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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mj Gleeson Plc | LSE:GLE | London | Ordinary Share | GB00BRKD9Z53 | ORD 2P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 496.00 | 492.50 | 515.00 | 515.00 | 496.00 | 515.00 | 6,925 | 10:03:12 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gen Contractor-oth Residentl | 328.32M | 24.17M | 0.4140 | 11.98 | 289.57M |
From Apr 2019 to Apr 2024
TIDMGLE
RNS Number : 1872F
MJ Gleeson PLC
19 February 2018
19 February 2018
MJ GLEESON PLC
Results for the half-year ended 31 December 2017
MJ Gleeson plc, the community regeneration housebuilder and strategic land specialist, is pleased to announce another strong performance with profit before tax up 19.1% and an increase in the interim dividend of 38.5% to 9.0p per share.
Hot Features
Premium
H1 17/18 H1 16/17 Change
Volume - Homes (plots) 593 451 31.5%
- Strategic Land (land
sales) 3 3 -
Operating profit - Homes GBP12.3m GBP8.5m 44.7%
- Strategic Land GBP2.3m GBP4.0m (42.5%)
Profit before tax GBP13.7m GBP11.5m 19.1%
Net cash flow from operating GBP2.1m GBP8.6m (GBP6.5m)
& investing activities
Cash and cash equivalents GBP26.7m GBP26.4m 1.1%
Return on capital employed 26.0% 22.1% 390 bp
20.6 16.8
Basic earnings per share pence pence 22.6%
Dividend per share 9.0 pence 6.5 pence 38.5%
A strong start to the year and confident in outlook for the full year and beyond
Gleeson Homes:
-- Unit sales increased 31.5% to 593 units (H1 16/17: 451) -- ASP up 2.5% to GBP124,400 (H1 16/17: GBP121,400) -- Revenue increased 34.7% to GBP73.7m (H1 16/17: GBP54.7m) -- Gross margin improved to 32.2% (H1 16/17: 31.9%) -- Operating profit increased 44.7% to GBP12.3m (H1 16/17: GBP8.5m) -- Operating margin increased to 16.7% (H1 16/17: 15.5%) -- Land pipeline of 12,001 plots (June 2017: 11,588 plots)
-- New pilot office opened in Ashington, Northumberland bringing total to 7 area offices and 3 pilot offices (June 2017: 7 area offices and 2 pilot offices)
Gleeson Strategic Land:
-- Completed 3 land sales (H1 16/17: 3 land sales) -- Operating profit lower at GBP2.3m (H1 16/17: GBP4.0m), as expected, due to smaller site size -- 11 sites with planning permission or a resolution to grant permission (H1 16/17: 13 sites)
Dividend
Interim dividend increased 38.5% to 9.0 pence per share (H1 16/17: 6.5 pence).
Full year dividend cover policy revised to between 1.75 times and 2.75 times.
Dermot Gleeson, Chairman of MJ Gleeson, commented:
"The Group has once again delivered a very encouraging start to the year. Gleeson Homes continued to benefit from its unique business model, increasing unit sales by 31.5% and operating profit by 44.7%.
"Land remains available to us at sensible prices and demand for our homes amongst our customer base remains strong.
"The division continues to source additional sites in both existing and new geographic areas and has recently opened another pilot office in Ashington, Northumberland.
"Gleeson Strategic Land completed the same number of site sales as in the prior first half year period. As anticipated, however, these sites were of a smaller size.
"Demand for consented sites remains strong from both large and medium sized developers. The division has a significant number of sites progressing to sale and is confident of achieving stronger second half results than in the comparable period last year.
"Against this background, the Board is confident that the Group will deliver a result for the full year in line with expectations."
Enquiries:
MJ Gleeson Tel: +44 11 4261
plc 2900
Chief Executive
Jolyon Harrison Officer
Chief Financial
Stefan Allanson Officer
Instinctif Tel: +44 20 7457
Partners 2020
Mark Garraway
Helen Tarbet
James Gray
Tel: +44 20 7496
N+1 Singer 3000
Shaun Dobson
Alex Laughton-Scott
Tel: +44 20 3100
Liberum 2111
Neil Patel
Richard Bootle
CHAIRMAN'S STATEMENT
It gives me great pleasure to report another strong first half performance.
