Sheffield-based affordable housebuilder MJ Gleeson plc said on Monday its revenue increased 27% to £249.9 million and profit before tax rose 11% to £41.2 million in the year to June 30.
However, Gleeson shares fell more than 3% as it revealed it has decided not sell its strategic land unit, quashing any expectations of a special dividend.
The firm is however proposing a final dividend of 23p, resulting in a total dividend for the year of 34.5p per share, an increase of 8%.
The firm’s Gleeson Homes unit saw volumes rise 25% to 1,529 units sold, with the average selling price rising to £128,900 from £125,200.
And the group said its Gleeson Strategic Land unit now has 60 sites with the potential to deliver 21,730 plots.
In June, MJ Gleeson said CEO Jolyon Harrison left the firm after a disagreement “regarding his remuneration and succession planning …”
James Thomson joined Gleeson as CEO on an interim basis.
Thomson is a former CEO of Keepmoat Homes Ltd, a private equity owned housebuilder.
On Monday, MJ Gleeson said: “The board is well-advanced in a search process, which includes both internal and external candidates, to appoint a permanent chief executive officer.
“We hope to announce the outcome of this process within the next three months.
“The board is also close to finalising a search process to find two new non-executive directors.
“We recognise the value in bringing fresh talent and diversity to the board and it is our intention to make these appointments shortly.”
MJ Gleeson chairman Dermot Gleeson said on Monday: “Our unique business model of building low-cost homes in the North of England and the Midlands and strategic land sales in the south continues to deliver outstanding results.
“Record volume growth in Gleeson Homes and record profit levels in Gleeson Strategic Land resulted in strong group profit growth.
“Despite the uncertainties caused by Brexit, demand for our homes continues to be extremely strong.
“Gleeson Homes is well on track to deliver its milestone target of doubling annual completions to 2,000 units by 2022.
“Led by a strong and highly experienced management team, the division continues to have significant scope for expansion by building low-cost homes for young, first time buyers and low-income families in a market that is underserved by other housebuilders.
“Following a review of options, we have concluded that retaining Gleeson Strategic Land offers significantly greater long-term value to the group than selling the business.
“The division had a record year and continues to benefit from high levels of demand for consented land in prime locations from both large and medium-sized housebuilders.
“The division has a strong portfolio of sites and anticipates that it will continue to maintain its successful track record in promoting potentially high value developments through the planning system.
“Against this background, the board is confident that the group will continue to deliver significant growth in both revenue and profits in the current year and beyond.”
Analysts at Peel Hunt wrote: “A good set of results …
“Following a strategic review, the group has announced that it will be retaining the Strategic Land division, quashing near-term expectations of a special dividend.
“We make no changes to group profit forecasts, but confidence in the outlook means we push our target price up to 800p (from 745p).
“We continue to like the relative defensive qualities of the business and growth outlook, but this is reflected in the share price. Remains a Hold.”