builders for generations
MJ Gleeson Group plc
Report and Accounts
for the year ended 30 June 2013
Contents
Financial Highlights
Chairman’s Statement
Community Matters
Business Review
Operating Risk Statement
Corporate Social Responsibility Report
Board of Directors
Directors’ Report
Directors’ Remuneration Report
Corporate Governance
Statement of Directors’ Responsibilities
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cashflow
Notes to the Financial Statements
Five Year Review
Advisers
1
2
4
8
14
16
18
20
22
26
31
32
34
35
36
38
40
68
Inside back cover
Community matters
Forward Thinking
Partnerships
page 4
The Gleeson
Community Sports
Foundation
page 5
The Gleeson
Apprenticeship
Scheme
page 6
Low Cost Homes
for Local People
page 7
Making a real and
difference to communities
lasting
Front cover image: Hackworth Place, Shildon
MJ Gleeson Group plc
MJ Gleeson Group plc
The Group is engaged in:
housebuilding on brownfield land in the North of England with a particular emphasis on
low cost homes for local communities;
strategic land trading, primarily in the South of England, and benefiting from the
enhancement of the value of green field sites by securing residential planning consents.
Financial highlights
2013
2012
Operating profit continuing operations
£6.0m
£2.7m
121%
Gleeson Homes operating profit
£4.0m
£0.3m
1,209%
Gleeson Strategic Land operating profit
£3.5m
£3.7m
6%
Revenue*
£’000
2010
2011
2012
33,231
41,210
40,807
2013
60,656
Profit before tax
continuing operations*
£’000
2010
2011
2012
(646)
1,106
3,026
2013
5,779
*Restated (see note 11)
Earnings per share
continuing operations*
(p)
2010
2011
2012
(0.75)
1.87
5.51
2013
19.14
Net Assets per share
(p)
2010
2011
2012
186
188
190
2013
212
Page 1
MJ Gleeson Group plc
Chairman’s Statement
The Group has continued to expand and strengthen its
presence in urban housing and regeneration on brownfield
sites in the North of England, where we are market leader.
Dermot Gleeson, Chairman
The Group made excellent progress over the year.
and strong demand for such sites, once consented, from volume
house builders.
Gleeson Homes increased unit sales by 46% to 406 units (2012:
279 units). Moreover, this increase in volume, which was
primarily driven by sales on recently acquired, higher margin
sites, has resulted in a significant rise in gross margins.
In addition, the division continued substantially to expand its
landbank, taking advantage of the low land prices that still
persist in most parts of the North of England.
Financial performance
Group revenues increased 49% to £60.7m (2012 restated:
£40.8m). The Group recorded an operating profit from continuing
operations of £6.0m, an increase compared to the previous year
of 121% (2012 restated: £2.7m). Discontinued operations, which
included the sale of our last PFI investment, generated a post-
tax profit of £1.3m (2012 restated: £0.7m).
Gleeson Strategic Land also produced a strong set of results,
reflecting both a high level of success in securing residential
planning consents for green field sites in the South of England
Profit for the year attributable to equity holders of the parent
company, including an exceptional deferred tax credit of £4.2m,
totalled £11.4m (2012: £3.6m).
Net Assets increased by 11.6% to £112.1m (2012: £100.4m),
representing net assets per share of 212p (2012: 190p). Net cash
at 30 June 2013 was £9.9m (2012: £13.9m), the decrease of
£3.9m primarily reflecting the continuing expansion of the
Group’s landbank and work-in-progress.
Normalised basic earnings per share, which excludes the
exceptional tax credit of £4.2m, was 13.7p (2012: 6.9p).
Market context
The housing market during the year benefited significantly from
the Government’s Funding for Lending, and Help to Buy schemes,
and continues to do so. Concerns have been expressed that the
Government initiatives may create an unsustainable housing
bubble but, in our markets, these seem misplaced. Outside
central London, the increases in prices and sales rates have been
very modest and are likely to remain so at a time when average
real incomes continue to be exceptionally constrained.
Employees
The average number of employees during the year increased to
201 (2012: 130). The number at the year end was 215 (2012: 166).
Continuing our community projects, see page 4
Page 2
MJ Gleeson Group plc
The Group’s strong performance during the year testifies to the
commitment and professionalism of our employees and, on
behalf of the Board, I would like to congratulate and thank them.
dividend will normally represent roughly two thirds of the total
dividend.
Dividend policy
I stated in last year’s Annual Report that, due to the improving
prospects of Gleeson Homes, the Board was hoping to
recommence regular dividend payments during 2013. I am
pleased to report that regular dividend payments duly
recommenced in April 2013 with the payment of an interim
dividend of 0.5 pence per share (2012: nil) at a total cost of
£0.26m. Furthermore, the Board is recommending a final
dividend for the year of 2.0 pence per share (2012: nil) at a cost
of £1.1m. Combined with the interim dividend, this will give a
total dividend for the year of 2.5 pence per share (2012: 5.0
pence per share special dividend). Subject to shareholder
approval at the Annual General Meeting, the final dividend will
be paid on 20 December 2013 to shareholders on the register at
close of business on 22 November 2013.
