TIDMPSN

RNS Number : 5953O

Persimmon PLC

22 August 2017

PERSIMMON PLC

HALF YEAR RESULTS FOR THE SIX MONTHSED 30 JUNE 2017

Persimmon plc today announces half year results for the six months ended 30 June 2017.

Highlights

 
  --   Profit before tax increased 30% to GBP457.4m (2016: GBP352.3m) 
  --   Revenue up 12% to GBP1.66bn (2016: GBP1.49bn) 
  --   Legal completions increased 8% to 7,794 (2016: 7,238) - an additional 
        556 new homes delivered 
  --   Average selling price of GBP213,262 up 4% (2016: GBP205,762) 
  --   Further expansion of underlying operating margin* to 27.6% (2016: 
        23.8%), an increase of 380bps 
  --   Return on average capital employed** increased by 33% to 47.3% 
        (2016: 35.6%) 
  --   9,319 plots of new land secured in the period bringing consented 
        land bank to 98,712 plots 
  --   Continued success in securing planning consent for the Group's 
        strategic land bank with 3,308 plots converted in the period, 
        35% of the new plots acquired 
  --   Net free cash generation*** of GBP284.5m in the period (2016: 
        GBP229.9m) 
  --   Net cash of GBP1,120.4m at 30 June 2017 (2016: GBP462.0m), prior 
        to GBP339.5m capital return paid on 3 July 2017 
  --   Basic earnings per share increased 30% to 119.5p (2016: 92.0p) 
  --   Current forward sales 15% ahead at GBP2.005bn (2016: GBP1.747bn) 
  --   Return of surplus capital under the Capital Return Plan of 25p 
        per share (GBP77.1m) paid 31 March 2017 in addition to the scheduled 
        payment of 110p per share (GBP339.5m) paid after the balance 
        sheet date on 3 July 2017 
  --   Commitment to return surplus capital of at least 110 pence per 
        share to shareholders each July until 2021 
 

(* stated before goodwill impairment)

(** 12 month rolling average stated before goodwill impairment)

(*** net free cash generation stated before Capital Return Plan payments)

Jeff Fairburn, Group Chief Executive, said: "The successful execution of the Group's long term strategy continues to support excellent trading results as seen again in the first half of 2017. Our focus on meeting market demand to deliver high quality sustainable growth in each of our 29 regional businesses is delivering excellent outcomes for our customers, our shareholders, and all our stakeholders."

"The market remains confident. Customer interest in our developments remains strong with encouraging levels of interest through both our websites and our sales outlets as we trade through the quieter summer weeks. Our private reservation rate over recent weeks is c. 2% ahead year on year. Whilst we remain vigilant to changes in market conditions we also recognise we are in a strong position to take advantage of opportunities that arise. We are looking forward to a good autumn sales season."

"With a high quality land bank, very strong balance sheet and excellent forward sales the Group has built a platform for its future success."

 
 For further information, please 
  contact: 
 Jeff Fairburn, Group Chief Executive     Simon Rigby 
  Mike Killoran, Group Finance Director    Jos Bieneman 
  Persimmon plc                            Ellen Wilton 
                                           Citigate Dewe Rogerson 
 Tel: +44 (0) 20 7638 9571 (on 22         Tel: +44 (0) 20 7638 9571 
  August 2017) 
  Tel: +44 (0) 1904 642199 (thereafter) 
 

Analysts unable to attend in person may listen to the presentation live at 09:30am by using the details below:

Telephone number: +44(0)20 3427 1906

Password: Persimmon

Webcast link: https://edge.media-server.com/m6/p/osykig2q

(An archived webcast of today's analyst presentation will be available on www.persimmonhomes.com/corporate this afternoon.)

HALF YEAR REPORT - TUESDAY 22 AUGUST 2017

CHAIRMAN'S STATEMENT

Persimmon's results for the first six months of 2017 are strong. Our disciplined high quality growth continues to deliver excellent free cash generation and a robust financial position.

Profit before tax increased by 30% to GBP457.4 million (2016: GBP352.3 million), underlying operating margin* of 27.6% (2016: 23.8%) improved 380bps, cash balances of GBP1,120.4 million were held at the end of June (2016: GBP462.0 million) and the consented land bank totalled 98,712 plots (December 2016: 97,187 plots).

Management continue to execute the long-term strategy commenced in 2012 successfully. This aims to sustain the delivery of superior levels of shareholder value and cash generation through the housing cycle. The Group invested c. GBP550 million of cash in land over the twelve-month period ended 30 June 2017 whilst also generating c. GBP740 million of free net cash inflow before capital returns, equivalent to c. 239 pence per share. On 31 March 2017 the Group paid an interim dividend of 25 pence per share as an additional return of surplus capital under the Capital Return Plan ("the Plan"). On 3 July 2017, after the balance sheet date, the Group paid the sixth instalment under the Plan of 110 pence per share, or GBP339.5 million, bringing the total returned to shareholders under the Plan to date to c. GBP1.5 billion (or 485 pence per share).

RESULTS

The Group traded strongly throughout the first half of 2017 increasing total revenues by 12% over the prior year to GBP1,662.2 million (2016: GBP1,489.3 million). With our focus on build and cash delivery the Group increased sales volumes by 8% to 7,794 new home legal completions (2016: 7,238) with an average selling price which was 4% higher at GBP213,262 (2016: GBP205,762).

The strength of the market through the first half is reflected in the Group's average weekly private sales rate per site of 0.80, which was c. 7% ahead year-on-year (2016: 0.75). Each of our regional businesses focuses on achieving sales rates that are appropriate to their regional market conditions. Our new Nottinghamshire business based in Mansfield which opened at the beginning of the year has made a good start to trading and delivered over 170 new homes in the first half. We look forward to further growth in this important regional market moving forward. The Group now has 29 regional businesses delivering new homes right across the UK.

In the private sales market both the Persimmon and Charles Church brands achieved increased average selling prices year on year. The Persimmon sales price increased by 3.7% to GBP213,982 and the sales price for Charles Church rose by 9.4% to GBP347,819. As seen over more recent periods the improvement in Charles Church average pricing reflects our greater focus on delivering higher value new homes in premium locations with no overlap with the Persimmon range and offer. Charles Church delivered 900 new homes in the period (2016: 973) whilst Persimmon legally completed 5,630 new homes (2016: 5,143). With 84% of Group sales being secured in the private market, sales to the Group's housing association partners totalled 1,264 new homes (2016: 1,122 new homes) a similar proportion of the sales mix year on year.

