Interim Management Statement

RNS Number : 5993D

Gleeson(M J)Group PLC

01 May 2013

 

1 May 2013

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 January 2013 to 30 April 2013, in accordance with the UK Listing Authority's Disclosure and Transparency Rules.

Gleeson operates as the following divisions:

·      Gleeson Homes An urban regeneration specialist in the North of England, with a particular focus on low cost homes for people on low incomes;

·      Gleeson Strategic Land  A strategic land development business, mainly in the South of England, that enhances the value of land through the planning process and sells it to developers;

Gleeson Homes

The start of 2013 has been very encouraging for the Group's urban regeneration business.  Visitor levels have been significantly higher than in the prior year and are also noticeably higher than in the first half of the financial year.

The higher visitor rate has resulted in a significant increase in the forward order book, which now totals £28.6m (2012: £13.9m).  It is anticipated that the number of houses sold in the current financial year will be more than 40% higher than in the year to 30 June 2012.

Since January two new sites have opened, which brings the total number of currently active sites to 29.

Selling prices during the financial year to date have been in line with management's expectations, averaging £118,000 per unit.  The proportion of the division's units being sold on recently acquired, higher margin sites has increased significantly since the prior year:  only 21% of units sold or reserved in the year to date have come from old, low margin sites, compared to 63% in the comparable period.

The increase in the proportion of units sold from higher margin sites, combined with the overall increase in units sold and the division's successful control of costs, will deliver an improved level of profitability in the current year, materially ahead of market expectations.

In common with the rest of the housebuilding industry, we very much welcome the enhanced support for first time buyers announced in the Budget and also the Government's, continuing efforts to increase mortgage availability by means of the Funding for Lending Scheme.

Two sites have been purchased during the period, which have added 103 plots to the urban regeneration land bank.  The division is currently in advanced discussions regarding the acquisition of a further 13 sites, which, if purchased, will add 1,253 plots to the regeneration land bank, taking the total number of plots to in excess of 3,900. The acquisition of these additional sites will be on a subject to planning basis and construction will commence as soon as planning consent is granted.

Gleeson Strategic Land

The Government's recent reforms to the planning system are, in some respects at least, making it easier to obtain consent for well-designed and sustainable housing schemes.  Nonetheless, the planning authorities, at every level, still frequently fail to adhere to their own guidelines for timely decision making and this can make the timing of planning consents, and therefore of land sales, difficult to predict.

During the period, Gleeson Strategic Land continued to enhance its portfolio and to progress sites through the planning system.  It entered into one new option agreement relating to 33 acres with the potential to deliver 200 plots.  Planning applications were submitted for four sites within the portfolio; and two reserve matters applications were submitted in relation to the Thanet site.

The volume house builders continue to display a strong appetite for green field residential land in the South of England and Gleeson Strategic Land has experienced a high level of interest in the sites that it has marketed for sale during the remainder of the calendar year. 

Outlook

The Board is encouraged by the achievements of both Gleeson Homes and Gleeson Strategic Land and remains confident that there will be further substantial improvements in the Group's trading performance in both the current year and beyond.  Although planning delays have created some uncertainty with respect to the number of land sales that will be achieved within the current financial year, the Group's profit is still expected to be in line with, or possibly better than, market expectations.

Enquiries:

M J Gleeson Group plc                                                                            01252 360 300

Jolyon Harrison              Chief Executive Officer

Alan Martin                   Chief Financial Officer

 

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