Persimmon cladding provisions linger above £200m

Housebuilder Persimmon expects to spend more than £200m extra to remediate its remaining buildings of dangerous cladding, it revealed in its annual accounts released today (11 March).

Persimmon made a provision of £235m for building safety remediation at the end of December 2024, according to its latest annual accounts.

It identified 83 buildings that needed remediation following the Grenfell Tower fire, which killed 72 people in 2017. Of those 83 developments, it has completed remediation on 40 sites.

It expects the next two years to be the “peak period of cash expenditure on this programme”.

Persimmon expects to be on site at all of its remediation projects by the end of 2025, and to complete remediation works on most of its sites by the end of 2026.

But it said: “Given our own proactive approach, and the sustained significant publicity around cladding and building safety, we do not anticipate substantial new building additions into the programme.”

In the year to 31 December 2024, Persimmon increased its pre-tax profit to £359.1m, from £351.8m during the previous year.

Group chief executive Dean Finch put this performance down to “disciplined investment and significant operational improvements in recent years”.

Turnover was also up at £3.2bn, in comparison to £2.8bn, although cash dipped from £420.1m to £258.6m.

Finch also predicted a “positive tailwind” for the firm, after recent policy announcements.

“The government’s welcome planning reforms and pro-housebuilding agenda demands more of the high-quality, affordable homes which are Persimmon’s core strength,” he said.

Persimmon is one of seven housebuilders currently being investigated by the Competition and Markets Authority (CMA) for potential market collusion.

In a statement in its accounts, Persimmon said it “continues to cooperate with the CMA in relation to their ongoing market investigation into alleged anticompetitive conduct by housebuilders”.

“The potential impact, if any, and timing is not yet known,” it added.

In January, the CMA extended its investigation by five months, and said it was looking further into whether the firms “may have exchanged competitively sensitive information”.