportion of

women in senior management, but also the challenge of recruiting women

into site-based construction roles. Actions to improve this were noted,

including the Group’s partnership with Women into Construction, targeted

recruitment of apprentices and promoting construction careers to the

Group’spredominately female salesand customer care employees.

Diversity &

Inclusion Council

The Diversity & Inclusion Council (“the Council”) continued its work during

theyear, developing the Group’s D&I strategy, overseeing its implementation,

driving accountability and monitoring progress throughout the Group.

During the year the Council held a joint session with the Diversity & Inclusion

Working Group (see below), to provide advice and guidance to support the

progression of the Working Group’s activities.

To reﬂect the strategic importance of the Council and its activities, the

Councilischaired by the Director of Talent &Diversity and its membership

includes a range of senior leaders including Executive Committee members.

Diversity & Inclusion

Working Group

A new Diversity & Inclusion Working Group, consisting of a diverse cross-

section of employees, was established in 2022 to feed directly into the work

ofthe Council and to representthe views of employees. Work streams to

support the Group’s D&I strategy have been assigned to Working Group

members covering areas including training, recruitment& attraction, data,

communications and social mobility.

D&I activity Detail

Inclusion

Review

During the year the results of the Group’s Inclusion Review were presented

to,and considered by, the Board. Theresults were also presented to the

GroupExecutive Committee andthe Diversity & Inclusion Council.

The review, which commenced in 2021 and was delivered by an external

diversity & inclusion specialist, included site visits and interviews with

a broadcross-section of individuals, as well as analysis of the Group’s

relevantdata, policies and processes.

The review’s ﬁndings and recommendations have helped the Group

todevelop a clear D&I strategy with practical action plans that focus on

areas for immediate improvement andimpact (communications, training

andrecruitment), with the objective of embedding D&I throughout the

Group’s processes and operations.

D&I

training

The Board and Group Executive Committee received a D&I training session

during the year, again demonstrating the Board’s and Group’s commitment

tothis issue.

To better embed D&I throughout the Group, mandatory “Inclusive

Leadership” training is being delivered to the Group’s senior managers,

whilesite-based employees will receive mandatory “Positive Workplace”

training with afocus onbanter, bullying, harassment, inclusion and mental

health awareness.

Training programmes

&courses

D&I has been incorporated into the Group’s training programmes and

courses with a view to embedding D&I throughout the Group.

Recruitment

processes

The Group established a new Talent Acquisition team during the year.

Tosupportrecruiting managers, and to embed D&I into recruitment

processes, additional training is being provided to managers involved

inrecruitment and selection of job candidates. A new Applicant

Tracking System was also deployedduring the year, which will assist

the Group withcollecting data relevant to recruitment and diversity.

Also, to further promote the Group’s focuson D&I, our careers

webpagewasredesignedduring 2022.

Diversity

celebrations

To raise awareness and contribute towards culture change, the Group

marked important events in the diversity calendar during 2022 including

International Women’s Day, Pride, International Day of Disability and

MentalHealth Awareness Week.

Beneﬁts

Review

The Committee notes the potential impact that pay and ﬂexible beneﬁts

packages can have in relation to diversity. Therefore, during 2022 the

Groupcommenced a review of the payand beneﬁts arrangements

acrosstheGroup, with a view to supporting the Group’s D&I strategy

andEmployer Value Proposition.

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 updates from both the Group HR Director and the Group’s Director of Talent and Diversity

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 also add to the Group’s eorts to develop and maintain a diverse pipeline of talent

forsuccession to senior management and executive positions.

Persimmon Plc | Annual Report | December 2022

112

Succession planning

The Group acknowledges the importance of succession planning inachieving the Group’s strategy and

in developing a diverse pipelineof talent. Succession planning for the Board and senior management is

therefore kept under review by the Committee, andregular Talent updates are received from the Group

HRDirector and/or Director of Talent and Diversity. 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 88 and 89.

Nigel Mills holds the role of Senior Independent Director. His 30-year banking 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 is Chief Executive of Britvic plc 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, employeeengagement and ESG.

Joanna Place 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, human

resources, sustainability and organisational culture are a valuable addition to the Board as we continue

toimplement our programme of progressive change.

Annemarie Durbin is the Chair of the Remuneration Committee. Annemarie is a highly experienced

international business executive, with a strong background in banking, corporate governance, human

resources and executive remuneration.

Andrew Wyllie 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 valuable tothe Board.

Shirine Khoury-Haq is the Chair of the Audit & Risk Committee. Shirine, who is the Chief Executive Ocer 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.

Board succession

During the year the Committee considered the balance of skills and experience of Board members, as well

as the qualities, knowledge and experience required to ensure the Board continued to remain eective.

In this context, the diversity of the Board was also considered. 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. However, during the

year the Committee agreed that it would be beneﬁcial to appoint an Independent Non-Executive Director

with relevant industry experience. The search for asuitable candidate is ongoing and the outcome of the

processwill be announced in due course.

Senior management succession

During the year the Committee received Talent reports on, and had oversight of, the Group’s signiﬁcant

Talent and senior management succession planning activities, details of which are set out in the table.

It is anticipated that the Group’s substantial Talent and succession planning activities, combined with its

signiﬁcant focus on diversity and inclusion, will lead to the development and maintenance of adiverse

pipeline of talent for succession to senior management andexecutive positions.

Talent and succession

planning activity Detail

Talent review

A comprehensive review of the Group’s talent was completed during the year,

covering c.3,000 employees insenior and middle management roles across

the Group’s housebuilding businesses and centralised functions. The review

has enabled the Group to develop robust and detailed succession plans,

identifying immediate to long-term successors. Training and development

needs have also been identiﬁed, which arebeing supported by newly

created and/or enhanced development programmes (see below).

MD essentials

During the year work was undertaken to strengthen MD Essentials, which

is a training resource for the Group’scurrent (and aspiring) Managing

Directors who run the Group’s housebuilding operating businesses. MD

Essentials includes guidance and information designed to provide current

and aspiring MDs with the broadknowledge they need to take on the

signiﬁcantmanagement responsibilities of the MD role.

MD Leadership

Development

Programme

With the support of an external leadership development specialist, this

programme provides management training, support and development to

theGroup’s Managing Directors. Feedback from programme participants

hasbeen very positive, with the programme contributing towards the

adoption ofnew management styles and improving theability of our

MDstomanage and develop their employees.

Future Leaders

Programme

This newly created programme was launched in 2022 and is designed

todevelop high-performing functional directors who have the potential

tobe promoted further. The programme will equip participants with the

skills and knowledge required to become a Managing Director of one

oftheGroup’shousebuildingbusinesses, or a director of a centralised

Groupfunction.

High Potential

Programme

The Talent Review identiﬁed a number of consistently high performing

individuals who have the potential to move into more senior roles. This

new programme will aim to develop and broaden participants’ experience,

enabling them to achieve promotion and develop their careersfurther.

Graduate Management

Training Programme

This programme, which was established in 2021, recruited its second cohort

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. To date, our 2021 and 2022 cohorts comprise

19graduates, including seven females.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

113

Composition, succession and evaluation

Nomination Committee report continued

Feedback from the 2022 Board evaluation

Examples of what the Board does well

The Chairman and Group Chief Executive enjoy an open, trust-based relationship

The Board is conﬁdent in the Group Chief Executive’s ability to deliver the Group’s strategy

The Board provides effective leadership by role-modelling the Group’s values and culture

The Chairman promotes open discussion that leverages the Board’s collective knowledge

andexperience

The Board has ensured that the Group has established ethical guidelines, purpose, and values

Areas for enhancement Action

Additional time to

understand the needs

of theGroup’s customers

would bebeneﬁcial

The Board will invite the Chief Customer Experience Ocer and

theGroup Sales Director to present at a 2023 board meeting

on how the Group is better understanding its customers’ needs.

Thispresentation would be in addition to the Customer Experience

presentation that is delivered at the Board’s annual Strategy Day.

The Board could

beneﬁtfromincreased

industry experience

This has been an area of focus for the Nomination Committee

during2022, which agreed during the year that it would be

beneﬁcialto appoint an Independent Non-Executive Director

withrelevant industry experience. The outcome of the process

willbeannounced in due course.

Succession planning

for key roles in the

management team

Succession planning for the Group Chief Executive and

ChiefFinancial Ocer will be an area of increased focus for

theNominationCommittee during 2023.

Internal ﬁnancial

controls

The Audit & Risk Committee’s 2022 annual formal assessment

of theGroup’s internal controls concluded that controls generally

operated eectively, see page 122. We have increased resource

to review the Group’s preparedness for the changes resulting

fromanticipated legal and regulatory reforms (sometimes referred

to as “UK SOX”) and this will be an area of focus for the Audit

&RiskCommittee during 2023.

Culture

To build upon the Group’s signiﬁcant changes and improvements

in recent years, the Board will continue to lead improvements

intheGroup’s culture.

Persimmon’s ability to

attract and retain talent

at all levels

This has been an area of increased focus for the Nomination

Committeein the last two years. Improvements have been made,

such as the MD Leadership Development Programme and the

FutureLeaders Programme. Further actions will be taken forward

in 2023, including the establishment of a Women’s Network.

TheNomination Committee and Board will continue their focus

on,andoversight of, these matters.

Persimmon Plc | Annual Report | December 2022

114

Actions taken during the year in response to the 2021 Board evaluation

Feedback from

2021evaluation Action taken during 2022

Increased face-

to-face timefor

Boardmembers

Following the relaxation of Covid-19 restrictions, Board meetings

anddinners in 2022 were held face-to-face.

Ensure a thorough

inductionfor new

ChiefFinancial Ofﬁcer

A comprehensive induction was provided. See page 108 forfurtherdetails.

The Board may

beneﬁt fromincreased

housebuilding

experience

Following consideration by the Nomination Committee, the search

foranewNon-Executive Director with relevant industry experience

wasinitiated.The search is currently ongoing.

Optimisation of

Board composition

andsuccession

planning processes

Jason Windsor was appointed as Chief Financial Ocer in 2022.

Succession planning was an area of focus for the Nomination Committee

during 2022, exercising oversight of the Group’s talent development

andsuccession planning activities, including the TalentReview, the MD

Leadership Development Programme andFuture Leaders Programme.

Board evaluation

During 2022 the Board undertook a formal and rigorous annual evaluation of its performance and that

ofitsCommittees. This was an internal evaluation, which was led by the Chairman and supported by

BoardClic, a digital board evaluation platform.

The evaluation involved Board members completing an extensive questionnaire which had been set

by BoardClic based on corporate governance best practice. Using the questionnaire, Board members

conducted a thorough assessment of the Board and its Committees, and provided detailed feedback

ontheareas where they considered the Board and its Committees had performed well, and those

areaswhere improvements could be made.

Following completion of the questionnaire, BoardClic prepared detailed reports for the Board and

its Committees, setting out the results of the questionnaire and the feedback received from Board

members. The reports were issued to all Board members and were discussed at subsequent Board

andCommittee meetings.

In addition to the internal Board evaluation, the Senior Independent Director undertook an appraisal

of theChairman’s performance. The appraisal consisted of private discussions between the Senior

IndependentDirector and each Board member. The result of the appraisal was reported to the

Board withoutthe Chairman present, following which feedback was provided to the Chairman.

Following thisappraisal it is considered that the Chairman continuestoperform well in his role.

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.

The Chairman is satisﬁed that all Directors continue to perform well intheir roles and contribute eectively.

Roger Devlin

Chair of the Nomination Committee

28 February 2023

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

115

Audit, Risk and Internal control

Audit & Risk Committee Chair’s statement

Audit & Risk Committee

Members and meeting

attendance 2022

Scheduled

meetings

attended

Percentage

of meetings

attended

Shirine Khoury-Haq

(Chair)

4/4 100%

Joanna Place 4/4 100%

Simon Litherland 4/4 100%

Andrew Wyllie 4/4 100%

Key duties of the

Audit & Risk Committee

The main role of the Audit & Risk Committee

isto support the Board in fulﬁlling its

corporategovernance responsibilities.

In particular, and as outlined within its terms

ofreference, the Committee provides

oversight of the following:

• Processes for ﬁnancial reporting (including

key accounting judgements and estimates)

and non-ﬁnancial reporting

• External audit

• Risk management framework

• System of internal controls

• Group Internal Audit processes

The composition of the

Committee has remained

stable throughout the year,

retaining the extensive

andbroad range of skills

andexperience to fulﬁl

itsduties effectively.

Shirine Khoury-Haq

Chair of the Audit &RiskCommittee

I am pleased to present the Group’s

Audit & Risk Committee Report for

the year ended 31December 2022.

This report details the work of the Committee

within the year, and how it has discharged its

responsibilities around ﬁnancial and non-ﬁnancial

reporting, audit, risk and internal control, as outlined

within its terms of reference. In performing these

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 Committee has worked especially closely with

the Group’s ﬁnance team, operational management

teams and Ernst & Young LLP (EY), as the Group’s

external auditor. This close cooperation has enabled

the Committee to ensure the Group has provided

clear and accurate ﬁnancial and non-ﬁnancial

reporting, with appropriate challenge of accounting

judgement and estimates, and has operated with

eective risk management, internal control and

internal audit regimes.

The Committee has been renamed within the year.

This followed adecision to merge the business of

the Committee with that of the Risk Committee,

reﬂecting the increased focus of the Board on risk

management and maintenance of appropriate

mitigating internal controls.

The other priorities and duties of the Audit &

Risk Committee have remained unchanged.

The Committee has maintained particular focus on

its oversight of the integrity and quality of ﬁnancial

reporting, ensuring an eective external audit, and

reviewing the work, performance and independence

of the Group Internal Audit department.

The composition of the Committee has

remainedstable throughout the year, retaining

theextensive and broad range of skills and

experience to fulﬁl itsduties eectively.

Persimmon Plc | Annual Report | December 2022

116

Areas of focus

Economic uncertainty

The business environment has been subject to

a range of uncertainties within the year, most

notably in respect of political change and the

combined impacts of inﬂationary pressures and

rising interest rates. Uncertainties have extended

to the legislative and regulatory environment, with

ongoing evolutions in key areas such as climate

change reporting, the Developer Pledge and audit

reform. In this context of uncertainty, the Committee

has placed particular focus on estimates and areas

of accounting judgement, such as the Group’s

asset-carrying values, going concern assessments,

Viability Statement and overall liquidity. In each

case, these considerations have been subject to

extensive management modelling and review,

with further scrutiny through the work of the

external auditors. The Committee has worked to

continually challenge these assessments and ensure

their appropriateness.

Corporate reporting

The Audit & Risk Committee has monitored and

reviewed the Group’s ﬁnancial and non-ﬁnancial

reporting throughout the ﬁnancial year ended

31 December 2022, with a particular focus on

governance and integrity of reporting. This has

included reviewing both the Half Year Report and

the Annual Report for the year and all associated

regulatory disclosures, including those describing

its management of climate change risk in line

with the recommendations of the Task Force on

Climate-related Financial Disclosures (TCFD). At the

request of the Board, the Audit & Risk Committee

has considered the 2022 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, quality,

independence andobjectivity

An ongoing area of focus for the Committee

is safeguarding the quality, independence

and objectivity of our external audit provision.

To do this eectively, the Committee has worked

closely with EY to understand and challenge

their methodology, resource commitments and

investments in technology, and ensured that an

appropriate fee structure is in place to support their

work. The Committee has also overseen 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.

Independence and objectivity have been managed

through a range of measures, including private

meetings between EY and the Committee, a Group

policy limiting the provision of non-audit services,

review of EY’s independence declarations and

periodic rotation of the audit partner. Given the

Committee’s extensive work in this area, we remain

satisﬁed that EY continues to be independent and

objective andthat the audit is eective.

Internal control and risk management

In line with the requirements of the UK Corporate

Governance Code, the principal and emerging

risks facing the Group were assessed by the

Committee. This included a review of the results of

a comprehensive survey of the Board and senior

management, with particular focus on movements

in certain risk areas and the eectiveness of the

Group’s controls to manage and mitigate these

risks. The eectiveness of the Group’s internal

control environment has been subject to routine

assessment through the work of the Group Internal

Audit department, with a speciﬁc summary report

presented to the Committee on an annual basis.

In yet another year with unpredictable external

inﬂuences, the Audit & Risk Committee has ensured

the accuracy of ﬁnancial reporting, the adequacy of

internal controls and the appropriate management

of risk. I am very thankful to Persimmon’s excellent

internal audit team and management, as well as my

fellow directors, for their conscientiousness, focus

andchallenge.

Anticipated areas of focus

for2023

Going forward, the Committee will retain its

emphasis on ensuring robust and accurate ﬁnancial

and non-ﬁnancial reporting, supported by high

quality external and internal audit. The development

of reforms in audit and corporate governance will be

another key area of focus, ensuring the Group takes

appropriate steps for compliance and alignment with

emerging good practice. The Committee will also

assess the eectiveness of internal audit provision

following changes inthe resourcing proﬁle and the

results of the planned EQA.

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 & Risk Committee

28 February 2023

To strengthen our capabilities around risk and

internal controls further, we have appointed a

Group Internal Control Manager to oversee the

implementation of a new controls monitoring system,

based on the COSO framework. This role has

performed valuable work in support of the Group’s

preparations for reforms arising from the Department

for Business, Energy and Industrial Strategy (BEIS)

consultation ‘restoring trust in audit and corporate

governance’. The Committee has continued to

receive routine updates on progress in this key area.

Internal audit

The Committee has continued its routine work in

supervising and monitoring the eectiveness of

the Group Internal Audit department. During the

year, this has included review and approval of the

annual internal audit plan, and reviewing the routine

reporting of the Group Internal Audit Manager

on internal audit ﬁndings, follow-up actions and

performance. The Committee has also approved

the department’s development plan and resourcing

provision for 2023, and the preparations for the

periodic External Quality Assessment (EQA) of the

department, which will fall due in 2023.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

117

Audit, Risk and Internal control

Audit & Risk Committee report

Audit & Risk Committee composition

and attendance

In line with the provisions of the UK Corporate Governance Code, the

Audit & Risk Committee is composed exclusively of Non-Executive

Directors. The membership of the Committee has been unchanged

throughout 2022, enabling the continued beneﬁt from the broad range

of skills and experience of the members. These are detailed further

within the Board biographies in the Governance Report on pages 88

to 89. The Board remains satisﬁed that Shirine Khoury-Haq has recent

and relevant ﬁnancial experience appropriate to Chair the Audit &

Risk Committee, through her role as Group Chief Executive Ocer

for TheCo-operative Group, where she previously held the role of

Group CFO.

In addition to the Audit & Risk Committee members, the meetings of

the Committee are attended by the Company Secretary, Group CFO

and Group Internal Audit Manager, as well as representatives from

the external auditors. By invitation of the Chair of the Audit & Risk

Committee, the Group CEO, Group CFO, other Board members and

senior managers of the Group have also attended meetings, either

infull or in part, within the year.

The Audit & Risk Committee meets four times per year, with all

members in attendance for each of these meetings within 2022.

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.

Committee governance

The Committee performs an annual review of its terms of reference,

ensuring that it remains reﬂective of good practice in corporate

governance. Within 2022, the terms of reference were subject to

update to reﬂect the merging of the business of the Committee with

that of the Risk Committee, and the heightened focus of the Board on

risk management and the system of internal controls. As noted in the

governance report on page 115, an internal evaluation of the Committee

was also performed within the year. The results of this evaluation

were positive, including an assessment against abenchmarkgroup of

companies. There were no material improvement areas identiﬁed from

the evaluation.

Audit & Risk Committee activities in 2022

The activities of the Audit & Risk 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. The annual cycle is ﬁnalised in the

Committee’s February meeting, with the review of all year end matters,

such as the assessment of the draft Annual Report and Accounts to

ensure it is fair, balanced and understandable, the assessment of

signiﬁcant ﬁnancial judgements, and the review of viability and going

concern disclosures.

April 2022

External audit

• Review of external auditor performance

Internal audit

• Review of the report of GroupInternal Audit

• Review and approval of GroupInternal

Audit Charter

Risk management and internal control

• Status report on preparations forUK

governance reforms

• Update on the Group’s anti-

moneylaundering controls

August 2022

Corporate reporting

• Half year statement review

External audit

• Review of external audit reportonhalf year audit

• Fee structure review and approval

• Private meeting with the Committee members

Internal audit

• Review of the report of Group Internal Audit

Risk management and internal control

• Status report on preparations forUK

governance reforms

• Review of the Group Tax status report

• Review of performance of the shared equity

loan portfolio

• Update on Group Procurement controls

• Review of cyber security improvement plans

• Review of FibreNest improvement plans

December 2022

External audit

• Audit plan ﬁnalised and agreed

• Independence review

Internal audit

• Review of the report of Group Internal Audit

• Approval of the 2023 annual internal audit plan

• Private meeting with the Group Internal

Audit Manager

Risk management and internal control

• Status report on preparations forUK

governance reforms

• Review of principal and emerging risks

• Review of cyber security improvement plans

• Review of FibreNest improvement plans

Committee governance

• Review of Committee terms of reference

• Internal Committee evaluation

February 2023

Corporate reporting

• Review of annual report as fair, balanced

and understandable

• Review of draft full year results, including viability

and going concern

• Review draft TCFD reporting for Annual Report

Internal audit

• Review of the report of Group Internal Audit

• Review of draft full year results, including viability

and going concern

External audit

• Review of external audit report on full year audit

• Private meeting with the Committee members

Risk management and internal control

• Review of the statement of eectiveness

ofinternal controls

• Status report on preparations for UK

governance reforms

• Review of the Group Tax status report

• Review of performance of the shared equity

loan portfolio

Persimmon Plc | Annual Report | December 2022

118

Priorities and main activities during the year

Further details on each of the Audit & Risk Committee’s priorities and

main activities for the 2022 ﬁnancial year are set out below.

1. Corporate reporting

The Audit & Risk Committee is responsible for the integrity of ﬁnancial

reporting, including the review of the Group’s Annual Report, Half Year

Report and related regulatory announcements. Financial reporting is

prepared by the Finance team, and subject to veriﬁcation processes

supervised by senior management in order to ensure the accuracy

of the underlying information. Due to the uncertainties within the

business and economic environment, the Committee has placed

additional emphasis on accounting estimates and areas of judgement,

ensuring robust challenge and veriﬁcation by both management and

external audit.

At the request of the Board, the Audit & Risk Committee has considered

whether the 2022 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. The Committee has reviewed the

2022 Annual Report, taking into consideration a range of information,

including the routine reporting it receives from senior management,

the external auditors and internal audit. It has also assessed the

underlying 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. Following this review, the

Audit & Risk Committee is satisﬁed that the 2022 Annual Report is fair,

balanced and understandable, and meets the required expectations

of shareholders.

Assessment of significant financial judgements

In line with its terms of reference, the Committee has performed

its assessment of areas of signiﬁcant ﬁnancial judgements facing

the Group, and the associated identiﬁcation of risks of potential

misstatement within the Group’s ﬁnancial statements. The material

ﬁnancial issues facing the Group in 2022 have been assessed

as follows:

Area of focus Risk factors

Procedures performed by

the external auditors Committee assessment

Revenue recognition

The Group’s revenue

for 2022 was £3,816m.

Theanalysis of total

Group revenues is found

atNote 5 to the Financial

Statements.

Misstatement in relation

to revenue recognition

could materially aect the

revenue in the income

statement, particularly

if cut-o errors or

potential management

bias resulted in revenue

being recorded in the

wrongperiod.

The accuracy of revenue and

cut-o controls is assessed

using data analytics tools and

detailed transactional testing,

in order to trace recorded sales

through to cash receipts and legal

completion statements. Revenue

from housing association sales is

also assessed based on the terms

of the relevant contracts.

Following review of the management controls

in operation and the assurance provided by the

external auditors, the Committee is satisﬁed

that the Group’s processes and controls over

revenue recognition are operating eectively,

and that revenues are reported accurately.

Carrying value of land

andwork in progress

At 31 December 2022,

the carrying value of

theGroup’s land was

£2,092m, the carrying

valueof work in

progresson-sitewas

£1,264m and the cost

ofsales was £2,948m.

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.

Challenge is provided through

arange of procedures as set

out in the independent auditor’s

report on page 155. These

include:

• Walkthrough tests on sampled

transactions to trace to source

records and ensure accurate

allocation

• Reviewing the valuation

process, including attendance

at selected valuation meetings

• Comparisons of estimated

and actual margins to assess

forecasting accuracy

• Assessing the appropriateness

ofcost and selling price

assumptions.

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, which reports to the Audit &

Risk Committee 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 2022 in the context of these

controls, andhas concluded that the approach

adopted by management supported theasset-

carrying values.

Legacy buildings

provision

The Group has

increasedthe value

of itsprovision for

remediation works

onlegacy buildings

to£333.3m.

