Interim Management Statement

RNS Number : 1158D

Gleeson(M J)Group PLC

11 May 2012

 

Friday 11 May 2012

M J GLEESON GROUP PLC

INTERIM MANAGEMENT STATEMENT

Gleeson (GLE.L), the urban regeneration and strategic land specialist, announces its Interim Management Statement, covering the period from 1 January 2012 to 10 May 2012, in accordance with the UK Listing Authority's Disclosure and Transparency Rules.

Gleeson operates as:

·      a housebuilder, mainly in the North of England, with a particular focus on low cost homes for local people;

·      a strategic land development business, mainly in the South of England, that enhances the value of land, principally held under option, through the planning process;

·      a specialist business unit that takes the lead in developing PFI opportunities that bring development opportunities to the Group's housebuilding business. 

Gleeson Regeneration & Homes

Despite uncertainty in the wider economy, conditions in the housing market during the period remained generally stable.  Against this backdrop, Gleeson Regeneration & Homes, which has continued to increase the number of its selling outlets, has enjoyed a very encouraging increase in both site visitors and net reservations.

Seven new sales outlets have been opened since December 2011, bringing the current total to twenty.  The volume of net private reservations in the period to the end of April has increased by 49% compared to the same period of last year, and the order book for future completions is 131 homes, an improvement of 72%.  The total number of private development homes sold to the end of June 2012 is expected to exceed the previous financial year by approximately 60%.

As previously reported, mortgage availability continues to remain restricted.  However, we have seen a significant level of interest in the Government's FirstBuy scheme, which provides support to first time buyers by way of a 20% equity loan.  To date we have reserved 18 homes to buyer's utilising this product.

The Group has continued to take advantage of low land prices in the North of England, purchasing a further 11 sites during the period, which have added 522 plots to the Group's land bank.  The Group is currently in discussions regarding the acquisition of a further 10 sites, which, if purchased, will add a further 1,290 plots to the land bank, taking the total number of plots to just under 3,000.

Gleeson Strategic Land

The volume housebuilders continue to display a strong appetite for green field residential land in the South of England and Gleeson Strategic Land has been pleased by the high level of interest shown in all of the sites with planning permission that it has recently brought to the market.

During the period, the business unit secured planning consent for 68 houses at Wickford Essex.  It also entered into option or promotional agreements with landowners regarding five new sites, comprising 236 acres and, potentially, 1504 plots.

The Group broadly welcomes the Government's new National Planning Policy Framework which was published in March 2012. The presumption in favour of sustainable development and the considerable simplification of the planning regime should eventually make it easier to secure residential consents. However, the vagueness of some clauses within the Framework may mean that, in the short term, more applications will have to be taken to Appeal in order to obtain clarification on a number of key issues.

Gleeson Capital Solutions

As previously reported, the Group expects to sell its one remaining social housing PFI investment in 2012.

The Group is part of a consortium that is one of two final bidders for a PFI social housing project in the North of England. It is hoped that a preferred bidder will be appointed in the second half of 2012.

The Government has announced that, following the current round of bids, the PFI will no longer to be used to procure social housing projects. This will inevitably result in the Group's withdrawal from this sector in the longer term.

Outlook

The Board is encouraged by the achievements of both Gleeson Regeneration & Homes and Gleeson Strategic Land in challenging circumstances and remains confident that they are laying the foundations of a strong and sustainable improvement in the Group's performance.

Enquiries:

M J Gleeson Group plc                                                                            01252 360 300

Dermot Gleeson             Chairman

Alan Martin                   Chief Operating Officer & Group Finance Director

 

END

 

 

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