In the year to 30th June 2022 Gleeson Homes sold precisely 2,000 new homes. This was an increase of 10.4% on the previous year (2021: 1,812 homes), although the 2021 number had been boosted by delayed completions carried over from the first Covid-19 lockdown in 2020.
Group revenue for the year was up 29% to £373.4m (2021: £288.6m). Pre-tax profit was up just 2% to £42.6m (2021: £41.7m) but this includes an exceptional provision of £12.9m related to fire safety remediation work, having signed the government’s building safety pledge in April. Underlying profit before tax was up 33% to £55.5m.
Revenue for the Gleeson Homes division increased by 26% to £334.6m (2021: £265.8m), exclusively from home sales (2021: included £1.5m from land sales). The average selling price of homes sold during the year increased by 15% to £167,300 (2021: £145,800), driven by higher underlying selling prices up 11.8% and changes in the mix of site locations and house types.
Gleeson’s strategy is to build homes aimed at first time buyers and people on low to average incomes. The average selling price of a new build home in its geographic regions (midlands and the north) is £266,000; the average selling price of a Gleeson home is just £167,300.
Revenue for Gleeson Land, preparing sites for other developers in the south of England, was up 70% to £38.8m (2021: £22.8m) with profit unchanged at £11.1m.
Chairman Dermot Gleeson commented: “This is another excellent performance which reflects not only the strong operational capability of our business but also the continuing structural under-supply of affordable homes for first time buyers on low incomes.
“As well as being affordable, our high-quality homes are also very energy efficient, costing significantly less to run than most houses in the UK, particularly in the rented sector. As a result, our homes are much sought after, and demand remains resilient.
“Gleeson Land’s market remained robust throughout the year and the business delivered a strong result. Demand in the south of England for quality sites with sustainable and implementable residential planning permission remains strong and the division is well-placed to drive further sustainable growth.”
He concluded: “The board has reviewed a range of macroeconomic forecasts and, notwithstanding the current outlook for the broader economy, remains confident that the group, with its defensive qualities and unique position within the wider house building sector, is well-positioned to deliver further profitable growth in the current financial year.”
As previously reported, James Thomson will step down as chief executive of MJ Gleeson at the end of this year and will be succeeded on 1st January 2023 by Graham Prothero, currently chief operating officer at Vistry Group.