Gleeson sales jump but prices fall 5%

Aaron Morby 11 years ago

House builder Gleeson crept back into an operating profit this year after a 64% rise in house sales to 286 units.

The average selling price of £124,000 fell 5%, reflecting the group’s policy to increase the number of units sold in the north, rather than the South of England where land dealing is its priority.

Operating profit returned to £0.9m after a loss of £300,000 last year, although turnover fell 10% to £41.5m.

Dermot Gleeson, chairman of MJ Gleeson, said: “During the year, conditions in the housing market remained challenging.

“However, the selling prices of new homes remained generally stable and towards the end of the period there was a welcome increase in the number of higher loan to value mortgages available for first time buyers.

He added: “The board continues to be confident that the group’s strategic focus on low cost brownfield development in the North of England and on the promotion and sale of high value green field sites in the South, will ensure a strong and sustainable improvement in performance.”

Advantage has been taken of reduced land prices in the North of England to build up a substantially enlarged landbank.

During the year, three sites were purchased in Yorkshire, adding 147 plots to the land bank. Subsequent to the year end, a further two sites of 414 plots have been purchased in Yorkshire and Manchester.

A further nine sites that have been conditionally purchased are expected to add in excess of 1,070 plots to the land bank in the near future.

When these acquisitions are completed, the land bank will total in excess of 2,400 plots.

Central overheads were reduced by 26% to £1.4m with the average staff head count now down to 100 from 283 in 2010.

Group pre-tax profit in the year to end-June reached £1.5m, up from £400,000 last time.

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