MJ Gleeson sees profits continue to rise
Homebuilder MJ Gleeson plc has reported profit before tax of £33m – a rise of 17% – with 1,013 house units sold at an average price of £122,700 in its Gleeson Homes division.
The Sheffield-based builder, which also has a Gleeson Strategic Land division, also has 11,588 conditionally purchased sites and saw profit before tax increase by 17% to £33m (2016: £28.2m).
In its land division, there were eight land sales completed during the year with the potential to deliver 841 residential plots. Planning consent was secured during the year for 1,495 residential plots.
Dermot Gleeson, Chairman of MJ 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 – delivered another excellent year of increased volumes, margins, profit and cash.
“Gleeson Homes achieved its milestone target of 1,000 unit sales per annum and has set a new milestone target of 2,000 unit sales per annum within the next 5 years. Affordability remains very attractive and demand exceeds supply, with buyers queueing on site opening days.”
The division opened another area office in Nottinghamshire, bringing the total number of area offices to seven, plus two pilot offices. It has a pipeline of owned and conditionally purchased sites containing 11,588 plots, equivalent to more than 11 years of sales at current build rates.
Gleeson Strategic Land also had a record year and continues to benefit from strong demand for consented land in prime locations from both medium sized and large housebuilders. The division has a strong pipeline of sites, predominantly in the South of England, which have the opportunity of developing 21,505 plots, and anticipates continuing to enjoy a high level of success in promoting commercially attractive sites through the planning system.
Demand for low cost homes in the North of England was very strong with long queues forming on launch days at new development sites.
Affordability for low income families buying a Gleeson home remained attractive and mortgage availability continued to support the young first time buyers who make up a large proportion of Gleeson Homes buyers.
The Government’s White Paper on housing, published in February 2017, was supportive of the approach to affordable housing on which Gleeson Homes’ business model is based and contains proposals which will, if adopted, make it easier for the division to secure planning permissions.
Gleeson Strategic Land continued to experience strong demand from both medium-sized and large housebuilders for consented land in high value areas in the South of England and attracted multiple bidders for all of its land sales.
Gleeson added: “We remain one of the few developers building low cost homes on brownfield sites in challenging communities and such sites continue to be available at relatively low cost. The Gleeson Homes’ land pipeline grew by 2,304 plots and 24 sites to a record high of 141 sites (2016: 117), comprising 11,588 plots owned or conditionally purchased (2016: 9,284). The division will continue to commence building on sites as soon as a fully implementable planning permission is obtained.”
Gleeson Strategic Land sourced developable sites in the South of England. During the year it obtained planning consent on 6 sites and entered agreements involving 6 new sites, potentially providing development opportunities on an additional 1,846 plots. Demand for prime sites with planning consent in the South of England from a wide range of housebuilders remains extremely strong.
“We have started the new financial year in a strong position. Robust customer demand and continuing site availability will allow Gleeson Homes to continue to grow volumes and profit,” said Gleeson.
