29th Sep 2014 10:40
LONDON (Alliance News) - Urban regeneration business MJ Gleeson Group PLC Monday said affordable housing will remain a top priority rather than increasing sales prices, as profit more than doubled in its last financial year.
The company, which operates from two divisions Gleeson Homes and Gleeson Strategic Land, posted pretax profit of GBP12.2 million for the year to June 30, up from GBP5.6 million a year earlier, as revenue jumped 34% to GBP81.4 million from GBP60.7 million.
The Hampshire-headquartered company said sales in its Homes division increased 38% to 561 units compared with 406 units a year earlier.
This increase in volume was accompanied by a modest improvement in selling prices to GBP121,000 from GBP118,000. Overall, the division recorded revenue of GBP70.6 million, up from GBP47.9 million a year earlier.
Gross profit margin for the arm improved to 29.2% from 27.8 a year earlier. Gleeson said this was due to a combination of the continued improvement in the mix of homes sold from the new, higher margin sites, an increase in the average selling price, and the maintenance of a very stringent approach to cost control.
The Strategic Land business, which buys and sells building plots, posted revenue of GBP10.8 million compared with GBP12.7 million a year earlier.
Although revenue was slightly lower, Gleeson said demand for residential land in the south of England from major housebuilders remained strong throughout the year.
As a result, the business unit was able to complete seven land sales, with a combined acreage of 85 acres, with the potential to deliver 617 plots for development.
During the year, seven new sites were secured by means of either option, promotion, or subject to planning agreements. These covered 236 acres, with the potential to deliver 1,445 houses. In addition, heads of terms have been agreed for a further 6 sites covering 216 acres, with the potential for 1,365 plots, Gleeson said.
At the year-end, Gleeson Strategic Land's portfolio totalled 3,082 acres compared with 3,582 acres a year earlier.
Looking ahead, the company said the outlook for the group remains "highly encouraging."
Nonetheless, it warned that its commitment to providing affordable homes to buyers on low incomes means that it does not expect a significant increase in sales prices.
"However, the substantial increase in the size of the land bank achieved over the last year means that there is considerable scope to generate significant further, year on year, profit growth by means of an increase in sales volume." Chairman Dermot Gleeson said in a statement.
On the back of its performance, the company increased its final dividend to 4.9 pence from 2.0 pence, making a total dividend of 6 pence compared with 2.5 pence a year earlier.
MJ Gleeson shares were quoted up 0.8% at 390.00 pence Monday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
MJGleeson