The value of this

provisioncould prove

to be inaccurate if

further legacy issues

are identiﬁed or

brought within the

scope of remediation.

Theprovision is also

based on forecasts of

costs that could prove

inaccurate as the works

are ultimately performed.

The external auditor has assessed

the Group’s key processes

and controls in relation to

legacy buildings. Following this

assessment, the external auditor

has challenged the basis for the

scope of buildings covered by

the provision, the estimated costs

for remediation, and assumptions

relating to cost inﬂation, estimated

timing of spend and discount

factors applied. Further detail

is provided in the independent

auditor’s report on page 155.

Regular updates are provided by management,

to both the Board and the Committee, on the

performance of remediation works in relation

to the legacybuildings provision and other

measures to ensure building safety.

The Committee has taken time to review

and challenge management’s assessment

and supporting evidence of the scope and

anticipated cost of this obligation, including

the basis on which the provision has been

utilised, treated and disclosed within the

ﬁnancial statements. Following its review, the

Committee is satisﬁed that the carrying value

ofthe provision isappropriate.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

119

Audit, Risk and Internal control

Audit & Risk Committee report continued

Viability Statement

The Committee has reviewed the Group’s Viability Statement

(seepages 75-77). The Group’s approach to assessing viability

utilises a range of comprehensive stress testing scenarios, focusing

on the potential impact of severe market disruption 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, compounded by reduced average selling prices and asset

impairments have been reviewed and challenged by the Committee.

Following 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 2027.

2. External audit oversight

External audit areas of focus

The Audit & Risk Committee receives routine reports from EY

throughout the year, before receiving a ﬁnal report and presentation

of the audit results. The presentation of EY’s report on the 2022

auditresults took place at the Committee’s meeting in February

2023. As noted in our assessment of signiﬁcant ﬁnancial judgements,

the keyrisks identiﬁed were largely 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 legacy buildings provision. Other ﬁnancial statement risk

areas considered included the impairment of goodwill and intangible

assets, share-based payments, the closed sites provision and

valuation of the Group’s obligations under deﬁned beneﬁt pension

schemes. In addition, the Audit & Risk Committee has reviewed

EY’sassessmentsof the Group 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 page 155).

External audit performance and effectiveness

Ensuring the quality and eectiveness of external audit processes

continues to be a key priority of the Audit & Risk Committee.

The assessments of quality and eectiveness are based on a range

ofconsiderations. These include the delivery of the agreed audit plan,

the quality of audit reporting, demonstration of appropriate scepticism

and challenge on key areas, and feedback obtained through the private

meetings with the audit partner. The Committee also makes use of the

Group’s well-established processes for obtaining detailed feedback

on auditor performance from internal stakeholders. The Committee

has reviewed the feedback from each of these areas in detail, and

hasconcluded that EY’s performance for 2022, and the overall

qualityof the audit, was satisfactory.

The commitment of EY to a quality audit has necessitated further

investments in technology and resourcing. These investments have

been reﬂected in an increase in the audit fee, which was reviewed

and approved by the Audit & Risk Committee. The fee paid to EY for

their audit work for the 2022 ﬁnancial year was £451k, further details

of which are set out from page 155. Further audit-related fees of £70k

were paid to EY for their work on their review of the Group’s 2022 Half

Year Report. EY also received payments of £50k and £5k for assurance

work on carbon emission reporting and for the audit of the 2021 annual

report of the Persimmon Charitable Foundation respectively. The ratio

of audit fees to non-audit fees for the year wastherefore 3.6:1.

Independence and objectivity of external audit

The Audit & Risk Committee monitors the independence and

objectivity of the external auditor and lead partner on an ongoing basis,

with a formal review annually. This is a crucial area of the Committee’s

work, as it serves to ensure an appropriate professional scepticism

inthe work of the external auditor. The independence and objectivity

ofthe external auditor are assessed through a range of measures.

Audit partner rotation

The Group’s policy is to rotate the audit partner at least every ﬁve

years.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 requirements.

Non-audit services policy

The Group has a deﬁned policy limiting the provision and value of

non-audit services performed by the external auditor. The policy

represents a key control to ensure that the nature of any non-audit

services performed, and the fee earned for such work relative to the

fees earned for the audit, does not compromise in fact or appearance

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 & Risk Committee. The Committee

has conﬁrmedthat this policy was adhered to within the year.

Independence declarations

The external auditor provides a detailed independence conﬁrmation,

prepared in line with the provisions of the FRC Ethical Standard and

ISA (UK) 260 (Communication of audit matters with those charged

withgovernance). This conﬁrmation is formally reported to, and

subjectto the review and approval of the Committee.

Private meetings with external audit

The Committee’s assessment is further informed by private meetings

with EY without management present. Within these meetings, the

Committee reviews the auditor’s assessment of the business risks

and management’s mitigation of those risks, and 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 is satisﬁed that these measures have operated

eectively in the year. As such, the Committee continues to

considerthat EY, and Victoria Venning as lead audit partner,

remainindependent and objective.

Persimmon Plc | Annual Report | December 2022

120

Overall external auditor assessment and re-appointment

As outlined above, the Audit & Risk Committee challenges the

externalauditor and assesses their performance, independence and

objectivity on an ongoing basis, with a formal assessment annually.

Following the formal review of auditor performance for the 2022

audit,the Audit & Risk Committee has concluded that EY remain

independent and objective, and continue to deliver a satisfactory

andreliable audit, which has been undertaken with the necessary

diligence and professionalism. Accordingly, the Committee has

recommended to theBoard that EY be re-appointed as auditor.

EY were ﬁrst appointed as the Group’s auditor in April 2016, following

a competitive tender exercise involving three leading audit ﬁrms.

Since the appointment of EY, the Company has complied with the

provisions of The Statutory Audit Services for Large Companies Market

Investigation (Mandatory Use of Competitive Tender Processes and

Audit Committee Responsibilities) Order 2014. In line with the provisions

of this Order, the Group will not be required to re-tender the external

auditor provision until the full year audit for 2026. However, the Audit

& Risk Committee will monitor the performance of EY continuously,

and 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 based on EY’s current

satisfactory performance and their detailed understanding of the

Group’s operations.

3. Monitoring the Group Internal Audit department

Persimmon has a well-established Group Internal Audit department,

which operates as an independent provider of assurance to the

Board in line with a Group Internal Audit Charter that, along with

thedepartment’s risk-based internal audit plan, is reviewed and

approved annually by the Committee.

The Group Internal Audit Manager attends all meetings of the

Committee in full, and presents a comprehensive report, including the

results of all completed internal audits, the follow-up status of agreed

actions, audit performance indicators and the status of department

development actions. In 2022, the Group Internal Audit department

delivered its agreed audit plan, which included a diverse range of

assurance work on issues including land viability processes, Real

LivingWage compliance and modern slavery, as well as investigations

and other work performed at the request of the Board.

The Group Internal Audit department continues to align its working

practices with the Professional Standards of the Chartered Institute

of Internal Auditors (IIA), and the IIA’s Internal Audit Code of Practice.

Adherence to the Professional Standards has been self-assessed

by the Group Internal Audit Manager within the year, with the results

presented to the Committee. An External Quality Assessment with

the IIA will fall due within 2023 and provide additional assurance over

the quality and professionalism of the Group’s internal audit provision.

The Committee was also pleased to note the department’s success

inthe Chartered IIA’s UK and Ireland annual Audit and Risk Awards

2022, where they were acknowledged with a ‘highly commended’

status in the Outstanding Team (Private Sector) category.

The Committee has fulﬁlled its duties as deﬁned within both the

UK Corporate Governance Code and its terms of reference, for

monitoring and reviewing the eectiveness of the Company’s

InternalAudit function.

This has been achieved through a combination of measures, including

the review of performance metrics provided to each meeting of

the Committee and an annual private meeting between the Audit

& Risk Committee members and the Group Internal Audit Manager.

At this meeting, the Committee obtained assurances that the

independence and objectivity of the Group Internal Audit department

is being maintained, and reviewed the department’s available skills

and resources, noting an expansion of specialist resource and a

co-sourcingarrangement would both be deployed within 2023.

Following its review, the Committee is satisﬁed that the Group Internal

Audit department remains eective 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 Chair of the Audit & Risk Committee has been appointed as the

Group’s Whistleblowing Champion, and acts as the sponsor to the

Group’s overall whistleblowing provision. The Group has a deﬁned

whistleblowing policy and procedure, which is communicated to the

workforce through posters and is available online. The whistleblowing

provision allows any member of the workforce to raise concerns,

anonymously if necessary, through various dierent media, including

a conﬁdential phone line, e-mail and web forms. The Group Internal

Audit department reviews all whistleblowing reports, conducting

investigations where necessary, and provides detailed reporting

to the Committee on all reports received. This year, the Committee

agreed for the Group to enter a partnership with Protect, the

whistleblowing charity. This has allowed the Group to benchmark its

whistleblowing provision against good practice, and deliver further

improvements where necessary. Having reviewed the reports provided

on whistleblowing matters within the year, and the agreed action

plan following the Protect exercise, the Committee remains satisﬁed

that the Group’s approach to whistleblowing is appropriate, and that

investigations have been conducted swiftly and with the necessary

competence and sensitivity. Where whistleblowing investigations

have identiﬁed issues or control weaknesses, the Committee has

been apprised of these and the resulting recommendations and

management action plans.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

121

4. Risk management and internal control

The Audit & Risk Committee recognises the importance of eective

systems of risk management and internal control, and plays a key role

in monitoring these on behalf of the Board. The key aspects of these

systems and related considerations within 2022 were 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 57 to 63). As in prior years, the assessment for

2022 was 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, were reported to the Board through the Audit

& Risk Committee in its December meeting. At this meeting, the

Committee assessed the various principal risks, both individually and

in interactionwith one another, and the eectiveness of mitigating

controls. Emerging risk areas were also reviewed based on feedback

from the Board and senior management survey. The Committee’s

assessment of principal and emerging risks feeds into the Group’s

overall strategy, which is agreed by the Board and implemented

operationally by senior management within the Group. Once agreed,

the Group’s strategy and management of risk undergoes a continuous

and iterative process of implementation, review and adaptation in

response to the evolution of conditions in which the Group operates.

The Committee also reviewed the ﬁnalised Strategic Risk Register

ofthe Group (including the principal and emerging risks). The 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 sta from across the

Group,facilitated by Group Internal Audit.

Looking forward to 2023, the Committee has agreed a further

programme of work to ensure continuous improvement in the

Group’srisk management framework. This will include a maturity

assessment of the Group framework, and an evaluation of the

approachto deﬁning risk appetite and performance monitoring

inrelation to the Group’s principal risks.

System of internal controls

The Group’s internal control environment, including its system

of controls over ﬁnancial reporting, is based upon the widely

recognised ‘three lines’ model. The ﬁrst line of defence comprises

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 eectiveness of all

aspects of risk and internal control through the delivery of their risk-

based annual audit plan and other work performed at the request

of theBoard. In addition to the ‘three lines’, the Group beneﬁts

from additional assurance over its system of internal controls from

third parties, including the external auditors and other specialists

where necessary. The Audit & Risk Committee monitors the overall

eectiveness of the system of internal controls, through the review

ofreporting provided by second line functions, external specialists

andthe Group Internal Audit department.

The Audit & Risk Committee has continued to monitor and obtain

updates on the evolving regulatory landscape in respect of internal

controls, originating from the BEIS consultation ‘restoring trust in

audit and corporate governance’ and the Government’s response.

The Group’s Internal Control over Financial Reporting (ICoFR)

SteeringGroup was established in 2021 to oversee the preparations

for implementing an enhanced formalisation of reporting on internal

controls and other anticipated measures, such as the development

ofan Audit and Assurance Policy. In 2022, the ICoFR Steering Group

has been strengthened with the appointment of the Group Internal

Control Manager as a dedicated resource to manage this programme

ofworks. The Group has also invested in technology that will support

the documentation, assessment and testing of a formalised internal

control environment, building on the recognised COSO framework.

The Committee receives regular updates fromtheGroup Internal

Control Manager on the work of the ICoFR Steering Group, and

willkeep this area under review throughout 2023.

Review of the effectiveness of internal control

The Audit & Risk 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. Within 2022, in addition to its routine

business, the Committee has received additional reporting from

management on controls in respect of procurement, tax, the shared

equity portfolio and anti-money laundering measures. In line with the

Board’s strong commitment to mitigating cyber and data risk, which is

recognised as a principal risk for the Group, the Committee receives

regular updates from the Group IT department. Additionally, the

Committee has reviewed externally provided reports on the maturity

ofthe Group’s cyber security measures and the FibreNest business,

and has assessed its associated actions and improvement plans.

A formal annual assessment of internal controls is performed by

theCommittee on behalf of the Board, in line with the provisions

ofthe UK Corporate Governance Code. This assessment draws

onanindependent assessment produced by Group Internal

Audit, utilising the Guidance on Risk Management Reporting,

Internal Controland Related Financial and Business Reporting

issued by theFRC in September 2014. The 2022 assessment

concluded that controls weregenerally operating eectively,

albeit with reliance onmanual controls in some areas, and

with correspondingopportunities for greater formalisation and

automationofcontrols. These opportunities will feed into the

workofthe Group Internal ControlManager, whoisoverseeing

aprogramme of control enhancements.

Audit, Risk and Internal control

Audit & Risk Committee report continued

Persimmon Plc | Annual Report | December 2022

122

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.

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 aect the proﬁts

and assets of the Group are listed in note 32 to the Financial

Statements. A complete list of the Company’s subsidiaries and

residents’ management companies under its control are contained

onpages189to197.

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 85 and in the Directors’ Report on pages 86 to

125. A description of the Group’s future prospects, research and

development, the principal risks and uncertainties facing the business

and important events aecting the Group since 31 December 2022

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 23 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 2022 was £3.82bn and its consolidated

proﬁtbefore taxation was £730.7m.

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.

The Board has recommended the payment of a ﬁnal dividend of 60p

per ordinary share for the year ended 31 December 2022.

In November 2022, it was announced that the Directors decided to

conclude the Company’s Capital Return Programme. A new Capital

Allocation Policy is to be implemented, as set out on pages 3, 19

and 55.

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 2024.

Further details are provided in note 2 to the Financial Statements.

Directors and Directors’ interests

The current Directors of the Company and their biographical

details are shown on pages 88 to 89. Information on the Executive

Directors’ service contracts and the Non-Executive Directors’ letters

of appointment are given in the Remuneration Report on page 137.

All of the Directors served for the whole of the year, with the exception

of Jason Windsor who was appointed to the Board on 11 July 2022.

Mike Killoran was the Group Finance Director until he retired on

14 Janaury 2022. The beneﬁcial and non-beneﬁcial interests of the

Directors and their connected persons in the shares of the Company

at 31 December 2022 and as at the date of this report are disclosed

inthe Remuneration Report on page 148. Details of the interests of

theExecutive Directors in share options and awards of shares can

befound on page 147 within the same report.

Appointment and replacement of Directors

The Directors shall be no less than two and no more than ﬁfteen 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 oce 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 oce.

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’) provide that at each AGM at least one third of the

Directors shall retire from oce and shall be eligible for reappointment

and therefore each Director shall retire from oce 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 oce.

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.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

123

Other disclosures continued

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 2022 116,958 ordinary shares were issued with a

nominal value of £11,696 to employees exercising share options.

The Company received consideration of £705,131 for options

exercised under the Group’s savings-related share option scheme.

At 31 December 2022 the issued share capital of the Company was

319,323,432 ordinary shares with a nominal value of £31,932,343.

At 28 February 2023 the issued share capital of the Company was

319,323,432 ordinary shares with a nominal value of £31,932,343.

Further details are provided in note 25 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 27 April 2022 shareholders

gave Directors authority to allot ordinary shares up to a maximum

nominal amount of £10,642,179, representing approximately one

third of the Company’s issued share capital as at 7 March 2022.

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 £1,596,327. These authorities

will expire at the conclusion of the AGM on 26 April 2023.

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 30 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 23 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.

Emissions

The Group’s greenhouse gas emissions are set out in the

StrategicReport on page 47.

Employee involvement

The Group places considerable value on the involvement of its

employees and has continued to keep them informed on matters

aecting them as employees and on various ﬁnancial and economic

factors aecting the performance of the Group. The Group has

introduced an employee news app, publishes an employee newsletter

and uses regular email updates from relevant directors to ensure

employees are kept well informed of the Group’s operations.

As mentioned on pages 38 and 100 of this report, the Group has an

Employee Engagement Panel, which is attended by our designated

Workforce Director. This allows employees to receive information

on board activities and to ask questions. The designated Workforce

Director gives update on the Employee Engagement Panel to

the Board.

Persimmon Plc | Annual Report | December 2022

124

There is also a Diversity & Inclusion Council and a Diversity and

Inclusion Working Group, which are part of the Group’s commitment

to employee engagement, diversity and corporate governance best

practice. The Company regularly updates its employment policies and

sta 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 pages 37 and 79.

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 communicated to employees.

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 23

totheFinancial Statements.

Acquisition of own shares

At the AGM held on 27 April 2022 shareholders granted the

Company authority to purchase up to an aggregate of 31,926,537

ofits own shares. No shares have been purchased to date under

this authority and therefore at 31 December 2022 the authority

remained outstanding. This authority expires on 26 April 2023

anda resolution torenew the authority will be put to shareholders

attheforthcoming AGM.

At 31 December 2022 the Company held no shares in treasury.

Annual General Meeting

The AGM will commence at 12 noon on 26 April 2023 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 will be sent to shareholders in March 2023.

Disclosure of information to auditors

The Directors who held oce 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.

Listing Rule Disclosures

The disclosures required under Listing Rule 9.8 can be found in

the tables below. As at 31 December 2022 and as at 28 February

2023, 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:

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 & Risk

Committee. Further details are provided on page 119.

By order of the Board

Tracy Davison

Company Secretary

28 February 2023

Persimmon Plc

Company registration number 1818486

Name

As at 31 December 2022 As at 28 February 2023

Number of

voting rights

% of total

votingrights

Number of

voting rights

% of total

voting rights

Nature of

holding

Black Rock Inc 31,741,385 9.92 31,741,385 9.92 Indirect

Canada Pension Plan Investment Board 13,285,338 4.16 13,285,338 4.16 Direct

1. Represents the number of voting rights last notiﬁed to the Company by the shareholder in accordance with D.T.R.5.1.

Item Further information

Statement of Directors’ share interests

Read more on page 143.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

125

Remuneration

Remuneration Committee Chair’s statement

Remuneration Committee

Members and meeting

attendance 2022

Scheduled

meetings

attended

Percentage

of meetings

attended

Annemarie Durbin

(Chair)

4/4 100%

Nigel Mills 4/4 100%

Joanna Place 4/4 100%

• Over the last 2 years the Persimmon Charitable

Foundation as a whole has donated over £2.4m,

and the Persimmon Community Champions

scheme has donated over £1.35m to more

than 1,400 local charities, sports clubs and

community groups.

• During 2022, we tracked several potential

environmental measures that we could apply

to PSP awards. We now consider that we are

in a position to incorporate a long-term

environmental measure in thePSP which

has robustly calibrated metrics against

which meaningful targets can be set in

line with our key priorities. Therefore,

the 2023 PSP awards will have an

environmental metric (based onour

Science Based Targets for scope 1 and

scope2 emissions reduction) with a 10%

weighting. This supports the achievement

ofourlong-term sustainability target and

reﬂectsthe importance of sustainability

to Persimmon.

During a year when many have

struggled with the cost of living crisis, it

is more important than ever to ensure

that our approach to remuneration for

the senior leaders and the broader

workforce is aligned to our strategy to

build homes with quality our customers

can rely on at a price they can aord.

Our focus and approach in 2022

The Group traded strongly in 2022 despite continuing

supply chain issues in the early part of the year and a

more dicult sales environment in the second half of

the year. Towards the end of the year, rising interest

and mortgage rates and higher levels of inﬂation

signiﬁcantly impacted customer conﬁdence. In the

context of this challenging environment, the Board

was very pleased with the ﬁnancial performance in

the period, with strong proﬁt and cash generation

and returns to shareholders as described in the

Group Chief Executive’s statement on pages 14 to

20. It is particularly pleasing that the Group’s strong

performance has been delivered whilst remaining

focused on building quality homes, customer care

and maintaining high standards of health, safety

and wellbeing for our customers, our workforce

and the communities in which we operate.

In particular:

• We continued to focus on the quality of our

homes and our customer care, and remain

above 90% under the HBF “Recommend a Friend”

survey. Given our strategic focus on quality and

customer care, we continue to use these as

performance measures for the annual bonus

andPSP. Details ofthe outturn for 2022 are

set outonpages143 and 144.

I am pleased to present

the Group’sRemuneration

Report forthe year ended

31December2022.

Annemarie Durbin

Chair of the Remuneration Committee

Persimmon Plc | Annual Report | December 2022

126

The Executive Directors, the management team

and, indeed, all of our colleagues, have worked

exceptionally hard to deliver these strong results.

Their achievements are reﬂected in the 72.78%

outturn for the Executive Directors’ 2022 bonus,

achieved against the very stretching performance

targets that we set for the year.

Given the cost of living challenges faced in 2022,

we have been even more focused on ensuring that

our approach to remuneration for all employees is

aligned to our strategy to build homes with quality our

customers can rely upon at a price they can aord.

This compelling purpose aligned to our remuneration

approach supports the delivery oflong-term

sustainable performance, to beneﬁt all stakeholders.

The Committee has been very mindful of the impact

of inﬂation on our workforce and our communities.

In this context we were pleased to see a number of

enhancements being implemented for the broader

workforce. These included:

• Implementing the Real Living Wage increases in

January 2023 ahead of the required May 2023

timeline, as part of our accreditation asaLiving

Wage employer;

• Implementing a tiered pay review in July 2022

with 7% going tothoseemployees on the lowest

base salaries;

• Progress towards harmonising remuneration and

beneﬁt practicesfor our weekly paid workforce

to align more closely withour monthly paid

colleagues; and

• Continuing to review and improve the beneﬁts

available to our employees including enhancing our

paternity policy and increasing holiday entitlement.

During the year, we reviewed our Remuneration

Policy to ensure this continues to align to best

practice and support the ﬁve key priorities of the

Group. The conclusion of our review is that the

current Policy is functioning well and appropriately

supports our strategy.

Therefore only minor changes are proposed.

See page 128 for a summary of the changes and

pages 132 to 139 for the detailed Policy which we are

asking shareholders to approve at the AGM.

Jason Windsor, our Chief Financial Ocer, joined

the business in July and received buy-out awards

for remuneration which was forfeited when he

left his previous role. Details of these, together

with his remuneration on joining Persimmon,

were communicated to shareholders in the 2021

Directors’Remuneration Report.

The buy-out awards were made on the basis 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 on page 145.

When granting the buy-out awards in respect of

remuneration forfeited by Jason Windsor when he

joined the Group, we were mindful of the risk of

“windfall gains”. We considered the relevant share

prices and took action to mitigate these risks, both

when Jason joined in July 2022 and when we

granted Jason’s PSP award in September 2022.

Further information in relation to each is set out below.

2022 Remuneration outcomes

The Committee set very stretching targets for the

year across a range of key metrics which support the

delivery of our ﬁve key priorities. The annual bonus

opportunity for the Chief Executive in respect of

2022 was based on a mix of ﬁnancial metrics (60%)

and ESG/cultural metrics (40%). For the period since

joining Persimmon the bonus for the Chief Financial

Ocer was based on the same metrics as the Chief

Executive. Reﬂecting the performance which has

been delivered in an extremely challenging year, as

set out on page 130 the annual bonus outcomes for

the Chief Executive Ocer and Chief Financial Ocer

were 72.78% of maximum, resulting in 145.56% and

127.37% of salary respectively. This part of the bonus

for the Chief Financial Ocer will be pro rated to

reﬂect his date of joining Persimmon.

Full details of the targets and performance

achieved can be found on pages 143 and 144.

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.

194 employees (including the Chief Executive

and former Finance Director) hold PSP awards

which were granted in 2020 and which vest by

reference to performance over the three years

ended 31 December 2022. Reﬂecting performance

over that three year period, the awards will vest at

58.72%of the maximum, and then be subject to

a two year holding period before the shares are

released to the participants.

The Committee is satisﬁed that no windfall gains

occurred in respect of the 2020 awards as the

share price at grant was broadly in line with the

price the previous year, and higher than the current

share price, so no adjustments have been made.

Further details including the grant prices are

provided on pages 144, 145 and 147.

New Chief Financial Officer

Remuneration

Details of the remuneration for Jason Windsor

weredisclosed in the 2021 Directors’ Remuneration

Report and can also be found on page145. For the

proportion of 2022 prior to joining Persimmon the

CFO’s annual bonus takes into account the Aviva

plc bonus outturn for the year ending 31 December

2022 as disclosed in its annual report and accounts

for that year.

