Persimmon plc’s Space4 timber frame factory supplied 34% of the group’s homes in 2011 – a figure which is set to rise as further investment in the plant goes on line.
The housebuilder revealed Space4’s improvement in its newly-published annual results today – which show a 55% boost in annual pre-tax profits to £148.1m (2010: £95.5m).
The Castle Bromwich-based Space4 factory, which Persimmon acquired as part of its takeover of Westbury in 2006, sold more than 3,250 new closed panel timber frame system home kits in 2011, a 19% rise on the previous year.
Persimmon group companies acquired 98% (3,185) of the volume.
“With the increase in production and further process improvement, the Space4 management team has increased its efficiency of operation and provided our operational businesses further opportunity to reduce their build costs and deliver improved site margins,” said Persimmon group chief executive Mike Farley.
An additional wall production line is being commissioned to provide additional capacity and resilience of operations in support of new home sales.
Space4 is also developing new products to fulfill requirements of the updated Building Regulations, which are being introduced in 2013.
Meanwhile, Persimmon achieved its 55% group pre-tax profits boost by increasing its operating margins by nearly 2% to 10%, through minimising development costs, optimising selling consents and maximising selling prices.
Average selling prices reduced by 2% in 2011 to £166,142, reflecting a greater proportion of first-time buyers, while legal completions were steady at 9,360 (2010: 9,384).
Persimmon’s forward sales were up 9.4% to £927.4m.
“Visitor levels and reservations continue on an improving trend and, although we expect the UK housing market to remain difficult, Persimmon is in a strong position to meet this challenge,” said chairman Nicholas Wrigley.
