Just for fun, I decided to see how often the government’s “Help to Buy” scheme got mentioned in Persimmon Homes’ latest results.
For the record, those three little words that have done so much to drive the house builder’s success finally appear in the risks section at the bottom of the regulatory statement that only anoraks like me read.
They did get a mention in the results pressie about four minutes in, but the company isn’t making a song and dance about it.
No wonder. Help to Buy underpins mortgages, and keeps rates competitive, for first time buyers, on whom Persimmon relies.
It has done far more to fuel the company’s stellar success than anything done by CEO Jeff Fairburn, who runs what looks very much like a Government subsidised business.
A business that handed him a £75m bonus all the same.
It would have been even more, but he agreed to give a up a bit of it after his shareholders belatedly kicked up a fuss and both the company’s chairman, and the chair of its pay setting remuneration committee, resigned.
Help to Buy is still doing a great deal to help Persimmon.
Its results were positively glowing, with profits for the first six months up 13 per cent to a shade over half a billion quid, revenues up 5 per cent and sales up 4 per cent.
The average selling price of its homes only just inched up, by 1 per cent, but given the wider market slowdown, no one was seriously quibbling.
It’s the future that is causing concern, and the sense, as Laith Khalif, an analyst with Hargreaves Lansdown, said, that the UK is reaching the tail end of the housing boom.
What happens if the current price slowdown turns into a slump? Perhaps as a result of more interest rate rises, or if the economy takes a Brexit kick to the guts. Perhaps as a result of Help to Buy getting amended, one of the company’s worries. A new government could decide to can the scheme.
That’s when it will get interesting. Or scary, depending on your perspective.
A CEO’s mettle is tested not when the going is easy, as it has been for Persimmmon, but when it’s tough.
We might soon find out whether Mr Fairburn is as good as he, and the people who signed off on that bonus, think he is.