Housebuilder MJ Gleeson announces £3m 'One Yorkshire' restructure for regional team
Sheffield-based housebuilder MJ Gleeson has announced a £3m company restructure which will create a ‘one Yorkshire’ structure within its business.
From the start of July, its current ‘Yorkshire East’ team will be integrated into ‘Yorkshire South and West’.
A statement from the company said: “The creation of one Yorkshire region, and reallocation of certain sites into the Midlands region, will improve the efficiency of those regions, refocus our investment into higher return land opportunities and generate annualised regional overhead savings of £0.9m.
"The related costs are estimated at up to £3.1 million, comprising cash restructure costs of £0.3m and the non-cash impairment of certain conditionally purchased land assets of between £1.5m and £2.8m, and will be recognised as an exceptional item in the full-year accounts.
"Our new management teams have identified issues on previously completed legacy developments, mainly in Yorkshire, which require rectification in order to achieve adoption of the roads (and other statutory services) by the relevant local authorities.
"As we work through these issues we expect to establish cost provisions in the current financial year estimated at between £5.2 million and £7.1 million, for remedial works to be undertaken over the next three to four years. It is expected that adjusted results for the current financial year will exclude these legacy site provisions.”
The company also said it has recorded ‘resilient’ trading in the 11 weeks to April 24 with it being ‘too early’ to forecast the impact of the Middle East conflict on its business.
Chief executive Graham Prothero said: “Whilst it is frustrating that further work is required on a number of legacy sites, I am pleased with the determination of our new management teams to identify and rectify legacy issues which now allows Gleeson Homes to look forward with confidence.
"It is too early to forecast the degree to which the crisis in the Middle East will impact customer confidence, mortgage affordability and build cost inflation over the coming months. We have recently seen some softening in footfall and reservations, and limited increases in the cost of some materials.
"This, together with ongoing challenges with planning and site viability, prompts even higher than usual caution in how we manage the business, including land investment decisions, into the next financial year.
"However, following the successful implementation of Project Transform, which has driven a greater focus on operational effectiveness and efficiency, the business as a whole is now in a much stronger position to manage through this period of uncertainty and capitalise on the significant opportunities we see ahead when the market returns to growth."