Gleeson to focus on regeneration

Gleeson will sell off its engineering division, Concrete Repairs Limited (CRL) and non-housing PFI investments to concentrate on regeneration.

Gleeson announced its strategic review this morning to the Stock Exchange. It notes that while the engineering arm and CRL are market leaders and performing strongly, "neither sits well within the group's new model". Gleeson will sell these to purchasers who "can offer good value to shareholders, while providing enhanced career opportunites for the employees concerned".

The group's commercial property investment portfolio (16 schemes in total) and non-housing PFI investments will also be sold, as will the current head office in Cheam, Surrey. The group will in future be based at the Gleeson Homes office in Fleet, Hampshire.

Gleeson Homes' activities outside regeneration will be "substantially reduced". The regeneration activities will comprise: houisng for sale, mainly on local authority land; maintenance and refurbishment services for social housing providers, to be carried out by the Powerminster and Gleeson Assetcare businesses; and social housing PFI projects.

The group is also considering moving to the Alternative Investment Market.

Having seen this announcement, Castle Acquisitions is no longer bidding for Gleeson.

Last week Gleeson sold Gleeson MCL to Morgan Sindall. Last year it sold its core building arm to a management buy-out.

• Gleeson posted a substantial drop in pre-tax profit to £685,000 (down from £7.5m) on turnover up slightly to £179.3m in the six months to 31 December 2005.