Prospects
The Group has continued to expand and strengthen its presence
in the two areas of the housing market in which it now operates:
urban housing and regeneration on brownfield sites in the North
of England, where we are market leader, and the promotion
through the planning system and subsequent sale of high value
green field sites in the South of England.
Forward orders are significantly ahead of last year and we are
confident that, barring an unexpected deterioration in economic
conditions, we will achieve further significant growth in revenue
and profit in the current year and beyond.
It is the Board’s intention to maintain a progressive dividend
policy in which, from the current year onwards, the final
Dermot Gleeson
Chairman
Carlisle Park, Swinton
Page 3
MJ Gleeson Group plc
Community Matters
“Making a real and lasting difference to communities”
We understand the importance of involving the community before & during the construction
of our developments & leaving a legacy once our works are complete.
The following are just some of the ways we help local communities.
Forward Thinking
Partnerships
Throughout
The communities in which we build
new homes are the core of our
every
business.
development we work with local
people and local authorities to
build strong relationships. We have
a flexible approach to ensure the
development meets
local needs
and new homes are in keeping with
other buildings in the area. We
liaise with planning, housing and
social service departments to build
good quality low cost housing for
local people.
Mayor of Hartlepool, Cllr Stephen Akers-Belcher and Regional Director, Ed Alder
at Tanfield Gardens, Hartlepool
Projects for
Schools
We work with local schools to foster
partnerships within the community,
coordinate competitions & projects
for
our
pupils
development and
to educate
children on the dangers of playing
on building sites.
throughout
Pupils from West Boldon Primary School, Boldon Colliery, get a bricklaying lesson
Page 4
Ecclesfield Spartans away kit, supplied by MJ Gleeson.
The Gleeson Community Sports Foundation
Since its inception in 2010 the Foundation has sponsored nearly 20 community run, junior
sports teams across the three operating regions.
Ardwick Lads Amateur Boxing Club, Manchester
“Parents and children get a big lift when
companies like Gleeson show a positive
interest in what we are trying to achieve for
young people. The sponsorship helps us
reach our goal of making sport, and not
crime, a choice for young people.”
Bolton Woods Junior Football Club, Shipley
shown
"Angling, apart from being good fun, has
to help young people
been
understand the local environment as well as
helping with discipline, concentration &
boosts confidence. We provide all the
equipment, bait & facilities. Gleeson’s help
will allow us to continue our programme.”
Terry Littlewood, Phoenix & Parkgate Junior Angling Club
Darfield Cricket Club
Page 5
MJ Gleeson Group plc
Some of our apprentices in the North East
The Gleeson
Apprecticeship Scheme
The Gleeson Apprenticeship Scheme offers young people the
opportunity to train for a qualification in either brick-laying or
joinery whilst gaining hands-on, paid work experience on one of
Gleeson’s new homes developments.
Following the recent intake in September 2013, Gleeson Homes
has increased the number of apprentices by 50% to 21.
Macauley Bartley, Bricklaying Apprentice
at Moorland Walk, Barnsley
Kavan Grainger, Apprentice Joiner at
Lowfield Park, Bolton-upon-Dearne
Josh Fowler, Bricklaying Apprentice at
Lowfield Park, Bolton-upon-Dearne
Proven Success
Simon Cauchie commenced his
Apprenticeship with Gleeson
Homes in 2011 working as a
carpenter at Grove Village in
Manchester. He soon became an
integral part of the team,
winning
for
‘Most
Improved Student’ at
Manchester College during the
second year of his course.
award
the
Simon has now successfully
completed his apprenticeship
and has set up his own business
as a carpenter.
Page 6
MJ Gleeson Group plc
Low Cost Homes for Local People
We pride ourselves in building homes for local people at prices they can afford. Owner
occupiers take on responsibility for their homes and become stakeholders in society.
Gleeson has many schemes to help people buy their new home. There are currently 10 schemes to assist this first step on the housing
ladder including the Government’s Help to Buy scheme.
“When we found out we were
expecting a baby we decided to
move in with my parents so we
could save towards a deposit and
look for a new home. We were
really impressed with the new
homes at Allendale Court and were
excited when the Gleeson’s Sales
Negotiator explained that they
offered a number of schemes which
could help us buy. We had already
saved a small deposit so chose to
scheme
use The MatchMaker
whereby Gleeson matched our
deposit which enabled us to buy a
new home much sooner than we
thought possible.”
Faye Beadle, Ormesby,
Middlesbrough
Oswald Park, Burnley
Hackworth Place, Shildon
“We didn’t think we could afford
to buy as we had no deposit saved.
However, thanks to Gleeson’s Save
& Build scheme, we were able to
reserve a home last August and save
a 5% deposit whilst the property
was built. Once our home was
ready to move into, and our deposit
saved, we took advantage of
Gleeson’s Shared Equity scheme
which helped lower our monthly
mortgage repayments.”
