Gleeson gears-up for post pandemic work push

Grant Prior 3 years ago
Share

MJ Gleeson is planning to raise £16.4m from a share placing to allow the house builder to accelerate construction work after the Covid-19 crisis.

Gleeson suspended building work on all of its sites last month and furloughed three quarters of its workforce.

Gleeson is now preparing for the post-pandemic world and an acceleration in build rates.

Key to boosting work rates will be protecting the supply chain and Gleeson has set aside £4m of the new cash for its subcontractors.

The share placing will :

  • Ensure subcontractors and key trades are ready to re-commence building. The Company will work closely with its supply chain, mindful of their own financial positions, honouring commitments and bringing them back to site. This is expected to cost c.£4m
  • Secure materials including the supply of bricks, block timber, kitchens and other materials ensuring availability on resumption of building. This is expected to cost c.£2m
  • Purchase and open new sites under contract. This is expected to cost c.£10m

Gleeson currently has 1,046 plots built to slab level across its 67 active sites.

It anticipates that, in addition to the resumption of building on its current sites and completion of its current order book, there “will be a significant opportunity to convert the company’s current pipeline of new sites owned or under contract to help satisfy demand for the company’s homes.”

Gleeson has 22 new sites owned or in planning of which management had, prior to the current lock-down, planned to phase the openings of 17 sites during the remainder of the first half of 2020.

It is now “targeting a compression of these new site openings into a smaller window once COVID-19 restrictions are lifted.”

Gleeson said: “The company believes that once COVID-19 restrictions are lifted, low cost homes and those sold to first-time buyers will be the segment of the housing market that will recover the fastest.

“A precursor to home ownership is the saving of a deposit of as little as £5,000. A significant proportion of the company’s customers are the Key and Critical Workers who will be working overtime during the current health crisis and may emerge from this period having saved such amounts.

“To be able to meet the demand for its homes, building on current sites and opening of new sites will be concertinaed into a much shorter time scale, which will be more capital intensive than usual.

“The Company is therefore proposing to raise additional capital by way of the Placing to provide additional liquidity.”

Latest news

Materials giant CRH looks to sell contractor Farrans

More than 550 staff set to get new owner
2 days ago

West Yorkshire transport projects delayed to save £270m

Over 30 transport schemes to be placed on hold due to cost inflation budget pressure
19 hours ago

Decision on A1 Costain dualling job delayed for third time

Development consent decision for £260m Northumberland scheme put back a further 9 months
20 hours ago

Colas wins £140m Cheshire highways upkeep deal

Incumbent contractor Ringway will handover to Colas in April
20 hours ago

Skanska to lend staff cash

Contractor links-up with finance firm to offer affordable loans to employees
20 hours ago

Ilke Homes pulls off £100m record-breaking fund raise

Largest-ever capital raise by a UK modular house builder to fund expansion
2 days ago

Construction buyers fear for year ahead

"Construction companies now have a tightrope to walk in terms of being ready for recovery and cautious around investment"
2 days ago

Gove calls for competition probe into house building

Levelling Up and Regeneration Bill 'strengthened' with new measures
2 days ago

Schools get £500m for energy upgrades this winter

Extra cash found for better heating controls, insulation and energy efficient lighting
2 days ago

1,000-home North London scheme approved

Developer Hill will start work in the Spring on South Tottenham site
2 days ago

Bid race for £500m Suffolk construction framework

Construction and building services firms called up for East of England four year deal
2 days ago

Mace employs robot dog to avoid slip and trips in tunnel

Robot working in dark and hazardous conditions under Heathrow Airport
2 days ago

Administrator details confirmed at Southampton M&E firm

Begbies Traynor now in charge at Working Environments as suppliers face large losses
2 days ago

Former Galliard chief takes helm at Inland Homes

New CEO Don O'Sullivan sets out to return south east house builder to profitability
2 days ago

Applicant numbers nosedive for construction vacancies

Recruitment market gets even more competitive - how the Enquirer can help
3 days ago

Industry veteran to head Henry Bros northern arm

Peter Commins, former Kier and Balfour Beatty northern chief, to spearhead growth drive
2 days ago

Housing association shuts in-house modular factories

Swan closes loss-making steel frame and cross-laminate timber factories
3 days ago

350-homes approved around iconic London Tube station

Housing blocks to be built around Grade II-listed Hounslow West Tube station
3 days ago

Domis set for £195m Boddingtons Brewery scheme

Developer Salboy buys Manchester site to kickstart long-awaited 556 homes project
3 days ago

John Lewis £500m funding deal to build 1,000 rental homes

Deal to advance BTR flats at store sites in Bromley, West Ealing and Reading
3 days ago

Esh launches new housing retrofit division

Esh Retrofit Solutions will target market to improve the energy performance of social rented homes
3 days ago

Eric Wright wins tricky £52m Liverpool transformation

Contractor working with engineers at Ridge and Partners on "challenging" Stanley Lock Flight site
6 days ago

Investment giant buys Bristol M&E contractor

RDCP Infrastructure acquires Avon Combined Electrical Services
6 days ago

Demolition start for £50m Farnworth town centre rebuild

Caddick Construction is tipped for main works due to start in the spring
6 days ago

L&G Modular strikes deal to build 1,000 affordable homes

Modular homes business teams up with Hampshire's Vivid housing association
6 days ago

Former Erith operations director joins John F Hunt

Scott Exell named new operations director at demolition specialist John F Hunt
6 days ago

Green light for £135m Leeds twin tower resi scheme

Construction to start in New Year on 500 build-to-rent apartments
6 days ago

Mace hits 1m tonnes carbon saving target for clients

Present work pipeline betters 2026 carbon emission saving target
6 days ago

Plans in for £40m surf park at former Kent colliery

Seahive surf lagoon and health resort will be built near Deal
7 days ago

Crushed demolition worker vows to return to industry

Shannon Brasier hoping to return to construction following horror accident
7 days ago

Contractor services