Persimmon Homes has a new boss but could Martin the Monkey do better?

The builder has just reported a £1.1bn profit amid reports that the Government is considering cutting it out of the Help to Buy scheme for first time buyers

Persimmon: The scandal hit housebuilder has reported a £1.1bn profit (Reuters)

The stock market might have been pleased with Persimmon Homes’ results and its appointment of a new CEO, but nobody else should be.

They painted a picture of a company that has apparently learned little from its recent travails and would richly deserve the comeuppance of being shut out of the Government’s Help to Buy scheme that Housing Minister James Brockenshire is said to be considering.

Let’s start with new CEO Dave Jenkinson, a consummate insider from a company that really could use some of the fresh thinking an outside contender might have brought.

The finance chief has been serving as acting CEO since the departure of Jeff Fairburn, who was unable to live down the scandal over the £75m share based bonus he was handed.

It led to accusations of corporate looting.

The announcement of Jenkinson’s appointment blandly declared that there will be “no change to his remuneration upon his appointment as group chief executive” and “Dave will not participate in annual bonus arrangements in 2019 and will not receive an award under the Group's 2017 Share Performance Plan”.

That looks nice until you realise that he pocketed £34m under the plan that paid Fairburn £75m, which is still hugely problematic. Why? Persimmon, which built a £1.1bn profit last year, is one of the biggest beneficiaries of Help to Buy. It is supposed to assist first time buyers with getting on the housing ladder but has done even more to assist the builders participating in it with flattering their bottom lines and their executives’ bank balances.

Help to Buy amounts to a state subsidy. It’s a bit much to say that a chicken could make a mint building houses with its assistance, but if you were to put a smart monkey in the boardroom they’d probably do alright.

It’s not just Persimmon’s approach to boardroom pay that raises issues. The company boasts profit margins of more than 30 per cent, and rising.

Martin the Monkey could tell you why. There’s a shortage of new homes being built and too many people chasing them. Offer those people government subsidies and cha-ching, your margins go through the roof.

In that environment it’s fair to raise questions about when making a profit becomes profiteering.

If Andrew Tyrie’s newly assertive Competition & Markets Authority is really focussed on putting the interests of the consumer first, as has been claimed, perhaps it might like to think about providing us with an answer to that.

Chuck in the issue of leasehold contracts on new builds and the complaints about shabby customer service that have been doing the rounds, and the picture painted by Persimmon is about as pretty one of Dali’s darker entries.

No wonder Persimmon was so keen to stress its ‘customer service initiatives’, its love for its people, its concern about their skills. Please Mr Brockenshaw, we’re trying really, really hard.

What Persimmon should be trying is people’s patience.

Were Brockenshaw to bring the hammer down, and cut Persimmon out of Help to Buy, he’d win himself some brownie points with the public, something all politicians could use right now.