MJ Gleeson Plc – Final Results 2020

MJ GLEESON PLC   

(“Gleeson” or “the Group” or “the Company”) 

Audited results for the year ended 30 June 2020

Gleeson, the low-cost housebuilder and strategic land specialist, announces audited results for the year ended 30 June 2020 (“2020”)

• 2020 results reflect Covid-19 impact on historically critical Q4 period
• Strong start to 2021 with record order book and work in progress, and high levels of demand 
• Strong platform for future growth
• Board re-affirmed target to reach 2,000 units p.a. in 2022

Resilient business model

Gleeson Homes:

• Volumes down 29.9% to 1,072 units sold (2019: 1,529 units)
• Gross profit margin on unit sales 27.8% (2019: 30.1%) due to £2.9m of Covid-19 related costs
• Operating profit down 70.1% to £9.0m (2019: £30.1m)
• Average Selling Price £130,900 (2019: £128,900)
• Land pipeline, including conditionally purchased sites, of 13,801 plots (2019: 13,575 plots)
• Board re-affirmed target to reach 2,000 units p.a. in 2022
• Platform for future growth put in place prior to Covid-19

Gleeson Strategic Land:

• Operating profit of £0.2m (2019: £13.0m)
• Two land sales completed during the year (2019: nine)
• Eleven sites with planning consent or resolution to grant with the potential to deliver 3,855 plots
• Portfolio: 68 sites (2019: 60 sites) with the potential to deliver 23,314 plots (2019: 21,730 plots)
• Demand expected to return during 2021

Resilient financial position

Gross cash balance £76.8m (2019: £30.3m)

• £60m bank loans drawn down and proceeds of £16.4m (gross) share placement
• £10m overdraft facility remained undrawn
• £6.6m interim dividend cancelled; no final dividend proposed

Capital prioritised in short term to delivering target of 2,000 homes per annum in 2022  

Dividends to resume as soon as prudent to do so

Dermot Gleeson, Chairman, commented:

“First and foremost, and on behalf of my Board colleagues, I would like to say how grateful we are to our employees, subcontractors, suppliers and customers in helping us to respond quickly to the Covid-19 crisis.  These results, whilst a significant reduction on the prior year, reflect their efforts and the overall resilience of the business.

“Our unique business model is focussed on building high-quality, low-cost homes in the North of England and the Midlands and continues to deliver homes to the people who need them most. The majority of our customers are young, first-time buyers and around two-thirds are key workers, who can now benefit from our recently introduced Gleeson Key Worker Priority Programme.

“We are currently seeing strong demand and expect this to continue through the year as the demographics of our customer base and the nature and price point of our product helps to insulate us from the impacts of rising unemployment, the end of the stamp duty holiday and the forthcoming changes to the Help to Buy scheme.

“We have therefore re-affirmed our interim target of delivering 2,000 homes per annum in 2022 and will prioritise investment in the business to achieve it.

“We expect the strategic land market will continue to recover as house builders cautiously scale up their targets for the acquisition of new sites. 

“The Board recognises the uncertainties arising from both the continuing pandemic and the UK's withdrawal from the EU. Nonetheless, our balance sheet remains strong and the Board is cautiously optimistic that the Group will see significant growth in the current year and beyond.”