A HOUSEBUILDER embroiled in a bonus scheme row has lauded the impact of a controversial incentive plan after enduring demand helped push sales and profits higher.

Persimmon says an “outstanding performance” across its sites leaves the business well placed to take further strides in the coming months.

The firm, which has offices in Bowburn, near Durham City, today (Tuesday, February 27) revealed underlying pre-tax profits rose 25 per cent to £977.1m in 2017, as sales increased by 872 homes to more than 16,000.

The company’s average selling price was also higher, up 3.2 per cent to £213,321, which helped revenue lift nine per cent to £3.42bn.

The performance comes as a welcome tonic for Persimmon, which, in recent weeks, has been the subject of shareholder and public ire, and the resignation of chairman Nicholas Wrigley, over a reported £800m bonus row.

The situation centres upon a long-term incentive plan, first announced in the aftermath of the economic downturn in 2012, which is expected to see top officials share a substantial windfall.

The scheme was designed to reward more than 130 executives with hand-outs linked to the share price of the company.

However, it has been the subject of criticism since Persimmon, headquartered in York, has benefited from the Government’s Help to Buy scheme, which provides support to get more people on the property ladder, and last week top bosses, including chief executive Jeff Fairburn, bowed to pressure and agreed to cap future pay-outs.

Referring to its results, Nigel Mills, senior independent director, said the performance had been “excellent”, citing the impact of its incentive plan.

He added: “The group’s outstanding performance is demonstrated by both the strength of the financial position of the business and the quality of the asset platform, which provides the opportunity to continue to deliver excellent returns moving forwards.

“Since the launch of the group’s new strategy in 2012, it has increased new home completion volumes by more than 70 per cent and invested around £3.18bn of cash in land while simultaneously returning nearly £1.50bn of surplus capital to shareholders.

“The start to the spring sales season in 2018 has been encouraging with the group’s private sales rate per site being seven per cent higher than last year at this point”, added Mr Mills, who has stepped in as acting chairman following Mr Wrigley’s departure.

Mr Fairburn reiterated the business’ confidence over enduring demand, though he did flag concerns over Brexit.

He said: “While conditions in the new-build housing market remain supportive, the negotiations associated with the UK’s exit from the EU present key uncertainties that will have a substantial influence on market outcomes.

"However, with a long-term unfulfilled demand for housing, we believe that UK fundamentals remain strong.”

According to the changes in bosses’ pay-outs, Mr Fairburn, alongside chief finance officer Mike Killoran and group managing director Dave Jenkinson, will see their windfalls reduce after acceding to policy changes.

The Echo understands chief executive Mr Fairburn, formerly scheduled to pick up more than £100m, will see his hand-out cut by around £30m.

It is also believed Mr Killoran will take £24m less than an original £78m figure, with Mr Jenkinson shaving £2m off a £40m pot.

Mr Fairburn earlier this month attempted to take some sting out of the situation by revealing he will use a “substantial amount” of his pay-out to establish a private charitable trust, though he declined to disclose an exact figure.

There will be no changes to the plan for other participants.

Persimmon has developments in Shildon, County Durham, and Aykley Heads, on the outskirts of Durham City.

Its brands include Charles Church, which lists a Darlington Feethams development in its portfolio.