The housebuilder says it has further partnership transactions under negotiation
Gleeson Homes has announced a move into partnership work in a trading update that predicted profit ahead of market expectations.
In a year-end trading update published this morning, the housebuilder said its results for the year to 30 June were expected to be broadly in line with expectations, but with better-than-expected operating profit of around £30m.
The business also revealed it had entered its first partnership agreement and had further transactions under negotiation.
The company says it will hold a briefing on its partnerships strategy “in due course”.
It comes after the business set out a refreshed strategy last July, which included exploring partnership opportunities, in an effort to scale up to building 3,000 new homes per year.
“We are encouraged by the number of discussions currently underway with further potential partners and look forward to updating the market on progress in due course,” said Graham Prothero, chief executive of MJ Gleeson.
“We also welcome the Chancellor’s comments regarding mandatory housing targets, planning reform and other measures to increase substantially the supply of new homes.
“There is much to do if aspiration is to become reality, but the determination that we have seen since the election to get things done marks a positive change in approach. Gleeson is ready to play its part in delivering much needed affordable homes.”
The firm sold 1,722 new homes in the year to 30 June, up 2.8% on the prior year,
Net reservation rates over the last six months average 0.63 per site per week and the company now holds a forward order book of 599 plots.
The firm said its sales rate over that period had been “steady but less vigorous than expected”, which it attributed to deferred expectations around interest and mortgage rate reductions.
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The board expects that demand for new homes will strengthen in the new financial year.
The group’s land business is expected to report an operating profit of around £2m, below market expectations.
Gleeson Land sold four sites duing the year, with the timing of the general election resulting in the deferral of one dignificnat disposal, which is expected to complete in the current financial year.
The group ended the year with a net cash position of £12.9m, up from £5.2m the previous year.
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