At the date of this report the Aviva plc annual

report was not published and therefore the value

of this 2022 bonus buy-out is not disclosed in this

Directors’ Remuneration Report (“DRR”). The value

of this bonus buy-out will be disclosed infull inthe

2023 DRR.

Share buy-out awards were made in July 2022,

and when approving these and when granting the

PSP award in September, the Committee carefully

considered the possibility of windfall gains. For both

awards an adjustment was made which reduced the

number of shares which would have been granted

ifthe price at date of grant had been used.

For the share buy-out awards, which were made

when Jason joined Persimmon, we took into

accountthe movement in the respective Persimmon

and Aviva share prices between the announcement

in January 2022 of Jason joining, and his start

date, and the grant of the awards in July 2022.

The Committee concluded that a fair approach,

balancing the interests of shareholders, was to use

the average price between the announcement

date of Jason’s appointment (13th January 2022)

and his date of joining (11th July 2022). This resulted

in areduction of circa 15% in the number of shares

issued compared to using the share price at the

grant date.

The PSP award was made in September as

part of the normal grant cycle for new joiners.

The share price at the time of grant was £14.30.

The Remuneration Committee agreed that an

adjustment should be made and awards were

granted at £17.84 (the share price at the date

Jasonjoined Persimmon).This resulted in a

reductionof circa 20% in the number of shares

granted compared to using the share price at the

grant date. See page 146 for full details of the award.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

127

Remuneration

Remuneration Committee Chair’s statement continued

Summary of Remuneration Policy changes

Proposed change 2020 Policy 2023 Policy

Bonus maximum opportunity

200% of salary for the CEO and 150% of salary

forother Executive Directors.

200% of salary for the CEO. 175% of salary for

other Executive Directors. As we explained in

the 2021 Directors’ Remuneration Report, when

combined with the PSP opportunity, this provides

Jason Windsor with the same overall incentive

opportunity as at his former employer.

Threshold vesting for annual bonus

Payment at threshold performance is up to 10%

ofmaximum.

Payment at threshold performance is up to 20%

of maximum. This reﬂects the level of stretch

in the performance targets set and brings our

approach into line with typical practice in the

FTSE 100 and in sector peers. Payment for

on-target performance will remain at up to

50%ofmaximum in line with the 2020Policy.

Recruitment policy

The maximum level of variable remuneration

whichmay be granted to a new Chief Executive

Ocer on appointment (excluding any ‘buy out’)

is500% of salary, with a maximum of 450% of

salary for any other Executive Director.

No change to the maximum for a new Chief

Executive, 500% of salary. For any other

Executive Director, the maximum will increase

to 475% of salary reﬂecting the change in the

bonus maximum.

In service shareholding guidelines

Executive Directors appointed on or after the

date on which the 2020 Policy was approved are

required to acquire and retain shares with avalue

equal to 400% of base salary. A holding of 200%

of salary should be achieved within 5years of

appointment, with the balance of the guideline

acquired within a period agreed with the Chairman.

The overall guideline remains the same.

However, Executive Directors will now be

required to retain all shares acquired under

the PSP and deferred bonus awards, on a net

of tax basis, until the shareholding guideline

ismet, unless in exceptional circumstances

theCommittee exercises discretion to vary

thisrequirement.

Other changes

Other minor amendments have been made to the 2020 Policy to aid administration and to take

accountof changes in practice since the 2020 Policy was approved by shareholders. This includes

theremoval of legacy provisions which do not apply to current or future ExecutiveDirectors.

Remuneration Policy

Our current Policy was approved at the 2020 AGM with over 97%

votes in favour. At the 2020, 2021 and 2022 AGMs, our Directors’

Remuneration Report also received votes in favour of over 90%.

In line with the usual timetable for Policy renewal, we will be

seekingshareholder approval for a new Policy at the 2023 AGM.

During 2022, the Committee reviewed the current Policy and

engaged with stakeholders as appropriate. The conclusion of the

review is that the current Policy is functioning well, and appropriately

supports our ﬁve key priorities. There was strong consensus amongst

stakeholders for maintaining the overall current structure. Therefore,

the proposed new Policy will retain the framework of the current Policy.

Modest changes are proposed to the annual bonus opportunity for

the Chief Financial Ocer as previously notiﬁed to shareholders, with

further minor changes to introduce ﬂexibility to aid the operation of the

Policy and provide further alignment with best practice. The changes

are summarised in the table opposite and the full Policy can be found

on pages 132 to 139.

The proposed 2023 Policy has been determined with the

following aims:

• to align the interests of the Executive Directors, senior management

and employees with those of shareholders and wider stakeholders,

and to ensure appropriate alignment with values and key priorities;

• to ensure that remuneration and incentives adhere to the

principles of good corporate governance, support good risk

management practice and promote long-term sustainable

Companyperformance;and

• to have a competitive mix of ﬁxed remuneration and short-term and

long-term incentives, with an appropriate proportion of the package

determined by stretching targets linked to the Company’s ﬁnancial

and non-ﬁnancial performance.

Persimmon Plc | Annual Report | December 2022

128

2023 Implementation

Salary

The normal eective date for salary increases for Executive Directors

has now been moved to 1 July, in line with other employees.

Dean Finch’s salary has not increased since 1 January 2022

andremains at £746,750.

As previously disclosed Jason Windsor’s salary was set at £675,000,

the same salary as he was receiving in his prior role.

Any salary increases for the Executive Directors for 2023 will be in

line with or below the wider workforce. When ﬁnalising our approach,

we will have regard to all of the circumstances, including the impact

of any Executive Director salary increases on their total remuneration

opportunities. We will conﬁrm any changes to the Executive Directors’

salaries in the 2023 Directors’ Remuneration Report.

Annual bonus

The maximum bonus quantum for Dean Finch will remain at 200%.

As previously disclosed and set out above, the bonus opportunity

for Jason Windsor has been agreed at 175%, subject to shareholders

approving a change to the Remuneration Policy.

The performance measures applying to both Executive Directors for

2023 are subject to a minor change from the previous year. 60% of

the bonus remains subject to ﬁnancial performance (proﬁt before tax

and cash generation). The cultural metrics are customer care (25%)

and build quality (15%). The environmental target has been removed

from the annual bonus and incorporated into the PSP awards for 2023.

Further details are set out on page 152.

The ﬁnancial targets are commercially sensitive and therefore will be

disclosed in the 2023 Remuneration Report. Delivery of a stretching

target level ofperformance will result in the Executive Director receiving

50% ofthe maximum award. Vesting is at 20% of the maximum

for thresholdperformance (subject to shareholders approving this

changeto the Remuneration Policy).

PSP

The 2023 PSP awards will be made following the AGM in April

whenthevote on the 2023 Remuneration Policy has taken place.

The maximum PSP award for each Executive Director will remain

at 200% of salary. The metrics for PSP awards to be granted in

2023 willbe changed to include an environmental metric based on

achievement of our Scope 1 and 2 Science Based Targets. We are

mindful that a signiﬁcant percentage of our carbon footprint is created

from the indirect activities of our business, including carbon emissions

from our supply chain for materials and services, and from sold homes

in use, but we also recognise that data capture is still maturing and

actions required to reduce these Scope 3 emissions will take a number

of years and require sector wide collaboration. The Committee will

keep this under review. For the 2023 PSP, we believe setting a robust

and measurable scope 1 and 2 emission target is the most suitable

environmental metric.

The proposed metrics are relative TSR (35%), cash generation (35%),

environmental (10%) and a cultural metric (20%) based again on the

HBF customer ‘recommend a friend’ score based on the 9 month

HBF survey. Further details of the metrics can be found on pages

152 and 153. The targets for the cash generation metric and for the

environmental metric are not yet ﬁnalised and will be disclosed in the

regulatory announcement when the awards are granted, in addition to

being included in the Directors’ Remuneration Report for 2023.

The Board believes in the importance of ESG and cultural metrics

andthis is reﬂected in our use of customer care and quality in

the annual bonus and PSP, and the incorporation of a clear and

measurableenvironmental target in the PSP. When taking into

accountboth the cultural and ESG metrics, there is now a 30%

ESGweighting in total inthe PSP.

The Committee continues to be mindful of the risk of “windfall gains”.

When the 2023 PSP awards are made the Committee will carefully

consider the quantum of the grants, having regard to share price

performance and market conditions at that time.

The Committee considers that 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 153. The Committee determines the Chairman’s fee

and the Board (excluding the Non-Executive Directors) determines

theNon-Executive Directors’ fees.

In line with the approach for Executive Directors, fees were increased

on 1 January 2022 as disclosed in the 2021 Directors’ Remuneration

Report and there has been no increase since this date. In line with the

wider workforce, fees for Non-Executive Directors will be reviewed

withan eective date for anyincreases of 1 July 2023.

Looking ahead – key focus areas for the

Committee for 2023

We believe that the proposed Directors’ Remuneration Policy is fully

aligned to our ﬁve key priorities and reﬂects best practice and trust

thatthis will result in a positive shareholder vote at the AGM.

2023 will be a challenging year for the Group with uncertainty in the

wider economic environment. We will continue to monitor the operation

of the Policy to ensure that targets remain relevant and stretching and

that it provides an appropriate level of reward to attract and retain high

calibre individuals in a very competitive market. We will continue to

consider the experiences of 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 hope this Directors’ Remuneration Report demonstrates. We believe

the Policy operated as intended and consider that the remuneration the

Executive Directors received in 2022 is 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

28 February 2023

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

129

Remuneration

At a glance

2022 actual remuneration Implementation in 2023

2022 variable pay outturns

Annual bonus earned for 2022

Reﬂecting the strong performance which has

been delivered the annual bonus outcomes for

the Chief Executive and Chief Financial Ocer

were 72.78% of maximum (145.56% and 127.37%

of salary) respectively.

Performance Share Plan

Dean Finch received a PSP award in 2020.

Based on performance over 2020-2022 the award

has vested at 58.72%. A further two-year holding

period will apply to the vested shares.

Outturn (% of maximum)

Weighting (% of maximum)

Proﬁt Before Tax

Pre-land cash generation

Build quality

Customer care

Environmental

0% 5% 10% 15% 20% 25% 30%

CEO

Dean Finch

CFO

Jason Windsor

Salary*

£746,750 £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 175%** of salary

PSP Maximum

opportunity

200% of salary 200% of salary

* Base salaries will be reviewed 1 July 2023.

** Subject to shareholders approving the 2023 Remuneration Policy.

CEO

Dean Finch

CFO

Jason Windsor

Salary

£746,750 £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

joining Persimmon, 175% of salary for

the period after joining Persimmon

PSP Maximum

opportunity

200% of salary 200% of salary

Single Figure Total

for2022

£2,143,066 £2,736,352*

* Single ﬁgure total for 2022 includes buy-out awards for remuneration forfeited when he joined Persimmon. See page 145 for details.

15.39

6.39

Persimmon Plc | Annual Report | December 2022

130

Alignment to key priorities Ensuring shareholder alignment

Our wider workforce

andcommunities

All permanent salaried employees are eligible

toparticipate in a bonus or commission scheme

A tiered pay increase wasimplemented in July

2022 with the highest increase of 7% going

toourlowest paid employees.

Persimmon is a Living Wage Foundation

accredited employer.

No. of employees

participating in SAYE

2,149

During the last two years

Persimmon Community

Champions donated

£1.35m+

to over 1,400 local groups

No. of employees granted

PSP Awards in2022

277

As at 31 December 2022

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

fiveyears of appointment.

Progress toward holding requirement

Balance of 200% holding requirement

expectedto be achieved within ﬁve years

ofappointment

Dean Finch CEO

Jason Windsor CFO

Build quality

& safety

• Customer care and

qualitymetrics included

asperformance conditions

forincentives

• Failure of acceptable

healthand safety standards

explicitly included in recovery

provisions for incentives

Reinforcing trust:

customers at

the heart of

our business

• Customer care metrics are

included in both our annual

andlong-term incentives

Disciplined growth:

high quality land

investment

• Financial metrics included

asperformance conditions

forincentives

• Proﬁt Before Tax

• Pre-land Cash

• Total Shareholder Return

Industry-leading

financial

performance

• Financial metrics included

asperformance conditions

forincentives

• Proﬁt Before Tax

• Pre-land Cash

• Total Shareholder Return

Supporting

sustainable

communities

• Environmental metrics are

included in our incentives

• We are delivering our new

diversity and inclusion

strategy

Annual Bonus Performance

measures 2023

Performance Share Plan

Performance measures 2023

Proﬁt Before Tax 30%

Pre-land Cash generation 30%

Customer care 25%

Build Quality 15%

Relative TSR 35%

Pre-land cash generation 35%

Customer Care 20%

Environmental 10%

27%

46%

173%

154%

27%

46%

173%

154%

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

131

Remuneration

Directors’ future Remuneration Policy

The Remuneration Policy (‘the 2023 Policy’) for Executive Directors, the

Chairman and Non-Executive Directors is set out below. Shareholders

willbe asked to approve this at the AGM to be held on 26 April 2023.

Once approved the Policy will apply to payments made from this date.

Untilthis time the Remuneration Policy approved by Shareholders

on29 April 2020 will continue to apply (the ‘2020 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 eect from 1 July.

When reviewing salaries, consideration is given to any

increases awarded to the Group’s salaried employees,

business and market conditions, 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 or below increases applied to

the Group’s salaried employees (in percentageterms).

Increases may be made above 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 Company operates

adeﬁnedcontribution (DC) scheme.

A Director may receive a salary supplement in lieu

ofsome or all of the pension beneﬁts available

undertheschemes.

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 oered 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

Executive Directors

A summary of the proposed changes to the Remuneration Policy are set out on page 128, together with the

aims of the Policy.

To achieve the aims of the 2023 Policy, the remuneration of the Executive Directors is made up of dierent

elements of ﬁxed and variable pay, with a signiﬁcant emphasis on performance related pay for achievement

of stretching targets. If challenging performance conditions attached to variable pay are achieved in full,

asubstantial proportion of an Executive Director’s remuneration will be performance related.

Persimmon Plc | Annual Report | December 2022

132

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, in line with usual practice.

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 below.

The maximum annual bonus potential is 200% of base

salary for the Group Chief Executive and 175% of base

salary for other Executive Directors. Maximum bonus

isonly payable if stretching targets are met.

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 20% 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.

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Persimmon Plc | Annual Report | December 2022

133

Purpose How it operates Maximum payable Performance framework

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 eect.

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. The Committee also

hasthe discretion to adjust awards due to windfall

gainsifit believes this to beappropriate.

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 below.

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 are not limited

to, cashgeneration, relative TSR, cultural and

environmental metrics.

Awards will vest as to 25% for threshold performance,

increasing to 100% for maximumperformance.

Remuneration

Directors’ future Remuneration Policy continued

Persimmon Plc | Annual Report | December 2022

134

Share ownership guidelines

In-service requirement

During employment, Executive Directors are required to acquire and retain shares with a value equal to

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. Executive Directors will be

required to retain all shares acquired under the PSP and deferred bonus awards, on a net of tax basis, until

the shareholding guideline is met, unless in exceptional circumstances the Committee exercises discretion

tovary this requirement.

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 will not be subject to any post-employment holding requirement.

The Committee retains discretion to vary this requirement in exceptional circumstances.

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 aects 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 eect 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.

Operation of share plans

The Committee may amend the terms of awards and options under its share plans in accordance with

theplan rules in the event of a variation of the Company’s share capital or a demerger, special dividend or

other similar event or otherwise in accordance with the terms of the plans. The Committee will operate any

such plan in accordance with its rules. Share awards granted under any such plan may be settled (in whole

or in part) in cash, although the Committee would only do so where the particular circumstances made

itappropriate to do so – for example, where there is a regulatory restriction on the delivery of shares.

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, and/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 on

Capital Employed

underpin)

Relative TSR

A cultural metric and/or

environmental metrics

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 and environmental metrics support our future success and reﬂect the

importance to the Group of environmental considerations.

The Committee retains the right to adjust or set dierent 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.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

135

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. All employees are

able to participate in share ownership either through the PSP or the SAYE which is operated on an annual basis.

Over 200 employees received a PSP award in 2022.

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eect from 1 July.

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.

Reimbursed expenses may

include a gross-up to reﬂect

any tax or social security due in

respect of the reimbursement.

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 oce of Senior

Independent Director, or

the oce of Workforce

Engagement Non-Executive

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 2023 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.

• In general our policy is to set salaries based on the market rate. In certain circumstances 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 2023 Policy

setout above.

• The variable remuneration that may be awarded will be subject to the applicable limit set out below.

• Without prejudice to the ability to oer 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 sucient time to assess performance, subject to the

applicable 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 475% of salary and, for a new Chief Executive, 500% of salary.

As described in the policy tables above, it may also be necessary to oer relocation beneﬁts for external

andinternal appointments.

Remuneration

Directors’ future Remuneration Policy continued

Persimmon Plc | Annual Report | December 2022

136

‘Buy-out’ awards

The Committee may oer 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.

Service contracts

The Company’s policy is for service contracts with Executive Directors to have no more than a 12-month

notice period.

The Chairman and the Non-Executive Directors are not employees, they have letters of appointment

whichset out their duties and responsibilities; they do not have service contracts.

The Chairman’s and the Non-Executive Directors’ letters of appointment are eective from their date

ofappointment. Their appointment is initially for a three-year term but is subject to re-election at each

AGMandtheir appointment may be terminated on three months’ notice for the Chairman and one

month’snotice for the Non-Executive Directors.

Name Commencement date Unexpired term remaining as at 31 December 2022

Dean Finch 28 September 2020 Terminable on 12 months’ notice.

Jason Windsor 11 July 2022 Terminable on six 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.

Policy on payment for loss of office

Payments in lieu of notice

The Company retains the right to terminate each Executive Director’s service agreement by making

apayment in lieu of some or all of the notice period. Any such payment would consist of base salary

andmayalso include beneﬁts (including pension or salary supplement contributions) in respect of

theunexpired notice period for termination.

Annual bonus

Any payment to an Executive Director on termination in respect of annual bonus will be determined by the

Committee taking into account the circumstances of the termination. Any payment will be pro-rated to reﬂect

the proportion of the bonus year worked and subject to performance achieved. Payments will ordinarily only

be made at the usual time (although the Committee retains discretion to make payments early in appropriate

circumstances). The Committee retains discretion to pay the whole of the bonus for the year of departure

and/or the previous year in cash, but will only do so in exceptional circumstances.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

137

Entitlements under the Company’s share plans will be treated in accordance with the plan rules in the event

of cessation of employment, which provide as follows.

Plan Treatment

PSP

Cessation during the performance period.

In the event of cessation during the performance period, an award will ordinarily lapse.

However, in ‘good leaver’ circumstances (including cessation due to death, ill-health,

injury, disability or any other reason at the discretion of the Committee) awards may be

retained. Retained awards will ordinarily vest and be released on the originally anticipated

timescale subject to the satisfaction of the performance conditions and a reduction to

reﬂect the proportion of the performance period that has elapsed (although the Committee

has discretion to vest and release the awards earlier, and to assess the performance

conditionsaccordingly, and not to apply the time based reduction).

Cessation during the holding period.

In the event of cessation during the holding period, the award may be retained (other than

in the case of summary dismissal) and will be released at the ordinary release date to the

extent the performance condition was met (although the Committee has discretion to

release the award earlier).

Deferred

Bonus Plan

In the event of cessation before vesting, an award will ordinarily lapse.

However, if a participant leaves as a result of death, ill-health, injury, disability or any other

reason at the discretion of the Committee, the award will be retained and will vest on the

originally anticipated timescale (or at the date of cessation in the event of death or if the

Committee otherwise determines).

SAYE

SAYE options will vest and become exercisable in the event of cessation in line with the

planrules and applicable legislation, which do not provide for any discretion.

In determining whether an Executive Director is a good leaver’ and therefore should receive an annual

bonus or whether to exercise discretion to treat an Executive Director as a ‘good leaver’ for the purposes

of any subsisting awards under the Deferred Bonus Plan or PSP, the Committee will have regard to a

range of factors, including the circumstances of the termination, the Executive Director’s length of service,

performance and behaviour in role, overall business performance and, where relevant, contribution to

anorderly succession.

The Committee reserves the right to make any other payments in connection with an Executive Director’s

cessation of oce or employment where the payments are made in good faith in discharge of an existing

legal obligation (or by way of damages for breach of such an obligation) or by way of settlement of any

claim arising in connection with the cessation of a Director’s oce or employment. Any such payments may

include but are not limited to paying any fees for outplacement assistance and/or the Director’s legal and/

or professional advice fees in connection with their cessation of oce or employment and/or payments

inrespect of accrued but untaken holiday.

Change of Control

The rules of the Company’s share schemes provide for early exercise of awards on a takeover or change

of control.

Entitlements under the Company’s share plans will be treated in accordance with the plan rules in the event

of change of control, which provide as follows.

Plan Treatment

PSP

Unvested PSP awards will vest in the event of a change of control to the extent determined

by the Committee taking into account the extent to which the performance condition has

been satisﬁed and the proportion of the performance period that has elapsed (although

theCommittee has discretion to waive this time based reduction).

Vested PSP awards which are in a holding period will be released in the event of a change

of control to the extent determined by reference to the satisfaction of the performance

condition.

Deferred

Bonus Plan

Deferred Bonus Plan awards will vest in the event of a change of control.

SAYE

SAYE options will vest and become exercisable in the event of a change of control in line

with the plan rules and applicable legislation, which do not provide for any discretion.

Legacy arrangements

The Committee retains discretion to make any remuneration payment or payment for loss of oce

(includingexercising any discretion available to it in respect of any such payment) outside the 2023 Policy:

• where the terms of the payment were agreed before the 2023 Policy came into eect, provided in the

case of any payment whose terms were agreed after the Company’s 2017 AGM and before the 2023

Policy becomes eective, the remuneration payment or payment for loss of oce was permitted under

theCompany’s relevant former Directors’ Remuneration Policy; or

• where the terms of the payment were agreed at a time when the relevant individual was not a Director

ofthe Company and, in the opinion of the Committee, the payment was not in consideration of the

individual becoming a Director of the Company.

For these purposes, ‘payment’ includes the satisfaction of awards of variable remuneration and, in relation

toan award over shares, the terms of the payment are agreed no later than the time the award is granted.

External appointments

The Directors recognise 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.

Remuneration

Directors’ future Remuneration Policy continued

Persimmon Plc | Annual Report | December 2022

138

Illustrations of application of 2023 Policy

The following charts illustrate the remuneration packages of the Group Chief Executive Ocer and Chief

Financial Ocer for the year ending 31 December 2023 under the 2023 Policy for various indicative levels

of performance.

Base salary, beneﬁts and pension Annual bonus PSP

Minimum

performance

Dean Finch

(Total remuneration £000)

100%

£857k

37%

32%

31%

£2.351m

22%

39%

£3.844m

33%

48%

£4.591m

19%

22%

39%

Performance

in line with

expectations

Maximum

performance

(with 50% share

price increase)

Maximum

performance

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

Jason Windsor

(Total remuneration £000)

Minimum

performance

100%

£779k

38%

29%

33%

£2.045m

23%

36%

41%

£3.310m

30%

51%

£3.985m

19%

22%

39%

Performance

in line with

expectations

Maximum

performance

(with 50% share

price increase)

Maximum

performance

For the purpose of these charts, the following assumptions have been made.

• Fixed remuneration comprises base salary, pension and other beneﬁts.

• Base salary levels are those applying on 1 January 2023.

• Beneﬁt levels are those applying as at 1 January 2023.

• Minimum performance reﬂects ﬁxed remuneration as above, and assumes no payment under the annual

bonus and no vesting is achieved under the PSP.

• Expected performance reﬂects ﬁxed remuneration above, and assumes 50% of annual bonus is earned

(100% of base salary for the Group Chief Executive and 87.5% of base salary for the Chief Financial Ocer)

and 50% of the PSP (100% of base salary for each of the Group Chief Executive and Chief Financial

Ocer)vests.

• Maximum performance reﬂects ﬁxed remuneration as above, and assumes full bonus pay out (200%

of base salary for the Group Chief Executive and 175% of base salary for the Chief Financial Ocer)

and full vesting under the PSP (200% of base salary for each of the Group Chief Executive and Chief

Financial Ocer).

• The ﬁnal illustration is based on the same assumptions as the maximum performance illustration,

butalsoassumes for the purposes of the PSP that share price increases by 50%.

Statement of consideration of shareholder views

The Committee consults with major shareholders and their representative bodies on remuneration matters,

particularly if any material changes are proposed to the remuneration policy. When determining the 2023

Policy,the Remuneration Committee consulted with the Company’s major shareholders representing 51.7%

of theshare register, as well as leading proxy voting service providers, and we are grateful for stakeholders’

engagement with us.

