Pre-tax profits crept back to £447,000 from a £50m loss last time.

But the group, which has shrunk heavily in recent years and now only employs just 95 staff, continued to struggle at a trading level with a £300,000 operating loss.

Revenues increased by £3.5m to £46.5m in the year to June as the strategic land business sold three significant sites and the commercial property arm disposed of its remaining properties.

Gleeson’s main remaining business Regeneration & Homes reduced operating losses to £1.3m from £33.3m last time on revenue virtually halved at £22.7m.

The improvement came from the partial reversal of earlier assets writedowns.

Over the year, the number of homes sold fell to 174 compared to 313 last time, although a 17% rise in average selling prices to £131,000 helped to offset this fall.

Glesson’s strategic land arm, which operates mainly in the South East, sold three sites to return to the black with an operating profit of £2.2m.

The sale earlier this year of profit making maintenance contractor Powerminster for £6.6m to Morgan Sindall accounted for the sharp fall in staff from 286 to 95.

Dermot Gleeson, chairman of MJ Gleeson Group, said: “During the year to 30 June 2010, conditions in the housing market showed modest signs of improvement.

“The steep fall in selling prices experienced in the previous two years levelled off and there was some easing of the credit conditions required by mortgage providers.

“Against this background, the group, which has net cash balances, recommenced construction on a number of mothballed developments and has begun selectively to purchase new residential sites, taking advantage of depressed land prices in the North of England.

“Although trading to date during the current year has been in line with expectations, the short term outlook for housing demand remains difficult to predict.”