Group operating profit, net of group overheads, increased 18.3% to GBP13.6m (H1 16/17: GBP11.5m) driven by an excellent performance in Gleeson Homes.
Strong cash generation in Gleeson Homes resulted in a small increase in cash from GBP26.4m to GBP26.7m despite both significantly higher dividend payments and the timing of Strategic Land's receipts, which were especially high in the prior half year period.
Gleeson Homes increased unit sales 31.5% to 593 units (H1 16/17: 451 units), ended the period with 59 active sites (31 December 2016: 51 active sites), and acquired a further 1,069 plots during the first half of the year, increasing the pipeline to 12,001 plots at 31 December 2017.
Gleeson Strategic Land completed three site sales (H1 16/17: three site sales). The mix of site sales expected this financial year has resulted in smaller sites completing in the first half. Sales in the second half are expected to substantially exceed those of the prior half year period.
Gleeson Homes
Gleeson Homes is a housing regeneration specialist working in challenging communities to build new homes for sale to people on low incomes in the North of England. The division's customers are highly motivated, financially prudent and too often ignored by the more 'traditional' big housebuilders.
During the period the division achieved growth in volume, margins and profit.
Revenue increased 34.7% to GBP73.7m (H1 16/17: GBP54.7m), reflecting a 31.5% rise in the total number of units sold from 451 to 593.
The average selling price ("ASP") for the units sold in the period increased 2.5% to GBP124,400 (H1 16/17: GBP121,400) reflecting modest price increases and the effect of plot mix and development mix.
Gross margin on units sold in the period increased 30 basis points to 32.2% (H1 16/17: 31.9%).
Operating margin increased 120 basis points to 16.7% (H1 16/17: 15.5%) and operating profit increased 44.7% to GBP12.3m (H1 16/17: GBP8.5m).
During the period, 63% (H1 16/17: 66%) of unit sales benefited from the Government's Help to Buy scheme. In addition, our own bespoke purchaser assistance packages continued to prove attractive.
At 31 December 2017, we were selling from 59 sites, an increase of seven sites on the corresponding period last year. We expect to open a significant number of sites during the coming months and anticipate the number of active selling sites to be approaching 70 by June 2018.
The pipeline of owned plots increased during the period by a net 329 plots to 5,649 plots and conditionally purchased plots increased by a net 84 plots to 6,352 plots, bringing the total pipeline of owned and conditionally purchased plots to 12,001 plots on 148 sites at December 2017 (June 2017: 11,588 plots on 141 sites). 13 new sites were added to the pipeline during the period, while 6 sites were either completed or we did not proceed to purchase.
We continue to see significant scope for expanding our proven model and are actively sourcing sites beyond our existing areas of operation. In July 2017 we announced our plan to achieve a doubling of completions to 2,000 units per annum within five years. We are already making excellent progress towards achieving our target.
Gleeson Strategic Land
Gleeson Strategic Land, our land promotion business, continued to see strong demand from medium and large housebuilders for good quality residential sites in the South of England.
The division recorded the sale of three sites (H1 16/17: three sites), covering combined residential development totalling 133 plots.
Revenue decreased GBP4.6m to GBP3.7m (H1 16/17: GBP8.3m), reflecting the smaller size of the three sites sold.
Gross profit decreased GBP1.7m to GBP3.1m (H1 16/17: GBP4.8m). Operating profit decreased GBP1.7m to GBP2.3m (H1 16/17: GBP4.0m).
There are currently 11 sites in the portfolio with planning permission or a resolution to grant permission (H1 16/17: 13 sites). Eight of these sites, which will deliver 1,593 plots, are currently being progressed for sale (H1 16/17: seven sites, 1,055 plots).
In total, there are 11 sites where the division is currently awaiting either the determination of a planning application or the outcome of a planning appeal.
The Strategic Land portfolio continues to be replenished with one further agreement, with the potential to deliver 100 plots, having been secured in the period.
At 31 December 2017 Gleeson Strategic Land had a portfolio of 63 sites (30 June 2017: 65 sites) having sold three sites and acquired one site during the period. The portfolio, in which the Group has an overall 74% beneficial interest, has the potential to develop in excess of 21,400 plots.