There was general support for the 2023 Policy with recognition of the Remuneration Committee’s

determinationtodeliver best practice. The links to our ﬁve key priorities, with appropriate balance

betweenﬁnancial and non-ﬁnancial metrics, were well received.

Statement of consideration of employment conditions elsewhere

intheGroup

In accordance with the UK Corporate Governance Code, the Committee reviews pay and employment

conditions of the wider workforce, and takes these into account when reviewing and determining

remunerationof the Executive Directors.

Whilst the Committee does not directly consult with the wider workforce when determining the remuneration

ofthe Executive Directors, it engages with the Employee Engagement Panel, to whom it presents its approach

to executive remuneration and seeks their feedback.

The Company is also a Living Wage Foundation accredited employer, paying the Real Living Wage to our

employees, and has established (and regularly reviews) a remuneration dashboard of Group-wide workforce

pay statistics and trends. Further information on wider workforce remuneration and our approach to

engagement can be found on page 149.

These approaches enable the Committee to better know and understand the Group’s workforce, to ensure

thatall remuneration decisions are made in context.

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 2022. 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 2022 the Committee met

onfour occasions with additional calls as necessary. The attendance at meetings can be located on page 126.

The Committee determines the remuneration policy for the Group’s Chairman, Executive Directors, and the Senior

Executive Group, which for 2022 consisted of the UK MD and Deputy MD, Chief Commercial Ocer, Regional

Chairman, the Group Transformation and Land Strategy Director, Chief Customer Experience Ocer, Group

Strategy and Regulatory Director and the Company Secretary. This Group is kept under review to ensure it aligns

to the organisational structure and comprises the senior management roles. 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 improve build quality 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 88 and 89.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

139

Remuneration

Annual report on Remuneration

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 at a price they can aord, deliver proﬁtable growth and return cash to shareholders, therefore

providing sustainable value for allstakeholders through the housing cycle. Directors are not involved in the

setting of their own remuneration, and are recused from any conversations on their own pay. If Directors

oer 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 eective

engagement with

shareholders and

theworkforce.

We have taken a fully transparent approach to our Remuneration Policy and

arrangements. Our full proposed Remuneration Policy can be found on pages 132

to 139 of this annual report. We consulted with the Company’s major shareholders,

as well as leading proxy agencies in relation to the new Remuneration Policy and

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

available 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 Ocer’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 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 this applies 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. As disclosed

in the Committee Chair’s statement on page 127, during 2022 we considered the

risk of windfall gains arising in relation to PSP awards and buy-out awards and took

appropriate action to mitigate this risk, as further described in that statement.

Principle Alignment to the Code

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 Ocer, the annual bonus maximum award quantum is

up to 175% (subject to approval of the Directors’ Remuneration Policy), 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, which include a two-year post-cessation shareholding

requirement. The value of any share award is 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.

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. From 2023 there is also an environmental metric

in the PSP. Subject to the Committee’s discretion to override formulaic outturns,

annual bonus awards will result in payment at threshold performance of up to 20%

of the maximum (subject to approval of the Directors’ Remuneration Policy). 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 2022 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 Ocer 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 page 96. Further information on the

non-ﬁnancial metrics can be located onpages 143 to 144 and 152 to 153.

Persimmon Plc | Annual Report | December 2022

140

What the Committee has focused upon during the year

Key areas offocus Remuneration Committee activities in 2022

2023 Remuneration

Policy

• Agreed the proposed new Remuneration Policy, with the dierences between

thecurrent Policy and the new Policy described in the Committee Chair’s

statement on page 128.

New Chief

FinancialOfficer

remuneration

• Approved awards to compensate Jason Windsor for the remuneration forfeited

on leaving his previous employer, and in particular considered the possibility

ofwindfall gains and adjusted awards accordingly.

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 2022 annual bonus

and2022 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.

• Agreed the approach to Jason Windsor’s PSP grant having regard to the risk

ofwindfall gains.

• Discussed and agreed in principle the environmental metric that would be used

for the 2023 PSP awards, in particular focusing on the robustness of the data,

measurement and assurance available to set and assess performance against

such targets.

Workforce

Remuneration

• Noted salary increases and pay practices for employees during the year

including enhancements to beneﬁts.

• Reviewed the HR dashboard which sets out key workforce data at each

meeting andconsidered the impact on decisions relating to Executive

Directors and the Senior Executive Group.

What the Committee is focusing on for 2023

Key areas offocus Remuneration Committee priorities for 2023

ESG Metric

• A speciﬁc environmental target will be incorporated in the PSP in 2023 –

furtherdetails are included in the Committee Chair’s statement on page 129.

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 2023 awards.

PSP Awards

• Agree performance conditions for 2023 PSP awards.

• Agree the level of awards made to the Executive Directors, the Senior

Executive Group and to other senior managers in the Group, including

consideration of potential windfall gains.

Advisors

The Committee sought advice during the year on remuneration matters in relation to the review of the

remuneration policy; remuneration for the incoming Chief Financial Ocer and in particular in relation to

the grant price used for buy-out and PSP awards. 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. Deloitte also provided advice

onremuneration disclosure and share plan matters 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 aect 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 2022 was £80,965, charged on a time spent basis.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

141

2022 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 2022

The ﬁgures set out in the tables below are the actual amounts of salary or fees earned in the year to 31 December 2022.

Executive Remuneration (Fixed)

Fixed remuneration

Salary Beneﬁts

Salary supplement

in lieu of pension

Total ﬁxed

remuneration

Executive

2022

2021

2022

2021

2022

2021

2022

2021

D Finch 746,750 725,000 47,187 43,492 67,208 65,250 861,145 833,742

J Windsor

320,186 – 16,466 – 28,817 – 365,469 –

M H Killoran

20,469 532,270 1,355 33,966 1,842 47,904 23,666 614,140

Total 1,087,405 1,257,270 63,653 77,458 97,867 113,154 1,250,280 1,447,882

Executive Remuneration (Variable)

Variable remuneration

Annual bonus

Value of long-term

Awards Vesting

Value of SAYE

options vesting

Value of

buy-out award

Total variable

remuneration

Executive

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

D Finch 1,087,021 1,340,776 194,900 – – – – 404,384 1,281,921 1,745,160

J Windsor

409,856 – – – – – 1,961,027 2,370,883

M H Killoran

– 722,299 366,267

– – – – – 366,267 722,299

Total 1,496,877 2,063,075 561,167 – – – 1,961,027 404,384 4,019,071 2,467,459

Executive

Total

2022

2021

D Finch 2,143,066 2,578,902

J Windsor

2,736,352 –

M H Killoran

389,933 1,336,439

Total 5,269,351 3,915,341

1. 2022 ﬁgures are from 11 July 2022, the date Jason Windsor was appointed to the Board.

2. 2022 ﬁgures are to the date of Mike Killoran’s retirement on 14 January. As disclosed when

Mike Killoran retired, his membership of the Group Medical Scheme continued until 1 March

2022, and the value of this beneﬁt to that date is included in the beneﬁts ﬁgure above.

Having regard to Mike Killoran’s long service and retirement he was granted “Good Leaver”

status for the purpose of his outstanding PSP awards on his retirement from the Board,

each ofwhich was reduced pro-rata to reﬂect the date of retirement. The value of the 2020

PSP award which vested by reference to performance to 31 December 2022 is included in

the table, as described in note 3. His SAYE vested upon leaving the Group but this expired

unexercised during 2022 so no value was received.

3. Dean Finch and Mike Killoran were granted PSP awards in 2020 which vested by reference

to performance over the three years ending 31 December 2022. Further details in relation

toawards, including the basis on which the values in the table above are calculated, are set

out on pages 144 and 145.

4. The buy-out award for Jason Windsor reﬂects the value of certain awards granted to

Jason Windsor in respect of remuneration forfeited when he left his previous employer.

Further information is included on page 145.

5. The buy-out award for Dean Finch reﬂects the value of the award granted to Dean Finch

in2021 in respect of remuneration forfeited when he left his previous employer, as referred

tointhe 2020 Directors’ Remuneration Report.

Remuneration

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142

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.

Fixed remuneration

Salaries and fees Beneﬁts Total

Chairman

2022

2021

2022

2021

2022

2021

R Devlin 330,000 300,000 – – 330,000 300,000

Non-Executive

N Mills 82,000 75,000 – – 82,000 75,000

S Litherland 65,000 60,000 – – 65,000 60,000

J Place

75,000 – – – 75,000 –

A Durbin 82,000 75,000 – – 82,000 75,000

A Wyllie

65,000 59,616 – – 65,000 59,616

S Khoury-Haq

82,000 35,000 – – 82,000 35,000

Total 781,000 654,616 – – 781,000 654,616

1. Joanna Place waived her fee during 2021. The Company chose to make a payment to the Persimmon Charitable Foundation, equivalent to her

waived fees.

2. 2021 ﬁgures are from 4 January 2021, the date Andrew Wyllie was appointed to the Board.

3. 2021 ﬁgures are from 1 July 2021, the date Shirine Khoury-Haq was appointed to the Board.

4. Non-Executive Director fees can vary based on whether additional duties are required e.g. to chair a committee or perform the senior

independent role. A more detailed explanation of this can be found on page 153.

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, Jason Windsor and Mike Killoran (up to his date of retirement from the Board) received a salary

supplement in lieu of pension, equal to 9% of their base salary.

Annual Bonus 2022

Each of Dean Finch and Jason Windsor was eligible to earn a bonus of in respect of 2022. The maximum

bonus was up to 200% of salary in the case of Dean Finch. For Jason Windsor for the period from 11 July

2022 (the date he commenced employment with Persimmon) the maximum bonus was up to 175% of salary,

pro-rated for the proportion of the year from his date of joining. Mike Killoran was not eligible to earn a bonus

in respect of 2022.

As discussed in the Committee Chair’s statement on page 127, for the proportion of the year prior to joining

Persimmon Jason Windsor received a buy-out bonus opportunity which takes into account the Aviva plc

bonus outturn for 2022. This information was not available at the date of this report so full details will be

included in the 2023 Directors’ Remuneration Report.

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 ﬁve key priorities. 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

30% £940.3m £1,011.1m £1,041.43m £1,011.9m 15.39

Pre-land cash

generation

30% £870.5m £936.1m £982.9m £1,002.7m 30

Customer Care 20% See below

Met in part 16

Build Quality 15% See below

Met in part 6.39

Environmental 5% See below

Met in full 5

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 2021: 1,246.6m

Cash at 31 December 2022: 861.6m

Decrease in cash: (385.0m)

Add: Dividends paid: 750.1m

Net land spend: 637.6m

1,002.7m

3. 15% of the customer measure was achieved by reference to 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 2022. The outturn shows that 22 of the 30 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.

These scores start from zero each year meaning that the level of attainment required is a challenging target to meet.

4. 7.5% of the quality score was achieved by reference to the fraction of those operation businesses in the Group rated as 90% or above as

measured by the results of the HBF 8 week quality question for the year to 30 September 2022. The outturn shows that 7 of the 30 operating

businesses achieved a score of 90% or above. A further 7.5% of the quality score is based on the results of independent assessments carried

out on Persimmon sites by the Group’s warranty providers from 1/ 1/22 to 31/12/22. 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 circa 20% was required for target performance, with the level of improvement required based on the warranty provider’s scoring system.

These scores start from zero each year meaning that the level of attainment required is a challenging target to meet.

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Persimmon Plc | Annual Report | December 2022

143

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 48.8 20 30

LABC 4 37.5 50 61.8

Premier 47. 2 10.7 78.5

5. The Committee has reviewed evidence to assess achievement against the objectives comprising the environmental metric. A summary is

provided below. The Committee robustly considered the achievements in the year and concluded that those achievements demonstrated strong

performance relative to the objectives set such that this element of the bonus was earned in full.

Objective Achievements

Development of an annualised carbon reduction glide

pathto 2026

New carbon model has been created with functionality for a range of scenarios

and interventions

Process improvements in energy/carbon data capture,

tracking and reporting

Implementation of sustainability bi-monthly returns from OpCos and Business.

Executive level review of data

Championing improvements in energy usage and delivery

of actions needed across the group to improve energy

eciency and reduce carbon emissions

HVO trials as a low carbon alternative to diesel; trial of solar panels on cabins,

oce upgrades and inclusion of energy ecient features

Supporting roll out of energy awareness training,

initiativesand campaigns

Energy on Site awareness training programme in place, incorporated into Site

Managers Essentials, new Environmental Management system

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. The deferred

share award will ordinarily be subject to continued employment.

Performance share plan awards vesting in respect of performance

in2022

PSP awards were granted on 22 May 2020 to Mike Killoran and on 28 September to Dean Finch.

These awards were based on performance over the three-year period which ended on 31 December 2022.

As disclosed in the 2021 Directors’ Remuneration Report, having regard to Mike Killoran’s long

service andretirement, he was granted “Good Leaver” status for the purpose of his outstanding PSP

awards. His 2020 PSP was pro-rated to reﬂect the proportion of the performance period which had

elapsed at hisleaving date. The award remained subject to the rules of the PSP and the applicable

performance conditions.

The awards vested at 58.72%, and further information is set out below. The awards remain subject

toafurtherholding period before they will be released so that the vested shares can be acquired.

The targets and performance against these targets are as follows:

Performance measure Weighting

Threshold

(25% vesting)

Target

(50% vesting)

Maximum

(100% vesting) Outturn

Extent PSP

Measure Met

(% of maximum)

Relative TSR

40% Median – Upper quartile

or above

Between

median

and upper

quartile

27.72

Average pre land

cash generation

over the three year

performance period

40% £523m £717m £860m £622.7m 15.14

Underpin applying

to the pre land

cash measure – An

average ROCE

of 20%

over the three-year

performance period

36.2

Customer Care

20% Group is

a four-star

builder

over the

performance

period

– Group is

a four-star

builder over the

performance

period and

all operating

businesses

achieve a HBF

eight-week

score of 90%

22 out of 30 15.86

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 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 2022.

The outturn shows that 22 of the 30 operating businesses achieved a score of 90% or above. 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. This underpin has been met.

Remuneration

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Persimmon Plc | Annual Report | December 2022

144

In the single total ﬁgure of remuneration table, the value of these awards is calculated as set out below.

As theshare price average for the ﬁnal quarter was below the grant share price no value is attributable

toshare price growth.

Number

of shares

subject to

award

Vesting

outturn

Vested

Value of

Dividend

equivalent

Total for single

total ﬁgure of

remuneration

Dean Finch 17,917 58.72% 10,520 £133,896 £61,004 £194,900

Mike Killoran 33,667

58.72% 19,769 £251,615 £114,652 £366,267

1. The number of shares subject to Mike Killoran’s award is stated after the reduction to reﬂect the proportion of the performance period which had

elapsed at his leaving date.

2. In accordance with the relevant regulations, the value for the purposes of the single total ﬁgure of remuneration table is calculated by reference

to the average share price over the ﬁnal quarter of 2022 (£12.73).

3. In accordance with the rules of the PSP, each Executive Director is entitled to a further beneﬁt by reference to dividends on their vested shares.

These will be calculated over the period ending at the end of the holding period and delivered in shares. The value in respect of dividend

equivalents over the period ended 31 December 2022 is included in the table above.

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 were

exercised in 2022.

CFO buy-out awards

As previously disclosed, in recognition of Jason Windsor’s forfeiture of remuneration on leaving Aviva

plc thefollowing buy-out awards were granted on 11 July 2022. The approach to the determination of the

numberof shares subject to the awards is set out in the Committee Chair’s statement on page 127.

Forfeited remuneration

Number of Persimmon shares

subjecttothebuy-out award Vesting date of buy-out award

Annual bonus for 2021

1, 2

23,900 (reﬂecting 50%

oftheforfeitedbonus)

March 2025

2019 Deferred Bonus

2,530 11 July 2022

2020 Deferred Bonus

18,569 In respect of 9,285 Persimmon shares,

11July 2022

In respect of 9,284 Persimmon shares,

23 March 2023

2021 Deferred Bonus

23,829 In respect of 7,943 Persimmon shares,

11July 2022

In respect of 7,943 Persimmon shares,

25 March 2023

In respect of 7,943 Persimmon shares,

25 March 2024

2019 Restricted Stock

17,296 11 July 2022

2020 LTIP

96,449 23 March 2023 (followed by a two year

holding period)

2021 LTIP

26,808 25 March 2024 (followed by a two year

holding period)

1. Half of Jason Windsor’s forfeited annual bonus for 2021 was satisﬁed by a cash payment of £424,575. Half of the net of income tax and national

insurance amount of this payment was used by Jason Windsor to purchase 6,191 Persimmon shares. The other half of that forfeited annual bonus

was satisﬁed by the grant of an award over Persimmon shares, as set out in the table.

2. In line with the reporting regulations, the value of these awards are included in the 2022 single total ﬁgure of remuneration, notwithstanding that a

number of the awards do not vest until 2023, 2024 and 2025. In the 2022 single total ﬁgure the value of these awards is calculated as the sum of:

(a) the amount of the cash payment (£424,575); and

(b) the product of the number of shares (86,124) and £17.84 (being the closing share price on 11 July 2022, the date of grant of the share awards)

(£1,536,452).

3. The vesting of these awards is subject to the satisfaction of the performance conditions applying to the forfeited awards and their value will be

included in future Directors’ Remuneration Reports as required when the vesting outturn is known. As at the date of this report the Aviva annual

report and accounts for 2022 was not available and therefore the vesting outturn for the 2020 LTIP buy-out cannot be calculated. The value of

the 2021 LTIP buy-out cannot be calculated as this remains subject to performance conditions and does not vest until 2024.

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Persimmon Plc | Annual Report | December 2022

145

Performance share plan awards made during the year

PSP awards were granted on 8th March 2022 to Dean Finch and on 20th September 2022 to Jason Windsor.

Type

of award

Basis

of award

Threshold

level of vesting

Face value

of award £000

Performance

period

Shares subject

to option

Dean Finch

Nil-cost

option

Percentage of

salary – 200%

25% 1,493 1/1/22 – 31/12/2024 64,653

Jason Windsor

Nil-cost

option

Percentage of

salary – 200%

25% 1,350 1/1/22 – 31/12/2024 75,672

1. The face value of the award is based on the closing share price on the day before the grant of the award (£23.10).

2. The face value of the award is based on the closing share price on 11 July 2022, the date Jason Windsor joined Persimmon (£17.84). The closing

share price on the day before the grant of the award was £14.30. The Committee’s approach to the determination of the price is discussed in the

Committee Chair’s statement on page 127.

3. The awards will vest in 2025 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.

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

40% Median – Upper quartile

or above

Average pre land cash generation over the three

year performance period

40% £949m £1,117m £1,285m

Underpin applying to the pre land cash measure

– An average ROCE

of 20% over the three-year

performance period

Customer Care

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.; PLC; Crest Nicholson Holdings plc;

Redrowplc; Taylor Wimpey plc; The Berkeley Group Holdings plc; Vistry Group PLC. In the 2021 Directors’ Remuneration Report, we explained that

thepeer group would include Countryside Properties PLC. Reﬂecting the takeover of that company with eect from November 2022, that company

hasbeen removed from the comparator group; in due course the Remuneration Committee will decide how to take account of the takeover of that

company for the purposes of the PSP awards granted in 2021 to ensure that performance is assessed on a fair basis.

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.

Payments for loss of office

There were no payments for loss of oce made in the year.

Payments to past directors

There were no payments to past Directors for the year ended 31 December 2022 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 2022

isincluded in the single ﬁgure table.

As noted in the 2021 DRR the Committee exercised its discretion to grant “Good Leaver” status to

MikeKilloran for the purpose of his outstanding PSP awards, which remained subject to their performance

conditions and a time-based reduction to reﬂect the proportion of the performance period that had elapsed

at the date of his retirement. The vesting value of the 2020 PSP award is included in the 2022 single total

ﬁgure of remuneration. The 2020 PSP award remains subject to a two year holding period. The 2021 PSP

wasoriginally granted over 36,049 shares and was reduced to be over 12,477 shares.

Remuneration

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Directors’ share option scheme interests

Scheme

Total interests

outstanding at

31 December 2021

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 2022

Options vested

but unexercised

Latest

vesting

date

D Finch

Buy-Out Award 13,694 – 13,694 – 2953p – – – – March 2022

PSP 2020 17,917 – – – 2411p – 17,917 17,917 – Spring 2023

PSP 2021 49,103 – – – 2953p – 49,103 49,103 – Spring 2024

PSP 2022 – 64,653 – – 2310p – 64,653 64,653 – Spring 2025

2021 Deferred Bonus – 30,583 – 2192p 30,583 – 30,583 – Spring 2025

J Windsor

Buy-Out Award:

Annual Bonus 2021 – 23,900 – – 1776.5p

23,900 – 23,900 – March 2025

Buy-Out Award:

Deferred Bonus 2019 – 2,530 2,530 – 2207.17p

– – – – July 2022

Buy-Out Award:

Deferred Bonus 2020 – 18,569 9,285 – 2207.17p

9,284 – 9,284 – March 2023

Buy-Out Award:

Deferred Bonus 2021 – 23,829 7,943 – 2207.17p

15,886 – 15,886 – March 2024

Buy-Out Award:

Restricted Stock Award 2019 – 17,296 17,296 – 2207.17p

– – – – July 2022

Buy-Out Award:

LTIP 2020 – 96,449 – – 2207.17p

– 96,449 96,449 – March 2023

Buy-Out Award:

LTIP 2021 – 26,808 – – 2207.17p

– 26,808 26,808 – March 2024

PSP 2017 – 75,672 – – 1784p

– 75,672 75,672 – Spring 2025

M Killoran

PSP 2020

49,530 – – 15,863 2128p – 33,667 33,667 – Spring 2023

PSP 2021

36,049 – – 23,572 2953p – 12,477 12,477 – Spring 2024

SAYE

970 – – 970 1854p – – – – January 2022

2021 Deferred Bonus

– 16,476 – – 2192p 16,476 – 16,476 – Spring 2025

1. Jason Windsor joined the Group on 11 July 2022.

2. Mike Killoran retired from the Group on 14 January 2022.

3. Mike Killoran’s PSP awards were reduced pro-rata to reﬂect the proportion of the relevant performance periods which had elapsed as at Mike’s leave date.

4. Mike’s options under the SAYE Scheme were reduced pro-rata to reﬂect the proportion of the three-year savings period which had elapsed as at Mike’s leave date. Following his retirement, Mike had six months to exercise his SAYE options. As Mike did not exercise his SAYE options, they lapsed

infull six months after his leave date.

5. Mike Killoran’s bonus in respect of 2021 was awarded in 2022. Having regard to Mike’s long service and retirement, Mike’s deferred share award will vest at the end of the usual three-year deferral period.

6. The PSP award granted to Jason Windsor on 20 September 2022 was based on the Daily Ocial List Closing Price of Persimmon Plc shares on 11 July 2022, being Jason’s start date with the Company.

7. The Buy-Out Award: Annual Bonus 2021 granted to Jason Windsor on 11 July 2022 was based on the Daily Ocial List Closing Price of Persimmon Plc shares on 8 July 2022, being the working day before Jason’s start date with the Company.

8. The other Buy-Out Awards also granted to Jason Windsor on 11 July 2022 were based on average of the Daily Ocial List Closing Prices of Persimmon Plc shares between the date the Company announced Jason’s appointment (13 January 2022) and the date Jason joined the Company

(11 July2022). The Buy Out Awards replaced awards granted by Jason’s previous employer (Aviva). The price of Aviva shares for the purposes of buy-out award calculations was £4.2418 per share, being an average between 13 January 2022 and 11 July 2022.

All of the above represent share options and were granted for no ﬁnancial consideration.

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Persimmon Plc | Annual Report | December 2022

147

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 2023:

Director

Shareholding

requirement

No. of shares

and share

awards that

count towards

shareholding

requirement at 31

December 2022

Percentage

of base salary

held at 31 December

2022 (including

shares held by

connected persons

and shares net of

assumed tax for share

awards which are no

longer subject to

performance

conditions)¹

Beneficial holdings (including interests

of theDirector’s connected persons)

31 December 2022

(or if earlier, date of

leaving the Board)

31 December 2021

(or if later, date of

joining the Board)

D Finch 4 times salary

32,665 53.2% 16,457 15,708

J Windsor 4 times salary

51,315 92.5% 25,309 –

M H Killoran 5 times salary

1,939,924 9,290.1% 1,931,192 1,931,192

Chairman

R Devlin N/A N/A N/A 32,575 12,575

Non-Executives

J Place N/A N/A N/A 11,360 3,408

N Mills N/A N/A N/A 716 716

S Litherland N/A N/A N/A 0 –

A Durbin N/A N/A N/A 0 –

A Wyllie N/A N/A N/A 1,012 1,012

S Khoury-Haq N/A N/A N/A 355 355

Total 2,018,976 1,957,708

1. Calculated based on the closing price of £12.17 at 31 December 2022 and on base salary at 31 December 2022 (or if earlier date of leaving

the Board).

