Gleeson looks at lie of the land after £20m deal

Jolyon Harrison of MJ Gleeson
Jolyon Harrison of MJ Gleeson
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HOUSEBUILDER MJ Gleeson Group said it will acquire more land for development after securing a new £20m credit agree-ment.

The firm, which was founded in Sheffield more than 100 years ago, said it has agreed the revolving credit facility with Lloyds Bank Commercial Banking to accelerate its growth plans.

The group said it will use the facility to capitalise upon renewed confidence in the housing market by increasing its number of sales outlets in key geographic territories and acquiring additional land for development.

Gleeson specialises in building affordable housing on brownfield land in the North of England.

Jolyon Harrison, chief executive officer, at MJ Gleeson Group, said: “This facility strengthens our financial position and provides us with the additional flexibility and capacity for growth.

“Forward orders are significantly ahead of last year and we are confident our focussed strategy will continue to deliver positive results.”

Gleeson reported sales of £60.7m in the year to June 30, up from £40.8m a year earlier. Pre-tax profits nearly doubled from £3m to £5.8m.

The group said the revenue growth was achieved thanks to improved conditions in the housing market, combined with the group’s “tightly focused business model”.

Mr Harrison said: “We specialise in building low-cost homes selling more than 75 per cent to first-time buyers.

“Our average selling price is £117,000.

“We are currently building on eight developments in Yorkshire with another three planned in the very near future at Ferrybridge, one in Leeds and one in Barnsley.”

He added: “The market for first-time buyers is always there. It doesn’t matter really what’s happening in the general econ- omy.

“People still get married, get divorced, grow up and leave home, that sort of thing, so that market is ever present.

“So the reason why we are increasing our numbers and things are getting better for us is because we are expanding the company and it’s not necessary directly related to the improvement in the economy and the housing market though that helps of course.”

The group employs 215 people from its offices in Sheffield, Bury, Fleet and Sunderland.

Mr Harrison said: “There obviously is renewed confidence in the housing market but the reality is two years ago we built 288 houses, in the last financial year it was 406, this year it is going to be something with a five at the front and in the medium term we are aiming to build a thousand houses a year and that’s an achievable target.”

Gleeson is looking for opportunities all over the North of England, especially Sheffield and Leeds.

“Both cities have fairly large areas of land that need low-cost housing on and regeneration.”

Mr Harrison said Gleeson’s typical customer is a bus driver on £17,500 to £18,500 a year, reaching about £21,000 with some overtime.

His wife works at the check-out in Asda and earns £12,000 to £13,000 a year, giving them an average joint income of £31,000 to £36,000 a year.

Typically, the pair don’t have enough money for a deposit so will join Gleeson’s savings scheme which allows them to buy a house that hasn’t been started yet.

The customer is sold the house in 12 months’ time.

“As long as the customer hits the savings hurdles, we’ll help them to save a five to 10 per cent deposit,” said Mr Harrison.

Sheffield law firm Irwin Mitchell advised Lloyds Bank Commercial Banking on the credit agree- ment.