Persimmon Memo

To: Group Chairman, John White

Subject: Analysis of Persimmon plc and its strategy

Description of core business activities: Persimmons core business activity is house building. Its three main brands are �Persimmon Homes’, �Charles Church’ and the �Westbury Partnership’.

Persimmon Homes

• Persimmons core operation

• Prides itself in building quality homes which provide the very best in design, construction and service to its customers.

Charles Church

• Persimmons premium brand

• Has an unrivalled reputation in building exclusive homes in both modern and traditional styles.

Westbury Partnerships

• Focuses on social housing

• Aims to offer solutions to some of the affordable housing problems the Government wishes to resolve

Financial Performance: Persimmon continues to achieve industry high margins, supported by an excellent land bank, good forward sales and an experienced management team with a clear focus on cash management and continued improvement of shareholder returns

2006 unit sales volume=16,701

2006 net pre tax profit= Ð'Ј566.1 million

2006 gross profit= Ð'Ј 737.7 million

2006 total revenue= Ð'Ј3141.9 million

2006 % gross margin= 23.5%

2006 % net profit margin= 18%

The table below shows the key numbers for fiscal year ending 2006 for Persimmon and two of its biggest competitors. From this table it is easy to see that Persimmon’s performance is the greatest of the three, although Persimmons sales are lower than Taylor Wimpey’s their Net Income, One Year Growth and Income Growth are higher than either of its competitors.

Persimmon Taylor Wimpey Berkeley Group

Sales ($) 6,152.5M 7204.2M 1675.5M

One Year Growth 56.5% 17.7% 17.9%

Net Income ($) 776.2M 569.1M 221.5M

Income Growth 30.9% 15.5% 19.7%

The Table below illustrates Persimmons performance from 2004 to 2006. From the table it is evident that the greatest improvements happened in the year ending 2006.

2006 2005 2004

Unit Sales 16,701 12,636 12,360

Revenue Ð'Ј3,141.9m Ð'Ј2,285.7m Ð'Ј2,131.3m

Average Selling Price Ð'Ј188,129 Ð'Ј180,892 Ð'Ј172,431

Profit from operations Ð'Ј652.7m Ð'Ј527.8m Ð'Ј498.0m

Profit