25th Feb 2015 11:19
LONDON (Alliance News) - MJ Gleeson PLC Wednesday reported strong growth in operating profit and revenue in the first half of its financial year, driven by its home building unit which is set to report a record increase in home completions for the year as a whole.
The urban regeneration and strategic land specialist reported an operating profit from continuing operations of GBP4.0 million for the six months to end-December, up from GBP2.6 million a year earlier, as revenue rose to GBP42.6 million, from GBP34.4 million. Pretax profit rose to GBP3.9 million, from GBP2.7 million. Its net profit actually declined slightly to GBP3.2 million, from GBP3.6 million, but the year-earlier figure has been bolstered by a GBP1.1 million exceptional deferred tax credit.
Sales of Gleeson Homes rose to 321 units in the half, from 258 a year earlier, and the gross margin in the business improved to 28.8% from 25.9%. Its average selling price rose 3.8% to GBP124,600, from GBP120,000.
"The forward order book for Gleeson Homes, which totalled 299 homes at 31 December 2014 has continued to improve during January and early February and the board now expects to record an increase in completions in the year to 30 June 2015 of not less than 30% against the prior year total of 561 units," Chairman Dermot Gleeson said in a statement.
The division now has a land pipeline of more than 5,200 plots including owned sites and sites in the process of being acquired.
The company's Gleeson Strategic Land business, which helps landowners sell land to other housebuilders, sold two sites of a combined 16.5 acres in the half. It now has ten sites in the portfolio with planning permission or resolution to grant planning permission, and twelve sites awaiting determination of a planning application or the outcome of a planning appeal.
"Gleeson Strategic Land continues to progress the sale of a number of sites and anticipates an increase in profits compared to the prior year. Against this background, the board remains confident that the group's trading performance will match current market expectations," Dermot Gleeson said.
The company more than doubled its interim dividend on the back of the strong performance, to 2.7 pence from 1.1p.
Its shares were up 0.9% at 378.00 pence Wednesday morning.
N+1 Singer is forecasting the company will report a pretax profit of GBP16.6 million for the current financial year as a whole, according to data on Morningstar, rising to GBP19.95 million in fiscal 2016. The company reported a pretax profit of GBP12.2 million for its last financial year.
By Steve McGrath; [email protected]; @stevemcgrath1
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