Gladman bounces back

COMMERCIAL property specialist Gladman Developments enjoyed a significant turnaround in its fortunes last year, with sales growing by 61% to £46.1m.

The Congleton-based company also made a pre-tax profit of £1.6m in the year to March 31, 2011, compared with a £45.3m loss in the prior year when it was forced to write down £44.1m from the value of its property portfolio.

The company, which was founded by co-owner David Gladman in 1987, said that the profit made was considered by directors to be a “satisfactory” result given the prevailing economic conditions.

“The impact of the recession on the UK economy in general has led to very difficult market conditions for property developers, particularly those focused on speculative developments,” the company said.

“The demand for new build developments, both for end users and investors, has recovered slightly but remains subdued as reduced levels of bank funding and loss of investor confidence continued to impact on our markets.”

The firm said that it would continue with its strategy of reducing the amount of work in progress and its stock of finished developments, to give priority to contracted schemes and to only build speculatively on sites where demand “is believed to be exceptional”.

“Achieving these targets has, in he directors’ opinion, ensured the business will return to higher levels of profit as market sentiment turns more positive over the next 12 months”.

It added that one of its key strengths were that the business was run by its major shareholders, thereby ensuring “the correct risk/reward decisions are made to maximise profitability”.

Sales of assets meant the company was able to reduce net debt from £60.5m to £31.9m by its year end. It also completed a £50m refinancing towards the end of the year, with RBS and the Co-operative providing debt funding.

Notes to the accounts show that the directors have provided personal guarantees in respect of £25m of the borrowings.