Housebuilder’s pre-tax profit down 40% as land-selling arm treads water
Profit at MJ Gleeson slumped by 40% in the six months to the end of December 2019, the firm revealed this week.
The Sheffield-based housebuilder’s strategic land business, which it had been looking to sell last year, made no contribution to revenue in the first half.
Last September Gleeson announced that it was scrapping plans to sell the operation, which in 2018 made an operating profit of £13m.
Chairman Dermot Gleeson said the group’s homes division had grown its operating profit by nearly 14% to £16m on revenue up 19% to £105m. But its overall pre-tax profit fell 40% to £13.3m, on group revenue down 11% at £105m.
Despite the decline in the first half Gleeson expects to sell at least three sites in the second half and said it was on track to deliver turnover for the year to the end of June 2020 of around £269m and a pre-tax profit of £45m.
Gleeson said: “We are delighted with the performance of our homes division, with completions up 17.4% at 811 units.”
He said the firm had a substantial pipeline in place for its strategic land business “and demand for consented sites, from both large and medium-sized developers, remains very high”.
Gleeson named James Thomson as chief executive with immediate effect in December following the shock departure of Jolyon Harrison.