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1. Company Snapshot

1.a. Company Description

Persimmon Plc, together with its subsidiaries, operates as a house builder in the United Kingdom.The company offers family housing under the Persimmon Homes brand name; executive housing under the Charles Church brand name; and social housing under the Westbury Partnerships brand name.It also provides broadband services.


Persimmon Plc was founded in 1972 and is headquartered in York, the United Kingdom.

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1.b. Last Insights on PSN

Persimmon Plc's recent performance is driven by positive developments in the UK housing market and company-specific initiatives. The projected fair value for Persimmon is estimated to be around UK£22.89, indicating potential upside. The company is on track to meet its yearly sales target, despite tough conditions. Additionally, Persimmon, along with Barratt and Redrow, has launched a 5% mortgage deposit scheme to make new-build homes more accessible to first-time buyers. This move aims to stimulate demand.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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How Recent Analyst Insights Are Shaping the Evolving Persimmon Story

Nov -28

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UK property sales edge up in October

Nov -28

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Why The Narrative Around Persimmon Is Shifting After Analyst Adjustments and Sector Updates

Nov -14

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10 gorgeous gatehouses that make a lasting first impression

Nov -14

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UK property market cools amid autumn budget fears

Nov -13

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Why buying property before the budget might bag you a bargain

Nov -10

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UK house prices see fastest growth since January as mortgage approvals rise

Nov -07

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9 high-tech homes that make daily life easier

Nov -07

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.67%)

6. Segments

Persimmon Homes

Expected Growth: 7.5%

Persimmon Homes' 7.5% growth driven by increasing demand for new homes, strategic landbank expansion, and efficient operations. Government initiatives such as Help to Buy and relaxed planning regulations also support growth. Additionally, Persimmon's focus on affordable housing and partnerships with housing associations contribute to its success.

Westbury Partnerships

Expected Growth: 8.5%

Westbury Partnerships' 8.5% growth is driven by increasing demand for affordable housing, strategic partnerships with local authorities, and Persimmon Plc's investment in modern methods of construction, enhancing efficiency and reducing costs. Additionally, the UK government's 'Help to Buy' scheme and relaxation of planning regulations have boosted demand for new homes, contributing to Westbury's growth.

Charles Church

Expected Growth: 7.8%

Charles Church from Persimmon Plc's 7.8% growth is driven by increasing demand for new homes, strategic land acquisitions, and effective cost management. Additionally, the brand's focus on quality and customer service has led to higher sales rates and improved margins. Furthermore, the UK government's Help to Buy scheme has boosted demand, contributing to the segment's growth.

7. Detailed Products

Homes

Persimmon Plc is a leading UK housebuilder, building a range of homes from apartments to detached family homes.

Part Exchange

Persimmon's Part Exchange scheme allows customers to trade in their existing home when buying a new one.

Help to Buy

Persimmon participates in the UK government's Help to Buy scheme, providing financial assistance to first-time buyers and existing homeowners.

Retirement Homes

Persimmon's retirement homes are designed specifically for older adults, offering a range of amenities and services tailored to their needs.

Land and Planning

Persimmon's land and planning services involve acquiring and developing land for future housing projects.

8. Persimmon Plc's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Persimmon Plc is medium due to the presence of alternative housing options, such as apartments and condominiums, which can substitute for single-family homes.

Bargaining Power Of Customers

The bargaining power of customers is low due to the fact that individual homebuyers have limited negotiating power compared to large developers like Persimmon Plc.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers of building materials and services, which gives Persimmon Plc some negotiating power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the UK housing market, including the need for significant capital investment and regulatory approvals.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several large developers, including Taylor Wimpey, Barratt Developments, and Berkeley Group, which compete with Persimmon Plc for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 10.30%
Debt Cost 5.19%
Equity Weight 89.70%
Equity Cost 10.60%
WACC 10.05%
Leverage 11.49%

11. Quality Control: Persimmon Plc passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Berkeley

A-Score: 6.1/10

Value: 7.8

Growth: 4.1

Quality: 7.5

Yield: 6.9

Momentum: 2.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Persimmon

A-Score: 4.9/10

Value: 7.0

Growth: 1.4

Quality: 5.2

Yield: 8.8

Momentum: 1.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Redrow

A-Score: 4.9/10

Value: 6.7

Growth: 3.8

Quality: 7.4

Yield: 4.4

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Taylor Wimpey

A-Score: 4.7/10

Value: 4.4

Growth: 1.6

Quality: 5.1

Yield: 8.8

Momentum: 1.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Bellway

A-Score: 4.5/10

Value: 6.2

Growth: 1.6

Quality: 5.9

Yield: 5.6

Momentum: 2.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Barratt Developments

A-Score: 4.5/10

Value: 3.1

Growth: 1.3

Quality: 5.0

Yield: 7.5

Momentum: 3.5

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.62$

Current Price

13.62$

Potential

-0.00%

Expected Cash-Flows