MJ Gleeson Plc - Half-Year Report

H1 17/18

H1 16/17

Change

 

 

 

 

Volume - Homes (plots)

593

451

31.5%

- Strategic Land (land sales)

3

3

-

 

 

 

 

Operating profit - Homes

£12.3m

£8.5m

44.7%

- Strategic Land

£2.3m

£4.0m

(42.5%)

 

 

 

 

Profit before tax

£13.7m

£11.5m

19.1%

 

 

 

 

Net cash flow from operating & investing activities

£2.1m

£8.6m

(£6.5m)

 

 

 

 

Cash and cash equivalents

£26.7m

£26.4m

1.1%

 

 

 

 

Return on capital employed

26.0%

22.1%

390 bp

 

 

 

 

Basic earnings per share

20.6 pence

16.8 pence

22.6%

 

 

 

 

Dividend per share

9.0 pence

6.5 pence

38.5%

 

 

A strong start to the year and confident in outlook for the full year and beyond

 

Gleeson Homes:

·    Unit sales increased 31.5% to 593 units (H1 16/17: 451)

·    ASP up 2.5% to £124,400 (H1 16/17: £121,400)

·    Revenue increased 34.7% to £73.7m (H1 16/17: £54.7m)

·    Gross margin improved to 32.2% (H1 16/17: 31.9%)

·    Operating profit increased 44.7% to £12.3m (H1 16/17: £8.5m)

·    Operating margin increased to 16.7% (H1 16/17: 15.5%)

·    Land pipeline of 12,001 plots (June 2017: 11,588 plots)

·    New pilot office opened in Ashington, Northumberland bringing total to 7 area offices and 3 pilot offices (June 2017: 7 area offices and 2 pilot offices)

Gleeson Strategic Land:

·    Completed 3 land sales (H1 16/17: 3 land sales)

·    Operating profit lower at £2.3m (H1 16/17: £4.0m), as expected, due to smaller site size

·    11 sites with planning permission or a resolution to grant permission (H1 16/17: 13 sites)

Dividend

Interim dividend increased 38.5% to 9.0 pence per share (H1 16/17: 6.5 pence).

Full year dividend cover policy revised to between 1.75 times and 2.75 times.

 

 

Dermot Gleeson, Chairman of MJ Gleeson, commented:

 

"The Group has once again delivered a very encouraging start to the year. Gleeson Homes continued to benefit from its unique business model, increasing unit sales by 31.5% and operating profit by 44.7%.

 

"Land remains available to us at sensible prices and demand for our homes amongst our customer base remains strong.

 

"The division continues to source additional sites in both existing and new geographic areas and has recently opened another pilot office in Ashington, Northumberland.

 

"Gleeson Strategic Land completed the same number of site sales as in the prior first half year period. As anticipated, however, these sites were of a smaller size.

 

"Demand for consented sites remains strong from both large and medium sized developers. The division has a significant number of sites progressing to sale and is confident of achieving stronger second half results than in the comparable period last year.

 

"Against this background, the Board is confident that the Group will deliver a result for the full year in line with expectations."