Dividend and Dividend timetable
In light of these strong results and of our confidence in the future, the Board is declaring an interim dividend of 9.0 pence per share, an increase of 38.5% over the prior year (H1 16/17: 6.5 pence per share).
The interim dividend will be paid on 6 April 2018 to shareholders on the register at close of business on 9 March 2018 and with an ex-entitlement date of 8 March 2018.
The Board aims to maintain a progressive dividend policy with the interim dividend representing one third of the total dividend. Gleeson Homes' unique business model, which is highly cash generative with low land costs, has led the Board to approve a new dividend cover policy of between 1.75 times and 2.75 times. This compares with the previous policy of maintaining a dividend cover level of between 2 times and 3 times.
Summary & Outlook
The Group has once again delivered a very encouraging start to the year. Gleeson Homes continued to benefit from its unique business model, increasing unit sales by 31.5% and operating profit by 44.7%.
Land remains available to us at sensible prices and demand for our homes amongst our customer base remains strong.
The division continues to source additional sites in both existing and new geographic areas and has recently opened another pilot office in Ashington, Northumberland.
Gleeson Strategic Land completed the same number of site sales as in the prior first half year period. As anticipated, however, these sites were of a smaller size.
Demand for consented sites remains strong from both large and medium sized developers. The division has a significant number of sites progressing to sale and is confident of achieving stronger second half results than in the comparable period last year.
Against this background, the Board is confident that the Group will deliver a result for the full year in line with expectations.
Financial Overview
Income Statement
Group revenue increased 22.9% to GBP77.4m (H1 16/17: GBP63.0m), with revenue growth in Gleeson Homes and the sale of smaller sites in Gleeson Strategic Land.
Group gross profit increased 21.2% to GBP26.9m (H1 16/17: GBP22.2m).
The Group's operating profit increased 18.3% to GBP13.6m (H1 16/17: GBP11.5m). Net interest income of GBP0.1m (H1 16/17: nil) resulted in profit before tax increasing 19.1% to GBP13.7m (H1 16/17: GBP11.5m).
The tax charge for the period was GBP2.4m (H1 16/17: GBP2.3m) reflecting an effective rate of 17.4% (H1 16/17: 19.6%). The profit after tax from continuing operations was GBP11.3m (H1 16/17: GBP9.3m). Discontinued operations recorded a post-tax loss of GBP0.2m (H1 16/17: GBP0.2m loss). The profit for the period attributable to equity holders was GBP11.2m (H1 16/17: GBP9.1m).
Balance Sheet and Cash Flow
Total shareholders' equity stood at GBP173.7m at 31 December 2017 compared to GBP156.7m at 31 December 2016. This equates to net assets per share of 318.3 pence (31 December 2016: 289.6 pence).
Cash flows from operating and investing activities reduced by GBP6.5m to GBP2.1m (H1 16/17: GBP8.6m inflow) due to the timing of cash flows in Gleeson Strategic Land.
The Group's net cash balance at 31 December 2017 was GBP26.7m (31 December 2016: GBP26.4m).
Risks and Uncertainties
The Group is subject to a number of risks and uncertainties as part of its activities. The Board regularly considers these and seeks to ensure that appropriate processes are in place to identify, control, and monitor these risks. The directors consider that the principal risks and uncertainties facing the Group are those outlined on pages 33 to 35 of the Report and Accounts for the year ended 30 June 2017.
