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MJ Gleeson confident after record year for its strategic land division

"Gleeson Strategic Land 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."
Man building a house
Gleeson Homes is on track to deliver its next milestone target of doubling annual completions of low-cost homes between 2017 and 2022 to 2,000 units

Urban housing regeneration and strategic land trading firm MJ Gleeson PLC (LON:GLE) increased the full-year dividend by a third after a strong performance.

Revenue in the year to the end of June 2018 rose 23% to £196.7mln from £160.4mln the year before while profit before tax climbed 12% to £36.9mln from £33.0mln the previous year.

READ: MJ Gleeson sees strong home sales boost half-year profits

Operating cash flow before the payment of dividends was up 10% year-on-year paving the way for the proposal of a final dividend of 23p, resulting in a total dividend for the year of 32p, up from, 24p the previous year.

The group ended the reporting period with cash and cash equivalents of £41.3mln, up from £34.1mln at the end of June 2017.

The Gleeson Homes division sold 1,225 units in the year, up from 1,013 units the previous year with the average selling price rising to £125,200 from £122,700. The group said it is on track to meet its target of doubling sales to 2,000 units a year between 2017 and 2022.

“Led by a strong and highly experienced management team, who have created a very attractive land pipeline, the division's scope for expansion continues to be underpinned by strong demand from our customers who aspire to home ownership but who are ill-served by the majority of housebuilders,” said Dermot Gleeson, the chairman of MJ Gleeson.

Gleeson Strategic Land had a record year and chipped in with an operating profit of £12.6mln, up from £12.0mln the year before, driven by an increase in transactions.

The division has nine sites with planning consent or resolution to grant with the potential to deliver 2,089 plots.

"Our twin-track strategy – the development of low-cost homes for open market sale in the North of England and the Midlands and strategic land sales in the South – delivered another excellent year of increased volumes, profit and cash,” Dermot Gleeson said.

“The board is confident that the group's unique business model will continue to deliver significant growth in both revenue and profits in the current year and beyond," he added.

Shares in Gleeson were up 4.6% at 728p in early deals.

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