The Group's gross margin improved by 360 basis points over the first half of 2016 to 30.5% (2016: 26.9%). This further progress is a result of our continuous drive to invest in high quality land, opening up these new sites as promptly as possible, and growing the regional businesses' build and sales delivery whilst exercising strong control over our costs. This has enabled the Group to reduce the land cost recoveries associated with our legal completions and improve our build efficiencies and overhead recoveries. We are pleased to report that the majority of the margin improvement year on year, being 320 basis points, has been secured through strong control over our development costs, with the remainder delivered from improved land cost recoveries. With the Group's growth in sales, gross profits have increased 27% year on year to GBP507.3 million (2016: GBP400.8 million).

Underlying operating profit* increased by 30% to GBP459.4 million (2016: GBP354.5 million) reflecting the further progress of the Group's operating margin* to 27.6%, an increase of 380 basis points over last year (2016: 23.8%).

The combination of strong trading and capital discipline resulted in a total capital value per share generated in the first six months of the year (before capital returns) of 126.5 pence (2016: 69.6 pence). Total capital returns of 135 pence per share recognised in the period resulted in a decrease in reported net assets per share at 30 June of 8.9 pence to 878.4 pence from 887.3 pence at 31 December 2016.

The Group's underlying return on average capital employed** improved year on year by 33% to 47.3% (2016: 35.6%) and underlying basic earnings per share* for the first six months of 2017 of 121.2 pence increased by 30% over the prior year (2016: 93.3 pence).

From the launch of our long-term strategy at the start of 2012 to 30 June 2017 the Group has delivered c. 72,500 new homes across the UK, increasing the number of new homes delivered to customers by over 65%. We have also invested c. GBP2.94 billion in new land and opened c. 1,100 new sales outlets whilst returning a total of c. GBP1.5 billion of surplus capital to shareholders, GBP630 million more than was originally planned at this point.

RETURNS TO SHAREHOLDERS

The Group will achieve the objectives of its long-term strategy by ensuring the business operates at optimal scale in its regional markets whilst executing disciplined, well-judged land investment at the right time through the cycle. Persimmon will return capital that is considered surplus to the reinvestment needs of the business back to shareholders through the cycle. During the period, on 31 March 2017, the Group returned 25p per share (or GBP77.1 million) of surplus capital to shareholders, whilst also recognising at the balance sheet date the commitment to return a further 110p per share (or GBP339.5 million) on 3 July 2017.

Total surplus capital of GBP4.85 per share, or c. GBP1.5 billion, has now been paid to shareholders. The remaining Capital Return scheduled to 2021 of GBP4.40 per share is planned to be paid in equal instalments of GBP1.10 per share over the next four years. The seventh instalment under the Plan is scheduled for early July 2018 and will be finalised with the 2017 Full Year results of the Group to be announced on Tuesday 27 February 2018.

LAND

One of the major challenges the industry faces in increasing output is the expansion in the number of active outlets which are under development to meet the demand from local communities across the UK. With the National Planning Policy Framework requiring planning authorities to plan and deliver sufficient land in sustainable locations to fulfil their local housing need for the next five years, the land market has remained attractive. We have maintained our disciplined approach to land replacement, continuing to invest through the first half of the year to ensure we are better placed to bring new opportunities to the market. The Group acquired a total of 9,319 new plots of land across 47 sites during the period, including 3,308 plots in 16 locations converted from our strategic land bank. The Group's land spend was GBP369 million in the first half of the year (2016: GBP305 million).

The Group owned and controlled 98,712 plots in its consented land bank at 30 June 2017 (December 2016: 97,187 plots) with c. 49% previously held by the Group as strategic land. Within this total, the Group owned 53,180 plots with detailed planning consent. The Group is developing all sites where it has secured a detailed consent. In addition to its consented land bank the Group owns and controls c. 16,340 acres of strategic land. The Group's planning teams continue to work hard in partnership with local communities and planning authorities to bring this land through the planning system so we can make a start on our development plans as swiftly as possible.

A key element of our long-term strategy is to judge the timing of our investment in high quality new land well so as to support the sustained delivery of superior shareholder value through the housing cycle. We will remain cautious with respect to new land investment for as long as the uncertainties facing the market persist, particularly those associated with the risks to the UK economy resulting from the UK's exit from the EU. However, we continue to identify attractive opportunities which will result in further investment on a selective basis.

CURRENT TRADING

Through the second half of 2016 the Group experienced stronger market conditions than expected post the EU Referendum on 23 June 2016, particularly through the traditionally slower summer weeks. Against these stronger comparatives, customer interest over the last seven weeks from 1 July has remained robust and our average weekly private sales rate per site was 2% ahead of the same period last year. Our website leads, the number of customers visiting our sales offices and the consistent lower levels of cancellations are encouraging. Pricing has remained firm.

Resourcing sites with the required trade skills to meet the demands of our build programmes remains a challenge. We have progressed development works on 25 sites which will be released for sale on commencement of the autumn sales season in early September to ensure customers are able to move into their new home in line with our development expectations. The Group is managing to contain the inflationary pressures in the supply chain well, capturing the benefits of the increasing utilisation of the Group's standard house types and improving direct overhead efficiency as each regional business grows to its optimal scale. We will continue to pursue strong control over our costs to deliver the best outcomes for our shareholders.

The value of our forward sales, including legal completions from 1 July 2017, is now 15% stronger than at the same point last year at GBP2.005 billion (2016: GBP1.747 billion). We have 6,669 new homes sold forward into the private sale market (2016: 5,836) with an average selling price of c. GBP231,500 (2016: GBP224,200).

We continue to monitor market activity closely whilst also remaining vigilant regarding broader external conditions. We will maintain strong discipline over operations to ensure we fulfil our strategic objectives.

OUTLOOK

The housing market across our regions remains confident and consumer sentiment is resilient. The potential headwinds of higher inflation are being mitigated by healthy employment levels and a competitive but disciplined mortgage market. Customers are finding good levels of support from mortgage lenders who have approved c. 195,000 loans during the second quarter of 2017, a very similar level compared with the same period last year despite the heightened uncertainties associated with the result of the recent UK General Election.