Jenkins,
Lee
South Yorkshire
Goldthorpe,
Lastingham Green, Buttershaw
Gaisby Mill, Shipley
Page 7
MJ Gleeson Group plc
Business Review
The year to 30 June 2013 has been a transitional year for the
Group which has resulted in a significantly improved financial
performance. Gleeson Homes, focused on the provision of low
cost homes in the North of England, substantially increased the
number of sites under development, the volume of homes sold
and its gross and net margins. Gleeson Strategic Land once again
delivered an impressive profit and a high return on capital
employed from the sale of land with residential planning
permission in the South of England.
GROuP BuSiNESSES AND STRATEGy
Gleeson Homes
A housebuilder focusing on development on brownfield land in
the North of England, with a particular emphasis on low cost
homes for local communities. The strategy is to grow the business
in the North of England, particularly in areas of urban
regeneration.
land owners to acquire land in socially and economically
deprived areas which will benefit from urban regeneration.
• Driving down building costs. We build traditional 2, 3 and 4
bedroom detached and semi-detached homes. We ensure that
our homes are built with good quality but inexpensive products
to the specification that our customers require.
• Low overheads. We ensure that overhead costs are kept low
by having small and similarly structured management teams in
each operating region and continuously measuring their
relative performance.
• Enabling the customer. We offer our customers a large range
of bespoke packages to enable them to become homeowners.
Gleeson Strategic Land
A land promotion business that enhances the value of land by
securing residential planning consents. The primary focus is on
green field sites in the South of England likely to be attractive
to volume housebuilders.
The key features of the Gleeson Homes business model are:
The key features of the Gleeson Strategic Land business
model are:
• Successful land purchase. We have a very carefully targeted
land buying strategy that has clearly defined and challenging
hurdle rates. We partner with local authorities and private
Cllr Ann O’Byrne becomes a builder for the day at Grafton
Park, Toxteth, Liverpool
Page 8
• Achieving mutually beneficial agreements with landowners.
We enter into agreements with landowners to promote their
land through the planning process.
• Promotion through the planning process. The division’s team
of land surveyors and town planners, along with legal and
technical experts, steer the land through the planning process
with a view to achieving a commercially attractive residential
planning consent.
• Realising value. We strive to ensure that the best value is
achieved for all stakeholders by managing the sale of the
consented site to a developer.
DiSCONTiNuED OPERATiONS
Gleeson Capital Solutions: The Group commenced winding down
this business unit in 2011. The Group sold its last PFI investment
in February 2013.
Gleeson Commercial Property Developments: The Group has
now sold its commercial property developments and ended its
remaining leasehold interests.
Building and Engineering Contracting: The Group sold certain
contracts, assets and liabilities of the Building Contracting
Division and Engineering Division in 2005 and 2006 respectively.
The activity of this business unit are now limited to the resolution
of occasional contractual claims.
MJ Gleeson Group plc
PERFORMANCE
Gleeson Homes
Gleeson Homes’ results for the year were as follows:
Revenue
Operating profit
2013
2012
£47.9m
£4.0m
£32.6m
£0.3m
During the year, 406 homes were sold, an increase of 46% from
the prior year’s total of 279. The proportion of homes sold from
new, higher margin sites rose from 31% in the prior year to 75%.
This increase in the contribution from new sites, along with the
increase in the volume of homes sold, significantly improved the
profitability of the business unit.
The Average Selling Price (“ASP”) for the homes sold in the year
was £118,000 (2012: £117,000).
Customer demand increased in the second half of the year, with
reservation rates improving from January onwards. Mortgage
availability remained constrained but was helped by the
Government’s Funding for Lending scheme which improved the
availability of higher loan to value mortgages. The Government’s
FirstBuy and Help to Buy schemes were also of assistance to many
of our customers.
Included within the Operating Profit is an exceptional credit of
£1.0m (2012: £3.0m) relating to the partial reversal of a debtor
write down. The exceptional credits in the prior year related to
the partial reversal of inventory write downs and the release of
contract and restructuring provisions.
At the year end, Gleeson Homes had 34 selling outlets, located in
County Durham, Derbyshire, Merseyside, Manchester, Newcastle,
Nottinghamshire, Tyneside and Yorkshire. The number of outlets
is expected to increase during the course of the current financial
year to in excess of 40.
The business unit continued to take advantage of reduced land
prices in the North of England to build up a substantially enlarged
landbank. During the year, 15 sites were purchased which added
1,050 plots to the landbank. A further 16 sites that have been
conditionally purchased are expected to add a further 1,240 plots
to the landbank in the near future. When and if these acquisitions
are completed, the landbank will total in excess of 3,860 plots.
Impaired plots now represent only 7% of the landbank. In addition
to owned and conditionally purchased plots, there are a further
2,000 plots which are being actively considered for acquisition.
