Persimmon drops divi after £780m loss

Housebuilder Persimmon today racked up losses of £780 million and cancelled its dividend, but insisted it was financially secure.

The 2008 losses followed profits of £582.7 million in 2007 and came after the firm, whose brands include Charles Church and Westbury, made write-offs of £652.3 million to the value of its land.

House sales slumped 36% to 10,202 and average selling prices fell by more than £16,500 to £172,994.

Chief executive Mike Farley said: "The UK housing market has experienced one of the most severe downturns in activity due to a significant reduction in mortgage availability and the loss of buyer confidence. As a result, 2008 has been a challenging year for Persimmon."

He warned that 2009 would be "another difficult year" but said the firm was on a sound financial footing following a deal yesterday with its bankers over the company's debts.

Farley said lower interest rates and cheaper houses had improved business recently but rising unemployment and the lack of lending meant there was no sign of a recovery.