Turnover at once mighty MJ Gleeson is now just 7% of the £624m posted in 2003, when the construction group celebrated its centenary.
Revenue for the year ending 30 June 2010 increased marginally to £46.5m (2009: £43m).
Profit before tax was £447,000, though the firm would have made another loss had it not been for an exceptional credit of £3.5m, due to the partial reversal of asset valuation write-downs. In 2009, it made a loss of £50.7m.
The group had a net cash balance at 30 June 2010 of £18.4m (2009: £10.9m).
During the year, Gleeson sold its M&E maintenance business Powerminster to Morgan Sindall for £6.6m, and disposed of its remaining commercial property assets.
This has helped reduce the central overhead by 47% to £1.9m (2009: £3.6m).
The group now comprises three businesses:
- Gleeson Regeneration & Homes, focusing on estate regeneration and housing development on brownfield land in the south of England;
- Gleeson Strategic Land, which purchases options on sites in the south of England, and enhances their value by securing residential planning consents; and
- Gleeson Capital Solutions, which manages the group's PFI portfolio while looking for new PFI investment opportunities.
During the year, Gleeson Regeneration & Homes made an operating loss of £1.3m (2009: £33.3m) on revenue of £22.7m (2009: £39.8m). The operating loss included exceptional credits of £2.8m (2009: charge £27.3m) from the partial reversal of asset valuation write-downs caused by reductions in construction costs and better than forecast selling prices.
It sold 174 units (2009: 313) at an average selling price of £131,000 (2009: £112,000), up 17%, reflecting a change in product mix year-on-year with higher proportion of units being sold in the south.
Gleeson said the business had, “reduced build and labour spend, in response to market conditions. However, the longer term strategy is to grow the business in the North of England, and the business unit has recently recommenced the purchase of land for development.”
Gleeson Strategic Land completed three land sales during the year, generating an operating profit of £2.2m (2009: loss £5.9m) on revenue of £10.5m (2009: £1.1m). Its portfolio increased to 1,563 hectares (2009: 1,520) acres.
Gleeson Capital Solutions recorded a profit of £300,000 (2009: loss of £600,000). In the year, no PFI investments were sold and no new PFI projects reached financial close.
Dermot Gleeson, chairman of MJ Gleeson Group, said: "During the year to 30 June 2010, conditions in the housing market showed modest signs of improvement. The steep fall in selling prices experienced in the previous two years levelled off and there was some easing of the credit conditions required by mortgage providers.
“Against this background, the group, which has net cash balances, recommenced construction on a number of mothballed developments and has begun selectively to purchase new residential sites, taking advantage of depressed land prices in the north of England.
“Although trading to date during the current year has been in line with expectations, the short term outlook for housing demand remains difficult to predict. However, the board has been encouraged by the achievements over the last year of both Gleeson Regeneration & Homes and Gleeson Strategic Land and believe that both are well placed to meet the challenges ahead."