Gleeson cuts more jobs after £9.6m writedown

Urban regeneration specialist and housebuilder MJ Gleeson has written down the value of its landbank by £9.6m after a further deterioration in market conditions.

In a trading update today it announced a 7% writedown (£5.6m) on land earmarked for regeneration and housing and a 22% writedown (£4m) on its commercial property land.

A company statement said: “The financial markets have remained very troubled and there have been further falls in credit volumes. This continuing reduction in liquidity, combined with a growing lack of confidence in the economic outlook for the UK, has reinforced the difficulties to which the group is exposed in the housing and commercial property markets.”

It also announced further job cuts to the 335 made this year, which will knock £1.6m off the balance sheet this year. It said the future benefits of the move would be £3.7m.

As part of the changes, it also plans to move from its head office in Fleet, Hampshire, by next September to Sheffield, where it currently has a regional office.

The company has maintained its net cash positive balance during the period and has not drawn down any of its £50m bank facility.

It said: “Housebuilding work in progress and overheads are being subjected to rigorous review and control. Where appropriate, the group is prepared selectively to rent rather than sell completed properties, especially flats, in order to secure higher returns in the longer term.”