Turnover at once mighty MJ Gleeson is now just 7% of the 拢624m posted in 2003, when the construction group celebrated its centenary.
Revenue for the year ending 30 June 2010 increased marginally to 拢46.5m (2009: 拢43m).
Profit before tax was 拢447,000, though the firm would have made another loss had it not been for an exceptional credit of 拢3.5m, due to the partial reversal of asset valuation write-downs. In 2009, it made a loss of 拢50.7m.
The group had a net cash balance at 30 June 2010 of 拢18.4m (2009: 拢10.9m).
During the year, Gleeson sold its M&E maintenance business Powerminster to Morgan Sindall for 拢6.6m, and disposed of its remaining commercial property assets.
This has helped reduce the central overhead by 47% to 拢1.9m (2009: 拢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.
Operations
During the year, Gleeson Regeneration & Homes made an operating loss of 拢1.3m (2009: 拢33.3m) on revenue of 拢22.7m (2009: 拢39.8m). The operating loss included exceptional credits of 拢2.8m (2009: charge 拢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 拢131,000 (2009: 拢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, 鈥渞educed 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.鈥�
Gleeson Strategic Land completed three land sales during the year, generating an operating profit of 拢2.2m (2009: loss 拢5.9m) on revenue of 拢10.5m (2009: 拢1.1m). Its portfolio increased to 1,563 hectares (2009: 1,520) acres.
Gleeson Capital Solutions recorded a profit of 拢300,000 (2009: loss of 拢600,000). In the year, no PFI investments were sold and no new PFI projects reached financial close.
Outlook
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.
鈥淎gainst 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.
鈥淎lthough 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."
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