In the 12 months to the end of June 2014, Gleeson Homes sold 561 units; an increase of 38% compared with the previous year's total of 406. More tellingly for the group's bottom line, the proportion of units sold on recently acquired, higher margin sites, also continued to improve with 84% of the units sold from the higher margin sites compared to last year's 75%.
The increase in sales from these sites, along with the increase in the volume of sales, is substantially improving the profitability of the business unit for the year. Gleeson Homes also ensured future pipeline, remaining active in purchasing sites. The landbank of owned and conditionally purchased plots at 30 June 2014 increased by 31% compared to the prior year, totalling 5,065 plots of which 1,815 plots have been purchased subject to planning permission. In addition, there are a further 1,600 plots which are in the pipeline to be acquired.
The group's strategic land division continues to exploit the opportunities created by the strong demand from major housebuilders for green field residential land in the South of England.
Going forward, Gleeson is in a strong cash position with balances of £13.8 million at the end of June and the group has told investors that it expects to deliver a level of profitability from the business units for the year ending 30 June 2014, significantly ahead of expectations.
Broker N+1 Singer remains a fan of the stock, maintaining that 'the new year has started with real momentum,' and it has upgraded full year to June 2015 pre-tax profit forecasts by 20% to £15 million.