PERSIMMON PLC

Persimmon Plc

Persimmon Plc

Persimmon plc (Persimmon) is a U.K. based house building company. The company provides design, construction and maintenance service regarding residential buildings. The company operates under three Brands namely Persimmon Homes, Charles Church and Westbury Partnerships. The company portfolio comprises three, four and five-bed detached properties, two and three-bed terraced and semi-detached houses; bungalows and apartments. Persimmon operates in EngLand, Wales and Scotland. The company is headquartered at York, U.K. The company reported Revenues of (British Pounds) GBP 1,755.10 million during the fiscal year ended 2010, a decrease of 41.79% from 2009. The operating loss of the company was GBP 708.30 million during the fiscal year 2010, as against an operating income of GBP 654.90 million during 2009. The net loss of the company was GBP 625.00 million during the fiscal year 2010, as against a net profit of GBP 413.50 million during 2009.

Current Index Score

Historical Index Score

Persimmon plc currently scores 50% in the index.

Persimmon plc is currently ranked equal 7 out of 2986. This is in the top 0.23% of Construction companies ranked in the index.

Persimmon plc is currently ranked equal 21 out of a total of 35419 included in the InfoGrok Company Index. This is the top 0.06% of all companies.

User perception of the company stands at 50%. This differs 0% over the score attributed to the company by other scoring factors.

Evaluation and Analysis of 5 Year Annual Report

The evaluation and analysis of the latest annual report is divided into five sections; five year business overview, review of income statement, review of business statement, review of cash flow statement and finally performance analysis using ratios. During the evaluation and analysis there will be referring to some important points mentioned in board reports, notes, press releases and others. According to corporate governance, all reports in the annual report for 2010 are committed to the latest and highest define standards of corporate governance.

Financial statements are an important tool in determining the overall performance of a company. Projected financial statements have the balance sheet, income statement and cash flow statements to indicate the company performance. Preparing projected financial statements can be very time consuming and it requires a careful analysis of the company's past and present financial health. Projected financial statements project or forecast a company's performance in the near future.

An analysis of returns earned by Persimmon Plc indicates that the company adds value for shareholders. The next logical question is can the company continue to add value by maintaining these returns? In order to answer this question I have computed the ROCE and ROE

Contrary to general perception, Persimmon Plc is an efficient user of capital, including equity capital. This is reflected in handsome returns, which I have attempted to break down into various components to check if they are sustainable.

FY06A

FY07A

FY08A

FY09A

FY10A

ROE %

30.9

34.1

35.6

37.0

28.0

Net Margin %

1.6

2.1

2.8

2.6

2.4

Asset Turnover (x)

4.4

4.4

3.5

3.2

2.7

Equity Multiplier (x)

4.4

3.6

3.7

4.5

4.4

ROE %

30.9

34.1

35.6

37.0

28.0

In order to evaluate Persimmon Plc from a broader perspective, I have attempted to reprobate the above analysis with return being earned on capital employed (ROCE), to assess the sustainability of these ...