MJ Gleeson back in the black with a pre-tax profit of £8m

MJ Gleeson’s struggle for survival has reached a happy conclusion as the group is at last out of the red. Latest annual results show a pre-tax profit of £8m which is quite a turnaround after the £12m loss suffered in 2006.

Annual results, covering the 12 months to 30 June 2007, show turnover at £190m, unchanged from the previous year.

Gleeson’s survival plan, announced back in March 2006, involved sacrificing several of its core operations. The plan left the group with a presence in three sectors:
• housing regeneration
• strategic land trading
• commercial property development.

In March 2007, Gleeson said it was quitting commercial property development, with the board arguing that "this market had probably peaked and Gleeson’s cash resources would be better invested in housing regeneration".

Today, the group continues to reduce the scale of its traditional housebuilding business and to run-off its commercial property operation.

There are still some legacy issues relating to the building contracting division (sold in August 2005) and the engineering division (sold in October 2006).

The on-going operations are:
• Gleeson Regeneration & Homes
• Gleeson Strategic Land
• Powerminster Gleeson Services
• Gleeson Capital Solutions

The Regeneration & Homes division built 467 units in the north (up from 259) and 172 units in the south (down from 228).

Strategic Land exercised one option over 20 ha at Hassocks, West Sussex, selling it on to a major housebuilder. Eight new option agreements were entered, covering 300ha.

At the year-end Gleeson had 1,200ha, representing a rise of 15%. The policy is not to buy, rather to hold under option and development agreements.

Over the last two years, Powerminster has transformed itself from an M&E operator working as a subcontractor, into a property maintenance service provider, offering both planned and reactive services.

The success of the approach is found in the financial figures – Powerminster has ceased to be a loss maker and now delivers a profit. Margins continue to rise.