Urban regeneration housebuilder MJ Gleeson said its pre-tax profit almost trebled to £11.3 million in its first half as more home buyers look to buy houses in former pit villages and other deprived areas in the North of England.
The Sheffield-based firm specialises in building houses on land that no-one else wants to buy and turning the developments into desirable areas that rejuvenate the local economy.
Jolyon Harrison, chief executive officer of MJ Gleeson, said: “We are gradually expanding in a very controlled way. More people are hearing about us and word is spreading. 50 per cent of the land we buy is local authority. They have land no-one else wants to buy and we develop areas that no-one else wants to buy. The synergy is perfect. We have a knock-on effect on the surrounding area.”
One new development will be on the car park at the failed Earth Centre in Doncaster, which was intended to be a world centre for sustainable development, but closed down more than 10 years ago.
Mr Harrison added: “We will build a couple of hundred houses there. It’s an important site for South Yorkshire, a great symbolic thing.”
He added that he had no idea what will happen to the centre, but didn’t rule out Gleeson trying to buy it at some stage to extend the development.
The group said it reported strong trading in the half year to December 31.
Group revenue rose 52 per cent to £64.8m, reflecting strong performances in both Gleeson Homes and Gleeson Strategic Land.
Gleeson Homes increased unit sales by 25 per cent to 400 units and acquired a further 823 plots during the first half of the year, increasing the pipeline to 7,919 plots by the end of December. The average selling price for houses increased 0.3 per cent to £125,000 from £124,600.
The group is looking to expand and has identified an office in Liverpool and it is also looking at Cumbria and North Midlands.
60 per cent of sales benefited from the Government’s Help to Buy scheme and Gleeson’s own bespoke purchaser assistance packages have also proved popular.
Gleeson said that in light of the strong results and its confidence in the future, the board is declaring an interim dividend of 4.5p per share, an increase of 66.7 per cent.
It said that against this backdrop, it is confident that full year trading will be in line with expectations.
Analyst James Tetley at N+! Singer said: ”Gleeson’s interims confirm another period of significant growth and a strong performance from both divisions. The group is well on track to meet full year expectations following the latest forecast upgrades in December. In our view, Gleeson is unique amongst the listed housebuilders. It sells good quality affordable homes to first-time buyers on low incomes in the North of England, often helping to regenerate challenging communities.”