With our extensive network of sales outlets across the UK offering attractive house types at affordable prices, we expect to see the normal seasonal increase in sales interest from customers as the summer holidays come to an end in early September. Since 30 June we have opened 22 new outlets for sales whilst 42 existing outlets have fully sold through. We plan to open a further c. 80 new outlets through to the end of the year, including the 25 outlets where we are already pushing forward with our build programmes and which will commence sales release in early September. The Group's current 355 active outlets will be added to as these 25 outlets are released for sale over the next few weeks (2016: 375 active outlets). We will continue to invest in bringing new land into production promptly to expand the Group's outlet network to offer new homes to as many local communities as possible. We look forward to engaging with the Government on its Housing White Paper consultation process over the coming months, specifically in relation to planning improvements.

Management are aiming to maintain the sustainable growth of the business and will increase build activity to reach our optimal scale in each of our regional markets. We will continue to invest in the management of our build programmes and improve the availability of newly built homes for our customers. We anticipate our cash generation will remain strong.

Persimmon's performance over the first half of 2017 has been excellent. By focussing on the consistent execution of our strategy over recent years, the Group is in an enviable position to adapt to changing market conditions and to take advantage of market opportunities as events unfold. We remain mindful of the risks the Group faces. We will continue to concentrate on delivering the best possible outcomes for our shareholders based upon maximising the cash efficiency of the business and continuing to invest in the Group's high quality land bank.

On behalf of the Board, I thank the entire Persimmon team for their continued hard work. All of the Group's employees, workers, subcontractors, and other stakeholders are congratulated for producing these outstanding results. The Board is confident of the future success of the Group.

Nicholas Wrigley

Chairman

21 August 2017

* stated before goodwill impairment (2017: GBP5.4m, 2016: GBP4.0m)

** 12 month rolling average stated before goodwill impairment

PERSIMMON PLC

Condensed Consolidated Statement of Comprehensive Income

For the six months to 30 June 2017 (unaudited)

 
                                                  Six months    Six months        Year to 
                                                  to 30 June    to 30 June    31 December 
                                                        2017          2016           2016 
--------------------------------------  ------  ------------  ------------  ------------- 
                                          Note 
 
                                                       Total         Total          Total 
                                                        GBPm          GBPm           GBPm 
--------------------------------------  ------  ------------  ------------  ------------- 
 
 Revenue                                             1,662.2       1,489.3        3,136.8 
 
 Cost of sales                                     (1,154.9)     (1,088.5)      (2,265.4) 
                                        ------  ------------ 
 
 Gross profit                                          507.3         400.8          871.4 
 
 Other operating income                                  6.0           6.4            6.8 
 Operating expenses                                   (59.3)        (56.7)        (107.7) 
 
 Profit from operations before impairment 
  of intangible assets                                 459.4         354.5          778.5 
 Impairment of intangible assets                       (5.4)         (4.0)          (8.0) 
--------------------------------------  ------  ------------  ------------  ------------- 
 Profit from operations                                454.0         350.5          770.5 
 
 Finance income                                          9.8           9.7           19.8 
 Finance costs                                         (6.4)         (7.9)         (15.5) 
--------------------------------------  ------  ------------  ------------  ------------- 
 
 Profit before tax                                     457.4         352.3          774.8 
 
 Tax                                     3.1          (88.8)        (69.3)        (149.5) 
--------------------------------------  ------  ------------  ------------  ------------- 
 
 Profit after tax 
  (all attributable to equity holders 
  of the parent)                                       368.6         283.0          625.3 
--------------------------------------  ------  ------------  ------------  ------------- 
 
 Other comprehensive expense 
 Items that will not be reclassified 
  to profit: 
 Remeasurement charges on defined 
  benefit pension schemes                10            (1.8)        (58.2)         (23.4) 
 Tax                                     3.2             0.3          10.5            4.4 
--------------------------------------  ------  ------------  ------------  ------------- 
 Other comprehensive expense for the 
  period, net of tax                                   (1.5)        (47.7)         (19.0) 
----------------------------------------------  ------------  ------------  ------------- 
 
 Total comprehensive income for 
  the period                                           367.1         235.3          606.3 
 
 
 Earnings per share (i) 
 Basic                                   4             119.5         92.0p         203.0p 
 Diluted                                 4             115.4         89.2p         197.0p 
--------------------------------------  ------  ------------  ------------  ------------- 
 

(i) Earnings per share is calculated in accordance with IAS 33 : Earnings Per Share.

PERSIMMON PLC

Condensed Consolidated Balance Sheet

At 30 June 2017 (unaudited)

 
 
                                               30 June     30 June     31 December 
                                      Note        2017        2016            2016 
                                                  GBPm        GBPm            GBPm 
---------------------------------  -------  ----------  ----------  -------------- 
 
 Assets 
 Non-current assets 
 Intangible assets                               208.2       217.6           213.6 
 Property, plant and equipment                    49.2        40.1            43.0 
 Investments accounted for using 
  the equity method                                3.0         3.0             3.0 
 Available for sale financial 
  assets                                 7       132.7       163.2           148.7 
 Trade and other receivables                       7.0         9.2             8.8 
 Deferred tax assets                              59.5        37.0            42.5 
 Retirement benefit assets              10        42.4         5.8            23.3 
---------------------------------  -------  ----------  ----------  -------------- 
                                                 502.0       475.9           482.9 
---------------------------------  -------  ----------  ----------  -------------- 
 
 Current assets 
 Inventories                             6     2,722.1     2,742.5         2,645.0 
 Trade and other receivables                     119.5       125.2           103.7 
 Cash and cash equivalents                     1,120.4       462.0           913.0 
---------------------------------  -------  ----------  ----------  -------------- 
                                               3,962.0     3,329.7         3,661.7 
 
 Total assets                                  4,464.0     3,805.6         4,144.6 
---------------------------------  -------  ----------  ----------  -------------- 
 
 
 Liabilities 
 Non-current liabilities 
 Trade and other payables                      (338.7)     (308.3)         (333.3) 
 Deferred tax liabilities                       (20.8)      (15.1)          (17.7) 
 Partnership liability                          (37.4)      (40.5)          (41.7) 
 Retirement benefit obligations         10           -      (45.0)               - 
---------------------------------  -------  ----------  ----------  -------------- 
                                               (396.9)     (408.9)         (392.7) 
---------------------------------  -------  ----------  ----------  -------------- 
 
