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Mon May 20 2024

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Gleeson nears pre-Covid productivity

14 Sep 20 Building firm MJ Gleeson saw revenue dive 41% in the past year and profits shrivel by 86%.

For the year ended 30th June 2020, MJ Gleeson made a pre-tax profit of £5.6m (2019: £41.2m) on revenue of £147.2m (2019: £249.9m).

Net cash reduced from £30.3m to £16.8m during the course of the year. Including borrowings, cash stood at £76.8m at year-end.

Gleeson Homes sold nearly a third fewer units, down from 1,529 last time to 1,072, at an average selling price of £130,900 (2019: £128,900).

Gleeson Strategic Land also had a quieter year, completing just one land sale during the year (compared to nine in 2019) to make an operating profit of £200,000 (2019: £13.0m).

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However, chief executive James Thomson is optimistic. The former Keepmoat Homes chief joined Gleeson in December 2019 to replace Jolyon Harrison.

He said: “Whilst the business has been challenged this year by the Covid-19 pandemic, I remain confident that we will achieve our ambition of delivering 2,000 new homes per year in 2022. We started the new financial year with a strong forward order book up 52% on prior year and work in progress up 55% as measured in terms of unit equivalents built. Reservation rates have picked up significantly post lockdown and selling prices on new reservations are above pre-Covid levels. Build rates per site are increasing and we expect to return to pre-Covid levels of build activity by January 2021.

“Whilst there remains uncertainty in the short term in relation to both Covid-19 and the UK's exit from the EU, particularly in terms of unemployment, house prices and mortgage availability, the market fundamentals for our homes remain strong.  These are driven by 200,000 new households which are formed each year, many of which are young people, leaving home and having families of their own and the lack of supply of affordable new homes for first-time buyers. Two-thirds of customer reservations since May 2020 are from key workers who are those that are keeping us all safe, fed and healthy at this unprecedented time.”

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