Interim Announcement
Gleeson (GLE.L) the urban regeneration and strategic land specialist,
announces its results for the half year to 31 December 2008.
During the period, market conditions facing the housebuilding
industry, which had been described in the 2008 Annual Report as
"the worst in living memory", deteriorated further as the problems
associated with a very restricted supply of credit have been
increasingly exacerbated by the onset of an exceptionally severe
recession.
Key Points - Financial
- Revenue from continuing operations decreased by 37% to
£30.6m, substantially reflecting reductions in units sold and
average selling price
- Excluding exceptionals, the pre-tax loss was £5.4m (2007:
£0.3m)
- Exceptional items totalled £18.3m, of which £16.7m
relates to write-downs of land and work in progress by Gleeson
Regeneration & Homes and Gleeson Strategic Land (£11.0m) and
Gleeson Commercial Property Developments (£5.7m). Exceptionals of
£7.1m are additional to those announced in the Interim Management
Statement on 19 November 2008
- The loss before tax is £23.7m (2007: £0.3m) and the loss
per share on continuing operations is 44.98p (2007:
0.52p)
- Total shareholders' equity of £135.9m at 31 December 2008
compared with £159.2m at 30 June 2008, equating to net assets per
share of 260p and 304p, respectively
- Net cash at 31 December 2008 totalled £7.1m, a decrease
of £14.8m in the period, of which deferred payments for land
acquisitions accounted for £10.6m. The Board expects the Group to
continue to be cash positive not only at the year end but also well
beyond
Key Points - Commercial
- Gleeson Regeneration & Homes and Gleeson Strategic
Land recorded an operating loss of £14.7m (2007: £0.7m); excluding
exceptionals, the 2008 loss would have been £3.2m
- Gleeson Regeneration & Homes recorded units for
revenue purposes totalling 150 (2007: 224) , down 33%, at an
average selling price of £101,000 (2007: £145,000), down 30%
- Gleeson Commercial Property Developments, in run off
since March 2007, recorded an operating loss of £6.3m (2007: profit
of £0.3m); excluding exceptionals, the 2008 loss would have been
£0.6m
- Gleeson Strategic Land recorded no material land transactions
during the period, as was the case with the comparable period, but
planning consent was secured on greenfield housing sites in West
Sussex and Essex, which are due to deliver 320 homes
- The Group's headcount since June 2008 (excluding that of
Powerminster Gleeson Services, which was unchanged) has been
reduced by nearly 60%
- The annual run-rate for central costs going forward has been
significantly reduced to approximately £2.8m from £6.1m for the
year ended 30 June 2008
Dermot Gleeson, Chairman, stated "Although there are some signs
of increased interest on the part of potential buyers, the
continuing dearth of mortgage finance means that the housing market
is likely to remain extremely weak for at least the remainder of
2009. Against this background, the Group's strategy remains
to maximise cash inflows without sacrificing value and to minimise
cash outflows by restricting building expenditure in the main to
the construction of presold social housing projects. The
Group continues to invest selectively in its Powerminster Gleeson
Services and Gleeson Strategic Land businesses.
The Group has a strong balance sheet and overheads have been
substantially reduced, without compromising the quality and
effectiveness of the Group's core skill base and
competencies. Accordingly, the Group is well-placed to
withstand a prolonged downturn in demand and to resume growth once
liquidity and confidence return to the market."
Enquiries:
M J Gleeson Group
plc
01252-360 300
Chris Holt (GCEO)
Alan Martin (GFD)
Bankside Consultants
Charles
Ponsonby
020-7367 8851