Gleeson, the housebuilder that focuses on cheap homes in the north of England, is to pay its first full-year dividend in five years after seeing revenues rise by nearly 50 per cent.
The Sheffield-based group, which recently restructured to focus on housebuilding in deprived areas of northern England and on buying land in the south, saw its turnover for the year to June 30 2013 rise 46 per cent to £60.7m as it sold 406 homes.
Adjusted operating profit, excluding exceptional credits of £1m in 2013 and £3m in 2012, increased from a £231,000 loss to £5m. Pre-tax profit on the same basis rose from break-even to £4.8m.
Houses built on expensive plots bought before the recession were being sold off, while newer homes are commanding higher margins. Gleeson pays less than £10,000 for a plot of land now, compared with £30,000 before the credit crunch.
The proportion of homes sold from new, higher margin sites rose from 31 per cent in the prior year to 75 per cent.
Jolyon Harrison, chief executive, said the average asking price would fall, from around £117,000 in the 2013 financial year to £115,000 in the following year.
He said there would be little competition from Help to Buy, the government scheme to lend deposits, which is being extended to second-hand homes: “We have to hold our customers’ hands through the buying process. Help to Buy is complicated. You have to go through everything twice.”
Alan Martin, chief financial officer, said revenue and profitability would continue to rise in the current financial year. “I don’t think we’ll grow 49 per cent, but it should be 25 per cent.” The company’s land bank continues to grow and stood at 3,860 plots at the year-end.
Gleeson Strategic Land, which buys sites in the south and obtains planning permission before selling on to housebuilders, recorded operating profit of £3.5m (£3.7m) on turnover of £12.7m (£8.2m). It made seven land sales, with a combined acreage of 42.5 acres.
Ten new sites were secured covering 203 acres, with the potential to deliver 1,200 houses. Heads of terms have been agreed for a further five sites covering 116 acres, with the potential for 950 plots.
The land owned or part owned by the group has residential planning permission for a total of 1,084 plots.
A full year dividend of 2.5p was recommended. Aside from a 5p special dividend in 2011, it is the first payout since 2008.
Basic earnings a share improved by 216 per cent to 21.7p (2012: 6.9p). Excluding the exceptional deferred tax credit, the basic earnings a share improved by 99 per cent to 13.7p (2012: 6.9p). For continuing operations only, excluding the exceptional deferred tax credit, basic earnings a share improved from 5.5p to 11.1p.