Dermot Gleeson
Chairman
Condensed Consolidated Income Statement
for the six months to 31 December 2017
Audited
Unaudited Unaudited Year
Six months Six months to
to 31 to 31 30
December December June
2017 2016 2017
Note GBP000 GBP000 GBP000
Continuing operations
Revenue 77,398 63,005 160,384
Cost of sales (50,527) (40,776) (103,674)
------------- ------------- ----------
Gross profit 26,871 22,229 56,710
Administrative expenses (13,334) (10,692) (24,051)
Other operating income 112 - 304
------------- ------------- ----------
Operating profit 13,649 11,537 32,963
Financial income 180 96 251
Financial expenses (96) (113) (202)
------------- ------------- ----------
Profit before tax 13,733 11,520 33,012
Tax 4 (2,387) (2,258) (6,488)
------------- ------------- ----------
Profit for the period from
continuing operations 11,346 9,262 26,524
Discontinued operations
Loss for the period from
discontinued operations
(net of tax) 3 (157) (158) (310)
Profit for the period 11,189 9,104 26,214
============= ============= ==========
Earnings per share attributable to equity holders of the parent company
Basic 6
======= ======= =======
20.61 16.84 48.49
p p p
20.34 16.67 47.75
Diluted 6 p p p
======= ======= =======
Earnings per share from continuing operations
Basic 6
======= ======= =======
20.90 17.13 49.06
p p p
20.62 16.96 48.31
Diluted 6 p p p
======= ======= =======
Condensed Consolidated Statement of Comprehensive Income
for the six months to 31 December 2017
Audited
Unaudited Unaudited Year
Six months Six months to
to 31 to 31 30
December December June
2017 2016 2017
GBP000 GBP000 GBP000
Profit for the period 11,189 9,104 26,214
Other comprehensive income/(expense)
Items that may be subsequently
reclassified to profit
or loss
Change in value of available
for sale financial assets 11 (106) (104)
Deferred tax on share-based
payments 181 - 665
------------- ------------- -------------------
Other comprehensive income/(expense)
for the period, net of
tax 192 (106) 561
------------- ------------- -------------------
Total comprehensive income
for the period attributable
to equity holders of the
parent company 11,381 8,998 26,775
============= ============= ===================
Condensed Consolidated Statement of Financial Position
at 31 December 2017
Unaudited Unaudited Audited
30
31 December 31 December June
2017 2016 2017
GBP000 GBP000 GBP000
Non-current assets
Plant and equipment 1,708 1,437 1,484
Investment properties 258 506 303
Investments in joint ventures - - -
Trade and other receivables 13,053 8,175 14,427
Deferred tax assets 4,909 4,409 5,001
19,928 14,527 21,215
============= ============= =========
Current assets
Inventories 150,379 126,586 142,550
Trade and other receivables 13,021 15,811 17,925
UK corporation tax - 751 -
Cash and cash equivalents 26,684 26,414 34,052
190,084 169,562 194,527
============= ============= =========
Total assets 210,012 184,089 215,742
============= ============= =========
Non-current liabilities
Trade and other payables (402) - (703)
Provisions (110) (100) (110)
------------- ------------- ---------
(512) (100) (813)
============= ============= =========
Current liabilities
Trade and other payables (33,554) (27,210) (40,924)
Provisions (99) (54) (101)
UK corporation tax (2,116) - (2,533)
(35,769) (27,264) (43,558)
============= ============= =========
Total liabilities (36,281) (27,364) (44,371)
============= ============= =========
Net assets 173,731 156,725 171,371
============= ============= =========
Equity
Share capital 1,091 1,082 1,082
Share premium account - 23 -
Available for sale reserve (677) (690) (688)
Retained earnings 173,317 156,310 170,977
Total equity 173,731 156,725 171,371
============= ============= =========
Condensed Consolidated Statement of Changes in Equity
for the six months to 31 December 2017
Share Available
Share premium for sale Retained Total
Note capital account reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 July 2016 (audited) 1,082 23 (584) 152,384 152,905
Total comprehensive
income for the period
Profit for the period - - - 9,104 9,104
Other comprehensive
expense - - (106) - (106)
Total comprehensive
income for the period - - (106) 9,104 8,998
========= ========= ========== ========== ========
Transactions with owners,
recorded directly in
equity
Contributions and distributions
to owners
Purchase of own shares - - - (24) (24)
Share-based payments - - - 254 254
Dividends 5 - - - (5,408) (5,408)
Transactions with owners,
recorded directly in
equity - - - (5,178) (5,178)
========= ========= ========== ========== ========