Barnburgh View, Goldthorpe, South yorkshire
Page 9
MJ Gleeson Group plc
Business Review continued
GLEESON STRATEGiC LAND
Revenue
Operating profit
2013
2012
£12.7m
£3.5m
£8.2m
£3.7m
The demand for green field residential land in the South of
England from the major housebuilders remained strong
throughout the year. As a result, the business unit was able to
complete seven land sales, with a combined acreage of 42.5
acres.
During the year, ten new sites were secured by means of either
option, promotion, or subject to planning agreements. These
covered 203 acres, with the potential to deliver 1,200 houses.
In addition, heads of terms have been agreed for a further five
sites covering 116 acres, with the potential for 950 plots.
Gleeson Strategic Land continues to progress the portfolio
through the planning system. During the year residential
planning approval was achieved on 35 acres over four sites, to
deliver 355 plots. It is expected that 175 plots on three of the
sites will be sold in the current financial year. At the year end
planning applications on two sites remain undecided, which if
successful will deliver 220 plots. During the current financial
year planning applications are expected to be submitted on a
further 22 sites, delivering a further 2,600 plots.
At the year end, Gleeson Strategic Land’s portfolio totalled 3,582
acres (2012: 3,653 acres), of which 155 acres (2012: 177 acres)
were wholly or part owned by the Group, 2,162 acres (2012:
2,337 acres) were held under option, and 1,265 acres (2012:
1,139 acres) were the subject of promotion agreements. The
geographic bias of the portfolio is towards the South of England,
predominantly in: Buckinghamshire, Dorset, Essex, Hampshire,
Hertfordshire, Kent, Oxfordshire, Surrey, Sussex and Wiltshire.
The land owned or part owned by the Group and managed by
Gleeson Strategic Land includes sites which have residential
planning permission for a total of 1,084 plots. In addition, the
Group and its joint venture partners have options to buy two sites
which have residential permission for a total of 42 plots.
May 2012
Allendale Court, Ormesby, Middlesbrough May 2013
Page 10
MJ Gleeson Group plc
FiNANCE REViEW
Overview
The profit before tax from continuing operations, increasing by
91% to £5.8m (2012: £3.0m). This significant improvement was
led by Gleeson Homes, which recorded a £3.7m increase in
operating profit to £4.0m (2012: £0.3m). Gleeson Strategic Land
achieved a profit of £3.5m (2012: £3.7m).
Key performance indicators
Revenue
Operating profit
Cash generation
Basic EPS - continuing operations
- normalised*
Net assets per share
2013
£60.7m
£6.0m
£(3.9)m
2012
Restated
Note 11
£40.8m
£2.7m
£(3.9)m
11.1p
212p
5.5p
190p
* Normalised EPS excludes the deferred tax credit of £4.2m recorded
in the year.
Gleeson Homes
2013 has been a year of strong growth and operational
performance. Revenue increased by 47% to £47.9m (2012:
£32.6m) driven by a 46% increase in home completions to 406
(2012: 279). Operating profit increased by £3.7m to £4.0m
(2012: £0.3m), resulting in an operating margin of 8.4% (2012:
0.9%).
A key factor in the improvement of the operating margin was the
64% reduction in the proportion of completions from sites that
had previously been impaired to 25% (2012: 69%). The proportion
of completions from impaired sites will continue to reduce as
these sites are sold out. At 30 June 2013, only 7% of the landbank
was impaired.
Included within the operating result are the following
exceptional credits:
Reversal of inventories write downs
and contract provisions
Release of restructuring provisions
Total
2013
2012
£1.0m
-
£2.9m
£0.1m
£1.0m
£3.0m
The average selling price was relatively stable at £118,000 (2012:
£117,000).
Gleeson Strategic Land
Gleeson Strategic Land recorded an operating profit of £3.5m
(2012: £3.7m) on revenue of £12.7m (2012: £8.2m) following the
sale of seven sites, comprising 42.5 acres.
Discontinued operations
Gleeson Capital Solutions was reclassified as a discontinued
operation during the year, following the sale of its remaining PFI
investment in February 2013. The business unit recorded a profit
after tax of £1.5m (2012: £0.7m). The result for the year
included the £1.4m profit on sale of a PFI investment which
generated gross proceeds of £3.6m. The operations of this
business unit have now ceased.
Gleeson Commercial Property Developments was reclassified as
a discontinued operation during the year as the Group has now
disposed of its commercial property developments and ended its
remaining leasehold interests. A profit after tax of £7k was
recorded in the year (2012: £183k).
The Building Contracting division of Gleeson Construction
Services, was reclassified as a discontinued operation during the
year as contracting work, including rectification work on behalf
of insurers, is now complete. Both the Building Contracting and
the Engineering Contracting divisions are now classified as
discontinued operations and any distinction between the divisions
is no longer relevant. Gleeson Construction Services recorded
revenue of £1.1m (2012: £1.2m), relating to rectification work on
behalf of insurers, on which a nominal gross profit was achieved.
