Ramping up housing completions to 2,000 a year by 2022 remains a top priority for MJ Gleeson (GLE), said chief executive James Thomson, but the housebuilder delayed opening new sites during the first half to tighten-up the pre-start process. “Sometimes the focus on the building can begin to slip,” said Mr Thomson. However, management still expects to open a further seven sites by June.
Lower active sites did not hinder completions during the first half, which rose 17 per cent to 811 units, although selling a greater proportion of two-bed homes meant Gleeson Homes’ operating margin declined 90 basis points to 15.1 per cent.
Three strategic site sales that were expected to complete in December were delayed due to the timing of the general election, although all are expected to complete by the end of February. That lack of sales was responsible for pulling down the group’s pre-tax profits during the period and meant the return on capital employed declined to 19.1 per cent, from 29.5 per cent in the prior year.
House broker Liberum forecasts adjusted pre-tax profits of £44.5m and EPS of 65.7p for December 2020, rising to £48.5m and 71.1p in 2021.
| MJ GLEESON (GLE) | ||||
| ORD PRICE: | 960p | MARKET VALUE: | £ 531m | |
| TOUCH: | 932-966p | 12-MONTH HIGH: | 1,010p | LOW: 690p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 366p | NET CASH: | £31m* | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 118 | 22.3 | 33.2 | 11.5 |
| 2019 | 105 | 13.3 | 19.9 | 12.0 |
| % change | -11 | -40 | -40 | +4 |
| Ex-div: | 05 Mar | |||
| Payment: | 03 Apr | |||
| *Excludes £3.4m in lease liabilities. | ||||
