Housebuilder says business is worth keeping
Listed housebuilder MJ Gleeson has announced it is scrapping plans to sell its strategic land business.
The firm launched a review of its options for the business back in April and said it had received several offers for the operation. But it had concluded it would gain more long-term value from hanging onto the business than from selling it.
Announcing its results for the year to 30 June 2019 chairman Dermot Gleeson said: “The [strategic land] business is extremely well positioned to continue delivering strong profits and cash, with a healthy portfolio of sites and a highly skilled team.”
Last year the strategic land arm reported an operating profit of £13m, up 3%.
Gleeson said it was seeing strong demand from developers including large national and mid-sized housebuilders, while the land market, particularly for sites in prime locations in the south of England, “remains buoyant despite the uncertainties caused by Brexit”.
On the subject of Brexit, Gleeson said it was less exposed to the potential problems arising from a no-deal Brexit than its larger rivals.
“We operate predominantly in the north of England and employ small, locally based suppliers and subcontractors on our development sites and do not rely on foreign labour. Ours have planned alternative supply routes and have built up short-term stocks to ensure that adequate supplies are maintained.”
It said there was “no evidence” that the prospect of Brexit is undermining the confidence of its customers.
Gleeson reported annual turnover of £250m, up 27% year-on-year, with operating profit coming in at £41m, up 11% and pre-tax profit up by 11% to £41.2m.
The group said its homes business completed 1,529 units, up 25%, and was on track to deliver its target of doubling annual completions to 2,000 units by 2022.
It added that it hoped to announce a permanent replacement for former chief executive Jolyon Harrison within the next three months.
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