Gleeson sell-offs help stem losses

MJ Gleeson Group’s massive transformation has pushed on past the mid-point and will be complete by June, said chief executive Paul Wallwork.

Interim financial results (six months to 31 December 2006) show a pre-tax loss of £300,000, an improvement on the £5m loss in the comparable period of the previous year.

The risk of Gleeson completely imploding has been avoided thanks to massive surgery, which has resulted in the disposal of several of its former business streams, including housebuilding and construction.

When Wallwork took over in the hot seat 15 months ago, he faced what he calls the mother of all hybrid companies. “It was strategically unfocused and indebted to the banks,” he said. “I had to deal with those issues right away. The transformation has resulted in a smaller group with focus and one which is net cash positive.

“As a result, the future is in our hands. There was a danger of the banks taking control and if they had, then they’d have done what I’ve done, although I think with having being able to handle it our way, I’ve done more for Gleeson shareholders than the banks would have.”

An attempt to analyse the picture behind the headline result of a small £300,000 loss opens up a complex set of counter-acting elements, including large costs relating to disposed businesses and one-off profits made on two PFI equity disposals.

Gleeson will in future act as a regeneration specialist in three areas:

• Building – both for private sale and for social housing.
• Gleeson Services – trading as Powermaster, involved in the fit-out of kitchens being installed as part of the government’s Decent Homes regeneration initiatives.
• Gleeson Strategic Land – once the slimmed-down group is running smoothly, annual turnover is expected to climb to between £150m and £180m over the next two years.