Record year for listed housebuilder as volumes and transactions increase

Housebuilder MJ Gleeson has seen pre-tax profits and revenues soar in a year driven by increased transactions.

The Sheffield-headquartered listed company this morning published its annual results for the year ended June 30. Pre-tax profits were up 12%to £37m and revenues soared 23% from £160m last year to £196m this year.

Its Gleeson Homes division saw volumes increase 21% to 1,225 units sold (2017: 1,013 units) and its operating profit on unit sales was up 20% to £26.2m (2017: £21.8m)

The average selling price of homes stood at £125,200, up from  £122,700 in 2017, which it said was due to higher selling prices and mix.

The firm’s land pipeline, including conditionally purchased sites, now stands at 12,852 plots (2017: 11,588 plots).

MJ Gleeson said it was on track to double sales to 2,000 units a year by 2022.

Its Gleeson Strategic Land division saw operating profit rise to £12.6m (2017: £12.0m), which was driven by an increase in transactions.

Ten land sales were completed during the year, with the potential to deliver 1,970 residential plots. The firm said there were nine sites with planning consent or resolution to grant with the potential to deliver 2,089 plots.

The firm proposed a final dividend of 23 pence per share (2017: 17.5 pence per share), resulting in an increase in the total dividend for the year of 33.3% to 32 pence per share (2017: 24 pence per share).

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 the Midlands and strategic land sales in the South – delivered another excellent year of increased volumes, profit and cash.

“Gleeson Strategic Land had a record year and continues to benefit from high levels of demand for consented land in prime locations from both large and medium-sized housebuilders. The division has a strong portfolio of sites and anticipates that it will continue to maintain its very successful track record in promoting potentially high value developments through the planning system.

“Gleeson Homes is on track to deliver its next milestone target of doubling annual completions of low-cost homes between 2017 and 2022 to 2,000 units. Led by a strong and highly experienced management team, who have created a very attractive land pipeline, the division’s scope for expansion continues to be underpinned by strong demand from our customers who aspire to home ownership but who are ill-served by the majority of housebuilders.

“Against this background, the Board is confident that the Group’s unique business model will continue to deliver significant growth in both revenue and profits in the current year and beyond.”

The firm said the outlook looked good, adding: “Demand for low-cost homes among Gleeson Homes’ traditional customers, hard-working families on low incomes, who dream of owning their own homes, remains strong.

“Mortgages for such families remain very affordable. The current wide range of mortgage products continues to be supportive of the young first time buyers who make up the vast majority of Gleeson Homes’ purchasers.

“The Government’s recent adjustments to The National Planning Policy Framework (NPPF) should make it easier for Gleeson Homes to secure planning permissions. We are supporters of the Government’s Help to Buy scheme. However, we believe that there is a strong case for amending the scheme so that it provides assistance primarily for those who need it most, young people on low incomes.

“Gleeson Strategic Land continues to attract multiple bidders for its sales of land in the South of England where demand for greenfield sites remains strong from both medium-sized and large housebuilders. 

“For Gleeson Homes the land market remains favourable. The division is one of the few developers building  affordable homes on brownfield sites in challenging communities where such sites continue to be available at relatively low cost.” 

The average number of employees during the year increased to 480 (2017: 370). The actual number of employees at the year end was 509 (2017: 405).

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