Sheffield’s Gleeson raises £16.4m via share placing

Sheffield-based affordable housebuilder MJ Gleeson plc said on Wednesday it raised £16.4 million by selling about 2.7 million new shares in the company via a placing of stock at 600p per share.

The new shares will represent 4.7% of the enlarged issued share capital of Gleeson.

Gleeson’s shares rose about 10% on Wednesday to around 636p.

MJ Gleeson CEO James Thomson said: “The money raised today will help position our company, once COVID-19 restrictions are lifted, to move quickly and support our customers, many of whom are the key workers that continue to provide an incredible service to our country, by supplying the much needed high quality, low-cost homes that they deserve.

“We want Gleeson to emerge, ready to take advantage of the positive market fundamentals, to re-open and build-out our existing sites, continue to deliver our high quality, low cost homes for our customers, the majority of whom are first time buyers on low and average incomes, and where possible accelerate new sites that we own and build out our pipeline of sites and strategic land sales.

“Our 2, 3 and 4 bedroom homes are truly affordable and start at just £90,000.

“Home ownership changes lives and we want to do our part alongside Government to restart the housing industry and to get Britain building again.

“We remain committed to our growth strategy which we are confident will maximise both our sales and earnings for our shareholders.”

On Monday, Gleeson said 76% of its workforce will be furloughed in line with the UK Government’s Job Retention Scheme “with the company topping-up salaries of those affected up to a minimum of 80% and a maximum of 95% of salary.”

Gleeson board members are taking a reduction in salary and fees of 30% and senior management are taking reductions in salary of between 5% and 20%.

“Together with the actions already taken including cancellation of the interim dividend, pausing all build activity and land acquisition, cutting discretionary costs and implementing a recruitment freeze, the company has now implemented a comprehensive range of actions to ensure that it is well placed to restart operationally once conditions allow,” said Gleeson on Monday.

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