 Current liabilities 
 Trade and other payables                      (944.9)     (956.4)         (935.0) 
 Capital Return liability                5     (339.5)           -               - 
 Partnership liability                           (5.4)       (5.4)           (5.4) 
 Current tax liabilities                        (66.3)      (91.1)          (74.1) 
                                             (1,356.1)   (1,052.9)       (1,014.5) 
 
 Total liabilities                           (1,753.0)   (1,461.8)       (1,407.2) 
 
 Net assets                                    2,711.0     2,343.8         2,737.4 
 
 
 Equity 
 Ordinary share capital issued                    30.9        30.8            30.8 
 Share premium                                    11.0         9.7            10.6 
 Capital redemption reserve                      236.5       236.5           236.5 
 Other non-distributable reserve                 276.8       276.8           276.8 
 Retained earnings                             2,155.8     1,790.0         2,182.7 
 
 Total equity                                  2,711.0     2,343.8         2,737.4 
 
 

PERSIMMON PLC

Condensed Consolidated Statement of Changes in Shareholders' Equity

For the six months to 30 June 2017 (unaudited)

 
                                       Share      Share       Capital            Other    Retained     Total 
                                     capital    premium    redemption             non-    earnings 
                                                              reserve    distributable 
                                        GBPm       GBPm          GBPm          reserve        GBPm      GBPm 
                                                                                  GBPm 
---------------------------------  ---------  ---------  ------------  ---------------  ----------  -------- 
 
 Six months ended 30 June 2017: 
 Balance at 31 December 2016            30.8       10.6         236.5            276.8     2,182.7   2,737.4 
 Profit for the period                     -          -             -                -       368.6     368.6 
 Other comprehensive expense               -          -             -                -       (1.5)     (1.5) 
 Transactions with owners: 
 Dividends on equity shares                -          -             -                -     (416.6)   (416.6) 
 Issue of new shares                     0.1        0.4             -                -           -       0.5 
 Exercise of share options/share 
  awards                                   -          -             -                -       (0.9)     (0.9) 
 Share-based payments                      -          -             -                -        22.6      22.6 
 Satisfaction of share options 
  from own shares held                     -          -             -                -         0.9       0.9 
---------------------------------  ---------  ---------  ------------  ---------------  ----------  -------- 
 Balance at 30 June 2017                30.9       11.0         236.5            276.8     2,155.8   2,711.0 
 
 
 Six months ended 30 June 2016: 
 Balance at 31 December 2015            30.7        9.3         236.5            276.8     1,902.5   2,455.8 
 Profit for the period                     -          -             -                -       283.0     283.0 
 Other comprehensive expense               -          -             -                -      (47.7)    (47.7) 
 Transactions with owners: 
 Dividends on equity shares                -          -             -                -     (338.3)   (338.3) 
 Issue of new shares                     0.1        0.4             -                -       (0.1)       0.4 
 Own shares purchased                      -          -             -                -       (1.0)     (1.0) 
 Exercise of share options/share 
  awards                                   -          -             -                -       (0.8)     (0.8) 
 Share-based payments                      -          -             -                -       (8.3)     (8.3) 
 Satisfaction of share options 
  from own shares held                     -          -             -                -         0.7       0.7 
---------------------------------  ---------  ---------  ------------  ---------------  ----------  -------- 
 Balance at 30 June 2016                30.8        9.7         236.5            276.8     1,790.0   2,343.8 
 
 
 Year ended 31 December 2016: 
 Balance at 31 December 2015            30.7        9.3         236.5            276.8     1,902.5   2,455.8 
 Profit for the year                       -          -             -                -       625.3     625.3 
 Other comprehensive expense               -          -             -                -      (19.0)    (19.0) 
 Transactions with owners: 
 Dividends on equity shares                -          -             -                -     (338.3)   (338.3) 
 Issue of new shares                     0.1        1.3             -                -       (0.1)       1.3 
 Own shares purchased                      -          -             -                -       (1.0)     (1.0) 
 Exercise of share options/share 
  awards                                   -          -             -                -       (1.0)     (1.0) 
 Share-based payments                      -          -             -                -        13.3      13.3 
 Satisfaction of share options 
  from own shares held                     -          -             -                -         1.0       1.0 
---------------------------------  ---------  ---------  ------------  ---------------  ----------  -------- 
 Balance at 31 December 2016            30.8       10.6         236.5            276.8     2,182.7   2,737.4 
 
 

PERSIMMON PLC

Condensed Consolidated Cash Flow Statement

For the six months to 30 June 2017 (unaudited)

 
                                            Note   Six months                  Six months        Year to 
                                                           to                          to    31 December 
                                                      30 June                     30 June           2016 
                                                         2017                        2016           GBPm 
                                                         GBPm                        GBPm 
-----------------------------------------  -----  -----------  --------------------------  ------------- 
 