An operating loss of £0.1m (2012: £0.1m) was recorded.
interest
Financial income of £0.4m (2012 restated: £0.3m) consists of
interest earned on bank deposits, and the unwinding of discounts
on deferred receipts. Interest earned on bank deposits was lower
than in the previous year due to lower average cash balances
during the year. Interest earned on unwinding of deferred
receipts was higher as a result of a higher level of discount being
unwound due to a higher level of deferred receipts outstanding.
Interest on joint venture loans totalling £0.2m (2012: £0.2m) was
recorded within discontinued operations. The joint venture was
disposed of in February 2013 at which point interest ceased to
be accrued, resulting in a lower income than the prior year.
Financial expenses of £0.6m (2012: £19k) consist of interest
payable on bank loans and overdrafts, bank charges and interest,
Page 11
MJ Gleeson Group plc
Business Review continued
and unwinding of discounts relating to deferred payments.
Financial expenses are higher in the current year due to bank
charges relating to the provision of the £5.0m overdraft which
was arranged during the year, along with the interest expense on
deferred payments for land acquisition.
Tax
A net tax credit for continuing operations, of £4.3m (2012: £0.1m
charge) has been recorded in the Income Statement. The tax
credit includes an exceptional credit relating to deferred tax of
£4.2m. Deferred tax assets relating to unused tax losses have
been recognised to the extent that it is probable that taxable
profits will be available against which the asset can be utilised.
The Group now has £67.9m (2012: £83.1m) of tax losses, of which
£19.9m have been recognised as a deferred asset, which can be
carried forward indefinitely.
The tax charge attributable to discontinued operations was £10k
(2012 restated: £24k), so the total tax credit was £4.3m (2012:
£0.1m charge). The net deferred tax asset recorded within the
Balance Sheet totals £5.0m (2012: £0.7m).
Earnings per share
Basic earnings per share improved by 216% to 21.7p (2012: 6.9p).
Excluding the exceptional deferred tax credit, the basic earnings
per share improved by 99% to 13.7p (2012: 6.9p). For continuing
operations only, excluding the exceptional deferred tax credit,
basic earnings per share improved by 101% to 11.1p (2012: 5.5p).
Dividend
Against the background of Gleeson Homes’ return to operational
profitability and of the continuing commercial success of Gleeson
Strategic Land, the Board decided to recommence regular
dividend payments with the payment of an interim dividend of
0.5 pence per share in April 2013. In the light of the continuing
improvement in the Group’s performance, the Board proposes a
final dividend of 2.0 pence per share. Combined with the interim
dividend, the dividend for the full year totals 2.5 pence per
share. A special dividend of 5.0 pence per share was paid in
December 2011.
Disposals
The Group sold its remaining PFI investment in February 2013.
The gross proceeds from the sale totalled £3.6m, generating a
Hackworth Place, Shildon
Page 12
MJ Gleeson Group plc
profit of £1.4m, which has been recognised within discontinued
operations.
In the previous year, the Group disposed of three PFI investments
with gross proceeds of £7.5m and a profit of £0.3m.
Treasury risk management
The Group’s cash balances are centrally pooled and invested,
ensuring the best available returns are achieved consistent with
retaining sufficient liquidity for the Group’s operations. The
Group only deposits funds with financial institutions which have
a minimum credit rating of AA.
Balance sheet
At 30 June 2013, shareholders’ funds totalled £112.1m (2012:
£100.4m).
As the Group operates wholly within the UK, there is no
requirement for currency risk management.
In the year, non-current assets increased by £7.3m to £20.0m
(2012: £12.7m). This included an increase in plant & equipment
of £0.5m, comprising the acquisition of site equipment and the
capitalisation of show homes, an increase in trade and other
receivables of £2.4m due to further shared equity sales, and an
increase in the deferred tax asset of £4.3m noted above.
Current assets increased by £16.6m to £120.2m (2012: £103.5m).
Inventories increased by £20.3m to £96.8m, with a £8.6m net
investment in land and a £11.7m increase in work-in-progress.
Trade and other receivables increased by £2.2m due to increased
deferred receipts following land sales, and assets classified as
held for sale reduced to £nil from £2.0m following the sale of
the PFI investment. Cash balances reduced by £3.9m.
Total liabilities increased by £12.2m to £28.0m (2012: £15.8m).
£2.2m of the increase related to the drawdown of a loan from
the Government’s Get Britain Building Fund. Trade payables
increased by £10.3m, with £7.2m due to an increase in land
creditors to £9.8m (2012: £2.6m).
Cash flow
The Group utilised £3.9m (2012: £3.9m) of cash in the year,
resulting in a net cash balance at 30 June 2013 of £9.9m (2012:
£13.9m).
Operating cash flows, including working capital movements,
utilised £8.7m (2012: £8.6m). Cash generated from investing
activities totalled £2.8m (2012: £7.2m), which included £3.3m
net proceeds from the sale of a PFI investment. Net cash flows
from financing activities generated £2.1m (2012: £2.5m utilised),
including £2.2m due to the drawdown of the Get Britain Building
loan and £0.3m (2012: £2.6m) on dividend payments.
