Interim Results - Replacement

Gleeson(M J)Group PLC 23 March 2004 The following replaces the Interim results announcement released this morning at 07:00 under RNS number 8055W; the retained profit/(loss) should be 1,505 and not (1,505) as previously stated. The full amended text appears below. MJ GLEESON GROUP PLC - INTERIM ANNOUNCEMENT •Gleeson, the construction services, homes and property group, announces that, in what is traditionally much the weaker half of the year, turnover increased by 7.4% to £306.8m with pre-tax profit increasing to £3.3m (2002/ 03: £0.3m) and earnings per share to 22.0p (2002/03: 3.4p). All three business units - Construction Services, Homes and Properties - increased their operating profits. •Net assets per share totalled £14.79 (2002/03: £14.52), providing substantial backing to the share price. •An interim dividend per share of 7.02p, up 4.0%, has been declared. •Construction Services increased turnover by 7.8% to £265.2m, generating an operating profit of £2.3m (2002/03: loss of £0.2m). The Construction Services order book at 1 March 2004 totalled £636m. •Gleeson Homes made an operating profit of £2.0m (2002/03: £1.8m) on turnover 5.0% lower at £37.7m. Additional selling outlets in the second half are expected to support an increase on last year's 489 units to over 600 in the year to June 2004. The average selling price is expected to be around £204,000, compared with £195,000 a year ago. Record levels of profitability are expected. •Gleeson Regeneration, which was formed in February 2003 to enable the Group to focus more closely on social housing and urban regeneration schemes, has very recently been selected as Liverpool City's preferred developer for the £300m redevelopment of the city centre's South Zone. •Gleeson Properties turnover totalled £3.9m (2002/03: nil) and generated an operating profit of £3.0m (2002/03: £1.9m). A modest programme of disposals of development and investment properties is planned for the second half. If achieved, Gleeson Properties should register a substantially improved result. •Dermot Gleeson, Executive Chairman, stated: 'The Board continues to believe that 2003/04 should see a significant uplift in Group profits and lay a strong basis for further profit growth thereafter.' Enquiries: M J Gleeson Group plc 020-8644 4321 Dermot Gleeson (Executive Chairman) Andrew Muncey (Group Managing Director) Colin McLellan (Finance Director) Bankside Consultants Limited Charles Ponsonby 020-7444 4166 CHAIRMAN'S INTERIM STATEMENT FINANCIAL OVERVIEW In what is traditionally much the weaker half of the year, turnover increased by 7.4% to £306.8m (2002/03: £285.7m). Profit before interest and tax, and profit before tax, were substantially higher at £4.9m (2002/03: £1.3m) and £3.3m (2002/ 03: £0.3m), respectively. Earnings per share were 22.0p (2002/03: 3.4p). In achieving this, all three Business Units - Construction Services, Homes and Properties - increased their operating profits. Net interest payable increased to £1.7m (2002/03: £1.1m). Gearing at the period end, a seasonally high point, was 70.9% (2002/03: 49.4%), mainly reflecting Gleeson Homes' increased investment in land and in work in progress. Net assets per share totalled £14.79 (2002/03: £14.52), providing substantial backing to the share price. INTERIM DIVIDEND The Board has declared an interim dividend per share of 7.02p, up 4% on 2002/ 03's 6.75p, which will be paid on 30th June 2004 to shareholders on the register at the close of business on 4th June 2004, with an ex-dividend date of 2nd June 2004. OPERATING REVIEW Gleeson Construction Services Gleeson Construction Services' turnover increased by 7.8% to £265.2m (2002/03: £246.1m), generating an operating profit of £2.3m (2002/03: loss of £0.2m). Building The Building Divisions' turnover increased by 35.5% to £161.7m (2002/03: £119.3m). A significant proportion of the work undertaken related to the Government's substantial capital expenditure programme on hospitals and schools. Civil and Process Engineering The Engineering Division's turnover fell by 27.5% to £64.8m (2002/03: £89.4m) following the completion of the Buxton cement works contract. The water sector, which is one of the busiest markets in the UK construction industry and in which Gleeson is the leading contractor, provided most of the Division's turnover. Specialist Subsidiaries The total turnover of the Group's specialist Construction Services subsidiaries, principal amongst which are Gleeson MCL Limited, Powerminster Limited and Concrete Repairs Limited, increased to £40.7m (2002/03: £38.5m). Gleeson Homes Gleeson Homes made an operating profit of £2.0m (2002/03: £1.8m) on turnover 5.0% lower at £37.7m (2002/03: £39.7m). In the half year, 197 units were sold at an average selling price of £181,000; compared with 191 and £207,000, respectively, in the first half of 2002/03. These minor reductions in turnover and selling prices reflect a fall in unit sales by Gleeson Classic Homes which specialises in small but very high value developments. Gleeson Properties Gleeson Properties turnover totalled £3.9m (2002/03: nil) and generated an operating profit of £3.0m (2002/03: £1.9m). The sale of a development site at Milton Keynes generated £3.9m of turnover and £1.2m of profit. Gross rental income totalled £2.4m (2002/03: £2.3m). The property investment portfolio remains concentrated on the office and industrial warehouse sectors. During the half year an office development in Fleet, Hampshire was acquired for £2.6m. PROSPECTS Gleeson Construction Services The Construction Services order book at 1 March 2004 totalled £636m. Of this, over 60% related to relatively low risk three to five year partnering agreements, and 20% related to PFI/PPP. Approximately half of the order book was water-related with the next most important categories being residential, rail, schools and hospitals. The present buoyant trading conditions enjoyed by the Building Divisions seem likely to be sustained for some time, The Government remains committed to maintaining high levels of capital spending, particularly in the health and education sectors. Moreover there appear to be opportunities for increased work in the retail sector for the Southern Building Division, whilst work for residential developers remains an important activity for the Northern Building Division. As a result, both the Building Divisions expect steady growth in the current year. The Engineering Division has commenced work on the £100m Katrine Water Project and its major role in Scottish Water's £1bn capital expenditure programme provides a strong platform for further expansion. Gleeson Homes Additional selling outlets in the second half are expected to support an increase on last year's 489 units to over 600 in the year to June 2004. The average selling price is expected to be around £204,000, compared with £195,000 a year ago. Success in the year in bringing a number of strategic land opportunities through the planning system should make it possible for a small number of land sales to contribute to record levels of profitability. The market remained strong during the first half, and the forward sales position for the balance of the year is very satisfactory. Improvement in the quality of the land bank has been maintained and sufficient plots will be in place to see further growth in 2005 and beyond. Gleeson Regeneration Gleeson Regeneration was formed in February 2003 to enable the Group to focus more closely on social housing and urban regeneration schemes. It is currently engaged in the £60m Grove Village, Manchester, PFI project, the first PFI project for social housing in the UK, and has very recently been selected as Liverpool City's preferred developer for the £300m redevelopment of the city centre's 'South Zone'. Gleeson Properties The commercial property market is benefiting from higher demand from tenants and owner-occupiers. In this context, a modest programme of disposals of development and investment properties is planned for the second half. If achieved, Gleeson Properties should register a substantially improved result. SUMMARY The Board continues to believe that 2003/04 should see a significant uplift in Group profits and lay a strong basis for further profit growth thereafter. AWARDS Since March 2003, the Company has been included in the FTSE's socially responsible investment index series, the FTSE4Good. It has also recently won the Corporation of London's Liveable City Environmental Management Award. In addition, the Sunday Times earlier this month adjudged the Group to be one of the 20 best companies to work for in the UK and the best company in the construction sector. These accolades have the potential to bring considerable business benefits to the Group, particularly in the public sector. Dermot Gleeson Chairman 23rd March 2004 CONSOLIDATED PROFIT AND LOSS ACCOUNT 6 months 6 months Year ended ended 31 December ended 31 December 30 June 2003 2002 2003 Unaudited Unaudited Audited £000 £000 £000 £000 £000 £000 Turnover: group and share of joint venture Existing operations 306,762 285,723 633,030 Less: share of joint ventures' turnover - - (8,466) ______ ______ ______ Group turnover 306,762 285,723 624,564 Cost of sales (283,959) (266,959) (575,906) ______ ______ ______ Gross profit 22,803 18,764 48,658 Investment property 2,381 2,318 4,613 income Net operating (19,838) (19,233) (40,045) expenses ______ ______ ______ Operating profit 5,346 1,849 13,226 Share of results of joint (400) (584) (1,275) ventures Profit on sale of investment - 78 95 properties ______ ______ ______ Profit on ordinary activities before 4,946 1,343 12,046 interest Interest receivable 305 186 493 Less: interest (1,958) (1,274) (3,054) payable _____ _____ _____ (1,653) (1,088) (2,561) _____ _____ _____ Profit on ordinary activities before 3,293 255 9,485 taxation Taxation on profit on (1,070) 83 (3,666) ordinary activities _____ _____ _____ Profit after 2,223 338 5,819 taxation Dividends (718) (670) (3,519) _____ _____ _____ Retained profit/ (loss) for 1,505 (332) 2,300 the period _____ _____ _____ ======= ======= ======= Earnings per share 21.98p 3.35p 58.03p Earnings per share - fully 21.71p 3.33p 57.77p diluted Interim dividend per 7.02p 6.75p share SUMMARISED CONSOLIDATED BALANCE SHEET As at As at As at 31 December 31 December 30 June 2003 2002 2003 Unaudited Unaudited Audited £000 £000 £000 Fixed assets Intangible assets 4,948 5,256 5,102 Tangible assets 96,815 88,518 93,590 Investments 4,118 6,059 4,478 ______ ______ ______ 105,881 99,833 103,170 Current assets Stocks 165,558 138,285 130,013 Debtors 115,871 117,256 121,321 Cash at bank and in hand 141 144 150 ______ ______ ______ 281,570 255,685 251,484 Creditors: amounts falling due within one year (235,308) (207,312) (204,332) ______ ______ ______ Net current assets 46,262 48,373 47,152 ______ ______ ______ Net assets 152,143 148,206 150,322 ______ ______ ______ ======== ======== ======== Capital and reserves Called up share capital 1,029 1,021 1,024 Share premium account 3,762 1,689 3,450 Capital redemption reserve fund 120 100 120 Revaluation reserve 9,424 10,685 9,480 Profit and loss account 137,808 134,711 136,248 ______ ______ ______ Total shareholders' funds 152,143 148,206 150,322 ______ ______ ______ ======== ======== ======== SUMMARISED CONSOLIDATED CASH FLOW STATEMENT 6 months ended 6 months ended Year 31 December 31 December ended 2003 2002 30 June Unaudited Unaudited 2003 Audited £000 £000 £000 Net cash (outflow)/inflow from operating activities (47,901) (27,936) 6,882 Returns on investments and servicing of finance 391 1,251 2,191 Taxation (1,432) (3,144) (5,885) Capital expenditure and financial investment (5,063) (4,746) (14,749) Acquisition and disposals (50) - (862) Equity dividends paid - - (3,296) Financing 317 (1,457) (1,241) ______ ______ ______ Decrease in net debt (53,738) (36,032) (16,960) ====== ====== ====== NOTES 1. Segmental analysis 6 months ended 6 months ended Year December December ended 2003 2002 June Unaudited Unaudited 2003 Audited £000 £000 £000 Analysis of turnover on continuing operations: Construction United Kingdom 263,689 244,726 517,165 Jersey 1,525 1,326 4,128 ______ ______ ______ 265,214 246,052 521,293 Homes - United Kingdom 37,668 39,671 103,271 Property - United Kingdom 3,880 - - ______ ______ ______ 306,762 285,723 624,564 ====== ====== ====== Operating profit on continuing activities: Construction 2,252 (226) 4,634 Homes 2,012 1,841 9,053 Property 3,003 1,867 2,639 Central costs (1,921) (1,633) (3,100) ______ ______ ______ 5,346 1,849 13,226 ====== ====== ====== 2. The interim statement was approved by the Board of Directors on 22 March 2004. 3. The interim accounts have been prepared in accordance with the accounting policies adopted in the preparation of the accounts for the year ended 30 June 2003 which are set out in the Company's Annual Report. 4. The abridged results for the year ended 30 June 2003 do not constitute Statutory Accounts within the meaning of S240 of the Companies Act 1985. The Auditors' Report on these Accounts was unqualified and did not contain any statement under S237 of the Companies Act 1985. 5. In accordance with FRS 14, the earnings per share figure is based on a weighted average number of shares which excludes 170,371 shares on which dividends have been waived. 6. Copies of this interim announcement will be circulated to shareholders and will also be available from the Company Secretary at Haredon House, London Road, North Cheam, Surrey SM3 9BS. This information is provided by RNS The company news service from the London Stock Exchange

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