 Cash flows from operating activities: 
 Profit for the period                                  368.6                       283.0          625.3 
 Tax charge                                  3.1         88.8                        69.3          149.5 
 Finance income                                         (9.8)                       (9.7)         (19.8) 
 Finance costs                                            6.4                         7.9           15.5 
 Depreciation charge                                      4.1                         3.9            8.0 
 Impairment of intangible assets                          5.4                         4.0            8.0 
 Share-based payment charge                               6.7                         4.1           14.0 
  Net imputed interest income                             3.2                         2.2            3.9 
 Other non-cash items                                   (0.4)                       (2.7)          (3.9) 
-----------------------------------------  -----  -----------  --------------------------  ------------- 
 Cash inflow from operating activities                  473.0                       362.0          800.5 
 Movements in working capital: 
 (Increase)/decrease in inventories                    (75.1)                      (92.7)            7.8 
 Increase in trade and other receivables               (44.7)                      (32.1)         (18.3) 
 Increase in trade and other payables                    16.0                        35.6           11.1 
 Decrease in available for sale 
  financial assets                                       24.0                        22.1           44.6 
-----------------------------------------  -----  -----------  --------------------------  ------------- 
 Cash generated from operations                         393.2                       294.9          845.7 
 Interest paid                                          (3.4)                       (3.4)          (4.0) 
 Interest received                                        1.8                         1.5            3.1 
 Tax paid                                              (94.4)                      (52.2)        (146.6) 
-----------------------------------------  -----  -----------  --------------------------  ------------- 
 Net cash inflow from operating 
  activities                                            297.2                       240.8          698.2 
-----------------------------------------  -----  -----------  --------------------------  ------------- 
 Cash flows from investing activities: 
 Purchase of property, plant and 
  equipment                                            (10.3)                       (7.4)         (14.7) 
 Proceeds from sale of property, 
  plant and equipment                                     0.1                         0.7            0.8 
-----------------------------------------  -----  -----------  --------------------------  ------------- 
 Net cash outflow from investing 
  activities                                           (10.2)                       (6.7)         (13.9) 
-----------------------------------------  -----  -----------  --------------------------  ------------- 
 Cash flows from financing activities: 
 Financing transaction costs                                -                       (0.9)          (0.9) 
 Payment of Partnership Liability                       (3.0)                       (2.8)          (2.8) 
 Own shares purchased                                       -                       (1.0)          (1.0) 
 Share options consideration                              0.5                         0.5            1.3 
 Dividends paid                                        (77.1)                     (338.3)        (338.3) 
 Net cash outflow from financing 
  activities                                           (79.6)                     (342.5)        (341.7) 
-----------------------------------------  -----  -----------  --------------------------  ------------- 
 Increase/(decrease) in net cash 
  and cash equivalents                         9        207.4                     (108.4)          342.6 
 Cash and cash equivalents at the beginning 
  of the period                                         913.0                       570.4          570.4 
------------------------------------------------  -----------  --------------------------  ------------- 
 Cash and cash equivalents at the 
  end of the period                                   1,120.4                       462.0          913.0 
-----------------------------------------  -----  -----------  --------------------------  ------------- 
 

Notes to the condensed consolidated half year financial statements (unaudited)

 
 1.   Basis of preparation 
 
      The half year condensed financial statements for the six months 
       to 30 June 2017 have been prepared in accordance with the Disclosure 
       Guidance and Transparency Rules of the Financial Conduct Authority 
       and with International Accounting Standard 34, 'Interim Financial 
       Reporting', as adopted by the European Union. The half year financial 
       statements are unaudited, but have been reviewed by the auditors 
       whose report is set out at the end of this report. This report 
       should be read in conjunction with the Group's annual financial 
       statements for the year ended 31 December 2016, which have been 
       prepared in accordance with IFRSs as adopted by the European 
       Union. 
 
       The comparative figures for the financial year ended 31 December 
       2016 are not the company's statutory accounts for that financial 
       year. Those accounts have been reported on by the company's auditors 
       and delivered to the Registrar of Companies. The report of the 
       auditors was (i) unqualified, (ii) did not include a reference 
       to any matters to which the auditors drew attention by way of 
       emphasis without qualifying their report and (iii) did not contain 
       a statement under section 498 (2) or (3) of the Companies Act 
       2006. 
 
       The accounting policies applied are consistent with those of 
       the annual financial statements for the year ended 31 December 
       2016, as described in those annual financial statements. 
 
      The Group has not applied the following new and revised IFRSs 
       that have been issued but are not yet effective and in some cases 
       have not yet been endorsed by the European Union: 
       - IFRS 15 Revenue from Contracts with Customers 
       - IFRS 9 Financial Instruments 
       - IFRS 16 Leases 
       - Amendments to IFRS 2: Classification and Measurement of Share-based 
       Payment Transactions 
       - Amendments to IAS 12: Recognition of Deferred Tax Assets for 
       Unrealised Losses 
       - Amendments to IAS 7: Disclosure Initiative 
       Where material, the expected impact to the Group Financial Statements 
       on adoption of the above standards is detailed in the Group annual 
       financial statements for the year ended 31 December 2016. This 
       assessment has not changed in the period to 30 June 2017. 
 
      Going concern 
 
      After making due enquiries, and in accordance with the FRC's 
       'Guidance on Risk Management, Internal Control and Related Financial 
       and Business Reporting' issued in 2014, 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 condensed consolidated half year financial statements. 
 
 2.   Segmental analysis 
      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. 
 
 
 
 3.     Tax 
 3.1    Analysis of the tax charge for the period 
 
                                                    Six months   Six months        Year to 
                                                            to           to    31 December 
                                                       30 June      30 June           2016 
                                                          2017         2016           GBPm 
                                                          GBPm         GBPm 
        ------------------------------------------------------  -----------  ------------- 
        Tax charge comprises: 
  UK corporation tax in respect of the 
   current period                                         86.5         71.1          153.6 
  Adjustments in respect of prior periods                    -        (6.1)         (11.3) 
 ------------------------------------------        -----------  -----------  ------------- 
                                                          86.5         65.0          142.3 
 ------------------------------------------        -----------  -----------  ------------- 
  Deferred tax relating to origination 
   and reversal of temporary differences                   2.3          0.2            3.0 
  Adjustments recognised in the current 
   period in respect of prior periods 
   deferred tax                                              -          4.1            4.2 
 ------------------------------------------        -----------  -----------  ------------- 
                                                           2.3          4.3            7.2 
 ------------------------------------------        -----------  -----------  ------------- 
                                                          88.8         69.3          149.5 
 ------------------------------------------        -----------  -----------  ------------- 
 
 3.2    Deferred tax recognised in other comprehensive income 
 
                                                    Six months   Six months        Year to 
                                                            to           to    31 December 
                                                       30 June      30 June           2016 
                                                          2017         2016           GBPm 
                                                          GBPm         GBPm 
       ------------------------------------------  -----------  -----------  ------------- 
  Recognised on remeasurement charges 
   on pension schemes                                    (0.3)       (10.5)          (4.4) 
 
 3.3    Deferred tax recognised directly in equity 
 
                                                    Six months   Six months        Year to 
                                                            to           to    31 December 
                                                       30 June      30 June           2016 
                                                          2017         2016           GBPm 
                                                          GBPm         GBPm 
       ------------------------------------------  -----------  -----------  ------------- 
        Arising on transactions with equity 
         participants 
  Related to equity-settled transactions                (15.9)         12.4            0.7 
 ------------------------------------------        -----------  -----------  ------------- 
 
  As at 30 June 2017, the Group has recognised deferred tax assets 
   on deductible temporary differences at 17%, the rate enacted at 
   the end of the reporting period. 
 