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. Whilst employed, Mike Killoran was required to acquire and retain shares worth 500% of his base salary. Mike Killoran retired from the Group

on14 January 2022. The value of shares held is based on the closing share price as at Mike’s leave date (£25.49).

The beneﬁcial holdings at 31 December 2022 of the Directors in oce at that point were 87,784 shares,

representing 0.03% of the Group’s issued share capital as at that date. There have been no changes in

theseinterests between 31 December 2022 and 28 February 2023.

The Committee has an agreed Post-Employment Shareholding requirement, details of which are included

inthe Directors’ Remuneration Policy on page 135. There are no share ownership requirements for the

Chairman and Non-Executive Directors.

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

Jan

2013

Jan

2014

Jan

2015

Jan

2016

Jan

2017

Jan

2018

Jan

2019

Jan

2020

Jan

2021

+212.1%

+169.5%

+86.4%

Jan

2022

Jan

2023

700

600

500

400

300

200

100

Remuneration

Annual report on Remuneration continued

Persimmon Plc | Annual Report | December 2022

148

Group Chief Executive Remuneration 2013 to 2022

Year Chief Executive

Single total ﬁgure

of remuneration

Annual bonus paid

against maximum

opportunity

PSP/LTIP awards

vesting against

maximum opportunity

2022 D Finch 2,143,066 72.78% 58.72%

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%

* 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 Je Fairburn from

18 April2013, the date he became Group Chief Executive.

The Wider Workforce

When making decisions about reward for the Executive Directors and Senior Executive Group the

Remuneration Committee takes 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 an accredited 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.

The Board is mindful of the impact inﬂation has on our employee population and in 2022 a tiered

pay reviewwas implemented which gave the highest increase of 7% to our lowest paid employees.

Improvements have also been made to beneﬁts including enhancing paternity pay and increasing the

holidayentitlement. There were also a signiﬁcant number of internal promotions which resulted in pay

increases, demonstrating the opportunities for career development and progression with the Group.

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 and Working Group.

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 52.

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

The Committee Chair met with the Engagement Panel during 2022 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 members of the Employee Engagement Panel cascade messages more broadly to the workforce

ensuring two-way engagement. The Committee tracks and discusses a number of workforce related

statistics via an HR dashboard of Group wide workforce statistics and trends. The Committee and

Board are informed of the outcomes of Employee Engagement Surveys which are undertaken annually.

Further information on our interaction with the workforce can be located on page 37.

The remuneration policy for the workforce is given due consideration when determining the remuneration

ofthe Executive Directors.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

149

Pay ratios

The table below compares the 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

pay ratio

75th percentile

pay ratio

2022 Option B 75:1 57:1 37:1

2021 Option B 99:1 60:1 45:1

2020

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 2022 is 57:1. The Company considers that the median pay ratio for 2022 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 may increase going forward due to the grant of bonus and PSP awards

to Executive Directors). The reduction in the pay ratio between 2021 and 2022 reﬂects the value of the

CEO’s vested PSP award in 2022 compared with the value of the buy-out award granted to him in 2021

inconnection with a deferred bonus forfeited at his previous employer.

The Company adopted ‘Option B’ from The Companies (Miscellaneous Reporting) Regulations 2018.

The latest available gender pay gap data (i.e. from April 2022) 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.

The CEO pay is the single total ﬁgure of remuneration for the relevant year, as stated in the Group Chief

Executive Remuneration 2013 to 2022 table on page 149.

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

pay ratio

75th percentile

pay ratio

2022 Total pay and beneﬁts £2,143,066 £28,644 £37,314 £58,147

2022 Salary £746,750 £25,779 £33,120 £44,075

2021 Total pay and beneﬁts £2,578,902 £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 measurement date of April 2022 the median Gender Pay Gap for the Group was 13.5% (2021: 18.1%).

This reduction is partly due to the pay increase given to our lower paid workers, together with changes in the

composition of our workforce and new roles brought into the Group. 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 Nomination Committee Report on page 110. 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 109.

In April 2022 we started delivery against a new diversity and inclusion strategy. A key workstrand within this

is data improvement, for both existing and new employees. We currently do not record and calculate ethnicity

pay ratios but once our data is suciently robust to allow meaningful analysis we will publish ethnicity pay

ratios in the future. Further information on our D&I strategy can be found on page 106.

Remuneration

Annual report on Remuneration continued

Persimmon Plc | Annual Report | December 2022

150

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 2022, with the change in remuneration of Persimmon Plc’s employees. Jason Windsor was appointed to

the Board in 2022 and, accordingly, he has 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

2021/22 2020/21 2019/20 2021/22 2020/21 2019/20 2021/22 2020/21 2019/20

Average of

Persimmon Plc’s

employees

31.4% 5% 5% 96.3% 21% -19% -8.2% 2% 18%

Average of

Group salaried

employees

7.3% 5% 2% 18.7% 21% -19% 1.9% 2% 0%

R Devlin 10% 5% – N/A N/A N/A – – –

D Finch* 3% 0% N/A -19% N/A**** N/A 8% -7% N/A

M H Killoran** 0% 2% 1.6% N/A N/A**** N/A**** -3% -30% -15%

N Mills 9% 5% – N/A N/A N/A – – –

S Litherland 8% 5% – N/A N/A N/A – – –

J Place***** – N/A N/A N/A N/A – – N/A

A Durbin 9% 5% N/A N/A N/A N/A – – N/A

A Wyllie*** 8% –

S Khoury-Haq*** 17% –

* 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 salary and beneﬁts for M Killoran. He retired from the Board

on14 January 2022. He was not eligible for a bonus in 2022.

*** The 2021 remuneration for A Wyllie and S Khoury-Haq has been “annualised” for the purposes of the above table to enable

avalid comparison.

**** Executive Directors’ bonuses for 2020 were forgone such that the percentage change between 2020 and 2021 is not considered

ameaningful comparison. No bonuses were payable in 2019.

***** Joanna Place waived her fees in 2021 meaning that a valid comparison cannot be made.

As noted above a tiered salary increase was implemented in July 2022 with lowest paid sta receiving

7%. 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 2022 versus the actual amount paid in

the2021 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.

2022

£m

2021

£m

Dierence

in spend

£m

Dierence as a

percentage

Remuneration for all employees* 259.2 224.0 35.2 15.7%

Total Capital Return Programme

payments made 750.1 749.6 0.5 0.07%

* Figures are taken from note 8 of the accounts relating to sta and employee costs except that employer social security costs and IFRS2

Share-based payment charges have been removed.

Statement of voting at general meeting

The Directors’ Remuneration Policy, eective from 29 April 2020 was put to shareholders for approval at

the 2020 AGM. The 2021 Annual Report on Remuneration was put to shareholders for approval at the 2022

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 2021 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 –

27 April 2022

204,416,579 90.46 21,547,079 9.54 225,963,658 1,947,554

(representing

0.609% of the

issued share

capital)

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

151

Statement of Remuneration Policy implementation 2023

A summary of the 2023 remuneration for each Executive Director is set out below.

Group Chief Executive pay Chief Financial Officer pay

• Base salary of £746,750 (review date 1 July);

• 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 (review date 1 July);

• 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

; and

• Maximum PSP award of 200% of base salary.

1. Subject to shareholders approving the proposed Remuneration Policy.

Annual bonus

Each Executive Director will be eligible for consideration of a bonus in respect of 2023, with maximum

opportunities as referred to above. In line with the 2022 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 2023 there will be two non-ﬁnancial metrics; 25% of bonus will be based on customer care measures,

15% will be based on quality. 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, and to score

75% or above under the HBF 9-month customer satisfaction survey. The quality measure will be based on

the results of independent warranty provider inspections to drive continued improvement in build quality.

As previously stated the environmental metric has been removed from the annual bonus for 2023 as this

willform part of the PSP.

Performance Share Plan awards

Following the AGM 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 Committee

continues to be mindful of the risk of “windfall gains”. When the 2023 PSP awards are made the Committee

will carefully consider the quantum of the grants, having regard to share price performance and market

conditions at that time.

The three-year performance period will run from 1 January 2023 to 31 December 2025. Awards will vest

in 2026 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, and a new environmental metric linked to reducing our carbon emissions. Collectively, these are

important factors in ensuring overall business performance, sustainability and reputation.

PSP performance metrics and targets – financial measures

Financial metrics will be based on relative TSR (35% of the overall award) and cash generation subject

to a ROCE underpin (35% 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. The PSP awards will be made following the AGM and details of the pre-land cash

targets and ROCE underpin will be prospectively disclosed at the time of grant.

Performance measure Weighting

Threshold

(25% vesting)

Target

(50% vesting)

Maximum

(100% vesting)

TSR Ranking

35% Median – Upper quartile

or above

Average pre-land cash generation

over the

three year performance period

35% To be disclosed

at time of grant

Underpin applying to the pre-land cash

measure – average ROCE

over the three

year performance period

To be disclosed

at time of grant

1. Compared to a peer Group of the UK’s largest listed house builders: Barratt Developments Plc; Bellway p.l.c.; 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.

Remuneration

Annual report on Remuneration continued

Persimmon Plc | Annual Report | December 2022

152

PSP performance metrics and targets – cultural and

environmentalmeasures

As with the 2022 PSP awards, the metric we use to measure customer care will continue to be based on

the HBF 9 month customer care Survey. These scores reset to zero at the start of each year meaning that

attainment of the targets remains stretching.

For the 2023 awards, we will assess the customer care measure by reference to the overall Group scores

because this aligns all participants with an improvement in Group performance.

We will continue to require that the Group scores at least 80% in the 8 week score in each of the three years

of the performance period. If that target is achieved, vesting will be determined by reference to the Group

HBF 9 month score for the period 1 January to 31 December 2025.

The Group 9 month survey score for the year to 30 September 2022 is currently 73.9% and the targets

forthe 2023 awards require an improvement on this for all performance levels.

The carbon reduction targets align with our Scope 1 & 2 absolute carbon reduction commitments.

Full detailsof the targets will be prospectively disclosed at the time of grant.

Performance measure Weighting

Threshold

(25% vesting)

Maximum

(100% vesting)

Customer care 20% Group scores at

least 80% in the

8 week score in each

of the three years

Group HBF 9 month

score for the 12 months

January to December

2025 is 75%

Group HBF 9 month

score for the 12 months

January to December

2025 is 80% or above

Environmental – Scope 1 & 2

carbonreduction

10% To be disclosed

at time of grant

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.

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.

In line with Executive Directors and the wider workforce the Non-Executive Director and Chairman fees will

be reviewed with an eective increase date of 1 July 2023. Any increases to fees are anticipated to be in line

with or below those given to the wider workforce.

The current fees as at 1 January 2023 are set out below, together with a comparison to 2022.

Performance measure Fees for 2023 Fees for 2022

Chairman £330,000 £330,000

Non-Executive Director £65,000 £65,000

Senior Independent Director £17,000 £17,000

Audit & Risk Committee Chair £17,000 £17,000

Nomination Committee Chair £17,000 £17,000

Remuneration Committee Chair £17,000 £17,000

Workforce Engagement NED fee £10,000 £10,000

Annemarie Durbin

Chair of the Remuneration Committee

28 February 2023

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

153

In respect of the annual report and the financial statements

The current Directors are listed on pages 88 to 89 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 aairs 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, 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 sucient 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 dier 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 issuer 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 Jason Windsor

Group Chief Executive Chief Financial Officer

28 February 2023 28 February 2023

Statement of Directors’ Responsibilities

Persimmon Plc | Annual Report | December 2022

154

Independent auditor’s report to the members of Persimmon Plc

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 aairs

asat31 December 2022 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

(together the ‘group’) for the year ended 31 December 2022 which comprise:

Group Parent company

Group balance sheet as at

31December2022

Company balance sheet as at 31 December 2022

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 33 to the ﬁnancial statements including

asummary of signiﬁcant accounting policies

Related notes 1 to 33 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sucient and appropriate to provide a basis for our opinion.

Independence

We are independent of the group and parent company 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:

1. 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.

2. 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 2024. Management has

prepared a base case scenario that assumes a decline in volumes and selling price from those achieved

in 2022. Management has also prepared a severe but plausible downside scenario which, reﬂects a

similar downturn to the impact of the Global Financial Crisis that took place in the late 2000s, with a

decrease in revenue through to 30 June 2024 of c.57% compared to 2022 levels and an average selling

price reduction of 17%. Finally, management has prepared an extreme scenario to assess the impact of

a complete shutdown of the housing market up to 30 June 2024. 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 2024 with no requirement to access the Group’s £300m Revolving Credit Facility.

For more detail on the assumptions in management’s assessment, please refer to Note 2 to the

ﬁnancial statements.

3. We assessed the appropriateness of the scenarios modelled by management. While the extreme scenario

is worse that would seem plausible, the model is reasonable.

4. We considered the appropriateness of the methods used in the cash ﬂow forecasts and covenant

calculations and tested the factors and assumptions included in each modelled scenario. We determined

that the cash ﬂow forecasts were appropriate to be able to make an assessment for the entity.

5. We read 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 2024.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

155

Independent auditor’s report to the members of Persimmon Plc continued

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 complete ﬁnancial information of

onecomponent and audit procedures on speciﬁc balances for a

furthertwo components.

The components where we performed full or speciﬁc audit procedures

accounted for 100% of Proﬁt before tax, 100% of Revenue and 100%

ofTotal assets.

Key audit matters

1. Revenue recognition

2. Inventory valuation and proﬁt recognition

3. Legacy Buildings Provision

Materiality

4. Overall group materiality of £48.3m which represents 5% of

proﬁtbefore tax adjusted for the exceptional legacy buildings

provisioncharge.

An overview of the scope of the parent company and group audits

Tailoring the scope

Changes from the Prior Year

For 2022, we performed speciﬁc audit procedures on two components, FibreNest Limited and Persimmon

Brickworks Limited, that were previously out of scope. This change was to gain additional coverage over the

Property, Plant & Equipment balances. There are no other changes to audit scoping since the prior year.

Our work on full and speciﬁc scope components covered 100% of Proﬁt before tax, 100% of Revenue

and100% of Total assets, which is consistent with the prior year.

All audit work performed was undertaken by the Group 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 74 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 unaudited

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 eort in considering climate change was focused on ensuring that the eects 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.

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 eect on: the overall audit strategy, the allocation of resources in the audit; and directing

the eorts 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.

Persimmon Plc | Annual Report | December 2022

156

Risk Our response to the risk

Key observations

communicated to

the Audit & Risk

Committee

Inventory valuation and proﬁt recognition

Refer to the Audit & Risk Committee Report (page

118); Accounting policies (page 168); and Note 18 of

the Consolidated Financial Statements (page176).

At 31 December 2022 the Inventory balance

includesWIP of £1,263m (2021 – £1,054m)

and Landof £2,092m (2021 – £1,798m).

At31December2022 the Cost of salesbalance

was£2,673m (2021 – £2,526m).

There is a risk that the margin used to recognise

proﬁt on each development is incorrect, resulting

in an error in the cost of sales recognised in the

year, and that the carrying value of Inventory (WIP

and Land) could be incorrectly valued and 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, that 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 of error within these assumptions, particularly

inthe early phases of plot sales when the estimate

risk is higher. There is also a risk that the carrying

value of inventory held in the balance sheet could

be subject to write downif the market declines

andsellingprices fall.

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 WIP and proﬁt recognition process. We considered management’s bi-monthly

valuationprocess to be the key control. We attended a sample of regional valuation meetings virtually to observe the level of management

challenge of the assumptions within the site valuations. For a sample of meetings for a sample of months, we inspected valuation meeting

packs to ensure that the appropriate individuals were in attendance at the meeting, that all sites were considered and that aggregate site

variances in excess of £10,000 had been appropriately explained. Wealso inspected action logs for a sample of meetings to ensure that

openmatters were followed up on a timely basis;

• We performed a substantive analytical review for the total cost of sales balance based on an overall group margin expectation;

• For a sample of sites completed in the year, we have analysed the margins throughout the site’s life so as to evidence management’s

historicforecasting accuracy;

• For a sample of the active sites at year end we have tested a sample of costs to come and expected selling prices tosupporting evidence;

• For a sample of entries to cost of sales in the year, we have checked that the margin recorded ties to the latest projected margin;

• We selected a sample of costs incurred from within inventory and agreed them to source documentation (i.e. purchase invoice), ensuring

thatthe costs had been appropriately allocated to sites;

• We performed sensitivity analysis on low margin sites held in WIP at year end; 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 166); and Note 5

ofthe Consolidated Financial Statements (page 170).

The Group has reported revenues for the year

of£3,816m (2021– £3,611m).

There is potential for material misstatement within

revenue, particularly in relation to revenue being

recorded in the wrong period, due to cut o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two 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.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

157

Independent auditor’s report to the members of Persimmon Plc continued

Risk Our response to the risk

Key observations

communicated to

the Audit & Risk

Committee

Legacy Buildings Provision

Refer to Accounting policies (page 169); and Note22

of the Consolidated Financial Statements (page 177).

At 31 December 2022, the Group holds a legacy

building provision of £333m (2021 – £73m).

There is estimation uncertainty and subjectivity

in determining the most likely costs which will be

required to remediate aected properties based

on the latest legal interpretation and government

guidance.

The risk has increased in the current year, due to

changes ingovernmentguidance and a signiﬁcant

increase in the quantum oftheGroup’s provision.

We performed the following procedures over this risk area:

• We performed a walkthrough to understand the key processes and identify key controls. We read and understood the relevant laws and

regulations including recently published government guidance and gained an understanding ofPersimmon’s commitments resulting from

theDeveloper Pledge;

• We read management’s accounting paper to understand the methodology applied and management’s rationale for recognising a signiﬁcant

increase in the provision in the current year;

• In light of the signiﬁcant increase in the provision in the year, we challenged management regarding the extent and timing of the increase

withrespect to the changes in the regulations and the requirements of IAS 37;

• We obtained management’s provision schedule, which showed the brought forward provision and the current year increases. Increases

relate to new sites identiﬁed and to various categories of additional costs on sites previously identiﬁed as a result of additional scope

requirements arising from the Developer Pledge, ongoing discussions with Department for Levelling up, Health and Communities (“DLUHC”)

as well as higher cost estimates. We understood the basis for signiﬁcant movements. An immaterial amount of cost has been spent to date;

• On a sample basis, we tested the individual development provisions. For those tendered, we agreed the expected cost to supporting third

party documentation (i.e. subcontractor tenders). For those untendered, we assessed management’s estimate by reference to the cost per

square foot of those already tendered;

• We involved EY Insurance Risk and Actuarial Specialists to critically assess management’s key assumptions regarding the cost of remediation

per site, the number of sites to be remediated, the time period for the work to be completed and the discount factor applied;

• We performed sensitivity analysis on the provision in order to establish whether these could give rise to material variances;

• In order to assess completeness of the property list, we reviewed ﬁnancial statements for the past 30 years and performed a press search

since 2017; and

• We assessed the appropriateness of the disclosures included within the ﬁnancial statements in relation to provision, including the disclosure

ofthe assumptions and associated sensitivities in relation to the key sources of estimation uncertainty.

Based on our audit

procedures we have

concluded that Legacy

Buildings Provision of

£333m is appropriately

recognised.

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the eect 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 £50.3 million (2021: £48.3 million), which is 5% (2021: 5%) of

Proﬁt Before Tax adjusted for the exceptional legacy buildings provision charge (2021: Proﬁt Before Tax).

We believe that Proﬁt Before Tax adjusted for the legacy buildings provision charge provides us with an

appropriate basis for materiality and this measure of underlying proﬁt 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 (2021: £22.3 million), which is 1%

(2021: 1%) of equity.

Starting basis

• Proﬁt Before Tax – £730.7m

Adjustments

• Add back exceptional legacy building provision – (£275.0m)

Materiality

• Totals £1,005.7m

Persimmon Plc | Annual Report | December 2022

158

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% (2021: 75%) of our planning

materiality, namely £37.7m (2021: £36.3m). 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 & Risk Committee that we would report to them all uncorrected audit dierences

in excess of £2.5m (2021: £2.4m), which is set at 5% of planning materiality, as well as dierences 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 154,

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.

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 123;

• 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 77;

• 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 77;

• Directors’ statement on fair, balanced and understandable set out on page 154;

• 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 eectiveness of risk management

andinternal control systems set out on page 122; and

• The section describing the work of the audit & risk committee set out on page 116 to 122.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

159

Independent auditor’s report to the members of Persimmon Plc continued

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set out on page 154, 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.

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 & Risk 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 eorts

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 enquiries about any instances of non-compliance with the Group

management and Internal Audit and understanding of the impact of any such non-compliance upon our

audit. We engaged internal specialists as required when designing and executing audit procedures. We also

performed journal entry testing, with a focus on manual consolidation journals, and journals indicating large or

unusual transactions based on our understanding of the business; 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 & Risk 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 2022.

• The audit opinion is consistent with the additional report to the audit & risk 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

28 February 2023

Persimmon Plc | Annual Report | December 2022

160

Note

2022

Total

£m

2021

Total

£m

Revenue 5 3,815. 8 3,61 0. 5

Cost of sales (2,948. 3) (2 ,52 6.7)

Gross proﬁt 8 67. 5 1,083.8

Analysed as:

Underlying gross proﬁt 1 ,1 42 .5 1,083.8

Legacy buildings provision 6 (275 .0) –

Other operating income 10. 3 6 .4

Operating expenses (1 52. 9) (129.7)

Operating proﬁt 10 7 24 . 9 960. 5

Analysed as:

Underlying operating proﬁt 1,006. 5 9 66 .7

Legacy buildings provision (275.0) –

Impairment of intangible assets 14 (6 .6) (6 . 2)

Finance income 9 9.9 9.9

Finance costs 9 (4 .1) (3.6)

Proﬁt before tax 7 30 .7 966.8

Analysed as:

Underlying proﬁt before tax 1,012 . 3 97 3 .0

Legacy buildings provision (275 .0) –

Impairment of intangible assets 14 (6.6) (6 . 2)

Tax 11.1 (1 6 9.7) (179.6)

Proﬁt after tax

(all attributable to equity holders of the parent) 13 5 61 .0 7 87. 2

Note

2022

Total

£m

2021

Total

£m

Other comprehensive (expense)/income

Items that will not be reclassiﬁed to proﬁt:

Remeasurement gain on deﬁned beneﬁt pensionschemes 28 5. 2 83.3

Tax 11.2 (7. 6) (2 4.8)

Other comprehensive (expense)/income for the year, net of tax (2.4) 58 .5

Total recognised income for the year 558 .6 8 45 .7

Earnings per share

Basic 13 175.8p 24 6 . 8p

Diluted 13 1 74 . 3p 24 5 . 6p

The Company is taking advantage of the exemption in section 408 of the Companies Act 2006 not to

present its individual income statement.

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2022

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

161

Note

Group

2022

£m

Group

2021

£m

Company

2022

£m

Company

2021

(Restated)*

£m

Assets

Non-current assets

Intangible assets 14 17 3 .0 17 5.6 0.3 0.5

Property, plant and equipment 15 118 .6 99.0 4.3 2.8

Investments accounted for using the equitymethod 16.1 0.3 0.3 – –

Investments in subsidiaries 16.2 – – 3,205.7 3,205.7

Shared equity loan receivables 17 2 9 .1 35 .7 – –

Trade and other receivables 19 0. 3 0.6 2,015.4 1,940.4

Deferred tax assets 24 1 0.5 9 .7 3.8 4.7

Retirement beneﬁt assets 28 15 5.9 14 8.8 155.9 148.8

4 8 7.7 4 69.7 5,385.4 5,302.9

Current assets

Inventories 18 3,462.9 2, 920. 7 – –

Shared equity loan receivables 17 6.9 9.9 – –

Trade and other receivables 19 193.2 123.9 13.3 29.4

Cash and cash equivalents 26 8 61 .6 1 , 24 6 . 6 603.3 1,054.9

Current tax assets 21.8 21 .4 – –

4,546.4 4, 322.5 616.6 1,084.3

Total assets 5 , 0 3 4 .1 4,792. 2 6,002.0 6,387.2

Liabilities

Non-current liabilities

Trade and other payables 21 (214.8) (203 .4) (2.0) (1.8)

Deferred tax liabilities 24 (7 2 .1) (5 4.6) (45.2) (37.4)

Partnership liability 29 (1 9.6) (23.8) – –

Legacy buildings provision 22 (196.8) – – –

(503. 3) (281.8) (47. 2) (39.2)

Current liabilities

Trade and other payables 21 (949.4) (8 07. 0) (3,883.0) (4,133.9)

Partnership liability 29 (5.6) (5.5) – –

Legacy buildings provision 22 (136. 5) (7 2.7) – –

(1, 091.5) (8 85 . 2) (3,883.0) (4,133.9)

Total liabilities (1,594.8) (1 , 1 67. 0) (3,930.2) (4,173.1)

Net assets 3,439.3 3, 625 . 2 2,071.8 2,214.1

Note

Group

2022

£m

Group

2021

£m

Company

2022

£m

Company

2021

(Restated)*

£m

Equity

Ordinary share capital issued 25 31.9 3 1.9 31.9 31.9

Share premium 25.6 24 . 9 25.6 24.9

Capital redemption reserve 236.5 236.5 236.5 236.5

Other non-distributable reserve 276 .8 276 . 8 – –

Retained earnings 2,868.5 3 ,0 55 .1 1,777.8 1,920.8

Total equity 3,439.3 3 ,6 25 . 2 2,071.8 2,214.1

* See note 19 for further details.

