MJ Gleeson (GLE) builds affordable homes for people on low incomes, exclusively in the north of England. The appeal is strong to ordinary working class couples renting or living at home because average selling prices are low at £125,200, which chief executive Jolyon Harrison is keen to point out means that a couple on the national living wage can afford a mortgage to buy one of the homes.
The other side of the business concentrates on bringing land though the planning process in the south of England and selling it to housebuilders. Both sides of the business performed well in the year to June 2018, and Gleeson remains on track to double the number of homes between 2017 and 2022 to 2,000 units a year. Completions in the year to June rose more than a fifth to 1,225. The company is now operating on a record 149 sites owned or conditionally purchased, with room for 12,852 units.
On the strategic land side, operating profits rose 5 per cent to £12.6m, with 10 transactions completed. There is also a pipeline of 61 sites, which could deliver nearly 23,000 residential plots.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to June 2019 of £40.6m and EPS of 59.4p (from £37m and 55.6p in 2018).
| MJ GLEESON (GLE) | ||||
| ORD PRICE: | 718p | MARKET VALUE: | £392m | |
| TOUCH: | 702-720p | 12-MONTH HIGH: | 830p | LOW: 606p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 345p | NET CASH: | £41.3m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 81 | 12.2 | 33.4 | 6 |
| 2015 | 118 | 17.3 | 23.2 | 10 |
| 2016 | 142 | 28.2 | 43.2 | 14.5 |
| 2017 | 160 | 33.0 | 49.1 | 24 |
| 2018 | 197 | 37.0 | 56.0 | 32 |
| % change | +23 | +12 | +14 | +33 |
| Ex-div: | 15 Nov | |||
| Payment: | 14 Dec |
