Preliminary Announcement
Gleeson (GLE.L), the urban regeneration and strategic land
specialist, announces its audited results for the year to 30 June 2008.
The year required the Group to respond to the worst market
conditions facing the housebuilding industry in living memory. The
second half of the year, in which there was a wholly unprecedented
decline, month on month, in the rate of house sales, was
particularly difficult.
Key Points - Financial
- Revenue from continuing operations decreased by 51% to
£94.6m, reflecting a 32% reduction in unit house sales, a 23%
decrease in average selling price ("ASP") and the absence of any
strategic land sales.
- The decrease in ASP, which was expected, was driven by the
Group's strategic decision, taken in 2006, to exit from high value
developments in the South and an increased proportion of sales to
Registered Social Landlords ("RSLs").
- The pre-tax loss was £20.8m (2007: profit of £8.3m) after
exceptional charges of £17.4m and a charge of £4.1m for the
settlement of a longstanding legacy issue in the former Gleeson
Building Contracting Division. Excluding the exceptional
charges and the settlement charge (included in announcements on 20
June 2008 and 15 May 2008), a profit before tax of £0.7m was
generated.
- Of the exceptional charges, £10.6m related to downward asset
revaluations, £5.2m to restructuring costs and £1.6m to a rental
guarantee.
- Year end total equity attributable to equity holders of the
parent company decreased to £159.2m (2007: £183.3m), representing
net assets per share of 304p (2007: 351p), down 13%.
- Net cash at 30 June 2008 was £21.9m (2007: £38.0m).
- In view of the continuing uncertainty in the housing market,
the absence of visibility as to when stability will return and the
Board's commitment to prioritising cash management, the Board has
decided not to propose a final dividend for the year to 30 June
2008.
Key Points - Commercial
- Gleeson Regeneration & Homes and Gleeson Strategic
Land made an operating loss of £16.3m (2007: profit of £4.1m),
which included exceptional charges of £15.1m (2007: £nil), on
revenue of £64.0m (2007: £157.0m). House unit sales reduced to 436
from 639 and the average selling price to £149,000 from £193,000,
reflecting an increased proportion of sales to RSLs and the exit
from high value developments. Gleeson Strategic Land made no
sales but increased its land holding, principally held under option
agreements, to 3,621 acres (2007: 3,064 acres).
- Gleeson Capital Solutions, which manages the Group's PFI
investments and takes the lead on developing new PFI opportunities,
had a successful year, both operationally and financially. An
operating profit of £2.3m (2007: £1.6m) was made on revenue of
£1.2m (2007: £0.7m).
- Powerminster Gleeson Services, the property maintenance
service provider, made an operating profit of £1.1m (2007: £0.7m)
on revenue of £19.5m (2007: £17.5m) and doubled its confirmed order
book to £158.8m as at 30 June 2008.
Current Trading and Prospects
Dermot Gleeson, Chairman, stated "The poor market conditions
experienced during the year to 30 June 2008 have shown no
improvement in the first three months of the current financial
year.
The Board believes that the housing market will not improve
until mortgage finance becomes more freely available and confidence
returns to the wider economy. The timing of these events is
not possible to predict with accuracy, but the Board does not
anticipate any material improvement before 2010.
Against this background, the Board will continue to give
priority to cash management in order to ensure that medium to
long-term shareholder value is maintained. The Board has
already taken action to reduce the Group's cost base and will
continue to keep it under very close review."
Enquiries
M J Gleeson Group plc 01252-360 300
Paul Wallwork (Group Chief Executive)
Chris Holt (Group Chief Financial Officer)
Bankside Consultants
Charles Ponsonby 020-7367 8851
Rose Oddy 020-7367 8853