The proﬁt for the year dealt with in the accounts of the Company is £604.2m (2021: £665.0m).

The ﬁnancial statements of Persimmon Plc (Company number: 1818486) on pages 161 to 199 wereapproved

by the Board ofDirectors on 28 February 2023 and were signed on its behalf by:

D Finch J Windsor

Group Chief Executive Chief Financial Officer

Balance sheets

As at 31 December 2022

Persimmon Plc | Annual Report | December 2022

162

capital

£m

premium

£m

Capital

redemption

reserve

£m

Other non-

distributable

reserve

£m

Retained

earnings

£m

Total

£m

Group

Balance at 1 January 2021 3 1.9 22. 3 236.5 276 . 8 2,950. 9 3, 51 8 .4

Proﬁt for the year – – – – 7 87. 2 7 87. 2

Other comprehensive income – – – – 58.5 58.5

Transactions with owners:

Dividends on equity shares – – – – (7 49.6) (7 49.6)

Issue of new shares – 2.6 – – – 2.6

Share-based payments – – – – 8 .1 8 .1

Balance at 31 December 2021 3 1.9 24 . 9 236.5 276. 8 3 , 0 55 .1 3 ,625 . 2

Proﬁt for the year – – – – 561 .0 561 . 0

Other comprehensive expense – – – – (2.4) (2. 4)

Transactions with owners:

Dividends on equity shares – – – – (7 50 .1) (7 50 .1)

Issue of new shares – 0 .7 – – – 0.7

Own shares purchased – – – – (0.7) (0.7)

Exercise of share options/share awards – – – – (1.0) (1 .0)

Share-based payments – – – – 5.6 5.6

Satisfaction of share options from own

shares held – – – – 1.0 1 .0

Balance at 31 December 2022 31 .9 25 .6 236.5 276 . 8 2,868.5 3,439.3

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.

capital

£m

premium

£m

Capital

redemption

reserve

£m

Retained

earnings

£m

Total

£m

Company

Balance at 1 January 2021 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

Proﬁt for the year – – – 604.2 604.2

Other comprehensive expense – – – (2.4) (2.4)

Transactions with owners:

Dividends on equity shares – – – (750.1) (750.1)

Issue of new shares – 0.7 – – 0.7

Own shares purchased – – – (0.7) (0.7)

Exercise of share options/share awards – – – (1.0) (1.0)

Share-based payments – – – 6.0 6.0

Satisfaction of share options from own sharesheld – – – 1.0 1.0

Balance at 31 December 2022 31.9 25.6 236.5 1,777.8 2,071.8

During the year the Company received dividends from wholly owned subsidiary undertakings of £600.0m

(2021: £700.0m).

Retained earnings include £0.7m of non-distributable items (2021: £4.4m).

The other non-distributable reserve arose prior to transition to IFRSs.

Statement of changes in shareholders’ equity

For the year ended 31 December 2022

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

163

Note

Group

2022

£m

Group

2021

£m

Company

2022

£m

Company

2021

£m

Cash ﬂows from operating activities:

Proﬁt for the year 561 .0 7 87. 2 604.2 665.0

Tax charge/(credit) 11.1 1 6 9.7 179.6 0.2 (8.2)

Finance income 9 (9 .9) (9. 9) (4.2) (0.7)

Finance costs 9 4 .1 3.6 0.5 0.6

Depreciation charge 15 15.8 14.5 1.0 1.1

Amortisation of intangible assets 14 – – 0.2 0.2

Impairment of intangible assets 14 6.6 6.2 – –

Legacy buildings provision 22 275 .0 – – –

Share-based payment charge 9.0 6.4 9.0 6.4

Net imputed interest income 2 .1 6 .1 – –

Other non-cash items (7. 9) ( 7. 9) 2.2 2.3

Cash inﬂow from operating activities 1,0 25.5 985.8 613.1 666.7

Movements in working capital:

Increase in inventories (5 32. 5) (9. 8) – –

Increase in trade and other receivables (8 1 .1) (59. 5) (60.3) (122.7)

Increase/(decrease) in trade and other payables 1 41 .1 3 7. 4 (250.4) 239.4

Decrease in shared equity loan receivables 13.3 18 .9 – –

Cash generated from operations 566. 3 97 2. 8 302.4 783.4

Interest paid (3.3) (3.7) (1.0) (2.1)

Interest received 3.5 1.9 1.0 0.1

Tax (paid)/received (1 64 . 2) (186.2) (2.1) 10.3

Net cash inﬂow from operating activities 402 . 3 784 .8 300.3 791.7

Cash ﬂows from investing activities:

Joint venture net funding movement – 1.8 – –

Acquisition of subsidiary (0. 2) – – –

Purchase of property, plant and equipment 15 (30.5) (20.9) (1.5) (0.5)

Proceeds from sale of property, plant and equipment 0.9 0. 9 – –

Net cash outﬂow from investing activities (29.8) (1 8 . 2) (1.5) (0.5)

Note

Group

2022

£m

Group

2021

£m

Company

2022

£m

Company

2021

£m

Cash ﬂows from ﬁnancing activities:

Lease capital payments (3.3) (3 .3) (0.3) (0.2)

Payment of Partnership liability (4 .1) (3.8) – –

Own shares purchased (0 .7) – (0.7) –

Share options consideration 0.7 2.6 0.7 2.6

Dividends paid 12 (75 0 .1) (7 49.6) (750.1) (749.6)

Net cash outﬂow from ﬁnancing activities (757 .5) (75 4.1) (750.4) (747.2)

(Decrease)/Increase in net cash and cash

equivalents 26 (3 85.0) 1 2.5 (451.6) 44.0

Cash and cash equivalents at the beginning of

theyear 1 , 24 6. 6 1 , 2 3 4.1 1,054.9 1,010.9

Cash and cash equivalents at the end of the year 26 8 61 . 6 1 , 24 6 . 6 603.3 1,054.9

Cash ﬂow statements

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

164

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 2022:

• Amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards –

Subsidiary as a First-time Adopter

• Amendment to IFRS 9 Financial Instruments – Fees in the ’10 per cent’ Test for Derecognition

of Financial Liabilities

• Amendment to IAS 14 Agriculture – Taxation in Fair Value Measurements

• Amendment to IAS 37 Onerous Contracts – Cost of Fulﬁlling a Contract

• Amendment to IAS 16 Property, Plant and Equipment – Proceeds before Intended Use

• Amendment to IFRS 3 Reference to the Conceptual Framework

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 IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction

• Amendments to IAS 8 Deﬁnition of Accounting Estimates

• Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting policies

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’). 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 2022. 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 2022, completing the sale

of 14,868 new homes (2021: 14,551) and generating an underlying proﬁt before tax* of £1,005.7m (2021: £966.8m).

At 31 December 2022, the Group’s strong ﬁnancial position included £861.6m of cash (2021: £1,246.6m), high quality

land holdings and land creditors of £472.8m (2021: £407.6m). In addition, the Group has an undrawn Revolving Credit

Facility of £300m, which extends out to 31 March 2026.

Given the economic turmoil resulting from the “mini budget” in September 2022 and the adverse impact it has had

on the UK housing market the Group’s forward order book, including legal completions taken so far in 2023, is c.30%

weaker year on year with new home forward sales of c.£1.5bn. We have over 2,800 new homes sold forward into the

private owner occupier market with an average selling price of over £288,600, which is 11% stronger than a year ago.

The cumulative average private sales reservation rate for the ﬁrst 8 weeks of the year is c.70% stronger than the rate

achieved in Q4 2022.

The Directors have carried out a robust assessment of the principal risks facing the Group, as described on page

57. 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 2024, including severe but plausible scenarios based

on experience gained by management during the Global Financial Crisis from 2007 to 2010, 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 75.

The scenarios emphasise the potential impact of severe market disruption, including for example the ongoing effect

of economic disruption from the cost of living crisis and the war in Ukraine, 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 downside scenario modelled, the combined impact is assumed to cause, when compared to the 2022

outturn, a c.59% reduction in volumes and a c.15% reduction in average selling price in 2023. The combined impact

results in a c.65% fall in the Group’s 2023 housing revenues. From the lower 2023 position, the scenario then assumes

a c.40% increase in housing revenue as a result of a c.34% increase in volume and a c.5% in average selling price.

A second, even more extreme, scenario assumes a signiﬁcant and enduring depression of the UK economy and

housing market in 2023, consistent with the above scenario, causing a reduction of c.59% in new home sales

volumes, a c.15% fall in average selling prices and a c.65% fall in the Group’s housing revenue in 2023. The scenario

then assumes that neither volumes nor revenue recover into 2024.

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. Each scenario fully reﬂects the current estimate of cash outﬂows, value and timing,

associated with the legacy buildings provision.

Notes to the ﬁnancial statements

For the year ended 31 December 2022

* Stated before legacy buildings provision charge (2022: £275.0m, 2021: £nil).

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

165

2 Accounting policies continued

In addition 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.

Having considered the inherent strength of the UK housing market, the resilience of the Group’s average

selling prices and the Group’s scenario analysis as detailed above, 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.

During 2022 the charge of £275.0m (2021: £nil) relating to the increase of the Group’s legacy buildings

provision has been disclosed as an exceptional item due to the non-recurring nature and scale of the charge.

Further details on this provision are found in notes 3 and 22.

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

166

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.

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 28.

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.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

167

2 Accounting policies continued

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.

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 17.

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.

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

168

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.

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. For further

information on the estimates used, please refer to note 14. The carrying amount of goodwill at the balance

sheet date was £72.3m with an impairment of £6.6m recognised during the year.

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.

For further information on the estimates used, please refer to note 28.

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 2022, 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 holds a provision of £333.3m (2021: £72.7m) 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. Prior years provisions

represented management’s best estimate if of the liability based on the information available at that point.

During 2022 we have signed the Building Safety Pledge (England) and worked constructively with the

Government to agree the ‘Long Form Contract’ that turns the pledge into a legal agreement, which we

anticipate signing imminently. As we have worked through this process we have identiﬁed further eligible

multi-storey developments requiring remediation for which we will be liable, and developed a more

detailed understanding of remediation costs.

The number of developments we are responsible for has increased and now stands at 73 (of which 33 have

now either secured EWS1 certiﬁcates or concluded any necessary works). This, along with a broader scope,

including reimbursement of any funds already outlaid by the Building Safety Fund, remediation of non-

cladding ﬁre related build defects and interim protection measures for residents, set against a background

of signiﬁcant build cost inﬂation has resulted in our total provision for ﬁre related build remediation works

increasing by £275.0m to £350.0m, before spend to date.

These estimates may change over time as further information is assessed, remedial works progress the

interpretation of ﬁre safety regulations further evolves and further developments requiring remediation works

are potentially identiﬁed. This is a highly complex area with judgements and estimates in respect of the costs

of remedial works to be incurred. Whilst management have exercised their best judgement in these matters,

there remains the potential for variations to this estimate from multiple factors such as material, energy

and labour cost inﬂation, limited qualiﬁed contractor availability and abnormal works identiﬁed on intrusive

surveys. Should a 10% variation in the costs of untendered projects occur then the overall provision would

vary by +/- £14.3m.

The following two areas of estimation uncertainty are not presented to comply with the requirements of

paragraph 125 of IAS 1, ‘Presentation of Financial Statements’ as it is not expected there is a signiﬁcant risk

of a material adjustment to the carrying amount of assets within the next ﬁnancial year. They are presented

as an additional disclosure of estimate used in these accounts.

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Persimmon Plc | Annual Report | December 2022

169

3 Critical accounting judgements and key sources of estimation uncertainty

continued

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 £97.0m, with no impairment recognised during

the year ended 31 December 2022.

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 2022 the loan recognised on the balance sheet was £36.0m (2021: £45.6m).

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.

5 Revenue

An analysis of the Group’s revenue is as follows:

2022

£m

2021

£m

Revenue from the sale of new housing 3,696.4 3,449.7

Revenue from the sale of part exchange properties 110.6 155.4

Revenue from the provision of internet services 8.8 5.4

Revenue from the sale of goods and services as reported in the statement of

comprehensive income 3,815.8 3,610.5

Other operating income 10.3 6.4

Finance income 9.9 9.9

3,836.0 3,626.8

Sale of goods includes £142.2m (2021: £126.5m) in respect of the value of properties accepted in part

exchange by the Group on the sale of new housing.

6 Exceptional items

During 2022 the Group have recognised an exceptional charge of £275.0m (2021: £nil) in relation to the

increase in the anticipated costs of the Group’s commitments to support leaseholders in buildings we had

developed with the costs of removal of combustible cladding and other ﬁre related remediation works.

This reﬂects the extended commitment of the government long form contract, the identiﬁcation of further

developments for which we are now responsible, and a greater understanding of remediation costs.

Further detail on this matter is provided in notes 3 and 22.

This has been disclosed as an exceptional item due to the non-recurring nature and scale of the charge,

in order to aid understanding of the ﬁnancial performance of the Group and to assist in the comparability

of ﬁnancial performance between accounting periods.

7 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 126 to 153. A summary of key management remuneration is as follows:

2022

£m

2021

£m

Short-term beneﬁts 3.2 3.1

Termination beneﬁts – –

Share-based payments 4.2 2.4

7.4 5.5

Total gains on exercise of options by key management in the year amount to £1.0m (2021: £nil).

8 Employees

Group

The average monthly number of persons (including Executive Directors) employed by the Group during the

year was 5,862 (2021: 5,121).

2022

£m

2021

£m

Staff costs (for the above persons):

Wages and salaries 249.7 217.1

Social security costs 29.2 23.0

Pensions charge 5.4 6.9

Share-based payments 7.5 6.0

291.8 253.0

The Group also uses the services of a substantial number of self-employed labour only site operatives.

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

170

Company

The average monthly number of persons (including Executive Directors) employed by the Company during

the year was 497 (2021: 353).

2022

£m

2021

£m

Staff costs (for the above persons):

Wages and salaries 41.1 24.9

Social security costs 5.5 3.0

Pensions charge 0.4 2.3

Share-based payments 7.5 6.0

54.5 36.2

9 Net finance income

2022

£m

2021

£m

Recognised in proﬁt after tax

Interest receivable on bank deposits 2.3 0.2

Gains on shared equity loan receivables 3.9 7.9

Net interest on pension asset 2.8 0.7

Other interest receivable 0.9 1.1

Finance income 9.9 9.9

Interest expense on bank overdrafts and loans 0.5 –

Imputed interest on deferred land payables 1.8 1.8

Interest on Partnership liability 1.3 1.5

Other interest payable 0.5 0.3

Finance costs 4.1 3.6

Net ﬁnance income 5.8 6.3

10 Profit from operations

2022

£m

2021

£m

Proﬁt from operations is stated after charging/(crediting):

Staff costs (note 8) 291.8 253.0

Proﬁt on sale of land holdings (5.3) (2.2)

Government grants (0.5) (0.3)

Rent receivable (3.4) (2.9)

Proﬁt on sale of property, plant and equipment (0.8) (0.9)

Depreciation of owned assets 15.8 14.5

Impairment of intangible assets 6.6 6.2

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.

Amounts receivable by the auditor, Ernst & Young LLP, and their associates in respect of:

2022

£‘000

2021

£‘000

Audit fees

Audit of the Parent Company and consolidated ﬁnancial statements 427 335

The audit of the Company’s subsidiaries pursuant to legislation 25 25

Total fees for the audit of the Company and its subsidiaries 452 360

Non-audit fees

Audit related assurance services 70 65

Total non-audit fees 70 65

522 425

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 & Risk 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 £656,285 (2021: £206,176).

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Persimmon Plc | Annual Report | December 2022

171

11 Ta x

11.1 Analysis of the tax charge for the year

2022

£m

2021

£m

Tax charge comprises:

UK corporation tax in respect of the current year 138.8 181.2

Residential Property Developer Tax (RPDT) in respect of the current year 28.7 –

Adjustments in respect of prior years (2.8) (8.3)

164.7 172.9

Deferred tax relating to origination and reversal of temporary differences – 5.4

Impact of introduction of RPDT on deferred tax 3.9 –

Adjustments recognised in the current year in respect of prior years

deferred tax 1.1 1.3

5.0 6.7

Tax charge for the year recognised in Statement of Comprehensive Income 169.7 179.6

The tax charge for the year can be reconciled to the accounting proﬁt as follows:

2022

£m

2021

£m

Proﬁt from continuing operations 730.7 966.8

Tax calculated at UK corporation tax rate of 22% (inclusive of RPDT) (2021: 19%) 160.8 183.7

Accounting base cost not deductible for tax purposes – 0.2

Goodwill impairment losses that are not deductible 1.2 1.2

Expenditure not allowable for tax purposes 0.8 0.2

Impact of change in rate of corporation tax – 2.7

Impact of RPDT on deferred tax introduction 3.9 –

Items not deductible for RPDT 6.8 –

Enhanced tax reliefs (2.1) (1.3)

Adjustments in respect of prior years (1.7) (7.1)

Tax charge for the year recognised in Statement of Comprehensive Income 169.7 179.6

The UK corporation tax rate will increase from 19% to 25% with effect from 1 April 2023. Legislation to increase

the corporation tax rate was enacted during the 31 December 2021 accounting period and the impact on

deferred tax was taken into account at the previous balance sheet date.

The Finance Act 2022 received Royal Ascent on 24 February 2022 introducing a new residential property

tax (‘RPDT’) which was effective from 1 April 2022 and is chargeable at 4% of proﬁts generated from

residential property development in excess of an annual threshold. RPDT was introduced by HM Treasury

to obtain contributions from the UK’s largest residential developers towards the cost of remediating

defective cladding in the UK’s high-rise housing stock.

11.2 Deferred tax recognised in other comprehensive income (note 24)

2022

£m

2021

£m

Recognised on remeasurement gain on pension schemes 7.6 24.8

11.3 Tax recognised directly in equity

2022

£m

2021

£m

Arising on transactions with equity participants

Current tax related to equity settled transactions (0.8) 0.1

Deferred tax related to equity settled transactions (note 24) 4.2 (1.8)

3.4 (1.7)

12 Dividends/Return of capital

2022

£m

2021

£m

Amounts recognised as distributions to capital holders in the period:

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

2021 dividend to all shareholders of 125p per share paid 2022 399.0 –

2021 dividend to all shareholders of 110p per share paid 2022 351.1 –

Total capital return 750.1 749.6

The Directors propose to return 60 pence of surplus capital to shareholders for each ordinary share held on

the register on 14 April 2023 with payment made on 5 May 2023 as a ﬁnal dividend in respect of the ﬁnancial

year ended 31 December 2022. The Directors do not intend to return any further surplus capital in respect

of the ﬁnancial year 31 December 2022. The total anticipated distributions to shareholders is 60 pence per

share (2021: 235 pence per share) in respect of the ﬁnancial year ended 31 December 2022.

The Parent Company received £600.0m dividends from wholly owned subsidiary undertakings during 2022

(2021: £700.0m) .

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

172

13 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 25) and any treasury shares, all of which are treated as cancelled, which

were 319.2m (2021: 319.0m).

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 321.8m (2021: 320.2m).

Underlying earnings per share excludes the legacy buildings provision charge and goodwill impairment.

The earnings per share from continuing operations were as follows:

2022 2021

Basic earnings per share 175.8p 246.8p

Underlying basic earnings per share 247.3p 248.7p

Diluted earnings per share 174.3p 245.6p

Underlying diluted earnings per share 245.3p 247.6p

The calculation of the basic and diluted earnings per share is based upon the following data:

2022

£m

2021

£m

Underlying earnings attributable to shareholders 789.5 793.4

Legacy buildings provision (net of tax) (221.9) –

Goodwill impairment (6.6) (6.2)

Earnings attributable to shareholders 561.0 787.2

14 Intangible assets

Group

Goodwill

£m

Brand

£m

Know-how

£m

Total

£m

Cost

At 1 January 2021, 1 January 2022 408.8 60.0 1.9 470.7

Arising in the year 4.0 – – 4.0

At 31 December 2022 412.8 60.0 1.9 474.7

Accumulated impairment losses/amortisation

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 1 January 2022 293.2 – 1.9 295.1

Impairment losses for the year – utilisation

of strategic land holdings 6.6 – – 6.6

At 31 December 2022 299.8 – 1.9 301.7

Carrying amount

At 31 December 2022 113.0 60.0 – 173.0

At 31 December 2021 115.6 60.0 – 175.6

Goodwill brought forward at the start of the year of £115.6m includes £95.6m (2021: £100.5m) 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 (2021: £37.0m) of this amount represented the brand value of Charles

Church, acquired with Beazer Group plc in 2001.

On the 6 May 2022 the Group acquired the entire share capital of Horsebridge Network Systems Limited

for a consideration of £1. The fair value of the balance sheet on date of acquisition was a £4.0m net liability.

As a result goodwill of £4.0m has arisen on acquisition and recognised in the Group’s balance sheet at

31 December 2022.

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 forecasts approved

by management to form the basis of the Group’s ﬁve-year business plan.

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Persimmon Plc | Annual Report | December 2022

173

14 Intangible assets continued

When performing the impairment review of the brands, the relevant retraction/growth rates included therein

vary between 0% to 17% (2021: 0% to 3%), reﬂecting the economic uncertainties associated with the ongoing

war in Ukraine and the cost of living crisis which is affecting the UK economy and the UK housing industry.

The retraction/growth rates in relation to the impairment review of goodwill allocated to strategic land

holdings vary between 0% to 3% (2021: 0% to +3%).

After this period the growth rates applied to calculate the cash ﬂow forecasts vary between 1 and 2%

(2021: 1 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 5% and 9% (2021: 2% and 8%) 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 £6.6m (2021: £6.2m). 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. The timescale for full impairment to occur is

difficult to calculate however based on current estimates, it is believed this will take over 20 years.

On concluding the annual impairment testing, there remains £53.1m (2021: £58.5m) and £18.9m (2021: £20.1m)

of Beazer and Westbury goodwill allocated to strategic land holdings and £37.0m (2021: £37.0m) allocated

to the Charles Church brand. In addition, there is £60.0m (2021: £60.0m) of carrying value in relation to the

Westbury brand.

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 2021, 1 January 2022 and 31 December 2022 5.0

Amortisation

At 1 January 2021 4.3

Charge for the year 0.2

At 1 January 2022 4.5

Charge for the year 0.2

At 31 December 2022 4.7

Carrying amount

At 31 December 2022 0.3

At 31 December 2021 0.5

15 Property, plant and equipment

Group

Land and

buildings

£m

Plant

£m

Fixtures and

ﬁttings

£m

Total

£m

Cost

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 1 January 2022 50.1 126.0 29.6 205.7

Additions 5.1 27.1 3.3 35.5

Disposals (0.6) (4.5) (1.0) (6.1)

At 31 December 2022 54.6 148.6 31.9 235.1

Accumulated depreciation

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 1 January 2022 9.5 78.7 18.5 106.7

Charge for the year 1.7 12.0 2.1 15.8

Disposals (0.4) (4.6) (1.0) (6.0)

At 31 December 2022 10.8 86.1 19.6 116.5

Carrying amount

At 31 December 2022 43.8 62.5 12.3 118.6

At 31 December 2021 40.6 47. 3 11.1 99.0

At 31 December 2022, the Group had £20.1m contractual commitments for the acquisition of property,

plant and equipment (2021: £2.8m).

At 31 December 2022, the Group had £nil held for sale (2021: £nil).

Within additions for the year are £5.4m of ‘Right of Use’ assets (2021: £2.2m). At 31 December 2022

a ‘Right of Use’ asset of £10.7m is reported within Property, plant and equipment (2021: £8.6m) .

