Contractor Gleeson has blamed the performance of its housing business for the group’s profit warning last week.
Gleeson group chief executive Dermot Gleeson said the firm was hit by a combination of cost overruns in the South-east and over-optimistic sales projections. This meant that the housing division’s operating profit for year to June 2002 would be “significantly” lower than predicted – and the £10.2m it made last year.

Gleeson said the group was switching to new-build projects because their costs were more predictable than refurbishment projects. He added that Roger Dunlop, formerly of Countryside Properties and Bryant, had been appointed operations director to help implement the new strategy.

He said: “The division’s problems relate largely to the recent past and assuming housing demand continues to benefit from historically low mortgage rates, a strong recovery is expected next year.”

The division’s problems relate to the recent past: a strong recovery is expected next year

Dermot Gleeson, chief executive, Gleeson

Gleeson added that, despite the housing division’s disappointing performance, the group was performing well and was on track to meet market expectations. He said the construction division was enjoying strong growth and its property arm was doing well.