At 31 December 2016
(unaudited) 1,082 23 (690) 156,310 156,725
========= ========= ========== ========== ========
Total comprehensive
income for the period
Profit for the period - - - 17,110 17,110
Other comprehensive
income - - 2 665 667
--------- --------- ---------- ---------- --------
Total comprehensive
income for the period - - 2 17,775 17,777
========= ========= ========== ========== ========
Transactions with owners,
recorded directly in
equity
Contributions and distributions
to owners
Adjustment to share
premium - (23) - - (23)
Purchase of own shares - - - 1 1
Share-based payments - - - 406 406
Dividends 5 - - - (3,516) (3,516)
--------- --------- ---------- ---------- --------
Transactions with owners,
recorded directly in
equity - (23) - (3,109) (3,132)
========= ========= ========== ========== ========
At 30 June 2017 (audited) 1,082 - (688) 170,977 171,371
========= ========= ========== ========== ========
Total comprehensive
income for the period
Profit for the period - - - 11,189 11,189
Other comprehensive
income - - 11 181 192
--------- --------- ---------- ---------- --------
Total comprehensive
income for the period - - 11 11,370 11,381
--------- --------- ---------- ---------- --------
Transactions with owners,
recorded directly in
equity
Contributions and distributions
to owners
Share issue 9 - - - 9
Sale of own shares - - - 25 25
Share-based payments - - - 476 476
Dividends 5 - - - (9,531) (9,531)
--------- --------- ---------- ---------- --------
Transactions with owners,
recorded directly in
equity 9 - - (9,030) (9,021)
========= ========= ========== ========== ========
At 31 December 2017
(unaudited) 1,091 - (677) 173,317 173,731
========= ========= ========== ========== ========
Condensed Consolidated Statement of Cash Flow
for the six months to 31 December 2017
Unaudited Unaudited Audited
Year
Six months Six months to
to 31 to 30
December 31 December June
2017 2016 2017
GBP000 GBP000 GBP000
Operating activities
Profit before tax from continuing
operations 13,733 11,520 33,012
Loss before tax from discontinued
operations (157) (158) (228)
----------- -------------- --------------
13,576 11,362 32,784
Depreciation of plant and
equipment 469 376 818
Share-based payments 476 254 660
Profit on sale of available
for sale financial assets (71) (30) (216)
Loss on sale of plant and
equipment 22 11 147
Loss on sale of investment
properties - - 9
Financial income (180) (96) (251)
Financial expenses 96 113 202
----------- -------------- --------------
Operating cash flows before
movements in working capital 14,388 11,990 34,153
Increase in inventories (7,828) (12,349) (28,312)
Decrease in receivables 6,105 12,380 3,650
(Decrease) / increase in payables (7,702) 220 14,633
----------- -------------- --------------
Cash generated from operating
activities 4,963 12,241 24,124
Tax paid (2,531) (3,472) (4,426)
Interest paid (66) (85) (135)
----------- -------------- --------------
Net cash flow surplus from
operating activities 2,366 8,684 19,563
=========== ============== ==============
Investing activities
Proceeds from disposal of
available for sale financial
assets 431 453 1,154
Proceeds from disposal of
investment properties 45 - 194
Proceeds from disposal of
plant and equipment - - 5
Interest received 4 15 18
Purchase of plant and equipment (717) (550) (1,180)
----------- -------------- --------------
Net cash flow (deficit) /
surplus from investing activities (237) (82) 191
=========== ============== ==============
Financing activities
Proceeds from issue of shares 9 - -
Sale / (purchase) of own shares 25 (24) (22)
Dividends paid (9,531) (5,408) (8,924)
----------- -------------- --------------
Net cash flow deficit from
financing activities (9,497) (5,432) (8,946)
=========== ============== ==============
Net (decrease) / increase
in cash and cash equivalents (7,368) 3,170 10,808
Cash and cash equivalents
at beginning of period 34,052 23,244 23,244
Cash and cash equivalents
at end of period 26,684 26,414 34,052
=========== ============== ==============
Notes to the Condensed Consolidated Financial Statements
for the six months to 31 December 2017
1. Basis of preparation and accounting policies
The Interim Report of the Group for the six months ended 31 December 2017 has been prepared in accordance with IAS 34 "Interim Financial Reporting", International Financial Reporting Standards ("IFRS") and IFRS Interpretations Committee ("IFRC IC") interpretations as adopted for use in the European Union ("EU") and in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority.
