300 jobs go at Persimmon in wake of Northern Rock crisis

The UK’s largest volume housebuilder was forced to cut 300 jobs last year because of the slump in the housing market, it has emerged.

Mike Killoran, the finance director of Persimmon, said half the redundancies were administrative and resulted from the closure of three regional offices, in the East Riding of Yorkshire, Surrey and Cheshire.

The other half were site staff and followed a review of activity levels. The redundancies represent 5% of the group’s 6,000 workforce.

Killoran, who made his comments after the firm posted results for 2007 this week, said: “We took what action we needed to last year. Unless there are further shocks to the market like Northern Rock we won’t need to make any more redundancies in 2008.”

In the year to 31 December 2007, Persimmon reported a 3% rise in pre-tax profit to £582.7m despite a 4% fall in turnover to £3bn.

He said it was too early to call the market for 2008, but sales for the first eight weeks were 19% down on last year by price and were down 11% by volume, to 6,250 units.

Killoran said visitor numbers had picked up since the interest rate cut this month and this was a cause for optimism.

Barratt agreed that visitor numbers for 2008 had been rising as it announced a 38% rise in turnover for the six months to 31 December 2007. It posted a 10.2% rise in pre-tax profit to £194.6m. Mark Clare, its chief executive, said the increased activity levels boded well for the crucial spring selling season.

Despite this upbeat assessment, forward sales for the first seven weeks were 7% down on 2007 at £1.6bn. Like-for-like completions had also fallen 14.8% to 10,623 units.

Alastair Stewart, an analyst at Dresdner Kleinwort, described Clare’s comments as “wishful thinking by an over-geared company”.

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