25th Apr 2014 09:17
LONDON (Alliance News) - Urban regeneration firm MJ Gleeson Group PLC Friday said it expects its full-year profit to be in line with, or "possibly better than", current market expectations, despite planning delays creating some uncertainty with respect to the exact number of land sales that will be achieved within the current financial year.
The Hampshire-headquartered company, which operates from two divisions Gleeson Homes and Gleeson Strategic Land, said its homes business has continued to perform well since January 1 and has been boosted by the UK government's Help to Buy scheme, with 31% of completions in the year taking advantage of the scheme.
The first part of the scheme, which is now a year old, makes buyers of newly built homes eligible for a 20% equity loan from the UK government on top of their 5% deposit. It has been extended by four years to 2020. The second phase, which has not been extended, started in the Autumn last year and guarantees a portion of a buyer's mortgage of new and existing homes.
The company expects Gleeson Homes to record more than 540 completions in the year to June 30, a 33% increase on the 406 units completed in the prior year.
Gleeson said the homes business currently has 37 actives sites, compared with 29 in the corresponding period last year, while total sales year to date, comprising reserved, contracted and completed homes, are up 63% on last year.
Gleeson Homes, which builds houses in areas including Durham and South Tyneside, is in active discussions regarding the acquisition of a further 10 sites, which if purchased will add 1,300 plots to its regeneration land pipeline, taking the total number of plots to in excess of 6,100.
The strategic land division, which buys and sells building plots, also has performed in line with expectations the firm said. The business currently has eight sites with planning permission. Six of these consisting of 706 plots, are being progressed for sale in the current financial year.
Gleeson said if all these sales are achieved, the division will contribute a higher level of profit than in any financial year since 2007.
The strategic portfolio consists of 67 sites totalling 3,811 gross acres, which have the potential to deliver 21,900 plots. There are currently 15 sites either with submitted planning applications or with a planning appeal lodged, which have the potential to deliver 100 acres of commercial land, a 60 bed nursing home and in excess of 2,000 plots.
The stock hasn't traded Friday. It closed Thursday at 373.66 pence per share.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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