The Interim Report does not constitute financial statements as defined in Section 434 of the Companies Act 2006 and is neither audited nor reviewed. It should be read in conjunction with the Report and Accounts for the year ended 30 June 2017, which is available either on request from the Group's registered office, 6 Europa Court, Sheffield Business Park, Sheffield, S9 1XE, or can be downloaded from the corporate website www.mjgleesonplc.com.
The comparative figures for the financial year ended 30 June 2017 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters which the auditor drew attention to by way of emphasis without qualifying their report and (iii) did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.
The accounting policies, method of computation, and presentation adopted are consistent with those of the Report and Accounts for the year ended 30 June 2017, as described in those financial statements.
The preparation of condensed half-yearly financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may subsequently differ from these estimates. In preparing these condensed consolidated financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual consolidated financial statements for the year ended 30 June 2017.
The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 July 2017. These new standards are not expected to have a material impact for the Group:
-- IAS 7 (Amended) 'Statement on cash flows' -- IAS 12 (Amended) 'Income Taxes'
Going concern
The Directors have, at the time of approving the interim accounts, a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for at least twelve months from the date of approval of the Interim Report. Thus they continue to adopt the going concern basis of accounting in preparing the Interim Report.
2. Segmental analysis
The Group is organised into the following two operating divisions under the control of the Executive Board, which is identified as the Chief Operating Decision Maker as defined under IFRS 8 'Operating Segments':
-- Gleeson Homes -- Gleeson Strategic Land
2. Segmental analysis (cont.)
All of the Group's operations are carried out entirely within the United Kingdom. Segment information about the Group's operations is presented below:
Unaudited Unaudited Audited
Six months Year
to Six months to
31 December to 30
2017 31 December June
2016 2017
Note GBP000 GBP000 GBP000
Revenue
Continuing activities:
Gleeson Homes 73,747 54,747 130,492
Gleeson Strategic Land 3,651 8,258 29,892
------------- ------------- -------------
Total revenue 77,398 63,005 160,384
============= ============= =============
Profit on activities
Gleeson Homes 12,348 8,466 22,760
Gleeson Strategic Land 2,259 3,952 12,040
------------- ------------- -------------
14,607 12,418 34,800
Group activities (958) (881) (1,837)
Financial income 180 96 251
Financial expenses (96) (113) (202)
------------- ------------- -------------
Profit before tax 13,733 11,520 33,012
Tax (2,387) (2,258) (6,488)
------------- ------------- -------------
Profit for the period from
continuing operations 11,346 9,262 26,524
Loss for the period from
discontinued operations
(net of tax) 3 (157) (158) (310)
Profit for the period 11,189 9,104 26,214
============= ============= =============
The revenue in the Gleeson Homes segment relates to the sale of residential properties and land. All revenue for the Gleeson Strategic Land segment is in relation to the sale of land interests.
Balance sheet analysis of business segments:
Unaudited 31 December
2017
Assets Liabilities Net
assets
GBP000 GBP000 GBP000
Gleeson Homes 134,029 (30,294) 103,735
Gleeson Strategic Land 48,442 (3,446) 44,996
Group activities / discontinued
operations 857 (2,541) (1,684)
Net cash 26,684 - 26,684
---------- ------------- ---------
210,012 (36,281) 173,731
========== ============= =========
Unaudited 31 December
2016
Assets Liabilities Net
assets
GBP000 GBP000 GBP000
Gleeson Homes 114,181 (19,739) 94,442
Gleeson Strategic Land 41,774 (5,983) 35,791
Group activities / discontinued
operations 1,720 (1,642) 78
Net cash 26,414 - 26,414
---------- ------------- ---------
184,089 (27,364) 156,725
========== ============= =========
2. Segmental analysis (cont.)
Audited 30 June 2017
Assets Liabilities Net
assets
GBP000 GBP000 GBP000
Gleeson Homes 133,785 (34,482) 99,303
Gleeson Strategic Land 47,085 (7,217) 39,868
Group activities / discontinued
operations 820 (2,672) (1,852)
Net cash 34,052 - 34,052
--------- ------------- --------
215,742 (44,371) 171,371
========= ============= ========
3. Discontinued operations
The activity of Gleeson Construction Services now only relates to remedial works and the division is classified as discontinued.
