Homebuilder anticipates post-Election boost as profits climb

The company, which develops affordable housing in the North of England under the Gleeson Homes brand, saw operating profit climb 56 per cent £4m in six months to December 2014.

Revenue rose 24 per cent to £42.6m, with homes sold up to 321 from 258 in the same period last year. Around 200 of these were in Yorkshire.

It expects to increase full year completions by at least 30 per cent on last year, in which it delivered 561 homes.

MJ Gleeson chief executive Jolyon Harrison told The Yorkshire Post that the trajectory of the business is “onwards and upwards”.

While some businesses have warned of uncertainty over the outcome of May’s General Election, Mr Harrison said the homebuilder is well positioned regardless of the result.

He said: “We all know about the strong drivers for increasing housing stock in the UK.

“We’re looking forward to the forthcoming General Election because both major political parties have spoken about helping first-time buyers, they’ve spoken about the dream of home ownership. Both political leaders have used exactly the same words.

“What’s going to happen after the General Election is going to help this business significantly. There is no doubt about that.

“They’ll give us even more help than we’ve had in the recent past, and we’ve had tremendous help from the Help to Buy.”

Gleeson Homes, which specialises in low-cost homes for people on low incomes in areas of industrial decline and social and economic deprivation in the North of England.

Around 43 per cent of completions benefited from Help to Buy.

Average selling price rose 3.8 per cent to £124,600, up slightly from £120,000. In some areas, including Bradford and Ferrybridge, two-bed semi-detached properties are priced at £85,000.

Using Help to Buy, a couple on a combined income of £26,000 could purchase a home of £120,000, Mr Harrison said.

“In other words, I could sell that house to a couple on the minimum wage,” he said.

“That’s a fantastic thing to say, I love saying that. Actually being able to sell houses to people who are on minimum wage is an incredible thing to be able to do.”

Average selling price is not expected to rise significantly, Mr Harrison said, with anticipated growth coming from higher volumes of sales.

The group has a “very sustainable business model” looking ahead, Mr Harrison said.

“No-one else does what we do - we don’t have any competition,” he added.

The business’ current land pipeline is up 30 per cent to 5,267 plots, with 1,900 under negotiation. It is currently working on 39 sites, and will soon have 20 sites in Yorkshire.

The firm is preparing to open a second regional office in the coming months, in addition to its offices in Sheffield, in order to cope with demand.

The office, which will be based around the Wakefield or Pontefract area, will serve West and North Yorkshire, while Sheffield will focus on South Yorkshire and the North Midlands.

In addition to its Gleeson Homes division, MJ Gleeson runs a strategic land division as part of its “twin-track strategy”, capitalising on higher land prices in the South of England through a land trading business.

Two sales were made in the reporting period, bringing in £2.4m revenue and £0.8m profit.

The division has a further 10 sites with planning permission, with seven potentially progressing to sale in the next half.