One-off hit puts Gleeson in the red

MJ Gleeson plunged into the red last year. The high cost of jettisoning the troubled building division left the group with a one-off hit of £52m.

Gleeson’s on-going businesses generated a profit of £38m, but once the burden of the discontinued division was added, the group’s latest financial results plunged to a pre-tax loss of £13m.

Martin Smout led a management buy-out of the building division in August. Four hundred Gleeson employees went to the new business.

Gleeson’s turnover of £590m (12 months to 30 June 2005) contained a £170m contribution from the former building division.

Dermot Gleeson, chairman, said: “The withdrawal from general building contracting has very substantially reduced the group’s risk profile.”

The biggest earner in Gleeson’s on-going divisions was housebuilding, which produced an operating profit of £17m. There was a further £13m from the remaining construction division, which undertakes civil and process engineering work – the figure was well ahead of the £8m operating profit recorded in the previous year and represents a margin of 5.1%.