Trading Update

RNS Number : 0605S

MJ Gleeson PLC

03 July 2015

 

3 July 2015

MJ GLEESON PLC

TRADING UPDATE

MJ Gleeson plc (GLE.L), the urban regeneration and strategic land specialist, is today issuing a trading update following the end of its financial year on 30 June 2015, and ahead of reporting preliminary results on Friday 25 September 2015. 

Gleeson Homes

Gleeson Homes specialises in selling low cost homes to people on low incomes and helping communities throughout the North of England.

Gleeson Homes sold 751 homes during the year, an increase of 34% compared with the previous year's total of 561.  The increase in volume, along with continued improvement in the gross margin and the sale of land at Stamford Bridge, Yorkshire have resulted in a substantial improvement in the profitability of the business unit for the year.

During the year Gleeson Homes remained active in purchasing sites.   The land pipeline of owned and conditionally purchased plots at 30 June 2015 increased by 63% compared to the prior year, totalling 7,496 plots of which 3,816 plots have been purchased subject to planning permission.  In addition, there are a further 460 plots which are in the pipeline to be acquired.

Gleeson Homes is currently active on 42 sites and anticipates that this will increase to in excess of 50 sites during the coming year.

As a result of the business unit's strong growth in Yorkshire and the North Midlands a new regional office will be opened in the Wakefield area in the coming months.

The forward order book at 1 July 2015 remains strong at £43.9m representing 337 homes, broadly in line with the prior year order book of 356 homes totalling £44.2m, and reflecting the fact that reservations are now being taken later in the build process.  The ASP for the forward order book of £130,200 exceeds the underlying ASP of £123,200 due to short term sales mix.  The business unit remains on track to reach its target of building 1,000 new homes a year and beyond, in the foreseeable future.

Gleeson Strategic Land

During the year Gleeson Strategic Land successfully disposed of five land interests comprising of 62.2 acres with the potential to deliver 460 plots for housing development and 1.5 acres of commercial land.  As previously stated, these transactions will result in a significant improvement in the profitability of the business unit for the year.

The business commences the current financial year in a strong position.  Two sites have been conditionally sold and are expected to complete early in the current financial year.  These comprise a site of 7.5 acres, which has full planning permission to deliver 132 plots, and another which will deliver 100 acres of commercial land.

The business currently has eight sites with planning permission and five further sites with resolutions to grant planning permission subject to entering into legal agreements.  These sites have the potential to deliver 1,950 plots, three care homes and 40 assisted living units.

A further seven sites are the subject of either submitted planning applications, refusals or lodged planning appeals and have the potential to deliver approximately 1,048 plots.

The strategic portfolio consists of 69 sites totalling 3,836 gross acres, which have the potential to deliver approximately 21,200 plots.

Trading Performance

The Group continues to be in a strong cash position with cash balances at 30 June 2015 of £16.2m (30 June 2014: £13.8m).

The Group reiterates its statement made on 1 July 2015 that it expects the results for the financial year to be ahead of its expectations at the time of its last announcement on 22 June.

Enquiries:

M J Gleeson plc                                                                    01252 360 300                     

Jolyon Harrison                       Chief Executive Officer          

Alan Martin                              Chief Financial Officer           

Instinctif                                                                                 020 7457 2020

Mark Garraway

Helen Tarbet

James Gray

N+1 Singer                                                                            020 7496 3000

Shaun Dobson

Alex Laughton-Scott

Ben Griffiths

Notes to Editors

MJ Gleeson plc operates in the house building sector through the following business units; Gleeson Homes, which focuses on estate regeneration and housing development on brownfield land in the North of England; and Gleeson Strategic Land, which purchases options over land in the South of England with the objective of enhancing the value of the site concerned by securing residential planning permission.

 

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