MJGleeson Regulatory News (GLE)

15 May 2009 08:26



15 May 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 January 2009, as required by the UK Listing Authority's Disclosure and Transparency Rules.

The Interim Management Statement contains forward looking statements which:

have been made by the Directors in good faith, based on the information available to them up to the time of their approval of this Statement; and

should be treated with caution due to the inherent uncertainties, including both economic and business risk factors that underlie such forward looking information.

This Interim Management Statement has been prepared for the Group as a whole.  It therefore emphasises matters which are significant for the parent company and its subsidiaries when viewed as a single unit.

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 process of developing out and disposing of its remaining portfolio in an orderly manner.

Market Conditions

In its Interim Announcement, issued on 25 February 2009, the Group stated that the market conditions facing the housebuilding industry were the "worst in living memory". Since that time, consumer confidence has remained very low, mortgage finance has remained scarce, especially for first time buyers, and there has been continuing downward pressure on selling prices and values.

Whilst welcome, the recent announcement by the Government of a number of new measures to support the housing market appears to have done little, at least as yet, to restore confidence.

Progress in the period 

In response to the weak market, Gleeson Regeneration & Homes has continued to minimise build costs on its sites in order to preserve cash.

Gleeson Strategic Land has not sold any sites with planning permission and is not expected to do so in the year to 30 June 2009. The Board will continue to resist the temptation to sell land at a discounted value merely in order to meet year end targets.

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

Powerminster Gleeson Services has improved its year-on-year revenue and profit and continues to be cash generative.  

The Group remains cash positive and retains its £50m bank facility.

Outlook

In consequence of the exceptionally difficult market conditions described above, the Board does not expect revenue in the second half of the financial year to exceed that achieved in the first half; and, due to the continuing decline of values, it is expected that there will be further exceptional write-downs at the year end.

The Board believes that a significant upturn in housing demand is unlikely in the near future However, the combination of the Group's strategy to preserve cash, its contracted pipeline of Regeneration projects, and its strong positions in facilities management, strategic land and the social housing PFI sector stand it in good stead to take advantage of the opportunities that will arise when the market recovers. 

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