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Credit crunch bites MJ Gleeson

Building giant MJ Gleeson is scaling down its operations in the south of England and will make job cuts in response to the 'worsening impact' of the credit crunch on the group.
Gleeson Regeneration & Homes, owned by the group, will close its Sheffield office as part of the group's plans to reduce the operating costs of Gleeson Regeneration & Homes and the group's overheads.

A spokesman for MJ Gleeson said 'Gleeson Regeneration & Homes, in common with the rest of the housebuilding industry, has experienced a further and marked reduction in reservation rates and an increase in cancellation rates'.

Gleeson Regeneration & Homes operates from four regional offices: Merseyside (Liverpool); North West (Bury); Yorkshire (Sheffield); and South (Fleet). The group is cutting the number of geographical locations it has to concentrate on areas where it enjoys a strong market presence.

The group will merge the North West and Yorkshire region offices as well as closing the Sheffield office. It will instead pursue housing development business in Yorkshire, from its Bury office.

In the south, the firm will be speaking to staff based at its head office in Fleet to discuss redundancies.

Referring to the south, a spokesman for the firm said 'This region does not enjoy the same level of market presence as its counterparts in the north and the board has concluded that, in current market conditions, it would not be value enhancing for shareholders to invest in new developments in this region'.

The company said in its trading statement 'due to an anticipated shortfall of income from house and land sales, it is inevitable that the group will make a loss before tax for the year to June 30, 2008'.

Powerminster Gleeson Services has been unaffected by the cutbacks carried out by parent firm MJ Gleeson Group.
The business of Powerminster Gleeson Services is facilities management for regeneration projects, and Gleeson Capital Solutions is the procurement of regeneration PFI projects. Both these businesses continue to operate as budgeted.

Powerminster Gleeson has regional offices in Manchester, Bradford, Leeds (with Gleeson Capital Solutions), Scarborough, London, the East Midlands and Kent. It is experiencing rapid expansion of its business in the regeneration and facilities management sectors. Powerminster Gleeson Services was awarded a 25 year facilities management contract for the Leeds Independent Living PFI project, worth £46m.

The business has a total facilities management order book valued at £140m.
25 June 2008


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