Bank facilities
The Group has a £5.0m overdraft facility, which is renewable in
February 2014. The Group is in advanced negotiations regarding
the acceptance of a revolving working capital facility, which
would be used to accelerate the Group’s growth plans.
Pension
The Group contributes to a defined contribution pension scheme.
A charge of £0.4m (2012: £0.3m) was recorded in the Income
Statement for pension contributions. The Group has no exposure
to defined benefit pension plans.
Going concern
The Group’s business activities, together with the factors likely
to affect its future development, performance and position, are
set out in the Business Review. The financial position of the
Group, its cash flows, liquidity position and borrowing facilities
are described above.
The Group meets its day-to-day working capital requirements
through its cash resources and the overdraft facility. Current
economic conditions inevitably create a degree of uncertainty,
particularly over the level of demand for the Group’s goods and
services and the availability of bank finance. However, the
Group’s forecasts and projections show that the Group is able to
operate without the need for debt finance, other than usage of
an overdraft, for the foreseeable future.
After making enquiries, the Directors have a reasonable
expectation that the Company and the Group have adequate
resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the annual Report and Accounts.
Page 13
MJ Gleeson Group plc
Operating Risk Statement
In common with other organisations, the Group faces risks that may affect its performance. The Group has established and operates
a system of internal control and risk management procedures, in order to identify, control and monitor the risks at various levels within
the organisation. These risks include but are not limited to the following:
Risk
Description
Mitigation
Economic environment
Continuing uncertainty in the wider economy,
• Sites are selected to meet the needs of the
The impact of continuing economic fragility
including government austerity measures,
local community.
and government austerity measures.
affect buyer confidence and the demand for
• Prices and
incentives are
regularly
new houses. This could have a negative
reviewed.
impact on revenues, profits, cash generation
• Lead indicators of the housing market,
and the carrying value of the Group’s assets.
such as visitors to sites and reservation
rates are closely monitored.
• A cautious approach to debt funding is
maintained.
Mortgage availability
The availability of mortgage
finance,
• Gleeson Homes provides a range of
The limited availability of mortgages for first
particularly the deposit requirements for first
customer assistance packages.
time buyers.
time buyers, is crucial to customer demand.
• We continually innovate to find additional
Restrictions on mortgages granted could
ways to assist customers to buy a home.
reduce demand for new homes and impact on
• We work with key lenders to ensure
the Group’s revenues and profits.
products are appropriate.
Land
Gleeson Homes needs to acquire consented
• We have a clearly defined strategy and
An inability to source sufficient land at an
land at appropriate prices and in appropriate
geographic focus.
acceptable cost to meet the Group’s business
areas in the North of England in order to
• There is a formal appraisal process and
needs.
construct and sell homes to deliver profit.
rigorous adherence to rates of return.
Gleeson Strategic Land needs to acquire
control of land in the South of England so that
it can promote it through the planning system
and subsequently sell it in order to deliver
profit.
Planning policy and regulations
Increased complexity in some aspects of the
• We have a very high level of in-house
The potentially damaging uncertainties in the
planning process may slow down, or increase
expertise devoted to monitoring and
planning regime relating to the Localism Act,
the cost of, the delivery of consented land for
complying with planning regulations and to
the National Planning Policy Framework and
development or sale and so impact on the
achieving
implementable
planning
the Community Infrastructure Levy.
Group’s revenues and profits.
consents.
• We consult with central government,
parliament and local authorities, both
directly and via industry bodies, in order to
understand proposed changes to regula -
tions and to highlight potential issues.
Page 14
MJ Gleeson Group plc
Risk
People
Description
Mitigation
The loss of key staff or the failure to attract,
• We have programmes that generously
An inability to attract, develop or retain good
develop and retain people with the right skills
reward the achievement of performance
people.
may have a detrimental impact on the
targets.
business.
• The Group encourages employee share
ownership.
• Our apprenticeship schemes enable us to
identify and secure the loyalty of talented
individuals at an early age.
• We perform regular performance and
development reviews.
• We monitor staff turnover and benchmark
remuneration against competitors.
Availability of
raw materials and
Shortages or increased cost of materials or
• The Group has multiple suppliers for both
subcontractors
skilled labour, the failure of key suppliers, or
labour contracts and material supplies.
An inability to secure materials and skilled
the
inability to secure supplies upon
• The Group seeks to partner with the supply
labour on a timely basis at suitable prices.
appropriate credit terms could increase costs
chain.
and delay construction.
Health & Safety
Health and safety breaches can result in
• Our documented policies and procedures
A failure to prevent unsafe practices within
injuries to employees, subcontractors and
are regularly reviewed and modified in
our construction activities, causing injury or
site visitors, delays
in construction,
order to ensure continuous improvement.
death.
additional cost,
reputational damage,
• Dedicated Health & Safety personnel
criminal prosecution and civil litigation.
ensure implementation and adherence to
these policies and procedures.
• Performance is reviewed both by local
management and the main Board.
