Trading Update

Gleeson(M J)Group PLC
24 July 2006


                              M J GLEESON GROUP plc
                                        

   Strategic Review Implementation,  Trading Update and Board Change


The Board of M J Gleeson Group plc announces an update on the implementation of
the Group's strategic review, which was announced with the Interim Results on 31
March 2006. An update is also provided on trading in advance of the announcement
of the preliminary results, which is scheduled for October 2006.


Strategic Review Implementation


Against the background of the Group's decision to concentrate on housing
regeneration, strategic land trading and commercial property development, good
progress continues to be made both with the disposal programme, which has
generated significant profits, and with the implementation of a range of
measures designed to promote transformational change.


   •As previously announced, the sales of Gleeson MCL Limited and Concrete
    Repairs Limited have been completed.


   •As anticipated, a number of parties have expressed serious interest in
    acquiring the Group's Engineering Division and discussions regarding the
    sale of this division are continuing.


   •Gleeson Properties sold the bulk of its commercial property investments
    in June 2006 for £27.9m, all at figures above the 30 June 2005 valuations.


In addition, negotiations in relation to the two remaining commercial property
investments are now well advanced.


Priorities for the half year to 31 December 2006 include:


   •a continued reduction in Gleeson Homes' activities outside the housing
    regeneration sector, involving the rundown of its non-strategic land
    holdings. This exercise, which is likely to continue into the second half of
    the current financial year to 30 June 2007, should free up a substantial
    amount of cash; and


   •the reduction of the Group's support costs in line with its reduced size.


The Group also plans to dispose of its four remaining non-housing PFI
investments, whose aggregate book value is £3.2m, in an orderly manner over the
next 18 months.


Trading Update


Cash generation during the second half of the year to 30 June 2006 was
excellent, driven both by disposal activity and by a focus on working capital
management. Accordingly, net debt at 30 June 2006 was circa £18m compared with
£102.3m at 31 December 2005. It is anticipated that during the remainder of the
current year additional cash will be generated from the sale of the Engineering
Division, from the completion of the remaining commercial property investment
sales and from the liquidation of the traditional house building work in
progress. By the end of this financial year the Group should be significantly
cash positive.


The Group's housing operations outside of the regeneration sector, which are
being largely discontinued, had a very disappointing second half. On 24 May 2006
the Group announced that the results of this business would be very
substantially below market expectations. A review of the carrying value of its
non-strategic land has revealed the need for substantial write-downs with
respect to a small number of sites. These, combined with below budget unit sales
, will result in an overall loss for this business for the year to 30 June 2006.


With regard to the continuing regeneration business, we are pleased to announce
that the Group has been appointed preferred bidder for a £70 million social
housing PFI in Ashford, Kent.


Gleeson Strategic Land, which has a land bank of approximately 2,500 acres, has
performed broadly to budget.


Similarly, Gleeson Property's development sales are in line with expectations.


Despite the distractions caused by its planned disposal, the Engineering
Division is expected to report results significantly ahead of budget.


Powerminster, which is not part of the disposal programme, is expected to return
to profit after two years of losses.


However, losses will be incurred on the closure of the Group Head Office in
Cheam in the half years to both 30 June 2006 and 31 December 2006.


In addition, the Group will be reporting several one off profits arising from
the strategy implementation programme. These will include profits on the
disposal of Gleeson MCL, Concrete Repairs and the commercial property investment
sales referred to earlier.


Taking into account the transactions and expectations detailed above, the Board
currently anticipates a modest increase in net assets at 30th June 2006 and that
the dividend will be at least maintained. In addition, strategic disposals are
expected to contribute to a further increase in net assets during the current
financial year.


The changes that the Group is in the process of implementing are radical and
inevitably disruptive in the short term. However, the Board remains entirely
confident that its decision to refocus its activities will enhance shareholder
value. In particular, the Board is convinced that housing regeneration - which
offers continuity of work over extended contractual periods, reliable margins,
improved returns on capital and very substantial opportunities for growth - is a
much more appropriate principal activity for the Group than traditional house
building.


Board Change


Terry Massingham, Chief Executive, has decided that, with immediate effect, he
will resign from the Board and leave the Group. The search for a successor,
which will involve external consultants, has already commenced. Paul Wallwork,
currently Finance Director, will assume the role of Interim Chief Executive,
pending the appointment of a permanent successor.


The recruitment of non-executive directors appropriate to the Group's changed
strategic direction is at an advanced stage.


The Board remains fully committed to its new strategy, which is designed to
unlock the Company's underlying value by focusing on Housing Regeneration,
Strategic Land Trading and Property Development.


Enquiries:

MJ Gleeson Group plc

Paul Wallwork, Chief Executive (interim)

0208 644 4321


Close Brothers Corporate Finance

Peter Alcaraz, Director

0207 655 3100


Bankside Consultants

Ian Seaton / Ian Payne

0207 367 8891/53






                      This information is provided by RNS
            The company news service from the London Stock Exchange