Interim Management Statement

RNS Number : 2676R

Gleeson(M J)Group PLC

16 November 2012

 



Friday 16 November 2012

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 2012 to 15 November 2012, in accordance with the UK Listing Authority's Disclosure and Transparency Rules.

Gleeson operates as the following divisions:

·      a housebuilder, mainly in the North of England, with a particular focus on low cost homes for local people;

·      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;

Gleeson Homes

Total sales, comprising reserved, contracted and completed homes, are up by 42% from a year ago.

Since the beginning of the period we have opened six new sites, two in each region.  A total of 26 sites are currently open.

Prices for units being sold are in line with management's expectations at an average of £119,000.  This is a decrease of £9,000 from the prior year due to a change in geographic mix.  The proportion of units being sold on recently acquired higher margin sites has improved significantly since the prior year, with only 25% of total sales noted above from old, low margin sites, compared to 64% in the comparable period.

The housing market in the North of England remains challenging and weekly sales rates have on occasion fallen below expectations.  Nonetheless, the division's very successful control of costs, coupled with the substantial increase in the number of new higher margin selling outlets, has meant that the overall level of sales achieved during the period will deliver a substantially improved level of profitability.

As previously reported, mortgage availability continues to remain restricted.  However, we have seen a significant level of interest in the Government's FirstBuy scheme, which provides support to first time buyers by way of a 20% equity loan.  In addition, Gleeson Homes is one of the first developers to have secured a low interest loan for site specific development from the Government's Get Britain Building Fund.

Five sites have been purchased during the period, which have added 331 plots to the Group's land bank.  The Group is currently in discussions regarding the acquisition of a further 13 sites, which, if purchased, will add 1,082 plots to the land bank, taking the total number of plots to in excess of 3,700.

Gleeson Strategic Land

During the period, Gleeson Strategic Land has sold two significant sites and continues to replenish the portfolio, entering three new agreements since 1 July 2012, comprising 170 acres and, potentially, 1,000 plots.

The volume housebuilders continue to display a strong appetite for green field residential land in the South of England and Gleeson Strategic Land is experiencing a high level of interest in the sites which it hopes to bring to the market in the remainder of the year.

Outlook

The Board is encouraged by the achievements of both Gleeson Homes and Gleeson Strategic Land in challenging circumstances and remains confident that they are laying the foundations of a strong and sustainable improvement in the Group's performance.

Enquiries:

M J Gleeson Group plc                                                                            01252 360 300

Jolyon Harrison              Chief Executive Officer

Alan Martin                   Chief Financial Officer

 

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