MJ Gleeson's home division 'comfortably' on track to achieve volume target
By Michele Maatouk
Date: Thursday 04 Jul 2019
(Sharecast News) - MJ Gleeson said on Thursday that its home division is "comfortably" on track to achieve its target of doubling volumes of new homes per year to 2,000 by 2022.
In a trading update ahead of its full-year results in September, the housebuilder said that Gleeson Homes - which builds low-cost homes for sale to people mostly on low incomes in the North of England and the Midlands - delivered its largest annual volume growth. The business sold 1,529 homes during the year, up 25% on the previous year.
Gleeson Homes is currently active on 69 sites and expects an increase to 80 or more sites in the coming year.
The company's land promotion business, Gleeson Strategic Land, which enhances the value of land by securing mainly residential planning consents in the South of England, sold nine land interests with the potential to deliver 1,755 plots for housing developments.
Gleeson said the division has started the current financial year in a strong position. Nine sites with planning permission, or resolution to grant, have the potential to deliver 2,929 plots for housing development, it said.
Chief executive officer James Thomson said: "Both Gleeson Homes and Gleeson Strategic Land have delivered a record performance with the group's positive outlook underpinned by continued strong demand."
Broker Liberum said it was leaving its pre-tax profit and earnings per share estimates unchanged, but noted that if Gleeson Homes continues to grow at this rate it will double volumes within three and a half years of 2017 rather than five.
"We see over 25% total shareholder return upside to our unchanged target price of 900p, based on a sum-of-the-parts valuation that values Homes as a growing small company rather than a housebuilder reflecting the limited competition and superior growth enjoyed by Gleeson Homes."
Liberum rates the stock at 'buy'.
At 0930 BST, the shares were up 4.3% at 769.94p.
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