MJ Gleeson to spread its wings

Operating exclusively in the north of England, sales were up by a third at 751, with demand underpinned by the government's Help to Buy scheme, used to fund nearly half of all sales. Indeed, reservations since the year-end have been running at record levels. During the reported period, Gleeson acquired 20 new sites equivalent to 1,203 plots which - together with conditional purchases - takes the land bank up to 7,500 plots. There are also plans to expand geographically. Chief executive Jolyon Harrison suggests the medium term target of building 1,000 units a year could at some point grow to three times that total.

Gleeson also has a strategic land operation, bringing sites through the planning process and selling them to hungry housebuilders, predominantly in the south of England. Sales doubled to £21.5m, pushing operating profits up from £4.8m to £8.1m. Three land sales were completed, with unconditional exchange on two further sites bringing the total sold to 62.2 acres. However, in the current financial year it has also completed the sale of a 100 acre site for a major commercial development. The land bank has been replenished with 13 new sites at various stages of negotiation, and the land bank at the year-end stood at 3,936 acres.

Normalised earnings per share doubled to 34.2p a share, while the headline figure fell by a third due to one-off costs associated with restructuring and a £4.9m provision on the carrying value of its 25 per cent state in the now defunct GB Group Holdings.

Analysts at N+1 Singer have upgraded their forecasts for the year to June 2016, and now expect underlying pre-tax profits of £25.1m and EPS of 37.2p (from £23.4m/34.3p in 2015).