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

174

Company

Land and

buildings

£m

Plant

£m

Computer

equipment,

ﬁxtures and

ﬁttings

£m

Total

£m

Cost

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 1 January 2022 2.1 1.1 5.7 8.9

Additions 0.7 0.4 1.4 2.5

Disposals – – – –

At 31 December 2022 2.8 1.5 7.1 11.4

Accumulated depreciation

At 1 January 2021 0.7 0.5 3.8 5.0

Charge for the year – 0.2 0.9 1.1

Disposals – – – –

At 1 January 2022 0.7 0.7 4.7 6.1

Charge for the year 0.1 0.3 0.6 1.0

Disposals – – – –

At 31 December 2022 0.8 1.0 5.3 7.1

Carrying amount

At 31 December 2022 2.0 0.5 1.8 4.3

At 31 December 2021 1.4 0.4 1.0 2.8

16 Investments

16.1 Investments accounted for using the equity method

Group

Investments

in joint ventures

£m

Cost

At 1 January 2021 and 1 January 2022 0.3

Distributions —

At 31 December 2022 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:

2022

£m

2021

£m

Non-current assets 0.1 0.1

Current assets 0.2 0.2

Current liabilities – –

Net assets of joint ventures 0.3 0.3

16.2 Investments in subsidiaries

Company

2022

£m

2021

£m

Cost

At 1 January 2021, 31 December 2021 and 31 December 2022 3,540.7 3,540.7

Impairment

At 1 January 2021, 31 December 2021 and 31 December 2022 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

(2021: £nil impairment). Details of Group undertakings are set out in notes 32 and 33.

17 Shared equity loan receivables

Group

2022

£m

2021

£m

At 1 January 45.6 56.2

Settlements (13.3) (18.9)

Gains 3.7 8.3

At 31 December 36.0 45.6

All gains/losses have been recognised in the Consolidated Statement of Comprehensive Income.

Of the gains recognised in ﬁnance income for the period £0.3m (2021: £4.2m) 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.

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Persimmon Plc | Annual Report | December 2022

175

17 Shared equity loan receivables continued

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 23.

18 Inventories

2022

£m

2021

£m

Land 2,091.7 1,798.2

Work in progress 1,263.9 1,054.1

Part exchange properties 61.0 24.8

Showhouses 46.3 43.6

3,462.9 2,920.7

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 2022. Our approach to this review has been consistent with that conducted at 31 December

2021. This review gave rise to a reversal of £nil (2021: £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 (2021: £nil).

Net realisable provisions held against inventories at 31 December 2022 were £5.5m (2021: £18.6m).

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 2022 review, £2.9m (2021: £4.1m) of inventories are valued at

net realisable value rather than at historical cost.

Land with a carrying value of £860.8m (2021: £811.4m) was used as security for land payables (note 21).

The value of inventories expensed in 2022 and included in cost of sales was £2,556.7m (2021: £2,443.6m) .

19 Trade and other receivables

Group

2022

£m

Group

2021

£m

Company

2022

£m

Company

2021 (restated)

£m

Non-current assets

Other receivables 0.3 0.6 – –

Amounts owed by Group undertakings – – 2,015.4 1,940.4

0.3 0.6 2,015.4 1,940.4

Group

2022

£m

Group

2021

£m

Company

2022

£m

Company

2021 (restated)

£m

Current assets

Trade receivables 153.7 87.9 1.3 0.7

Other receivables 17.9 26.0 8.2 27.0

Prepayments and accrued income 21.6 10.0 3.8 1.7

193.2 123.9 13.3 29.4

Following a review of the Company’s historic practice and future plans not to call on all intercompany

receivables in the short-term, £1,940.4m of current intercompany receivables at 31 December 2021 have been

reclassiﬁed to non-current in line with IAS 1. These balances remain repayable on demand, and can be called

upon at the sole discretion of the Company if required. This reclassiﬁcation has no impact on net assets,

result for the year or cash ﬂows. The impact on the 31 December 2020 balance sheet would be to reclassify

£1,840.5m of current intercompany receivables to non-current intercompany receivables.

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.

2022

£m

2021

£m

Ageing of overdue but not impaired receivables

Less than 3 months 29.8 13.7

Over 3 months 7.4 6.3

37.2 20.0

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

176

The carrying value of trade and other receivables are stated after the following allowance for expected

credit losses:

2022

£m

2021

£m

Group

At 1 January 2.0 2.0

Allowance for expected credit losses charged 0.2 0.1

Amounts written off during the year as uncollectable (0.2) (0.1)

Allowance for expected credit losses reversed – –

At 31 December 2.0 2.0

20 Borrowings

Detailed disclosure of the Group’s usage of ﬁnancial instruments is included in note 23. There are £nil

borrowings at 31 December 2022 (2021: £nil).

The contractual repayment terms of facilities are as noted below.

Currency

Nominal

interest rate

Year of

maturity

2022

£m

2021

£m

Bank overdrafts GBP

Base

+1%-3.25% 2023 26.0 31.0

Syndicated loan GBP

SONIA

+0.90%-

0.93% 2026 300.0 300.0

Available facilities 326.0 331.0

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.

21 Trade and other payables

Group

2022

£m

Group

2021

£m

Company

2022

£m

Company

2021

£m

Non-current liabilities

Land payables 202.8 190.2 – –

Other payables 12.0 13.2 2.0 1.8

214.8 203.4 2.0 1.8

Group

2022

£m

Group

2021

£m

Company

2022

£m

Company

2021

£m

Current liabilities

Trade payables 368.6 227.2 3.3 0.7

Land payables 270.0 217.4 – –

Deposits and on account contract receipts – 25.8 – –

Other payables 54.8 48.6 16.1 9.2

Accrued expenses 256.0 288.0 6.2 9.9

Amounts owed to Group undertakings – – 3,857.4 4,114.1

949.4 807.0 3,883.0 4,133.9

Trade payables subject to payment terms were 35 days (2021: 14 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.

22 Legacy buildings provision

Group

2022

£m

Group

2021

£m

At 1 January 72.7 75.0

Additions to provision in the year 275.0 –

Provisions utilised in the year (14.4) (2.3)

At 31 December 333.3 72.7

In 2020 the Group made an initial commitment that no leaseholder living in a building we had developed should

have to cover the cost of removal of combustible cladding. During 2022 we have signed the Building Safety

Pledge (England) and worked constructively with the government to agree the ‘Long Form Contract’ that turns

the pledge into a legal agreement, which we anticipate signing imminently. As we have worked through this

process we have identiﬁed further eligible multi-storey developments requiring remediation for which we will be

liable, and developed a more detailed understanding of remediation costs. The number of developments we

are responsible for has increased and now stands at 73 (of which 33 have now either secured EWS1 certiﬁcates

or concluded any necessary works). This, along with a broader scope, including reimbursement of any funds

already outlaid by the Building Safety Fund, remediation of non-cladding ﬁre related build defects and interim

protection measures for residents, set against a background of signiﬁcant build cost inﬂation has resulted in our

total provision for ﬁre related build remediation works increasing by £275.0m to £350.0m, before spend to date.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

177

22 Legacy buildings provision continued

It is assumed the majority of the work will be completed over the next 3 years and the amount provided for

has been discounted accordingly.

The charge of £275.0m in the year has been separately disclosed on the face of the Consolidated Statement

of Comprehensive Income.

This is a highly complex area with judgments and estimates in respect of the cost of the remedial works,

with investigative surveys ongoing to determine the full extent of those required works. Where remediation

works have not yet been fully tendered we have estimated the likely scope and costs of such works based on

experience of other similar sites. Whilst management have exercised their best judgement of these matters, there

remains the potential for variations to this estimate from multiple factors such as material, energy and labour cost

inﬂation, limited qualiﬁed contractor availability and abnormal works identiﬁed on intrusive surveys. Should a 10%

variation in the costs of untendered projects occur then the overall provision would vary by +/- £14.3m.

The ﬁnancial statements have been prepared on the latest available information, however there remains the

possibility that despite managements endeavours to identify all such properties, including those constructed

by acquired entities well before acquisition, further developments requiring remediation may emerge.

The Company has no provisions.

23 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 the assessment and effective management of the Group’s risks.

Comprehensive processes are in place to identify, monitor, mitigate and control risks, through the work

of the Audit & Risk Committee, Group Internal Audit department and operational management teams.

This includes a wide-ranging annual survey of Board and senior management in order to assess key risk

issues and emerging risks. Collectively, these processes provide the Board with visibility of the Group’s

full risk landscape, while remaining focused on the most signiﬁcant threats and trends, and allow for the

effective deployment of supporting controls.

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 has no signiﬁcant direct currency exposures.

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 2022 UK interest rates had been 1.0% higher/lower than the Group’s pre-

tax proﬁt would have increased/decreased by £5.1m (2021: increased/decreased by £10.6m). The Group’s

post-tax proﬁt would have increased/decreased by £4.0m (2021: increased/decreased by £8.6m).

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 2022, 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 £3.6m

(2021: £4.6m).

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 75 to 77.

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

178

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 (2021: £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 20 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 53 to 55.

The following are the contractual maturities of ﬁnancial liabilities, including interest payments (not discounted):

Group

2022

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 691.2 694.4 683.8 2.7 2.8 5.1

Land payables 477.3 481.7 269.2 142.3 62.2 8.0

Partnership liability 25.1 28.2 5.6 5.6 17.0 –

Financial liabilities 1,193.6 1,204.3 958.6 150.6 82.0 13.1

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

Company

2022

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) 3,885.1 3,885.1 3,884.3 0.3 0.5 –

Financial liabilities 3,885.1 3,885.1 3,884.3 0.3 0.5 –

It is noted that £3,857.1m (2021: £4,114.1m) 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

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 –

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

179

23 Financial risk management continued

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 (2021: £0.3m).

The maximum total credit risk is as follows:

Group

2022

£m

2021

£m

Trade and other receivables 164.9 114.5

Shared equity loan receivables 36.1 45.6

Cash and cash equivalents 861.6 1,246.6

1,062.6 1,406.7

Company

Loans and receivables (including intercompany balances) 2,024.9 1,968.1

Cash and cash equivalents 603.3 1,054.9

2,628.2 3,023.0

The maximum credit exposure of the Group to overseas parties is £nil (2021: £nil) (Company: £nil (2021: £nil)).

The Group’s credit risk is widely distributed. The maximum credit risk should any single party (excepting

ﬁnancial institutions) fail to perform is £56.6m (2021: £20.4m) and is not yet due (Company: £1,414.5m

(2021: £1,339.5m) 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 £188.7m (2021: £216.1m) .

Fair value

The fair value of ﬁnancial assets and liabilities is as follows:

Group

2022 2021

Fair

value

£m

Carrying

value

£m

Fair

value

£m

Carrying

value

£m

Trade and other receivables 164.9 164.9 114.5 114.5

Shared equity loan receivables 36.1 36.1 45.6 45.6

Cash and cash equivalents 861.6 861.6 1,246.6 1,246.6

Trade and other payables (691.7) (691.7) (577.0) (577.0)

Land payables (472.8) (472.8) (407.6) (407.6)

Partnership liability (24.1) (25.2) (30.1) (29.3)

(126.0) (127.1) (392.0) (392.8)

In aggregate, the fair value of ﬁnancial assets and liabilities are not materially different from their

carrying value.

Company

2022 2021

Fair

value

£m

Carrying

value

£m

Fair

value

£m

Carrying

value

£m

Trade and other receivables (including

intercompany balances) 2,024.9 2024.9 1,968.1 1,968.1

Cash and cash equivalents 603.3 603.3 1,054.9 1,054.9

Trade and other payables (including

intercompany balances) (3,885.1) (3,885.1) (4,135.7) (4,135.7)

(1,256.9) (1,256.9) (1,112.7) (1,112.7)

Income and expense in relation to ﬁnancial instruments is disclosed in note 9.

Financial assets and liabilities by category:

Group Company

2022

£m

2021

£m

2022

£m

2021

£m

Financial assets designated fair value through

statement of comprehensive income 36.1 45.6 – –

Trade and other receivables 164.9 114.5 2,024.9 1,968.1

Cash and cash equivalents 861.6 1,246.6 603.3 1,054.9

Financial liabilities at amortised cost (1,189.7) (1,013.9) (3,883.0) (4,135.7)

(127.1) 392.8 (1,254.8) (1,112.7)

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

180

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

2022

Level 3

£m

2021

Level 3

£m

Shared equity loan receivables 36.0 45.6

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

(2021: ten years) and discount rate 7% (2021: 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 17.

24 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 2021 2.0 (9.6) 3.7 (11.4) 0.1 (15.2)

(Charge)/credit to

income statement 11.1 (1.7) (2.8) 2.1 (3.6) (0.7) (6.7)

Credit to other

comprehensive income 11.2 – (24.8) – – – (24.8)

Amounts taken directly

to equity 11.3 – – 1.8 – – 1.8

At 1 January 2022 0.3 (37.2) 7.6 (15.0) (0.6) (44.9)

(Charge)/credit to

income statement 11.1 ( 7.2) (0.4) 1.5 (2.4) 3.7 (4.8)

Charge to other

comprehensive income 11.2 – ( 7.7 ) – – – (7.7)

Amounts taken directly

to equity 11.3 – – (4.2) – – (4.2)

At 31 December 2022 (6.9) (45.3) 4.9 (17.4) 3.1 (61.6)

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:

2022

£m

2021

£m

Share-based payments 4.9 7.6

Other items, including accelerated capital allowances 5.6 2.1

Deferred tax assets 10.5 9.7

Brands (17.4) (15.0)

Other items, including accelerated capital allowances (54.7) (39.6)

Deferred tax liabilities (72.1) (54.6)

Net deferred tax liability (61.6) (44.9)

The Group has recognised deferred tax liabilities of £45.3m (2021: liabilities of £37.2m) on retirement beneﬁt

assets of £155.9m (2021: assets of £148.8m).

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

181

24 Deferred tax continued

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 2021 0.3 (9.6) 1.7 0.9 (6.7)

Credit/(charge) to income statement (0.5) (2.8) 1.2 – (2.1)

Credit to other comprehensive income – (24.8) – – (24.8)

Amounts taken directly to equity – – 0.9 – 0.9

At 1 January 2022 (0.2) (37.2) 3.8 0.9 (32.7)

(Charge)/credit to income statement 0.2 (0.4) 2.3 0.3 2.4

Charge to other comprehensive income – ( 7.7) – – ( 7.7)

Amounts taken directly to equity – – (3.4) – (3.4)

At 31 December 2022 – (45.3) 2.7 1.2 (41.4)

No deferred tax assets and liabilities have been offset (2021: £nil) .

25 Share capital

2022

£m

2021

£m

Allotted, called up and fully paid

319,323,432 (2021: 319,206,474) 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 116,958 ordinary shares (2021: 135,213) 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 2022, the Trustee transferred 53,988 (2021: 0) to employees. At 31 December 2022 the trust held

88,635 shares (2021: 105,523) on which dividends have been waived. The market value of these shares

at 31 December 2022 was £1,078,688 (2021: £3,013,737).

Own shares

Own shares held at cost are reconciled as follows:

Group

£m

Balance at 31 December 2021 0.4

Disposed of on exercise/vesting to employees (0.3)

Balance at 31 December 2022 0.1

26 Reconciliation of net cash flow to net cash and analysis of net cash

Group

2022

£m

2021

£m

Cash and cash equivalents at 1 January 1,246.6 1,234.1

(Decrease)/increase in net cash and cash equivalents in cash ﬂow (385.0) 12.5

Cash and cash equivalents at 31 December 861.6 1,246.6

IFRS 16 lease liability (10.9) (8.8)

Net cash at 31 December 850.7 1,237.8

Net cash is deﬁned as cash and cash equivalents, bank overdrafts, ﬁnance lease obligations and interest

bearing borrowings.

27 Contingent liabilities

As disclosed in note 22 the Group has undertaken a review of all of its legacy buildings that used cladding

on their facades.

The ﬁnancial statements have been prepared on the latest available information, however there remains

the possibility that despite managements endeavours to identify all such properties, including those

constructed by acquired entities well before acquisition, further developments requiring remediation may

emerge. There is also the possibility that estimates based on preliminary assessments regarding the scale

of remediation works relating to buildings yet to be fully surveyed may prove incorrect. Cost of remedial

works will remain under review and be updated as works 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 £386m (2021: £372m),

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 32.

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

182

28 Retirement benefit assets

As at 31 December 2022 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 £5.7m (2021: £4.9m) 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 29 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 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.

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.

* Given the current ﬁnancial strength of the pension schemes net asset position a low risk investment strategy is applied.

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

183

28 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.20%) 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:

2022

£m

2021

£m

Fair value of Pension Scheme assets 555.6 751.9

Present value of funded obligations (399.7) (603.1)

Net pension asset 155.9 148.8

A deferred tax liability totalling £45.2m (2021: £37.2m) 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:

2022

£m

2021

£m

As at 1 January 148.8 50.6

Total gain recognised in the period 5.5 81.4

Company contributions paid in the period 1.6 16.8

Net pension asset 155.9 148.8

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:

2022

£m

2021

£m

Current service cost 1.9 2.0

Administrative expense 0.6 0.6

Pension cost recognised as operating expense 2.5 2.6

Interest cost 11.3 8.9

Return on assets recorded as interest (14.1) (9.6)

Pension cost recognised as net ﬁnance credit (2.8) (0.7)

Total deﬁned beneﬁt pension (credit)/cost recognised in proﬁt or loss (0.3) 1.9

Remeasurement gain recognised in other comprehensive income (5.2) (83.3)

Total deﬁned beneﬁt scheme gain recognised (5.5) (81.4)

The net remeasurement gain in the year of £5.2m (2021: £83.3m) reﬂects the net effect of a loss in asset

values of £189.5m, offset by a reduction in liability obligations of £194.7m, largely arising from an increase

in discount rates.

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

184

Assets

The assets of the Pension Schemes have been calculated at fair value and are invested in the following

asset classes:

2022

£m

2021

£m

Equity

– UK 4.5 31.3

– US 26.5 124.0

– Eurozone 19.3 40.3

– Other 14.1 21.8

Bonds

– Government 397.4 174.3

– sub-investment grade 4.9 105.7

Asset backed funding 24.1 30.1

Diversiﬁed Growth Fund 49.0 155.6

Cash 15.8 68.8

Total 555.6 751.9

All assets have a quoted market value in an active market, with the exception of Asset backed funding of

£24.1m (2021: £30.1m), which related to secured cash ﬂows.

The Persimmon Scheme holds 94% (2021: 93%) of the gross assets of the Pension Schemes and 94%

(2021: 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:

2022

£m

2021

£m

As at 1 January 751.9 694.4

Return on assets recorded as interest 14.1 9.6

Remeasurement (losses)/gain on assets (189.5) 53.6

Contributions 1.6 16.8

Beneﬁts and expenses paid (22.5) (22.5)

As at 31 December 555.6 751.9

Defined Benefit Obligation

The liabilities of the Pension Schemes, at each balance sheet date, have been calculated on the following

ﬁnancial assumptions:

2022

% p.a.

2021

% p.a.

Discount rate 4.8 1.9

General pay increases 3.0 3.1

RPI Inﬂation assumption 3.0 3.1

CPI Inﬂation assumption 2.5 2.6

Post retirement life expectancy for retirement aged members are as follows:

2022

Years

2021

Years

Male current pensioner 22.6 22.6

Male future pensioner 23.3 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.

2022

£m

2021

£m

Total value of current employees’ beneﬁts 21.5 39.8

Deferred members’ beneﬁts 139.6 244.0

Pensioner members’ beneﬁts 238.6 319.3

Total deﬁned beneﬁt obligation 399.7 603.1

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 .

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

185

28 Retirement benefit assets continued

Changes in the deﬁned beneﬁt obligation were as follows:

2022

£m

2021

£m

As at 1 January (603.1) (643.8)

Current service cost (1.9) (2.0)

Interest cost (11.3) (8.9)

Remeasurement gain on liabilities 194.7 29.7

Beneﬁts paid 21.9 21.9

As at 31 December (399.7) (603.1)

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.

2022

£m

2021

£m

Present value of deﬁned beneﬁt obligation (DBO) 399.7 603.1

– DBO following a 0.25% decrease in the discount rate 413.0 628.7

– DBO following a 0.25% increase in the discount rate 387.0 579.2

– DBO following a 0.25% decrease in the inﬂation assumption 392.9 591.1

– DBO following a 0.25% increase in the inﬂation assumption 406.4 617.4

– DBO following a 1 year decrease to life expectancy 386.5 575.6

– DBO following a 1 year increase to life expectancy 413.0 630.8

The sensitivity information shown above has been prepared using the same methodology as the calculation

for the current DBO.

29 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 £5.6m (2021: £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 28.

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.

30 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 (2021: £nil). 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.

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

186

Reconciliations of share options outstanding during each period, under each type of share scheme, are

as follows:

2022

Savings-Related Share

Option Scheme

2021

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 935,105 1,908.5p 946,876 1,804.6p

Granted during the year 1,266,190 1,080.0p 284,985 2,197.0p

Forfeited during the year (448,958) 1,935.4p (161,543) 1,808.9p

Exercised during the year (37,559) 1,877.4p (135,213) 1,908.2p

Outstanding at the end of the year 1,714,778 1,290.4p 935,105 1,908.5p

Exercisable at the end of the year 181,484 1,692.1p 38,212 1,888.0p

Group and Company

2022

Bonus Share Scheme

2021

Bonus Share Scheme

Number of shares under option Number of shares under option

Outstanding at the beginning of the year 13,694 –

Granted during the year 69,798 13,694

Exercised during the year (15,109) –

Outstanding at the end of the year 68,383 13,694

Exercisable at the end of the year – –

Group and Company

2022

Buy Out Award

2021

Buy Out Award

Number of shares under option Number of shares under option

Outstanding at the beginning of the year – –

Granted during the year 209,381 –

Exercised during the year (37,054) –

Outstanding at the end of the year 172,327 –

Exercisable at the end of the year – –

Group and Company

2022

Long Term Incentive

Plan 2007 HMRC Approved

2021

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 – – – –

Exercised during the year – – – –

Outstanding at the end of the year – – – –

Exercisable at the end of the year – – – –

Group and Company

2022

Long Term Incentive

Plan 2012*

2021

Long Term Incentive

Plan 2012*

Number of shares

under option

Number of shares

under option

Outstanding at the beginning of the year 12,000 12,000

Forfeited/waived during the year (8,491) –

Exercised during the year (3,509) –

Outstanding at the end of the year – 12,000

Exercisable at the end of the year – 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

2022

2017

Performance Share Plan

2021

2017

Performance Share Plan

Number of shares

under option

Number of shares

under option

Outstanding at the beginning of the year 1,770,343 1,261,754

Granted during the year 1,113,250 680,515

Forfeited during the year (316,758) (171,926)

Exercised during the year (85,613) –

Outstanding at the end of the year 2,481,222 1,770,343

Exercisable at the end of the year 386,479 126,544

The weighted average share price at the date of exercise for share options exercised during the period was

2,344.9p (2021: 2,835.0p). The options outstanding at 31 December 2022 had a range of exercise prices from

nil to 2,197.0p and a weighted average remaining contractual life of 1.6 years (2021: 1.3 years).

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

187

30 Share-based payments continued

The inputs into the Black Scholes option pricing model for options that were granted in the year were

as follows:

Option Valuation Assumptions

PSP 2022

Tranche 1

PSP 2023

Tranche 2

SAYE

2022

Grant date 8 March 2022 20 September 2022 21 October 2022

Risk free interest rate 1.34% 3.31% 3.82%

Exercise price – – £10.80

Share price at date of grant £22.28 £13.37 £12.19

Expected dividend yield* 0% 0% 6%

Expected life 3.0 years 2.4 years 3.1 years

Holding period 2.0 years 2.0 years n/a

Date of vesting 28 February 2025 28 February 2025 1 December 2025

Expected volatility 27.8% 28.1% 28.5%

Fair value of option £18.02 £9.85 £0.65

* 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 2022, the Group recognised total expenses before tax of £9.0m (2021: £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 2022 the total credit

recognised in relation to equity settled share-based payments was £23.4m (2021: £16.9m) of which £6.4m

(2021: £0.1m) related to options currently vested awaiting exercise. All share-based payments are expensed

by the Company.

31 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 7. Detailed disclosure of the individual remuneration of Board members is included

in the Remuneration Report on pages 128 to 153. 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:

2022

£m

2021

£m

Interest charges on intra-group funding (47. 2) (52.8)

Group services recharges 113.1 54.5

65.9 1.7

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 2022 totalled

£2,015.4m (2021: £1,969.8m). Amounts owed to subsidiary undertakings by the Company at 31 December

2022 totalled £3,857.4m (2021: £4,114.1m).

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 2022 is £24.1m

(2021: £30.1m).

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 2022 was £nil (2021: £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 2022 was £nil (2021: £nil).

The Company has suffered £nil expense in respect of bad or doubtful debts of subsidiary undertakings in the

year (2021: £nil).

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

188

32 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 2022. 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 33.

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).

