Gleeson closes regional offices as credit crunch bites

Permalink: Gleeson closes regional offices as credit crunch bites
by Lin Freestone

M J Gleeson, a housing and property development group that is battling against exceptionally difficult trading conditions, has decided to close its Sheffield office and wind down its operations in the south of England.

Future opportunities in Yorkshire will be handled from the Bury office in Lancashire, and a series of smaller developments in the southern region, where Gleeson does not have the same level of market presence, are to be run down.

It is anticipated that the initiatives will best protect shareholder interests from the increasing tough trading conditions, which have accelerated in the last few weeks. Members of staff affected by the cuts have been informed of the decision, and there will be job losses.

Gleeson has reported that the restructuring and a shortfall in land and house sales will cost in the region of £12.8m, greatly affecting pre-tax losses in its current financial year to the end of June. Last year the group made £8.3m in pre-tax profits.

As a result of the current downturn in the housing market, Gleeson is experiencing a further and marked reduction in reservation rates and an increase in cancellations.

In a trading statement, the chairman of the group said that it now seems likely that the housing market will remain weak for an extended period; indeed, conditions may well worsen before they improve.

Gleeson currently operates from four regional offices in Knowsley, Merseyside, Bury in Lancashire, Sheffield in South Yorkshire and Fleet in Hampshire.