Group sees a strong foundation for future growth

Completions rise by 31pc at housebuilder Gleeson

URBAN REGENERATION housebuilder MJ Gleeson reported a very strong first half as completions rose by 31 per cent in the six months to December 31.

This was way ahead of guidance given at the AGM last month that first half volumes would rise by “more than 15 per cent”.

The Sheffield-based group said trading for the first half is expected to comfortably exceed last year’s first half results.

The group’s CEO Jolyon Harrison said: “There’s a really big need for low cost homes for people on low incomes – particularly in Yorkshire.

“We are supplying that need. We’ve got 60 odd sites throughout the North of England and 30 planning applications. Things are going well.

“We are really proud of the 30 per cent increase. The only issue we have is building the houses. Building is a challenge, but our guys have really stepped up to that challenge.”

Mr Harrison said that whilst “most local authorities love what we do”, it will not build any more houses in Barnsley following a disagreement about Gleeson’s environmentally friendly drives.

“Barnsley Council don’t like our environmentally friendly gravel drives so we won’t build any more houses in Barnsley,” he said.

“If Barnsley would like to change their minds we will talk to them. There are plenty of other places we can build.”

He said the council has objected to the look of the gravel drives.

“They say the gravel spills onto the road. It doesn’t,” he said.

“Tarmac is horrible stuff. It’s not environmentally friendly. Gravel soaks up the rain and you don’t get so much water running off as you do with tarmac.”

Barnsley Council was contacted about Gleeson’s claims yesterday, but said it would need more time to respond.

Gleeson Homes completed the sale of 593 units in the first half, an increase of 31 per cent on the previous half year’s total of 451 unit completions.

Gleeson Strategic Land sold three sites, the same number as the previous half-year. These were smaller sites and, as indicated in the AGM statement issued on December 7, this will lead to the division’s first half results being lower than the previous first half. However second half results will be higher than the comparable second half the year before.

The group said results for the full year to June 30, 2018 will be in line with its expectations. Analysts welcomed the news. Charlie Campbell at Liberum said: “Gleeson’s half year trading update, covering the six months to the end of December, revealed that the first half finished very strongly, with Homes completing 31 per cent more units, considerably exceeding guidance given at the AGM that first half volumes would rise by ‘more than’ 15 per cent.

“Our confidence for the full year has been further strengthened.”

Mr Campbell said Liberum’s first half pre-tax profit expectations have been raised from £12.4m to £13.4m, up 18 per cent on the £11.4m achieved in 2016/17.

Active sites rose by 16 per cent to 58 (from 50 last year) and the group said that it hopes to increase these to approaching 70 by the end of the year.

“This would give Gleeson a 19 per cent increase in sites between June 2017 and June 2018, underpinning targets to double volumes in Homes by 2022, and giving us comfort in our 2018 unit completion estimate of 1,200 – up 19 per cent year on year,” said Mr Campbell.

There’s a really big need for low cost homes for people on low incomes. Jolyon Harrison, CEO of urban regeneration housebuilder MJ Gleeson.