Unaudited Unaudited Audited
Six months Six months Year
to 31 to 31 ended
December December 30 June
2017 2016 2017
GBP000 GBP000 GBP000
Revenue - - -
Cost of sales - - -
------------ ------------ -------------
Gross loss - - -
Administrative expenses (157) (158) (228)
------------ ------------ -------------
Operating loss (157) (158) (228)
Loss before tax (157) (158) (228)
Tax - - (82)
Loss for the period from
discontinued operations (157) (158) (310)
============ ============ =============
4. Tax
The results for the six months to 31 December 2017 include a tax charge of 17.4% of profit before tax (31 December 2016: 19.6%; 30 June 2017: 20.0%), representing the best estimate of the average annual effective tax rate expected for the full year, applied to the pre-tax income of the six month period.
Reductions in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and to 17% (effective 1 April 2020) were substantively enacted into law before the balance sheet date.
5. Dividends
Unaudited Unaudited Audited
Year
Six months Six months to
to to 30
31 December 31 December June
2017 2016 2017
GBP000 GBP000 GBP000
Amounts recognised as distributions
to equity holders:
Final dividend for the year
ended 30 June 2016 of 10.0p
per share - 5,408 5,408
Interim dividend for the year
ended 30 June 2017 of 6.5p
per share - - 3,516
Final dividend for the year
ended 30 June 2017 of 17.5p
per share 9,531 - -
9,531 5,408 8,924
============= ============= ========
On 16 February 2018 the Board approved an interim dividend of 9.0 pence per share at an estimated total cost of GBP4,910,000. The dividend has not been included as a liability as at 31 December 2017.
6. Earnings per share
Continuing and discontinued operations
The calculation of the basic and diluted earnings per share is based on the following data:
Earnings Unaudited Unaudited Audited
Six months Six months Year
to to to
31 December 31 December 30
2017 2016 June
2017
GBP000 GBP000 GBP000
Earnings for the purposes
of basic earnings per share,
being net
profit/(loss) attributable
to equity holders of the parent
company
Profit from continuing operations 11,346 9,262 26,524
Loss from discontinued operations (157) (158) (310)
Earnings for the purposes
of basic and diluted earnings
per share 11,189 9,104 26,214
============= ============== ==========
Number of shares 31 December 31 December 30 June
2017 2016 2017
No. 000 No. 000 No.
000
Weighted average number of
ordinary shares for the purposes
of
basic earnings per share 54,300 54,065 54,066
Effect of dilutive potential
ordinary shares:
Share options 712 542 834
Weighted average number of
ordinary shares for the purposes
of
diluted earnings per share 55,012 54,607 54,900
============= ============== ==========
Six months Six months Year
From continuing operations to 31 to 31 to
December December 30 June
2017 2016 2017
pence pence pence
Basic 20.90 17.13 49.06
============= ============== ==========
Diluted 20.62 16.96 48.31
============= ============== ==========
From discontinued operations Six months Six months Year
to 31 to 31 to
December December 30
2017 2016 June
2017
pence pence pence
Basic (0.29) (0.29) (0.57)
============= ============== ==========
Diluted (0.29) (0.29) (0.56)
============= ============== ==========
From continuing and discontinued Six months Six months Year
operations to 31 to 31 to
December December 30
2017 2016 June
2017
pence pence pence
Basic 20.61 16.84 48.49
============= ============== ==========
Diluted 20.34 16.67 47.75
============= ============== ==========
7. Financial instruments
The fair value of the Group's financial assets and liabilities are not materially different from the carrying values. The following summarises the major methods and assumptions used in estimating the fair values of financial instruments.
Available for sale financial assets
Unaudited Unaudited Audited
31 December 31 December 30
2017 2016 June
Level Level 2017
3 3 Level
3
GBP000 GBP000 GBP000
Balance at start of period 5,669 6,611 6,611
Additions - - -
Redemptions (325) (393) (902)
Unwind of discount (financial
income) 46 53 100
Fair value movement recognised
in other comprehensive income (24) (136) (140)
------------- -------------- --------
Balance at end of period 5,366 6,135 5,669
============= ============== ========
Available for sale financial assets represent shared equity loans advanced to customers and secured by way of a second charge on the property sold. They are carried at fair value which is determined by discounting forecast cash flows for the residual period of the contract. The difference between the nominal value and the initial fair value is credited over the deferred term to financial income, with the financial asset increasing to its forecast cash settlement value on the anticipated receipt date.
