Homebuilder Persimmon has reported a sharp increase in profits as a result of improved margins and house sales.
Pre-tax profits for 2010 almost doubled to £153.9m from £77.9m in 2009. Revenues grew 10.5 percent to £1.57bn.
Persimmon said sales activity at the beginning of the year had been encouraging, with visitor levels up 10 percent.
Much of the improved performance can be attributed to Persimmon’s successful efforts to slash costs, while also reducing debt by more than £215m.
The need to keep a tight control on costs was highlighted by Persimmon’s chief financial officer, Mike Killoran, when he spoke to Financial Director in May 2010.
Killoran’s efforts to right-size the business saw him renegotiate more flexible terms on its lending agreements and bring gearing back to 16 percent from 2008’s level of 38 percent – while taking out over half its headcount, according to the FD.
“That was a painful process,” Killoran told Financial Director at the time. “When you’re having to take those difficult decisions, you just have to keep focused on the fact that you’re looking for the business that emerges from that process, because that’s really what matters for the shareholders – to make sure the business remains on a very sound footing to take advantage of future opportunity.”
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