33 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 Limited1 Ordinary*

Anjok 172 Limited Ordinary*

Anjok 173 Limited Ordinary*

Anjok 269 Limited1 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 Limited1 A Ordinary* and B Ordinary*

Anjok Two Limited Ordinary*

Aria Homes Limited A Ordinary* and B Ordinary*

Name of undertaking Description of shares held

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 Limited1 Deferred* and A Ordinary*

Beazer Homes Glasgow Limited1 Deferred* and A Ordinary*

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) Limited1 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 Limited1 Ordinary*

Breakblock Limited Ordinary*

Broomco (3385) Limited Ordinary*

Bruce Fletcher (Leicester) Limited Ordinary*

Charles Church Civil Engineering Limited Ordinary *

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

189

Name of undertaking Description of shares held

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*

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*

Name of undertaking Description of shares held

Ferry Quay Developments Limited A Ordinary*, B Ordinary* and C Ordinary*

Flex Fibre Limited 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*

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*

Horsebridge Network Systems Limited A 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*

33 Details of all subsidiary undertakings continued

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

190

Name of undertaking Description of shares held

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*

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) Limited Ordinary*

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*

Name of undertaking Description of shares held

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) Limited2 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*

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 11) Limited Ordinary*

Persimmon GR (No 12) Limited Ordinary*

Persimmon GR (No 13) Limited Ordinary*

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

191

Name of undertaking Description of shares held

Persimmon GR (No 14) Limited Ordinary*

Persimmon GR (No 15) Limited Ordinary*

Persimmon GR (No 16) Limited Ordinary*

Persimmon GR (No 17) 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*

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*

Name of undertaking Description of shares held

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 Limited1 Ordinary

Persimmon Shared Equity Limited Ordinary

Persimmon Tileworks Limited Ordinary*

Persimmon Trustees Limited Ordinary

Pinnacle Developments (Scotland) Limited1 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*

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*

33 Details of all subsidiary undertakings continued

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

192

Name of undertaking Description of shares held

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) Limited1 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*

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%

Coton Park Consortium Limited

WD 50% 25%

Cramlington Developments Limited A Ordinary 100% 50%

Genesis Estates (Manchester) Limited

Ordinary 50% 50%

Gosforth Business Park Management

Company Limited

A Ordinary 100% 33.3%

Haydon Development Company Limited

Ordinary 20.5% 20.5%

Leebell Developments Limited A Ordinary 100% 50%

Newcastle Great Park (Estates) Limited

A Ordinary 100% 50%

North Haven Developments

(Sunderland) Limited

B Ordinary 100% 50%

North Swindon Development

Company Limited

Ordinary 15% 15%

Oxfordshire Land Limited Ordinary 33.3% 33.3%

Quedgeley Urban Village Limited

C Ordinary 100% 25%

Rothley Temple Estates Limited

Ordinary 28.5% 28.5%

Sociedade Torre de Marinha Realizacoes

Turisticas SA (Incorporated in Portugal)

Ordinary 50% 50%

Trafalgar Metropolitan Homes Limited A Ordinary 100% 50%

Triumphdeal Limited

Ordinary 50% 50%

Wick 3 Nominees Limited B Ordinary 100% 33.3%

* 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

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

193

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

Abbot Walk (Chatteris) Residents 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

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

Arnold Way No. 3 (Grove) Management Company Limited

Ashworth Place (Phase 2) Management Limited

Augusta Park (Dinnington) Management Company Limited

Avalon (Mansﬁeld) Management Company Limited

Aveley Village (Aveley) Residents Management Company Limited

Aveley Village (Thurrock) Management Company Limited

Avon Fields (Durrington) Management Company Limited

Awel Afan (Port Talbot) 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 Ltd

Backbridge (Malmesbury) Management Company 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

Bannerbrook Park Phase II (Coventry) Management Company Limited

Barber Court (Birmingham) Management Company Limited

Barrington Park Management Company Limited

Barry Waterfront Residents Management Company Limited

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

Bell Lane (Little Chalfont) Management Company Limited

Bells Hill Management Company Limited

Berrow Court Management Company Limited

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

Bootham Crescent (York) Residents Management Company Limited

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 Ltd

Company Name

Bridgeﬁeld (Ashford) Management Company Limited

Bridgeﬁeld Nine Management Company Limited

Brindle Park (Bamber Bridge) Management Company Limited

Broadway (Rainham) Residents Management Company Limited

Brockeridge Road (Twyning) Resident Management Company Limited

Brookﬁeld (Golborne) Management Company Limited

Buckton Place (Leiston) Residents Management Company Limited

Bugbrooke Road (Kislingbury) Management Company Limited

Burﬁeld Valley Estate Management Limited

Buttercup Leys (Boulton Moor) Residential Management

Company Limited

Buzzard Meadows (Leighton Buzzard) Residents Management

Company Limited

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

Carn Y Cefn RMC Ltd

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

Castle View (Netherton) Management Company Limited

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.2 Management Company Limited

Cathedral View (Durham) Management Company Limited

Cayton Meadows (Scarborough) Management Company Limited

Central Square (Stroud) Management Company Limited

Century Rise (Emersons Green) Management Company Limited

Chancery Park (Exning) Residents Management Company Limited

Charlton Place (Keynsham) Management Company Limited

Chaucers Meadow (North Petherton) Management Company Limited

Chilmark Glade Management Company Limited

Chorley G 1 Management Company Limited

Chosen View (No. 2) Management Company Limited

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

Clos Ty Gwyn (Hendy) Management Company Limited

Clover Chase (Lingwood) Residents Management Company Limited

Coastal Dunes (Lytham St Annes) Management Company Limited

Coatham Vale And Berrymead Gardens Residents Management

Company Limited

Coed Darcy (Llandarcy) Management Company Limited

College Park (Thurston) Residents Management Company Limited

Colliers Walk (Nottingham) Management Company Limited

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

Coverdale Paignton Management Company Limited

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

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

De Vere Grove (Colchester) Residents Management Company Limited

Deerwood Park (Colne) Management Company Limited

Dol Yr Ysgol (Bridgend) Management Company Limited

Douglas Gardens (Hesketh) Management Company Ltd

Downs View (Swanley) Residents Management Company Limited

Dukes Meadow (Tangmere) Management Company Limited

D’urton Heights (Preston) Management Company Limited

Dyffryn Management Limited

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

Eldon Whins (Middridge) Management Company Limited

Elkas Rise (Ilkeston) Management Company Limited

33 Details of all subsidiary undertakings continued

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

Persimmon Plc | Annual Report | December 2022

194

Ellesmere Park (The Oaks) Management Company Limited

Ellis Mews (Micheldever) Management Company Limited

Elm Farm (Wymondham) Residents Management Company Limited

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

Fairmoor (Morpeth) Management Company Limited

Fairways (Retford) Management Company Limited

Fallow (Benton) Residents Management Company Limited

Farley Fields South Petherton Management Company Limited

Fatherford View (Okehampton) Management Company Limited

Festival Park (Easton) Residents Management Company Limited

Field Place (Faversham) Management Company Limited

Fleckney Road Management Company Limited

Flint Grange (Clacton) Residents Management Company Limited

Foley Gardens (Newent) Residential Management Company Limited

Folly Grove (Hockley) Residents Management Company Limited

Forest View (Calverton) Management Company Limited

Forge Wood (Crawley) Management Company Limited

Foundry Meadows (Bexhill) Residents Management Company Limited

Foxes Chase (Anlaby) Residents Management Company Limited

Foxﬁelds (Stoke-On-Trent) Management Company Limited

Foxley Park (Dereham) Residents Management Company Limited

Friarwood Park (Pontefract) Management Company Limited

Garden Valley (Aylesham) Residents Management Company Limited

Garendon Park Residents Management Company Ltd

George Ward Gardens (Melksham) Management Company Limited

Germany Beck (Fulford) Management Company Limited

Gilden Park (Old Harlow) Resident Management Company Limited

Gipping Mill (Great Blakenham) Residents Management

Company Limited

Glan Yr Afon (Swansea) Management Company Limited

Golwg Y Glyn (Fforest) Management Company Limited

Golwg Y Mynydd (Mountain Ash) RMC Ltd

Gotherington Grange Resident Management Company Limited

Grangewood Park (Burnham On Crouch) Residents Management

Company Limited

Grays Court (Orpington) Residents Management Company Limited

Great Western Park (Didcot) No 1 Management Company Limited

Great Western Park (Didcot) No 2 Management Company Limited

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

Hampton Gardens Phase 3 (Peterborough) Residents Management

Company Ltd

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

Harebell Meadows And Hartburn Grange Residents Management

Company Limited

Harford Mews Ivybridge Management Company Limited

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

Harrow View West (Harrow) Residents 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

Hatﬁeld Lane Armthorpe Management Company Limited

Hathern Road (Shepshed) Management Company Limited

Hauxley Grange (Amble) Residents Management Company Limited

Hawthorn Chase (Aston Clinton) Residents Management

Company Limited

Haybridge (Wells) Management Company Limited

Haywards Gardens (Kegworth) Man Co. Limited

Haywood Heights (Writhlington) Management Company Limited

Hazel Brook Management Company Limited

Hazelmere (Flockton) Management Company Limited

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

Heritage Gate (Llantwit Major) Residents Management Company Limited

Heritage Green (Newbottle) Management Company Limited

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 Ltd

Herrington Grange (Philadelphia) Management Company Limited

Hethersett Residents Management Company Limited

Heugh Hall (Coxhoe) Residents Management Company Limited

Higham Lane Management Company Limited

Highﬁeld Farm (West Melton) Residents Management Company Limited

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

Homington Avenue (Swindon) Local Centre Management

Company Limited

Horsbere Mews (Longford) Management Company Limited

Horseshoe Meadows (Westbury) Management Company Limited

HRC (Ware) Residents Management Company Limited

Hunters Edge (Eaglescliffe) Residents Management Company Limited

Hurdle Court (Andover) Management Company Limited

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 Ltd

Jasmine Gardens Management Company Limited

Jubilee Gardens (Warminster) Management Company Ltd

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

Lakedale Whiteley Meadows (North Whiteley) Management

Company Limited

Lakeside Edge (Peterborough) Residents Management

Company Limited

Lambourn Meadow (Thatcham) Management Company Limited

Larkbear Management Company Limited

Lauder Mews Crediton Management Company Limited

Launds Field (Galgate) Management Company Limited

Laureate Heights Sidmouth Management Company Limited

Lavender Fields (South Wootton) Residents Management Company Ltd

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 Apartments RMC Ltd

Llanilltern Village RMC Ltd

Llys Ystrad (Bridgend) Management Company Limited

Lodmoor Sands (Weymouth) Management Company Limited

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

Lowen Bre Truro Management Company Limited

Lucknam Crescent (Swindon) Management Company Limited

Lythalls Lane (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

Manor Farm (Doncaster) Management Company Limited

Manor Farm (Mickleﬁeld) Management Company Limited

Manor Gardens (Selsey) Management Company Limited

Manor Park Residents Company Ltd

Manor Park Sprowston Residents Management Company Limited

Manor Place (Maidenhead) Residents Management Company Limited

Maple (221) Limited

Maple Oak (Alton) Management Company Limited

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

Company NameCompany Name

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

195

Mascalls Grange (Paddock Wood) Residents Management

Company Limited

Meadow View (Oundle) Management Company Limited

Meadow View (Redditch) Resident Management Company Limited

Mendip Chase Management Company Limited

Meon Way Gardens Management Company Limited

Merchants Walk Cullompton No 2 Management Company Limited

Mercians Place Management Company Limited

Meridian Place (Hertford) Residents Management Company Ltd

Merlins Lane (Scarrowscant) Management Company Limited

Mersey View (Bromborough Pool) Management Company Limited

Mill Gardens (Cullompton) Management Company Limited

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

Montfort Place (Odiham) Management Company Limited

Moorﬁeld (Easington) Management Company Limited

Moorﬁeld Park Management Company Limited

Moorlands Walk (Sherburn) Management Company Limited

Mulberry Grange (Castleford) Management Company Limited

Mulberry Grove (St Fagans Cardiff) Management Company Limited

Nelson’s Park (North Walsham) Residents Management

Company Limited

NGP Management Company (Cell E) Limited*

NGP Management Company (Cell F) Limited*

NGP Management Company (Commercial) Limited*

NGP Management Company (Town Centre) Limited*

NGP Management Company Residential (Cell G) Limited*

Norton Gardens Residents Management Company Limited

Norton Hall Meadow Management Limited

Oak Heights (Northiam) Residents Management Company Limited

Oak Tree Gardens (Audley) Management Company Limited

Oakcroft Chase (Stubbington) Management Company Limited

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

Old Road (Churwell) Management Company Limited

Open Space Management Limited

Orchard Croft (Diss) Residents Management Company Limited

Orchard Grove (Coxheath) Residents Management Company Ltd

Orchard Leaze Management Company Limited

Orchard Manor (Cheddington) Residents Management Company Limited

Orchard Meadows (Iwade) Residents Management Company Limited

Orchard Mews Pershore Management Company Limited

Otterham Park (Rainham) Residents Management Company Limited

Oxley Springs (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

Parklands (Hessle) Residents Management Company Limited

Parrett Gardens (Langport) Management Company Limited

Pavilion Gardens (Monkton Heathﬁeld) Management Company Limited

Pedlars Meadow (Swaffham) Residents Management Company Limited

Pembridge Court (Clehonger) Residents Management Company Limited

Penny Pot Lane (Harrogate) Management Company Limited

Perry Park View (Perry Barr) Management Company Limited

Persimmon Gardens (Hindley) Management Company Limited

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

Picket 20 Management Company Limited

Picket Twenty Two (Andover) Management Company Limited

Port Marine Management Limited

Portland Park (Ashington) Management Company Limited

Pottery Gardens (Cheadle) Residents Management Company Limited

Priory Green (Chilton Polden) Management Company Limited

Priory Meadows (Bodmin) Management Company Limited

Quantock View Management Company Limited

Quinta Mews Management Company Limited

Rackheath Residents Management Company Limited

Radstone Road (Brackley) Management Company Limited

Rainton Gardens (Chilton Moor) Management Company Limited

Rainton Meadows (Chilton Moor) Management Company Limited

Ramsdell (Ashford Hill) Management Company Limited

Rectory Lane (Standish) Management Company Limited

Redhayes Management Company Limited

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 Ltd

Rivendell (Gedling) Management Company Limited

Riverbourne Fields 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 Gate (Shaftesbury) 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

Seaton Vale (Ashington) Residents Management Company Limited

Sharpes Meadow (Heybridge) Residents Management Company Limited

Sherborne Fields (Basingstoke) Management Limited

Sherborne Fields Apartments Ph6 (Basingstoke) Management

Company Limited

Shilton Place (Coventry) Management Company Ltd

Shirewood (Beighton Road) Management Company Limited

Silver Hill (Preston) Management Company Limited

Silverwood (Garforth) 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

St Andrews (Uxbridge) Management Company Limited

St Andrews Park (Phase 3c Uxbridge) Management Company Limited

St Andrews Park (Vine Lane 1a) Management Company Limited

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

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 Place (Colchester) Residents 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 4 (Selby) 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

Swan Park (Dawlish) Management Company Limited

Sycamore Gardens (Oakdale) RMC Ltd

Sycamore Rise (Thame) Residents Management Company Limited

Tanners Meadow (Brockham) Management Company Ltd

Tarraby View (Carlisle) Management Company Limited

Teasdale Place (Carlisle) Management Company Limited

The Acorns (Shirley) Management Company Limited

The Alders (Gilwern) Residents Management Company Limited

The Blossoms (Blackburn) Management Company Limited

The Boulevards (East Tilbury) Residents Management Company Limited

The Boulevards (Newport) Residents Management Company Limited

Company Name

Notes to the ﬁnancial statements continued

For the year ended 31 December 2022

33 Details of all subsidiary undertakings continued

Persimmon Plc | Annual Report | December 2022

196

The Bridge (Dartford) 29 And 31a Residents Management

Company Limited

The Bridles (Ffos Las) Management Company Limited

The Carriages (Burscough) Management Company Limited

The Copse (Bridgwater) Management Company Limited

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 Ltd

The Grange (Chepstow) Limited

The Grange (Wellesbourne) Management Company Limited

The Hamptons (Newcastle) Resident Management Company Limited

The Haven (Swansea) Management Company Limited

The Heath (Sandbach) Management Company Ltd

The Hedgerows (Alsager) Management Company Ltd

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

The Maples (NGP) Management Company Limited

The Maples (Weston) Residents Management Company Limited

The Middles (Stanley) Management Company Limited

The Mile (Pocklington) Management Company Limited

The Oaklands (NGP) Residents Management Company Limited

The Oval (Selly Oak) Management Company Limited

The Paddocks (Aintree) Management Company Limited

The Paddocks (Farcet) Residents Management Company Limited

The Paddocks (Highworth) Management Company Limited

The Pastures (Lowton) Management Company Limited

The Pinnacles Management Company (Thamesmead) Limited

The Poppies (Harleston) Management Company Limited

The Poppies Management Company Limited

The Priory (Llandough) Residents Management Company Limited

The Quadrant (Whitney Crescent) Management Limited

The Reeds Lower Halstow Management Ltd

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 Ltd

The Swallows Management Company Limited

The View (Redditch) Management Company Limited

The Village, Aveley Phase Ii Residents Management Company Limited

The Weald (Easingwold) Management Company Limited

The Whinmoor (Leeds) Management Company Limited

The Wickets (Penenden Heath) Residents Management

Company Limited

The Willows Earlestown (Newton Le Willows) Management

Company Limited

The Windmills (Kirton) Residents Management Company Limited

Thornley Woods (Gateshead) Management Company Limited

Tilbury Fields (Oxford) Management Company Limited

Tir Y Bont (Bridgend) Management Company Limited

Towcester Grange (Towcester) Residents Management

Company Limited

Trelawny Place (Felixstowe) Residents Management Company Limited

Trevelyan Grange (Morpeth) Residents Management Company Limited

Trevethan Meadows Liskeard Management Company Limited

Trinity Pastures (Calvert Lane Hull) Residents Management

Company Limited

Tundra Point (Emersons Green) Management Company Limited

Urban Central (Grays) Residents Management Company Limited

Valley Heights (Frome) Management Company Limited

Village Mews (Southowram) Management Company Limited

Walmsley Park (Leigh) Management Company Ltd

Watercress Way Management Company Limited

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 Ltd

Weavers Meadow Estates Management Company Limited

Weavers Meadow Phase 2 (Hadleigh) Residents Management

Company Limited

Weavers Place (Skelmanthorpe) 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

Westhaven Apartments (Barry) Residents Management

Company Limited

Westhoughton (Lee Hall) Residents Management Company Limited

Weston Park Limited

Westwood Park (Churwell) Management Company Limited

White House Farm (Emersons Green) Management Company Limited

White Rose Park (Norwich) Residents Management Company Ltd

Whiteford Mews Management Company Limited

Whitewood Park (Bristol) Management Company Limited

Whittington Walk (Worcester) Management Company Limited

Whitworth Dale Management Company Limited

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

Woodlark Place (Newbury) Residents Management Company Limited

Worcester Gate (Worcester) Management Company Limited

Yew Tree Farm (Droitwich) Management Company Limited

Yew Tree Gardens (Tuffley) Management Company Limited

1. Pembroke House, Torquay Road, Paignton, Devon, TQ3 2EZ

2. Homer House, 8 Homer Road, Solihull, B91 3QQ

3. Whittington Hall, Whittington Road, Worcester,

Worcestershire, WR5 2ZX

4. Fountain House, Southwell Road West, Mansﬁeld,

Nottinghamshire, NG18 4LE

5. Persimmon House, Birmingham Road, Studley,

Warwickshire, B80 7BG

6. Unit 7, Portal Business Park, Eaton Lane, Tarporley,

Cheshire, CW6 9DL

7. Fisher House, 84 Fisherton Street, Salisbury, SP2 7QY

8. RMG House, Essex Road, Hoddesdon, Hertfordshire, EN11 0DR

9. 2nd Floor, 154 Great Charles Street, Queensway,

Birmingham, B3 3HN

10. Persimmon Homes, 3 Waterside Way, Northampton, NN4 7XD

11. 94 Park Lane, Croydon, Surrey, CR0 1JB

12. 46 Whitchurch Road, Cardiff, CF14 3LX

13. 250 Aztec West, Almondsbury, Bristol, BS32 4TR

14. Cheviot House, Beaminster Way East, Newcastle Upon

Tyne, NE3 2ER

15. North Point, Stafford Drive, Battleﬁeld Enterprise Park, Shrewsbury,

Shropshire, SY1 3BF

16. 1 Georges Square, Bath Street, Bristol, BS1 6BA

17. Unit 8, The Forum, Minerva Business Park, Peterborough, PE2 6FT

18. 1 Featherbank Court, Horsforth ,Leeds, West Yorkshire, LS18 4QF

19. 2 Hills Road, Cambridge, CB2 1JP

20. Unit 1,2 & 3 Beech Court, Wokingham Road, Hurst,

Reading, RG10 0RU

21. Queensway House, 11 Queensway, New Milton,

Hampshire, BH25 5NR

22. 4335 Park Approach, Thorpe Park, Leeds, LS15 8GB

23. Gateway House, 10 Coopers Way, Southend On Sea,

Essex, SS2 5TE

24. 20 King Street, London, EC2V 8EG

25. 3rd Floor Citygate, St. James’ Boulevard, Newcastle Upon

Tyne, NE1 4JE

26. Acorn Estate Management, 9 St. Marks Road, Bromley,

Kent, BR2 9HG

27. Foundation House, Coach & Horses Passage, Tunbridge

Wells, TN2 5NP

28. Castlewood Business Park, Tickenham Road, Clevedon, BS21 6FW

29. Scholars House, 60 College Road, Maidstone, Kent, ME15 6SJ

30. Woodwater House, Pynes Hill, Exeter, Devon, EX2 5WR

31. 1st Floor Lancaster House, 67 Newhall Street, Birmingham, B3 1NQ

32. Avon House, Stanwell Road, Penarth, Wales, CF64 2EZ

* Private Limited Company

Company Name Company Name

Strategic report Corporate governance Financial statements Other information

Persimmon Plc | Annual Report | December 2022

197

Band analysis as at 31 December 2022

Size of shareholding

Number of

shareholders

of shareholders

Number of

of shares

1 – 5,000 6,662 86.67 4,096,605 1.60

5,001 – 50,000 606 7.88 10,738,474 4.11

50,001 – 250,000 234 3.04 27,974,668 10.89

250,001 – 999,999,999 185 2.41 276,513,685 83.40

Total 7,687 100.00 319,323,432 100.00

Share price – year ended 31 December 2022

Price at 31 December 2022 £12.17

Lowest for year £11.39

Highest for year £28.83

The above share prices are the closing share prices as derived from the London Stock Exchange Daily

Ocial List.

Financial Calendar 2023

Ex-Dividend Date of 60p ﬁnal dividend 13 April 2023

Record Date of 60p ﬁnal dividend 14 April 2023

Annual General Meeting 26 April 2023

Trading Update 26 April 2023

Payment of ﬁnal dividend of 60p 5 May 2023

Announcement of Half Year Results 10 August 2023

Trading Update 7 November 2023

Five Year Record

2022 2021 2020 2019 2018

Unit sales 14,868 14,551 13,575 15,855 16,449

Housing revenue £3,696.4m £3,449.7m £3,129.5m £3,420.1m £3,545.8m

Average selling price £248,616 £237,078 £230,534 £215,709 £215,563

Proﬁt from operations £1,006.5m £966.7m £862.8m £1,036.7m £1,091.9m

Proﬁt before tax £1,012.3m £973.0m £863.1m £1,048.1m £1,100.0m

Basic earnings per share 247.3p 248.7p 220.7p 269.1p 286.3p

Diluted earnings per share 245.3p 247.6p 219.9p 268.6p 283.7p

Cash return/dividend per share 235.0p 235.0p 110.0p 235.0p 235.0p

Net assets per share 1,077.0p 1,135.7p 1,102.7p 1,021.7p 1,006.0p

Total shareholders’ equity £3,439.3m £3,625.2m £3,518.4m £3,258.3m £3,194.5m

Return on capital employed 30.4% 35.8% 29.4% 37.0% 41.3%

All ﬁgures stated before exceptional items, goodwill amortisation/impairment, legacy buildings provision and includes land creditors

where applicable.

Other information

Shareholder information

Persimmon Plc | Annual Report | December 2022

198

Directors

Roger Devlin

Chairman

Dean Finch

Group Chief Executive

Jason Windsor

Chief Financial Ocer

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

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 BANCO S.A.

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

Designed and produced by Radley Yeldar ry.com

This report is printed on Amadeus Silk which is a FSC® certiﬁed

paper. This report was printed by Pureprint Group, a CarbonNeutral®

company and ISO 14001 certiﬁed printer using vegetable oil based

inksand the paper is Carbon Balanced with the World Land Trust.

Balancing is delivered by World Land Trust, an international

conservation charity, who oset 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-eective and swiftest

ways to arrest the rise in atmospheric CO

e and global warming

eects. 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

Persimmon Plc

Persimmon House

Fulford

York YO19 4FE

Telephone 01904 642199

Email feedback@persimmonhomes.com