Gleeson customers ‘queuing up at site openings’

URBAN REGENERATION housebuilder MJ Gleeson told shareholders at its AGM that the forward order book at the end of November was up more than 30 per cent on last year.

The Sheffield-based firm said customers are queuing up on site opening days as more home buyers look to buy houses in former pit villages and other deprived areas in the North of England.

The firm, which specialises in building houses on land that noone else wants to buy and turning it into a desirable area that rejuvenates the local economy, said demand remains strong.

Chairman Dermot Gleeson told shareholders: “Land remains available at sensible prices and the pipeline remains strong. Gleeson Homes has a pipeline of 11,529 plots with a gross development value of £1.4bn, of which 5,582 plots are owned and 5,947 are conditionally purchased.”

The division currently has 58 active sites, compared with 50 at this time last year and the group expects the number of active sites to be approaching 70 by June 2018.

“The Government’s Help to Buy scheme remains popular with 63 per cent of our customers taking advantage of it so far this year while other buyers continue to be attracted by our own bespoke purchaser assistance packages,” said Mr Gleeson.

“The division’s increasing number of sales outlets, combined with very strong customer demand in all regions, good mortgage availability and attractive levels of affordability means that the outlook for the division remains very positive.”

The group expects Gleeson Homes to record an increase in completions for the first half year to December 31 of more than 15 per cent compared with the prior half year total of 451 units.

“Gleeson Strategic Land continues to experience strong demand for consented land in the first five months of the current financial year, completing the sale of two sites with planning permission for 50 plots and a 60-bed care home and is progressing sale negotiations on a further 10 sites,” Mr Gleeson told investors.

“The division’s land pipeline currently consists of 63 sites which have the potential to deliver approximately 21,455 plots. The portfolio includes 12 sites with planning permission.”

The group expects Gleeson Strategic Land results for the full year to June 2018 to be broadly in line with results for the prior financial year. Due to the timing of a site sale, the division’s results for the first half of the year may fall below those of the prior year. It said that in this event, the second half is likely to be significantly stronger than the first.

“The board, therefore, remains confident that the result for the full year to June 30, 2018 will be in line with expectations,” said Mr Gleeson.

Analyst Alex Stout at Peel Hunt said: “Gleeson Homes remains on track to deliver its new volume target of 2,000 units within five years and should complete 1,200 units in 2018.

“Demand remains robust, with the forward order book up 30 per cent on the prior year.”