MJGleeson Regulatory News (GLE)

19 Nov 2009 07:00



Thursday 19 November 2009

M J GLEESON GROUP PLC

INTERIM MANAGEMENT STATEMENT

Gleeson (GLE.L), the urban regeneration and strategic land specialist, announces its Interim Management Statement, covering the period since 1 July 2009, in accordance with the UK Listing Authority's Disclosure and Transparency Rules.

Our Operations

Gleeson operates:

as a housebuilder, mainly in the North of England, with a particular focus on the physical, social and economic regeneration of urban areas in partnership with or for public bodies;

a strategic land development business, mainly in the South of England, that enhances the value of land, principally held under option, through the planning process; 

a facilities management business, mainly in the North of England, that focuses on the long-term planned and reactive maintenance programmes of housing and property owning organisations; and

a specialist business unit that takes the lead in developing PFI opportunities that bring work to the Group's housebuilding and facilities management businesses.

The Group's commercial property development business has not committed to new projects since March 2007 and is in the latter stages of disposing of its remaining portfolio in an orderly manner.

Market Conditions

There have been some signs that the very difficult trading conditions that have been experienced by the Group's housebuilding business during the last two years may be starting to ease. However, it is not yet clear whether the increase that has been seen in visitor numbers and reservations will be sustained. Moreover, mortgage availability, particularly where borrowers require a high loan-to-value ratio, remains restricted.

Progress in the Period 

House sales by Gleeson Regeneration & Homes are ahead of the comparable period last year and reservations are ahead of management's expectations. Selling prices appear to have stabilised or even, in some areas, to have improved. However, a high proportion of sales are only being achieved with the assistance of shared equity. Construction spending will remain under strict control, reflecting the fragile market. 

As announced on 26 October 2009, Jolyon Harrison was appointed as Managing Director of Gleeson Regeneration & Homes with effect from 2 November 2009. Jolyon Harrison has a proven track record, established over many years, in regeneration and social housing in the North of England.

As expected, Gleeson Strategic Land did not sell any sites with planning permission during the period. However, the demand for development land from housebuilders has increased recently and a number of sites are expected to be brought to market during the current financial year.

Gleeson Capital Solutions continues to progress potential PFI opportunities and is one of two final bidders on a PFI social housing prospect in the North of England. 

Powerminster Gleeson Services continues to be profitable and cash generative and is managing to maintain margins within a sector which is becoming more competitive.

Gleeson Commercial Property Developments sold out of three sites during the period and now has only two sites remaining, with a net book value of £5.9m.

The Group continues to be cash generative, with significant progress made since the year end. Net cash was £19.7m at 18 November 2009, an increase of £8.8m on the £10.9m at 30 June 2009.

Outlook

As indicated above, there have been some signs of improvement in housing market conditions compared to the same period in 2008. However, a sustained upturn in demand will require an increase in both mortgage availability and consumer confidence. In the North of England, in particular, it is not yet clear when this will be achieved. Against this background, the Group's main focus will continue to be on rigorous cost control and cash generation. This will enable it to lay the solid foundations on which sustained growth can be achieved once more normal conditions return.

Enquiries:

M J Gleeson Group plc 01252-360 300

Chris Holt (Group Chief Executive)

Alan Martin (Group Finance Director)

Bankside Consultants Limited

Charles Ponsonby 020-7367 8851