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Date: Tuesday 08 Jul 2008

LONDON (ShareCast) - Housebuilder Persimmon confirmed that it is to cut around 1,100 staff as it weathers the UK's slowing housing market but added that it does not expect to announce write-downs in the first half.

Persimmon said poorer market conditions have continued as banks reduce the number of mortgages available, while a decline in consumer confidence stifles the number of house sales in the UK.

While housing market conditions deteriorate, the group does not expect to announce any significant write-down of its land values in its first half results due August.

The job cuts are part of a restructuring process, which the group hopes will generate a cash saving of around £45m per annum and an annualised overhead saving in excess of £20m.

The move follows fellow housebuilders Barratt Developments and Taylor Wimpey who announced job cuts last week.

Persimmon said it completed 5,501 houses sales in the six months to end-June, 31% lower year-on-year. Total sales revenue for the period was £1bn, a reduction of 34% in the first half of last year.

Operating margin for the period will be around 14% versus 20.8% previously.

"Our strategy is to maintain a presence in all markets across the UK whilst reducing costs, overheads and debt in line with current demand and market conditions," it said in a company statement.

Total net borrowings at the half year were around £900m and it expects to reduce debt levels as it continues with its strategy of reducing overhead, land spend and careful management of work in progress, it added.

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