 4.     Earnings per share 
 
 

Basic earnings per share is calculated by dividing the profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period (excluding those held in the employee benefit trusts and any treasury shares all of which are treated as cancelled) which were 308.5m (June 2016: 307.7m,December 2016: 308.0m).

Diluted earnings per share is calculated by dividing the profit for the period 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 period, giving a figure of 319.4m (June 2016: 317.3m, December 2016: 317.5m).

 
   Underlying earnings per share excludes goodwill impairment. The 
    earnings per share from continuing operations were as follows: 
 
                                                 Six months    Six months         Year to 
                                                         to    to 30 June     31 December 
                                                    30 June          2016            2016 
                                                       2017 
 --------------------------------------------  ------------  ------------  -------------- 
 
  Basic earnings per share                           119.5p         92.0p          203.0p 
  Underlying basic earnings per share                121.2p         93.3p          205.6p 
  Diluted earnings per share                         115.4p         89.2p          197.0p 
  Underlying diluted earnings per share              117.1p         90.4p          199.5p 
 --------------------------------------------  ------------  ------------  -------------- 
 
  The calculation of the basic and diluted earnings per share is based 
   upon the following data: 
 
                                                 Six months    Six months         Year to 
                                                         to    to 30 June     31 December 
                                                    30 June          2016            2016 
                                                       2017          GBPm            GBPm 
                                                       GBPm 
 --------------------------------------------  ------------  ------------  -------------- 
 
  Underlying earnings attributable to 
   shareholders                                       374.0         287.0           633.3 
  Goodwill impairment                                 (5.4)         (4.0)           (8.0) 
 --------------------------------------------  ------------  ------------  -------------- 
  Earnings attributable to shareholders               368.6         283.0           625.3 
 --------------------------------------------  ------------  ------------  -------------- 
 
 
 
 
 5.    Dividends/Return of capital 
 
       On 31 March 2017 an additional and fifth payment of the Capital 
        Return Plan of 25p per share (or GBP77.1m) was paid as an interim 
        cash dividend. 
 
        As at 30 June 2017 the Group balance sheet included a Capital Return 
        liability of GBP339.5m in relation to the sixth payment of the Capital 
        Return Plan of 110p per share (or GBP339.5m). This was paid as a 
        second interim cash dividend after the balance sheet date on 3 July 
        2017. 
 
                                                            Six months   Six months            Year to 
                                                            to 30 June           to        31 December 
                                                                  2017      30 June               2016 
                                                                  GBPm         2016               GBPm 
                                                                               GBPm 
      --------------------------------------------------  ------------  -----------  ----------------- 
 
  2016 Dividend to all shareholders of 
   110p per share                                                    -        338.3              338.3 
       2017 Dividend to all shareholders of 
        25p per share                                             77.1            -                  - 
      --------------------------------------------------  ------------  -----------  ----------------- 
  Total return to shareholders                                    77.1        338.3              338.3 
 -------------------------------------------------------  ------------  -----------  ----------------- 
 
 6.    Inventories 
 
                                                               30 June      30 June        31 December 
                                                                  2017         2016               2016 
                                                                  GBPm         GBPm               GBPm 
      --------------------------------------------------  ------------  -----------  ----------------- 
 
  Land                                                         1,970.8      2,085.5            1,946.4 
  Work in progress                                               676.1        587.4              617.2 
  Part exchange properties                                        32.2         27.4               37.1 
  Showhouses                                                      43.0         42.2               44.3 
 -------------------------------------------------------  ------------  -----------  ----------------- 
                                                               2,722.1      2,742.5            2,645.0 
 -------------------------------------------------------  ------------  -----------  ----------------- 
 
  At 30 June 2017 the Group conducted a further review of the net 
   realisable value of its land and work in progress portfolio. This 
   review did not give rise to an exceptional credit or debit to the 
   consolidated statement of comprehensive income (2016: GBPnil). Our 
   approach to the net realisable value review has been consistent 
   with that conducted at 31 December 2016 which was fully disclosed 
   in the financial statements for the year ended on that date. 
   The key judgements in estimating the future net present 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 this review GBP29.1m (2016: GBP42.7m) of inventories are 
   valued at fair value less costs to sell rather than at historical 
   cost. 
 
 
 
 7.    Available for sale financial assets 
                                                  30 June   30 June   31 December 
                                                     2017      2016       2016 
                                                     GBPm      GBPm       GBPm 
        ---------------------------------------  --------  --------  ------------ 
 
         Available for sale financial assets 
          at beginning of period                    148.7     177.9         177.9 
         Additions                                      -       0.4           0.5 
         Settlements                               (24.0)    (23.2)        (45.6) 
         Gains (Finance income)                       8.0       8.1          15.9 
        ---------------------------------------  --------  --------  ------------ 
         Available for sale financial assets 
          at end of period                          132.7     163.2         148.7 
        ---------------------------------------  --------  --------  ------------ 
         There have been no gains/losses recognised in other comprehensive 
          income other than those recognised through finance income in 
          profit and loss. Of the gains recognised in finance income for 
          the period GBP2.6m (2016: GBP3.3m) was unrealised. 
 8.    Financial Instruments 
 
       In aggregate, the fair value of financial assets and liabilities 
        are not materially different from their carrying value. 
        Financial assets and liabilities carried at fair value are categorised 
        within the hierarchical classification of IFRS 7 Revised (as 
        defined within the standard) as follows: 
                                                      30 June     30 June    31 December 
                                                         2017        2016           2016 
                                                      Level 3     Level 3        Level 3 
                                                         GBPm        GBPm           GBPm 
      ------------------------------------------  -----------  ----------  ------------- 
 
  Available for sale financial assets                   132.7       163.2          148.7 
 -----------------------------------------------  -----------  ----------  ------------- 
 
  Available for sale financial assets 
  Available for sale financial assets 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 assets. 
   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 from 
   inception to settlement of 10 years (2016: 10 years) and discount 
   rate of 8% (2016: 8%) based on current observed market interest 
   rates on secured second loans. 
 
