Paul Wallwork, chief executive of MJ Gleeson, has warned that hundreds more housebuilding jobs will be lost if the market fails to improve, writes Tom Bill.

Speaking after the regeneration and housing group described conditions in the sector as the “worst in living memory”, Wallwork (pictured) said further job cuts were inevitable, both at Gleeson and in the wider sector.

He said: “As projects come to an end, you’ll see more cost reductions. Sites go through their own cycle and once they finish there will be cuts in commercial, technical and financial staff because developments are not starting up elsewhere.”

As a result of job cuts so far, the company employs fewer than half the average number of staff it did in 2007 – 324 compared with 669. Wallwork said if there were no signs of stability in the run-up to the 2009 spring selling season, there would be more cuts.

In the year to 30 June 2008, the group made a pre-tax loss of £20.8m as a result of land writedowns of £10.6m and £5.2m in restructuring costs.

The board does not anticipate any material improvement before 2010

Dermot Gleeson, Chairman

Before exceptional items, profit was £700,000. The exceptionals also included a £4.1m out-of-court settlement with developer Devonshire Green Holdings over the West One scheme in Sheffield.

Turnover was down 51% to £94.6m as the number of units sold fell 32% from 639 to 436. The average selling price dropped by nearly a quarter from £193,000 to £149,000 and the percentage sold to registered social landlords rose from 15% to 39%.

Dermot Gleeson, chairman, said: “The board believes the housing market will not improve until mortgage finance becomes more freely available and confidence returns to the wider economy. The timing of these events is not possible to predict with any accuracy but the board does not anticipate any material improvement before 2010.”

Wallwork said the company would refinance next year before a £50m debt facility ran out in June 2010. It ended the year with net cash of £21.9m, but he said: “It’s not the greatest amount of money if you’re not selling a great deal.” He said the £50m figure would probably fall, given the state of the credit market.