The boss of homebuilder Persimmons – which has worked on sites across Devon and Cornwall – has confirmed he will be leaving the role after just a year in charge.
George Thorpe www.devonlive.com
The Financial Times reports that chief executive David Jenkinson has told the company that he will step down in “due course” but will stay in the position while the board searches for his replacement.
Jenkinson took the job in February last year and has been at the firm for 23 years.
“I will remain fully committed to both the chief executive role and to our programme of change until my last day in the job,” Mr Jenkinson said.
Following the announcement, shares in Persimmon dropped by 4% in early trading.
In recent years, the homebuilder has been at a number of issues with an independent review, which was launched after complaints about the company’s work and pay, saying Persimmon needed a “fundamental change in culture”.
The report also highlighted problems including insufficient fire protection at its properties, which affected some of its homes built in Truro which had safety barriers missing.
Yesterday (February 26), it was reported that Torbay Council had ordered the company to stop work on a controversial building site after claims that an ancient Devon bank, trees and parts of their gardens had been removed.
A spokesman for Persimmon Homes said they were working with the council to review the situation at Kings Ash Hill, where it has planning permission to build 68 properties.
On top of this, a number of complaints have been made by residents in Devon about the overall quality of their homes built by the firm.
Meanwhile, Plymouth Trading Standards launched an investigation in October over claims Persimmon Homes were “mis-selling” homes on estates in Plymstock and Ivybridge.
The company strongly refuted these claims.
Persimmon shareholders have dodged a bullet
Nils Pratley www.theguardian.com
David Jenkinson will depart housebuilder Persimmon with shares in the company worth roughly £45m, his prize from the same absurd incentive scheme that bestowed £75m on his predecessor as chief executive, Jeff Fairburn.
Perhaps Jenkinson, only a year after replacing Fairburn, wants to spend more time with his winnings. Or perhaps he’s just recognised what was blindingly obvious to outsiders: Persimmon’s claims to cultural reform, and its pledge to improve the quality of its houses, lacked credibility while a veteran of the old regime was at the helm.
Any doubt on the latter point evaporated with the damning independent report that the board, to its credit, published last December: in short, Persimmon had been building too many shoddy homes that had fire risks; box-tickers ruled the roost; and the company saw itself as “land assembler and house-seller rather than a housebuilder”.
Customers now come first, says chairman Roger Devlin, and, if you look closely at Thursday’s full-year numbers, there is circumstantial evidence to support the boast. An extra £213m was invested in “work in progress”, the cost of actually finishing the job, rather the handing homes to buyers when they’re full of snags.
Harder evidence of true reform, and commitment to reputational improvement, can only judged over time. It is why Devlin would do well to appoint a non-insider to replace Jenkinson. Better still, go for somebody from outside the housebuilding industry, an insular sector that enjoys nothing more than marking its own homework.
In the meantime, Persimmon’s shareholders should count themselves lucky. In a normally functioning market, there would be a heavy price to pay for pursuing a strategy that short-changed customers but made executives as rich as Croesus. Instead, Persimmon is still achieving pre-tax profits of £1bn and still has a return on capital employed of 37%. Help to buy has a lot to answer for.