Urban housing specialist hit by £45m land writedown, as turnover plummets 42%

Urban housing specialist MJ Gleeson has made a dramatic full-year pre-tax loss of £54.3m on revenues of just £55m following a massive land-value writedown.

The firm, which trades land and builds homes in regeneration areas, saw revenue plummet by 42% from £94.6m in 2008, and made a loss of £8.3m even before the land writedown. In total the firm suffered exceptional charges of £46m, of which £44.6m related to the fall in the value of its land holdings

Norfolk Park, Sheffield, by Gleeson
Norfolk Park, Sheffield, by Gleeson

It sold just 317 homes this year, 27% fewer than the previous year, and saw the average value of those homes fall by almost a third, to just £102,000, from £149,000. It said much of this fall was related to the greater number of sales to social landlords.

The firm said that over the year conditions had "continued to deteriorate". This reflects the fact that much of the improvement in house prices so far this year has been seen in traditionally strong areas of London and the South-east, rather than regeneration areas.

However, the firm said that since its year end in June there had been some signs of improvement in the market.

Dermot Gleeson, chairman, said: "Although conditions in the housing market remain very difficult, particularly in respect of regeneration areas in the north of England, recent months have seen some signs of improvement in buyer interest.

"Visitor levels have increased, selling prices appear to be stabilising, at least for the time being, and reservations in the current financial year are ahead of prior year comparables.

"It is too early, however, to call an end to the downturn. It remains to be seen how severely the continuing rise in unemployment will affect housing demand."

Gleeson, which in 2006 sold off its contracting arm Gleeson Building (now GB Building Solutions), cut almost 100 staff over the year, reducing the headcount from 382 to 286.