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MJ Gleeson profits rise amid 'extremely strong' demand

Mon 16 September 2019 12:57 | A A A

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(Sharecast News) - Urban regeneration and land development group MJ Gleeson reported a jump in annual profit and revenue and lifted its dividend on Monday thanks to "extremely strong" demand for its homes.

In the year to the end of June 2019, pre-tax profit rose 11% to £41.2m on revenue of £249.9m, up 27% on the year. Earnings per share pushed up 10% to 61p and the dividend per share was lifted 8% to 34.5p.

Volumes in Gleeson Homes were up 25% to 1,529 units sold, while the average selling price grew to £128,900 from £125,000.

In Gleeson Strategic Land - which it has decided to keep within the group rather than sell off - operating profit ticked up to £13m from £12.6m the year before, with nine land sales completed.

Chairman Dermot Gleeson said: "Our unique business model of building low-cost homes in the North of England and the Midlands and strategic land sales in the South continues to deliver outstanding results. Record volume growth in Gleeson Homes and record profit levels in Gleeson Strategic Land resulted in strong group profit growth.

"Despite the uncertainties caused by Brexit, demand for our homes continues to be extremely strong. Gleeson Homes is well on track to deliver its milestone target of doubling annual completions to 2,000 units by 2022. Led by a strong and highly experienced management team, the division continues to have significant scope for expansion by building low-cost homes for young, first time buyers and low-income families in a market that is underserved by other housebuilders."

Gleeson said that following a strategic review of options, the company has decided that keeping Gleeson Strategic Land within the group offers "significantly greater" long-term value than selling the business.

"The division had a record year and continues to benefit from high levels of demand for consented land in prime locations from both large and medium-sized housebuilders," he said.

Gleeson had said in April that it was mulling a number of options for the division.

A 1230 BST, the shares were down 3.3% at 822p.

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