MJ Gleeson (GLE) ticked all the right boxes in the six months to December 2016, pushing house completions ahead by 12.8 per cent, and with record reservations to add further earnings visibility. Shareholders were rewarded by a 44 per cent jump in the half-year dividend, and strong cash flow helped to boost net cash from £9.6m a year earlier to £26.4m.
The business model centres on building affordable homes in the north of England and selling buildings plots 'oven ready' to other housebuilders in the south of England. On the housebuilding side, the emphasis is on 'affordable', and average selling prices were just £121,400 which was down slightly as a result of a change in the sales mix. Net margins rose from 15.4 per cent to 15.5 per cent, and the land pipeline grew from 9,284 to 10,454 plots. Open sites rose from 45 to 51, and this number is expected to grow significantly by the June year-end.
Three land sales were completed against four the previous first half. And while profit was subsequently lower at £4m, land sales for the full year are expected to be roughly the same as in the previous year.
Analysts at Liberum are forecasting full-year pre-tax profit of £30.3m and EPS of 44.9p (from £27.9m and 42.6p in 2016).
| MJ GLEESON (GLE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 587p | MARKET VALUE: | £318m | |
| TOUCH: | 570-587p | 12-MONTH HIGH: | 620p | LOW: 385p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 290p | NET CASH: | £26.4m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 64.8 | 11.3 | 16.8 | 4.5 |
| 2016 | 63.0 | 11.5 | 17.1 | 6.5 |
| % change | -3 | +2 | +2 | +44 |
Ex-div: 9 Mar Payment: 7 Apr | ||||
