Gleeson says that its strategy of targeting first-time buyers with its low cost housing is paying dividends.
MJ Gleeson’s results for the year to 30th June 2021 show a pre-tax profit of £41.7m (2020: £5.6m) on revenue of £288.6m (2020: £147.2m).
While the growth on 2020 numbers is not much of a surprise, given the impact of the Covid-19 pandemic in 20202, that Gleeson topped its 2019 numbers might not have been expected, given that house-building sites were still impacted by disruption in the summer of 2020 at the start of Gleeson’s past financial year.
Revenue was 15.5% up on 2019 and pre-tax profit was up 1.5%.
Gleeson Homes’ volumes were up 69% to 1,812 homes sold (2020: 1,072, 2019: 1,529). This puts it on track to meet its target of building 2,000 homes sold in the current financial year (to June 2022).
Chairman Dermot Gleeson said that demand for his low-cost homes remained strong. Mortgage availability was good and the government's First Homes scheme and the 95% mortgage guarantee scheme also helped. In addition, most purchases of a Gleeson home are not subject to stamp duty and so the reduction and end of the stamp duty holiday does not impact on it much.
|Active build sites||81||71||69|
|Number of homes sold||1,812||1,072||1,529|
|Average selling price||£145,800||£130,900||£128,900|
Dermot Gleeson commented: "These are an excellent set of results. Our profits, revenue and volumes all exceeded pre-Covid levels, which represents a record performance for the group. This was achieved thanks to the resilience of our business model and the talent within the business. Our strategy of building low-cost, high-quality homes in the north of England and the Midlands and unlocking value by promoting land through the planning system in the south of England, ensured the business recovered strongly through what was a tough year.
“We are managing industry-wide supply chain pressures well and remain confident of delivering Gleeson Homes' interim target of 2,000 homes sold in the current financial year. Demand remains robust, we have a growing pipeline of sites, an experienced management team and a strong platform for continued growth. We continue to operate in a market underserved by other housebuilders, and as a result our homes are as needed and in demand as ever.
“The market for consented sites has recovered and Gleeson Land's pipeline continues to grow. The division's experienced management team remains focussed on delivering sites with sustainable and implementable residential planning permission to other developers in the south of England and is well placed to drive sustainable growth over the medium term.
“Against this background, the Board is cautiously confident that the group will deliver significant growth in both revenue and profits in the current year and beyond."