MJ Gleeson (GLE) buys derelict inner city land in the north of England and builds houses at prices those on lower incomes can afford. In the south, meanwhile, it buys land, gains planning consent and sells the land onto hungry housebuilders. But it was the booming housebuilding operation that explains the group's hefty half-year profit hike.
Average selling prices rose from £115,000 to £120,000 and sales revenue jumped 73 per cent to £33m, reflecting a 56 per cent rise in units sold to 258, with 44 per cent of completions coming through the government's Help to Buy scheme. Visitor numbers in the first two months of the second half are also well ahead of last year's outcome.
Profits from selling strategic land, meanwhile, fluctuate according to the timing of land sales. So, with just two land disposals made during the period - totalling four acres against 13 acres a year earlier - operating profit there fell from £1.7m to £100,000. But planning consent has been secured on three more sites and a further 12 applications are being processed.
Broker N+1 Singer expects full-year adjusted pre-tax profit of £9.5m, giving EPS of 17.8p (from £4.8m and 9p in 2013), rising to 23.7p in 2015.
| MJ GLEESON (GLE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 452p | MARKET VALUE: | £240m | |
| TOUCH: | 435-455p | 12-MONTH HIGH: | 467p | LOW: 170p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 216p | NET CASH: | £5.4m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 26.1 | 1.3 | 2.5 | 0.5 |
| 2013 | 34.4 | 2.7 | 7.0 | 1.1 |
| % change | +32 | +108 | +180 | +120 |
Ex-div: 5 Mar Payment: 4 Apr | ||||
