Persimmon withdraws dividend to conserve cash

HOUSEBUILDER Persimmon said it would not pay a dividend this year as it continues to conserve cash in the tough trading climate.

The firm, which also trades under the Charles Church name, warned that the short-term outlook remained challenging but assured the market that results for 2008 would be in line with expectations.

Persimmon completed the sale of 10,202 units in the year at an average selling price of £172,000 – compared with £189,558 reported for the previous year. It achieved turnover of £1.76 billion.

With the company focused on controlling costs, including through headcount reductions, Persimmon said total borrowings at the year end stood at about £600 million, down from £906m in June.

The company said: "Until there is an improvement in the restricted credit conditions currently experienced we will continue to focus on conserving cash. As a consequence the board does not intend to pay a final dividend this year."

It added: "We believe that the long term future for the UK housing market remains good."