  The discounted forecast cash flow calculation is dependent upon 
   the estimated future value of the properties on which the available 
   for sale financial assets 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 asset. 
   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. 
 
 
 9.     Reconciliation of net cash flow to net cash 
 
                                                    Six months    Six months        Year to 
                                                            to            to    31 December 
                                                       30 June       30 June           2016 
                                                          2017          2016           GBPm 
                                                          GBPm          GBPm 
       ----------------------------------------   ------------  ------------  ------------- 
 
  Increase/(decrease) in net cash 
   and cash equivalents in cash flow                     207.4       (108.4)          342.6 
  Net cash at beginning of period                        913.0         570.4          570.4 
  Net cash at end of period                            1,120.4         462.0          913.0 
 -----------------------------------------  ----  ------------  ------------  ------------- 
 
 10.    Retirement benefit assets/obligations 
 
        The amounts recognised in the consolidated statement of comprehensive 
         income are as follows: 
 
                                                    Six months    Six months        Year to 
                                                    to 30 June    to 30 June    31 December 
                                                          2017          2016           2016 
                                                          GBPm          GBPm           GBPm 
       -----------------------------------------  ------------  ------------  ------------- 
 
  Current service cost                                     1.2           1.2            2.4 
  Administrative expense                                   0.4           0.4            0.7 
 -----------------------------------------        ------------  ------------  ------------- 
  Pension cost recognised as operating 
   expense                                                 1.6           1.6            3.1 
  Pension cost recognised as net finance 
   credit                                                (0.3)         (0.3)          (0.8) 
 -----------------------------------------        ------------  ------------  ------------- 
  Total defined benefit pension cost 
   recognised in profit or loss                            1.3           1.3            2.3 
  Remeasurement charges recognised 
   in other comprehensive expense                          1.8          58.2           23.4 
 -----------------------------------------        ------------  ------------  ------------- 
  Total defined benefit scheme charge 
   recognised                                              3.1          59.5           25.7 
 -----------------------------------------        ------------  ------------  ------------- 
 
        The amounts included in the balance sheet arising from the Group's 
         obligations in respect of the Pension Schemes are as follows: 
 
                                                       30 June       30 June    31 December 
                                                          2017          2016           2016 
                                                          GBPm          GBPm           GBPm 
       -----------------------------------------  ------------  ------------  ------------- 
 
  Fair value of Pension Scheme assets                    637.1         536.0          605.6 
  Present value of funded obligations                  (594.7)       (575.2)        (582.3) 
 -----------------------------------------------  ------------  ------------  ------------- 
  Net pension asset/(liability)                           42.4        (39.2)           23.3 
 -----------------------------------------------  ------------  ------------  ------------- 
 
  An update on the 31 December 2016 IAS 19 valuation, adjusted 
   for current market conditions, has been obtained from the schemes' 
   actuary as at 30 June 2017 and has been used as the basis for 
   these figures. 
 
 11.    Related parties 
 
  There are no disclosable related party transactions (as required 
   by DTR 4.2.8R) during the period (2016: none). 
 
 
 
 
 12.                     Seasonality 
 
                         In common with the rest of the UK housebuilding industry, the 
                          Group experiences the highest level of sales in spring and autumn, 
                          which also results in peaks and troughs in the Group's working 
                          capital profile. Therefore, any economic weakness which affects 
                          the peak selling seasons can have a disproportionate impact on 
                          the reported results. 
 
