Persimmon boss Mike Farley today called time on a seven-year stint as chief executive after successfully steering the housebuilder through the credit crunch.
Farley, who turns 60 in June and has spent nearly 30 years with the business, is handing over the reins to group managing director Jeff Fairburn in April.
Persimmon — named after the racehorse which won the Epsom Derby in 1896 — was the only builder not forced to raise cash to get through some of the worst conditions that the construction industry has ever seen during the 2007/8 crisis.
The firm also avoided beartraps like Barratt Developments’ poorly timed acquisition of Wilson Bowden at the top of the market in 2007, as well as George Wimpey’s disastrous merger with Taylor Woodrow.
Although the share price is around half the 2007 peak, Persimmon is still the UK’s most valuable builder with market capitalisation of £2.5 billion.
During his time in charge, Farley slashed the group’s £1.2 billion debt into a £200 million cash pile.
“We know how to generate cash in this business,” he said. “In 2008 we were the first to close sites and stop the cash going out the door.
“But now the company is is great shape, we’ve had a good year and we’ve made great headway on margins,” Farley added.
Persimmon is also on track with plans to return £1.9 billion to shareholders over nine and a half years, and today reported a 6% rise in housing completions to 9,903. Revenues jumped by 12% to £1.72 billion.
The company’s shares ticked up 6.5p to 843.5p.
Panmure Gordon analyst Rachael Applegate said: “Farley did a very good job getting through the downturn.
“They’re not the type of company to go looking for managers, they promote from within.”
New man Fairburn has been with the firm for 23 years.
Farley has seen rising interest from first-time buyers since the launch of the Government’s FirstBuy scheme last year, which helps those trying to get on the property ladder with deposits.
It has funding for 3000 new homes under this scheme and is also looking for a boost from the Bank of England’s Funding for Lending initiative.
The UK’s biggest construction company, Balfour Beatty, also rang the changes today, with chief executive Ian Tyler handing over to chief operating officer Andrew McNaughton at the end of March. The firm’s shares fell in November after a profit warning triggered by the weak state of the UK market.
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