Gleeson Building's maiden set of results show pre-tax profit

Gleeson Building has out-performed its own expectations by logging a pre-tax profit in its first year of independent trading after the management-led buy-out from the Gleeson Group.

Martin Smout, GB’s chief executive and leader of the management buy-out, is over the moon with the performance.

After a first-year turnover of £184m, Smout anticipates a turnover figure of £200m in the current year followed by a jump to £275m in Year Three.

Gleeson Building has just published its maiden set of financial results (11 months to 30 June). There was a pre-tax profit of £100,000. Profit was trimmed back by one-off acquisition costs, mainly legal fees, and goodwill amortisation. Without these, the figure would have been £1.3m higher.

“Our budget was for a £650,000 loss so we came out well ahead of that,” said Smout. This year’s budgeted figure of £740,000 could also prove to be on the cautious side.

“There are no divisions here,” he added. “It’s all one business. “I told everyone that we’re not going to run fiefdoms. I’m passionate about that. There’s no room for managers who think ‘my clients’ and ‘my staff’ and ‘sod to everyone else’.”

Key changes include the appointment of three new regional directors. One of the trio, Paul Baxter, is heading up a new region, known as Central West, with a base in Tamworth.

Gleeson Building also has three new commercial directors as well as a director of design, Jose Castillo-Bernaus, and a director of cost planning, Bernard Thomas.

The management buy-out deal was achieved without needing to bring in venture capital, thanks to two strands of financial help from the parent group – there is access to a £3.5m reserve from MJ Gleeson should that ever be needed and a £2.5m loan note.

“A venture capitalist would drive us to expand quicker than we wanted, whereas we’ve been able to move steadily, first setting up the right platform for going forward” said Smout. “Venture capitalists put you into the situation of having to buy work.”

Gleeson Building has appointed a junior board. “It takes individuals out of their comfort zone and results in them working with people they’ve never met before,” said Smout.

“It’s a challenge to them and it’s also a challenge to us on a senior board. It’s rewarding to see how they have progressed.”