Latent defects
The Group may be exposed to latent defects
• We have experienced personnel, dedicated
Financial losses may arise from latent defects
which occur during the liability period on
to dealing with such claims.
that may arise on completed projects during
completed construction contracts that have
• Insurance policies are in place to minimise
the liability period.
not been transferred to the purchaser of the
Group liabilities, wherever possible.
relevant construction business. Although
•
The provisions relating to completed
subcontractors will normally resolve such
contracts are reviewed on a regular basis.
defects, the Group will become liable if the
subcontractor
is no
longer
trading,
potentially resulting in additional cost.
Page 15
MJ Gleeson Group plc
Corporate Social Responsibility Report
The Group recognises the importance that its activities have on
all its stakeholders, including shareholders, employees, customers,
the supply chain and the communities in which it operates.
Health & safety
Health and safety is of paramount importance to the Group and
is considered to be a key risk.
There have been no prohibition notices issued to the Group
during the year. There were no reportable injuries in the year
under the Reporting of Injuries, Diseases and Dangerous
Occurrences Regulations (“RIDDOR”). In the previous 2 years the
Group reported one and two injuries per year respectively under
RIDDOR.
The overall accident incidence rate (“AIR”) was zero (2012:
negligible) in spite of a further sizable increase in construction
activity and is significantly below the house building industry
average of 330 injuries per 100,000 employees, as published by
the Housebuilders Federation (“HBF”) and the Health & Safety
Executive. The AIR is an industry-wide indicator of health &
safety performance.
Community matters
The Group is heavily engaged in housing regeneration, and its
work is therefore at the heart of the communities where this
regeneration takes place. The Group is committed to improving
these communities and creating positive and long term enhance-
ment of the environment and the life of the community itself.
The Group understands the importance of involving the
community before and during the construction of our
developments, and leaving a legacy once our works are
complete. The following are just some of the ways the Group
helps local communities:
The Gleeson Community Sports Foundation: Our sports
foundation provides sponsorship opportunities for local junior
sports clubs. Local teams are invited to apply annually for
funding towards sports kit.
Engagement with local schools: We work with schools to
educate children on the dangers of playing on building sites.
Apprenticeship Schemes: We are dedicated to giving people the
opportunity to start a career in the housebuilding industry. We
provide training packages for local unemployed people to include
apprenticeships in conjunction with a local college.
Local jobs for local people: We are committed to giving priority
of employment to people living within two miles of each site.
We will assist local labour initiatives and make lasting
contributions to the local community and economy.
Design for Disability: We carry out alterations to our homes free
of charge for disabled occupants. We acknowledge that people
with apparently identical disabilities may have totally different
needs and we are happy to adapt our homes to suit their
individual needs, such as installing wet rooms and changes to the
internal configuration.
Environmental
management systems
The Group’s business units
each have an environmental
management system which
controls how environmental
performance is managed. At
the operational level, the
environmental management
system is contained within
our construction planning.
The Group’s environmental
strategy is focused on:
• minimisation of environ-
mental risk and maximi-
sation of environmental
opportunity; and
Jumanah Alqfaili, winner of the Design a Bedroom competition, with Cllr Ann O’Bryne at
Cawdor Park, Toxteth
Page 16
MJ Gleeson Group plc
• ensuring knowledge and understanding is at a level where all
employees are aware of the environmental responsibilities
involved in their job.
Waste management: minimisation & recycling
Site waste management plans are put in place at the start of
each project. Suitable recovery or disposal arrangements are
made for all waste. Arrangements are identified for dealing with
all waste in line with environmental agency recommendations.
Timber policy
The Group has a timber purchasing policy which requires that all
timber provided or used in the manufacture of its products must
be obtained from a certified sustainable source. The Group
complied with this policy throughout the year.
Human resources
It is the Group’s policy to ensure that it provides a safe,
professional and stable working environment, that all employees
are afforded equal opportunities and are free from unlawful
discrimination regardless of their age, sex, colour, race, religion
or ethnic origin and that disabled persons are not
disadvantaged.
It is gratifying to note that, despite the ongoing uncertainties of
the housebuilding sector, the Group’s employees have remained
loyal and committed with the voluntary turnover rate and
sickness absence rate below the national average.
The Group believes its employees are fundamental to its success
and has continued to invest in them through training and
development programmes. The Group actively encourages all of
its employees to be fully engaged in the identification of their
own training needs in order to achieve their full potential and to
meet the requirements of the business.
Individual employee performance is regularly reviewed using the
Group’s Performance Development Review process and
objectives and targets are set for personal development.
The Group remains committed to the objective of having all site-
based employees Construction Skills Certification Scheme
(“CSCS”) carded.
Charitable and political donations
Charitable donations in 2013 totalled £10,225 (2012: £3,475). No
contributions were made to political parties (2012: £nil).
