MJ Gleeson (GLE) builds houses in the north of England on inner-city sites at prices those on lower incomes can afford. It does operate in the south, too, but only in planning: it buys land, gets permission to build on it and sells it to hungry housebuilders.
It was the building side of the business that contributed most during the financial year to 30 June, with operating profits more than doubling to £9.4m. The key driver was a 38 per cent jump in sales to 561 units. The group also benefited from a bigger proportion of sales on land bought since the 2008 crash in land values - up from 75 per cent to 84 per cent of all sales. All these helped to lift gross margins from 27.8 per cent to 29.2 per cent.
Land prices in the north of England are still relatively cheap, and Gleeson bought 12 sites, bringing a further 1,180 plots on board. Another 24 sites have been conditionally purchased, adding a further 1,815 plots and lifting the total land bank to 5,065 plots. On the planning side of the business, operating profits rose over a third to £4.8m.
Analysts at N+1 Singer are forecasting adjusted pre-tax profit for the coming year of £15.4m and EPS of 22.7p (from £11.4m and 15.8p in 2014).
| MJ GLEESON (GLE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 390p | MARKET VALUE: | £209m | |
| TOUCH: | 390-395p | 12-MONTH HIGH: | 467p | LOW: 311p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 239p | NET CASH: | £11.8m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 46.5 | 0.5 | 1.3 | nil |
| 2011 | 41.4 | 1.5 | 3.0 | nil* |
| 2012 | 40.8 | 3.0 | 5.5 | nil* |
| 2013 | 60.7 | 5.8 | 19.1 | 2.5 |
| 2014 | 81.4 | 12.2 | 33.4 | 6 |
| % change | +34 | +110 | +75 | +140 |
Ex-div: 20 Nov Payment: 17 Dec *Excludes special dividends: 15p in 2011 and 5p in 2012 | ||||
