Operationally, total house sales rose from 174 units to 286 in the period, although the average selling price fell 5 per cent to £124,000 per home, reflecting the shift in construction to the north of the country. Gleeson has also taken advantage of cheap land prices in the north, increasing the size of the land bank to over 2,400 plots. On the strategic land side, Gleeson completed two substantial land sales, which boosted operating profit at the unit from £2.2m to £2.7m, while the land portfolio remained substantial but slightly lower at 3,766 acres. The fall in group turnover reflected the successful winding down of the commercial property development side.
Once again, there was no regular dividend pay-out but, following the sale of three PFI investments, a 5p special dividend is being proposed.
|M J GLEESON (GLE)|
|ORD PRICE:||102p||MARKET VALUE:||£53.7m|
|TOUCH:||100-107p||12-MONTH HIGH:||147p||LOW: 99p|
|DIVIDEND YIELD:||nil||PE RATIO:||35|
|NET ASSET VALUE:||188p||NET CASH:||£17.8m|
MJ Gleeson has a healthy cash pile and a significant land bank. But, while the shares trade well below the group's net asset value, today's uncertain trading backdrop leaves that discount looking about right. Fairly priced.
Last IC View: Fairly priced, 128p, 22 February 2011