Gleeson returns to profit after cutting overheads by half

Gleeson has returned to profit after the firm cut its overhead by half and reduced its payroll by 66%.

The firm, which now describes itself as an “urban regeneration and strategic land specialist”, recorded a pre-tax profit of £400,000 for the 12 months to 30 June 2010. The figure compares to a loss of £51m in 2009, when it took a hit of £41.3m in land write-downs.

Revenue was up from £43m in 2009 to £46.5m this year, due to the disposal of three major sites as well as commercial properties.

But it has been a year of cuts for the firm. It sold its social housing maintenance division, Powerminster Gleeson Services, on 30 June for £6.6m. It also sold the last of its commercial property sites, and is dismantling its engineering and building contracts in an attempt to concentrate on its land and housebuilding divisions, as well as its Capital Solutions sideline.

Speaking about his new streamlined firm chairman Dermot Gleeson said: “During the year to 30 June 2010, conditions in the housing market showed modest signs of improvement. The steep fall in selling prices experienced in the previous two years levelled off and there was some easing of the credit conditions required by mortgage providers.”

“Against this background, the group, which has net cash balances [of £18.4m], recommenced construction on a number of mothballed developments and has begun selectively to purchase new residential sites, taking advantage of depressed land prices in the North of England.”

The divisional breakdown is:

• Gleeson Regeneration & Homes - £1.3m loss (including £2.8m write-down) on £22.7m revenue.
• Gleeson Strategic Land - £2.2m profit on revenue of £10.5m.
• Gleeson Capital Solutions - £300,000 profit.