Gleeson focuses on north-south divide

MJ Gleeson builds houses and sells land, but its business model differs from that of others in the sector in that house construction is concentrated in the north of England, while land sales are in the south. This has its merits because brownfield sites in the north are cheap, while a decent turn can be made in the south simply by gaining planning consent on land and selling it on.

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.

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