‘Twin track strategy’ pays off for MJ Gleeson as profits soar
URBAN regeneration business MJ Gleeson has seen annual profits soar, which it attributes to a “twin track strategy” of developing low cost homes in the North and strategic land sales in the South.
The 100-year-old Sheffield firm saw revenue increase by 20.8% to £142.1m and profit before tax rise by 63% to £28.2m in the year to 30 June 2016.
Gleeson Homes sold 904 properties, up from 751 in the prior year, while the division’s operating profit rose from £17.4m to £19.5m.
Meanwhile, Gleeson Strategic Land’s operating profit came in at £10.2m, which it said was driven by an increase in transactions during the year. The division said seven land sales were completed during the year for 191 acres of residential and commercially developable land, while five new sites were secured during the year. Its portfolio at year end stood at 68 sites comprising 3,843 acres.
The company has proposed a final dividend of 10 pence per share, which it said reflects “the financial strength of the company as well as our confidence in the short term outlook”, resulting in the total dividend for the year increasing by 45% to 14.5 pence per share.
Chairman Dermot Gleeson said: “Our twin track strategy – the development of low cost homes for open market sale in the North of England and strategic land sales in the South – goes from strength to strength, delivering increased margins, profits and cash.
“Gleeson Homes continues to see strong customer demand for its low cost homes. The opening of two new regional offices and the increase in its land pipeline to 9,284 plots will enable the division to continue to grow in what remains a strong market for low cost homes in the North of England. We have commenced rolling out our distinctive and highly successful business model across a wider geographic area. The potential number of purchasers of Gleeson Homes in this wider area is three times the comparable figure within our current market.
“Similarly, Gleeson Strategic Land continues to see strong demand for consented land in prime locations from a wide range of housebuilders. The division has a strong pipeline of sites, predominantly in the South of England, covering 3,843 acres (2015 3,936 acres), and expects to continue to enjoy a high level of success in promoting commercially attractive sites through the planning system.
“The board has every confidence in the group’s outlook in both the short and longer term.”
