17th Feb 2014 09:26
LONDON (Alliance News) - Urban regeneration firm MJ Gleeson Group PLC Monday reported an increase in profit and revenue for the half year and said it is confident of meeting expectations for the full year, but said it is also mulling an overhaul of its corporate structure to take account of recent operational changes.
In a statement, the company said it is currently considering its options, including the insertion of a new group holding company, after it withdrew from contracting, commercial property development and PFI investment in 2013. It said an in initial review, still in its early stages, is focused principally on managing the exposure of the firm's ongoing businesses to potential costs from the discontinued activities.
The Hampshire-headquartered company posted pretax profit of GBP2.7 million for the six months to end-December, up from GBP1.3 million in the same period a year earlier, driven by a strong trading performance in its homes division.
"Gleeson Homes has commenced 2014 with a very encouraging level of visitors, and the number of reservations secured in January and early February has been well ahead of the level secured in the same period in 2013," the company said.
Group revenue rose 32% to GBP34.4 million during the fiscal first half, from GBP26.1 million a year earlier, reflecting a rise in the number of units sold by Gleeson Homes, which is focused in the north of England.
Gleeson Homes, which builds houses in areas including Durham and South Tyneside, saw revenue jump 73% to GBP33.0 million, from GBP19.1 million, reflecting a 56% rise in the total number of units sold to 258, from 165 a year earlier.
The firm said the UK government's mortgage-financing scheme Help to Buy has continued to be attractive to its customers, with 44% of completions in the period benefiting from the initiative.
The first phase of the Help to Buy scheme in England started in April 2013, making buyers of newly built homes eligible for a 20% equity loan from the government on top of their 5% deposit. The second phase, which started in the Autumn, guarantees a portion of a buyer's mortgage.
It said the average selling price for the units sold increases to GBP120,000, from GBP115,000, due to price increase on a number of high volume sites.
The strategic land division, which buys and sells building plots, saw revenue fall to GBP1.5 million, from GBP7.0 million, as a result of two land sales with a combined acreage of four acres. A year earlier the firm sold three sites with a combined acreage of 13 acres.
On a more positive note, the division achieved planning persimmon on three sites which will deliver a combined total of 380 plots when they are sold. In addition, 12 planning applications with the potential to deliver a total of 1,737 plots were submitted during the period, and more will be submitted during the second half of the financial year.
"Strategic Land continues to enjoy a considerable level of success in securing residential planning permissions and is currently progressing the sale of a number of sites," Chairman Dermot Gleeson said in a statement.
"Against this background, the board anticipates further substantial improvements in the group's trading performance and is therefore confident of delivering a result for the full year in line with expectations," he added.
The board proposed an increase in the interim dividend to 1.1 pence from 0.5 pence a year earlier.
The stock was trading at 440.12 Monday morning, down 9.62 pence, or 2.1%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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