Interim Management Statement

RNS Number : 4536W

Gleeson(M J)Group PLC

19 November 2010

 



Friday 19 November 2010

M J GLEESON GROUP PLC

INTERIM MANAGEMENT STATEMENT

Gleeson (GLE.L), the urban regeneration and strategic land specialist, announces its Interim Management Statement, covering the period from 1 July 2010 to 19 November 2010, in accordance with the UK Listing Authority's Disclosure and Transparency Rules.

Our Operations

Gleeson operates as:

·      a housebuilder, mainly in the North of England, with a particular focus on the physical, social and economic regeneration of urban areas in partnership with or for public bodies;

·      a strategic land development business, mainly in the South of England, that enhances the value of land, principally held under option, through the planning process;

·      a specialist business unit that takes the lead in developing PFI opportunities that bring work to the Group's housebuilding business. 

Gleeson Regeneration & Homes

Buyer interest has continued to improve. Compared to the same period last year, visitors to site are up by over 15%, private completions are up 26% and overall unit sales are up 47%.  In addition, selling prices on most sites have improved ahead of management's expectations. 

Mortgage availability, however, continues to be limited, constraining the number of sales that can be completed.  The number of providers willing to offer high loan-to-value mortgages has increased in recent months, but such mortgages are still only a small proportion of what was available prior to the credit crunch. 

Construction on sites is increasing but remains strictly tied to sales rates. Taking advantage of low land prices in the North of England, the Group conditionally purchased five sites in the period and expects to be selling from all of these by the end of the financial year.  These acquisitions will add a further 282 plots to our land bank.  Further land acquisitions are anticipated during the remainder of the year.

Gleeson Strategic Land

Planning permission was granted in July 2010 on the Gleeson Strategic Land's 93 plot site at Crawley Down, West Sussex and contracts for the sale of the site have since been exchanged.

The policy vacuum created by the Coalition Government's failure to clarify the details of its proposed changes to the planning system is currently making it more difficult to obtain commercially viable residential planning consents. However, the Group believes that its strategic land team has the depth of experience and expertise needed to continue to do so. Moreover, precisely because those sites that do achieve planning permission will be scarcer, they are likely to command a higher premium when sold.

Gleeson Capital Solutions

Gleeson Capital Solutions continues to manage the Group's portfolio of PFI investments and is also one of two final bidders on a PFI social housing prospect in the North of England.

Group financial position

The Group's balance sheet is strong with a cash balance at 31 October of £16.4m.  During the period, the Group changed its principal banker to Santander, who now provides the Group's day-to-day banking arrangements along with a £5m letter of credit and bonding facility.

Outlook

The continuing restrictions on mortgage availability and the adverse impact of the Government's spending review on consumer confidence mean that conditions in the housing market continue to be difficult. However, the Board is increasingly confident that the Group's, rigorous control of construction costs, coupled with a very disciplined approach to land acquisition, is laying down strong foundations for future growth.

Enquiries:

M J Gleeson Group plc                                                                            01252 360 300

Dermot Gleeson             Chairman

Alan Martin                   Chief Operating Officer & Group Finance Director

 

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