 
   Principal risks 
 
 Risk                      Impact                                Mitigation 
 UK's exit from            Following the referendum              We continue to closely monitor 
  the EU                    vote on 23 June 2016 and              the impact of this increased 
                            the commencement of negotiations      uncertainty on the UK economy 
                            to leave the European Union,          and the housing market through 
                            together with the result              the review of external information 
                            of the UK General Election            and changes in the behaviour 
                            on 8 June 2017, uncertainty           of our customer base. Close 
                            surrounding the outlook               management of work in progress 
                            for the UK economy has                levels matching supply to 
                            increased. Such uncertainty           demand will continue and 
                            may reduce consumer confidence        land investment decisions 
                            such that demand and pricing          will continue to be assessed, 
                            for new homes may be impacted         including measures to ensure 
                            affecting revenues, profits           exposure to market disruption 
                            and cash flows and may                is mitigated. The overall 
                            result in the impairment              shortage of supply of housing 
                            of asset values. In addition,         in the UK may provide a 
                            the devaluation of the                degree of support to the 
                            UK currency and a possible            housing market should these 
                            tightening of the availability        circumstances arise. Action 
                            of construction skills                taken by the Government 
                            due to potential changes              to adjust policy to support 
                            to legislation governing              UK economic performance 
                            free movement of labour               may provide further mitigation 
                            may impact costs and build            as might any response with 
                            activity.                             respect to interest rates 
                                                                  by the Bank of England. 
                                                                  We will continue to employ 
                                                                  robust tendering processes 
                                                                  to maintain strong cost 
                                                                  control over Group sourcing. 
                                                                  In addition, we will remain 
                                                                  focused on our training 
                                                                  initiatives to improve the 
                                                                  supply of the necessary 
                                                                  construction skills the 
                                                                  Group requires. 
 National and              The housebuilding industry            We control the level of 
  regional economic         is sensitive to changes               build on-site by closely 
  conditions                in unemployment, interest             managing our work in progress 
                            rates and consumer confidence.        levels. We carry out extensive 
                            Any deterioration in economic         due diligence prior to our 
                            conditions may significantly          land investment decisions 
                            decrease demand and pricing           to capture best returns. 
                            for new homes, which could            We monitor our geographical 
                            have a material effect                spread to mitigate the effects 
                            on our business revenues,             of local microeconomic fluctuations. 
                            margins and profits and               We monitor lead indicators 
                            result in the impairment              on the future direction 
                            of asset values.                      of the UK housing market 
                                                                  so as to manage our exposure 
                                                                  to any future market disruption. 
 Mortgage availability     Any restrictions in the               We monitor Bank of England 
                            availability of mortgages             commentary on credit conditions. 
                            for our customers could               We ensure that our investment 
                            reduce demand for our homes           in land and work in progress 
                            and affect revenues, profits          is appropriate for our level 
                            and cash flows. Early withdrawal      of sales and our expectations 
                            of the Government sponsored           for market conditions. We 
                            Help to Buy scheme could              monitor the Council of Mortgage 
                            reduce demand from first              Lenders' monthly reports 
                            time buyers and other customers       and lenders' announcements 
                            impacting revenues, profits,          for trends in lending. The 
                            and cash flows.                       Government's Help to Buy 
                                                                  scheme, which currently 
                                                                  is anticipated to remain 
                                                                  available until 2021, supports 
                                                                  customers to gain access 
                                                                  to the housing market across 
                                                                  the UK with very competitive 
                                                                  mortgage rates. 
 Health and safety         The health and safety of              We ensure that the Board's 
                            our employees, subcontractors,        health and safety strategy 
                            home owners and visitors              is implemented by our comprehensive 
                            to our construction sites             management systems and controls, 
                            is of paramount importance            overseen by our Group Health 
                            to us. Accidents on our               and Safety Department to 
                            sites could lead to reputational      minimise accidents on our 
                            damage and financial penalties.       sites. 
 Regulatory                Our business is subject               We operate comprehensive 
  compliance                to extensive and complex              management systems to ensure 
                            laws and regulations relating         regulatory compliance. We 
                            to planning, construction,            hold a landbank sufficient 
                            and the environment. Our              to provide security of supply 
                            obligations to comply with            for short to medium term 
                            legislation can result                requirements and engage 
                            in delays causing us to               extensively with planning 
                            incur substantial costs               stakeholders. 
                            and prohibit or restrict 
                            land development and construction. 
                            Non compliance could also 
                            result in damage to the 
                            Group's reputation. 
 Materials                 Expansion in UK housebuilding         We closely monitor our build 
                            has driven an increase                programmes and our supply 
                            in demand for materials               chain enabling us to manage 
                            and may cause availability            and react to any supply 
                            constraints and/or costs              chain issues. We build good 
                            to increase ahead of our              relationships with suppliers 
                            expectations.                         to maintain consistency 
                                                                  of supply and management 
                                                                  of costs. To strengthen 
                                                                  our control over brick supply 
                                                                  and cost, we have recently 
                                                                  constructed our own brick 
                                                                  plant, which will commence 
                                                                  supply to Group operations 
                                                                  in the second half of 2017. 
                                                                  This complements our existing 
                                                                  off site manufacturing capability 
                                                                  at Space4, the Group's business 
                                                                  producing timber frames 
                                                                  and highly insulated wall 
                                                                  panels and roof cassettes 
                                                                  which provides a modern 
                                                                  method of constructing new 
                                                                  homes. 
 Labour                    Having an appropriately               We closely monitor our build 
                            skilled workforce is a                programmes to enable us 
                            key requirement for housebuilding.    to manage our labour requirements. 
                            Expansion in UK housebuilding         We operate in-house apprentice 
                            has increased demand for              and training programmes 
                            skilled labour which may              to supply the Group with 
                            create site resourcing                skilled labour. 
                            shortfalls and/or increase            We are committed to playing 
                            labour costs ahead of our             a full and active role in 
                            expectations.                         external initiatives to 
                                                                  address the skills shortage 
                                                                  such as the Home Building 
                                                                  Skills Partnership, a joint 
                                                                  initiative of the Construction 
                                                                  Industry Training Board 
                                                                  and the Home Builders Federation. 
                                                                  Where appropriate, we use 
                                                                  the Group's Space4 modern 
                                                                  method of construction which 
                                                                  reduces the site based skilled 
                                                                  labour required in the construction 
                                                                  of our homes. 
 Strategy                  The Board has adopted its             The Group's strategy is 
                            strategy as it believes               agreed by the Board at an 
                            it is the one most likely             annual strategy meeting 
                            to add the greatest sustainable       and thereafter regularly 
                            value for shareholders                reviewed at Board meetings 
                            and stakeholders. It is               and by the Executive Directors. 
                            possible that, with time,             The Board engages with management 
                            factors become known that             and employees to ensure 
                            indicate that the strategy            the strategy is communicated 
                            currently being pursued               and understood and that 
                            is not the most effective             all employees have a clear 
                            or efficient and that alternative     understanding of the potential 
                            strategies may be more                benefits and risks of the 
                            appropriate.                          strategy. 
 
 
 

Statement of Directors' responsibilities in respect of the Half Year Report

We confirm that to the best of our knowledge:

 
  --   the condensed set of financial statements has been prepared 
        in accordance with IAS 34 Interim Financial Reporting as 
        adopted by the EU 
 
  --   the Half Year Report includes a fair review of the information 
        required by: 
         DTR 4.2.7R of the Disclosure Guidance and Transparency 
          Rules, being an indication of important events that have 
          occurred during the first six months of the financial 
          year and their impact on the condensed set of financial 
          statements and a description of the principal risks and 
          uncertainties for the remaining six months of the year; 
          and 
 
         DTR 4.2.8R of the Disclosure Guidance and Transparency 
          Rules, being related party transactions that have taken 
          place in the first six months of the current financial 
          year and that have materially affected the financial 
          position or performance of the entity during that period; 
          and any changes in the related party transactions described 
          in the last annual report that could do so. 
 

The Directors of Persimmon Plc are:

 
 Nicholas Wrigley   Chairman 
 Jeff Fairburn      Group Chief Executive 
 Mike Killoran      Group Finance Director 
 David Jenkinson    Group Managing Director 
 Jonathan Davie     Non-Executive Director 
 Marion Sears       Non-Executive Director 
 Rachel Kentleton   Non-Executive Director 
  Nigel Mills        Non-Executive Director 
 Simon Litherland   Non-Executive Director (appointed 3(rd) 
                     April 2017) 
 
 
 

By order of the Board

 
 Jeff Fairburn           Mike Killoran 
 Group Chief Executive   Group Finance Director 
 

21 August 2017

The Group's annual financial reports, half year reports and trading updates are available from the Group's website at www.persimmonhomes.com/corporate.

Independent Review Report to Persimmon Plc

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 which comprises the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Balance Sheet, the Condensed Consolidated Statement of Changes in Shareholders' Equity, the Condensed Consolidated Cash Flow Statement and the related notes 1 to 12. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLP

London

21 August 2017

This information is provided by RNS

The company news service from the London Stock Exchange

END

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