MJ Gleeson's £24m losses almost exceed its turnover
11:23 25 Feb 2009
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MJ Gleeson has racked up a loss of £24m on a turnover of just £30m.
The group has suffered a dramatic decline in its fortunes in recent years with both its former house building and its construction activities struggling.
Gleeson now describes itself as an urban regeneration and strategic land specialist.
Gleeson’s shares are trading at 80p.
The group’s latest interim results cover the half year to 31 December 2008.
Today’s new figures compare with a turnover of £49m and a pre-tax loss of £315,000 in the same period last year and come on the back of a £21m pre-tax loss in the 12 months to June 2008.
In a statement today, Gleeson said: “During the period, market conditions facing the house building industry, described in the 2008 annual report as "the worst in living memory", deteriorated further, exacerbated by an exceptionally severe recession.”
The slump in turnover reflected a reduction in the number of units sold and a lower average selling price.
In addition to a trading loss of £5m there were exceptional hits of £18m, of which £17m related to write-downs of land and the valuation put on work-in-progress:
- £11m by Gleeson Regeneration & Homes and Gleeson Strategic Land
- £6m by Gleeson Commercial Property Developments.
Despite the low value of the share price, Gleeson pointed to property worth £140m, equating to net assets per share of 260p.
Net cash stands at £7m. The board expects the group to continue to be cash positive not only at the year end but also well beyond.
Gleeson's headcount since June 2008 (excluding the Powerminster Gleeson Services division which was unchanged) has been reduced by nearly 60%
The annual run-rate for central costs going forward has been significantly reduced to approximately £2.8m from £6.1m for the year ended 30 June 2008
Dermot Gleeson, chairman, added a hopeful note, saying: “There are some signs of increased interest on the part of potential buyers.”
Might that be taken for Gleeson seeing those long-awaited green shoots of recovery?
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