Redemptions in the period of shared equity loans carried at GBP325,000 (H1 16/17: GBP423,000) generated a profit on redemption of GBP71,000 (H1 16/17: GBP30,000) which has been recognised in other operating income in the consolidated income statement. In the prior year, the profit on redemption of shared equity loans was recognised in cost of sales.
In addition, a net change in value of available for sale assets of GBP11,000 (H1 16/17: GBP106,000 expense) has been recognised in other comprehensive income. This is made up as follows:
Unaudited Unaudited Audited
31 December 31 December 30
2017 2016 June
2017
GBP000 GBP000 GBP000
Fair value movement recognised
in other comprehensive income (24) (136) (140)
Fair value recycled through
profit and loss 35 30 36
Total movement recognised
in other comprehensive income 11 (106) (104)
============= ============== ========
Forecast cash flows are determined using inputs based on current market conditions and the Group's historic experience of actual cash flows resulting from such arrangements. These inputs are by nature estimates and as such the fair value has been classified as Level 3 under the fair value hierarchy laid out in IFRS 13: Fair Value Measurement. There have been no transfers between fair value levels in the period.
Significant unobservable inputs into the fair value measurement calculation include regional house price movements based on the Group's actual experience of regional house pricing and management forecasts of future movements, the anticipated period to redemption of loans which remain outstanding and a discount rate based on current observed market interest rates offered to private individuals on secured second loans.
The key assumptions applied in calculating fair value as at the balance sheet date were:
-- Forecast regional house price inflation: 2.0% -- Average period to redemption: 5.5 years -- Discount rate: 8%
7. Financial instruments (cont.)
The sensitivity analysis of changes to each of the key assumptions applied in calculating fair value, whilst holding all other assumptions constant, is as follows:
Increase
/ (decrease)
in fair
value
Change in assumption GBP000
Forecast regional house price
inflation - increase by 1% 290
Average period to redemption
- increase by 1 year (298)
Discount rate - decrease by
1% 276
8. Group pension scheme
The Group operates a defined contribution pension plan. The assets of the pension plan are held separately from those of the Group in funds under the control of the trustees.
The total pension cost charged to the consolidated income statement in the six months to 31 December 2017 of GBP326,000 (six months to 31 December 2016: GBP302,000; year to 30 June 2017: GBP624,000) represents contributions payable to the defined contribution pension plan by the Group at rates specified in the plan rules. At 31 December 2017, contributions of GBP84,000 (31 December 2016: GBP75,000; 30 June 2017: GBP77,000) due in respect of the current reporting period had not been paid over to the pension plan. Since the period end, this amount has been paid.
9. Related party transactions
On 7 December 2017, the Group entered into a conditional agreement to purchase an area of land from Jolyon Harrison, CEO, for GBP98,750. The land, if purchased, will form part of a new Gleeson Homes site being developed in the ordinary course of business. The price paid by the Group was supported by an independent valuation and approved by the Board.
Other than disclosed above, there have been no material changes to the related party arrangements as reported in note 29 of the Report and Accounts for the year ended 30 June 2017.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
10. Seasonality
Reservations in Gleeson Homes are largely unaffected by seasonal variations and tend to be driven more by the timing of site openings than by seasonality. However, the number of completions in the second half of the financial year tends to be higher than the first half.
There is no seasonality in the Gleeson Strategic Land division. However, the number of transactions in the second half of the financial year tends to be higher than the first half.
Statement of Directors' responsibility
for the six months to 31 December 2017
The Directors confirm that, to the best of our knowledge:
a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union;
b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
c) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
The Board
The Board of Directors of MJ Gleeson plc at 30 June 2017 and their respective responsibilities can be found on pages 38 to 39 of the MJ Gleeson plc Report and Accounts 2017. There have been no changes since that date.
By order of the Board,
Stefan Allanson
Chief Financial Officer
16 February 2018
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR TFMFTMBJBBLP
(END) Dow Jones Newswires
February 19, 2018 02:00 ET (07:00 GMT)
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