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Sun October 20 2019

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Gleeson decides against break-up

16 Sep Low-cost housebuilder MJ Gleeson has decided against selling its strategic land division after a review of the business.

Dermot Gleeson
Dermot Gleeson

Gleeson appointed advisers in April 2019 to explore options for its strategic land business and got several takeover offers for it.

But it has now decided to keep the group intact.

"Following a review of options, we have concluded that retaining Gleeson Strategic Land offers significantly greater long-term value to the group than selling the business,” chairman Dermot Gleeson said. “The division 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 successful track record in promoting potentially high value developments through the planning system.”

In the year ended 30 June 2019 MJ Gleeson made a pre-tax profit of £41.2m (2018: £37.0m) on revenue up 27% to £249.9m (2018: £196.7m).

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Gleeson Strategic Land contributed an operating profit of £13.0m (2018: £12.6m) from nine land sales completed during the year.

Gleeson Homes sold 1,529 units during the year (2018: 1,225 units) and generated an operating profit of £30.1m (2018: £26.2m)

Dermot Gleeson said: "Our unique business model of building low-cost homes in the north of England and the Midlands and strategic land sales in the south continues to deliver outstanding results. Record volume growth in Gleeson Homes and record profit levels in Gleeson Strategic Land resulted in strong group profit growth.

“Despite the uncertainties caused by Brexit, demand for our homes continues to be extremely strong. Gleeson Homes is well on track to deliver its milestone target of doubling annual completions to 2,000 units by 2022. Led by a strong and highly experienced management team, the division continues to have significant scope for expansion by building low-cost homes for young, first time buyers and low-income families in a market that is underserved by other housebuilders.”

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