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Improvements for Gleeson

21 Sep 12 MJ Gleeson Group has reported a strong resurgence in profits and has built up its land bank for housebuilding.

Revenue on continuing operations for the year ending 30 June 2012 was steady at £41.9m (2011: £41.4m). Operating profit was £3,3m (2011: £0.9m) and profit after tax was £3.6m (2011: £1.6m).

Gleeson has been taking advantage of reduced land prices in the north of England to build up a substantially enlarged landbank, which now stands at 3,790 plots. During the year 17 sites were started, which resulted in 28 live sites at 30 June 2012.

The housebuilding division, Gleeson Homes, saw revenues fall 8% to £32.6m (2011: £35.4m) but last time’s £400k operating loss became a £300k operating profit this time.

Gleeson Strategic Land, a land promotion business mainly operating in the south of England, increased revenues to £8.2m (2011: £5.8m) and operating profits to £3.7m (2011: £2.7m).

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Chairman Dermot Gleeson said: "The group enjoys a very strong and competitive presence in the two sectors of the market on which it now concentrates: low cost housing development on brown field sites in the north of England; and the promotion through the planning system and subsequent sale of high value green field sites in the south. In consequence, the board is confident that, barring a further severe downturn in the UK economy generally, the group will continue to grow profits in the current year and beyond.

“The prospect of rising revenue from house sales combined with a planned reduction in the rate of growth of the land bank means that the group expects to become cash generative in the second half of the current financial year and, broadly, to remain so for the foreseeable future. Against this background, the board hopes to be able to recommence regular dividend payments in 2013."

Jolyon Harrison, who in July moved up from being managing director of Gleeson Homes to group chief executive officer, added: “2012 has been an important year for the group, in which it has significantly improved its financial performance.  Gleeson Homes, which is now focused on the provision of low cost homes in the north of England, has substantially increased the number of sites it is developing and has returned to profitability.  Gleeson Strategic Land has continued to deliver a strong financial performance from the sales of land in the south of England.”

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