July 2012
Moorland Walk, Barnsley May 2013
Page 17
MJ Gleeson Group plc
Board of Directors
Dermot Gleeson, MA (Cantab)
Chairman
Joined the Board in 1975. Appointed Chief Executive in 1988 and Chairman in 1994. Relinquished
the post of Chief Executive in 1998. Chairman of the Nomination Committee. Currently a Non-
Executive Director of GB Group Holdings Limited (the parent company of GB Building Solutions
Limited, previously Gleeson Building Limited). Previously employed in the Conservative Party
Research Department, the European Commission and Midland Bank International Limited. Formerly,
a Trustee of the British Broadcasting Corporation, Chairman of the Major Contractors Group, a Board
Member of the Housing Corporation, a Director of the Construction Industry Training Board and a
Trustee of the Institute of Cancer Research.
Jolyon Harrison, FCiOB, FioD, FCMi
Chief Executive Officer and Managing Director, Gleeson Homes
Appointed to the Board July 2010 and appointed Chief Executive on 1 July 2012. Joined the Group
in November 2009 as Managing Director of Gleeson Homes. Jolyon has over 40 years of house building
experience, most recently as founder and Chairman of Pelham Construction/North Country Homes
Group and prior to that as Managing Director of Shepherd Homes. Currently Chairman of York Housing
Association, JDP Rooflines Limited and the Yorkshire region of the Home Builders Federation.
Formerly a member of the North East Housing Board and a Council member of the National House
Building Council.
Alan Martin, BSc, ACA
Chief Financial Officer and Company Secretary
Appointed January 2009. Previously Group Financial Controller, a position he had held since November
2006. Formerly Group Financial Controller, Psion PLC. Alan qualified as a Chartered Accountant in
1990, following which he specialised in corporate recovery with PricewaterhouseCoopers in London
and in Sydney, Australia.
Page 18
MJ Gleeson Group plc
Ross Ancell, ACA (NZ)
Non-Executive Director
Appointed October 2006. Senior Independent Director. Chairman of the Remuneration Committee
and member of the Audit and Nomination Committees. Chairman of Churngold Construction Holdings
Limited and Independent Non-Executive Director of Galaxy Entertainment Group Limited.
Colin Dearlove, BA, FCMA, CGMA
Non-Executive Director
Appointed December 2007. Independent Director. Chairman of the Audit Committee and member
of the Remuneration and Nomination Committees. Colin was at Barratt Developments PLC from
1981 to 2006 where he held a number of senior finance positions with the most recent being Group
Finance Director, from 1992 until his retirement in 2006.
Christopher Mills
Non-Executive Director
Appointed January 2009. Founder of Harwood Capital Management Group and formerly Chief
Investment Officer of J O Hambro Capital Management Limited from 1993 to 2011. He is also Chief
Executive and Investment Manager of North Atlantic Smaller Companies Investment Trust PLC, a UK
listed investment trust. Christopher is a director of several publicly quoted companies, including
Catalyst Media Group plc, Bioquell and Cyprotex.
Page 19
MJ Gleeson Group plc
Directors’ Report
Results and dividends
During the year, the Group made a profit after taxation of £11.4m
(2012: £3.6m). An interim dividend of 0.5 pence per share was
paid to shareholders on 5 April 2013 (2012: nil). The Board
proposes to pay, subject to shareholder approval at the 2013
Annual General Meeting, a final dividend of 2.0 pence per share
(2012: nil) in respect of the 2013 financial year on 20 December
2013 to shareholders on the register at the close of business on
22 November 2013. On this basis, the total dividend for the year
will be 2.5 pence per share. A special dividend of 5.0 pence per
share was paid in December 2011.
Directors
During the year, the following served as Directors:
Dermot Gleeson
Chairman
Jolyon Harrison
Executive Director
Alan Martin
Executive Director
Ross Ancell
Non-Executive Director and Senior
Independent Director
Colin Dearlove
Non-Executive Director
Christopher Mills
Non-Executive Director
At the next Annual General Meeting of the Company, to be held
on 13 December 2013, all of the Directors will, voluntarily, offer
themselves for re-election. Of the Directors standing for re-
election, Jolyon Harrison and Alan Martin hold service contracts
that may be terminated by the Company with a notice period of
one year. Directors’ biographies are shown on pages 18 and 19.
Directors’ interests
The interests of the Directors serving during the financial year
and their connected persons in the ordinary share capital of the
Company were as follows:
Director
Dermot Gleeson
Jolyon Harrison
Alan Martin
Ross Ancell
Colin Dearlove
27 Sept
2013
30 June
2013
30 June
2012
1,053,086
1,053,086
1,053,086
1,301,920
1,301,760
1,154,190
10,979
10,817
9,591
-
-
-
-
–
–
Share capital
The Company has issued share capital of 52,876,487 ordinary
shares of two pence each, as at 27 September 2013. Further
details are given in note 30. The number of ordinary shares in
issue has increased by 146,252 shares since the date of
publication of the last Report and Accounts, following the issue
of shares to Jolyon Harrison as payment of his annual bonus.
Substantial shareholdings
On 27 September 2013, the shareholdings noted below,
representing 3% or more of the issued share capital, had been
notified to the Company. In addition, as at 27 September 2013,
Capita IRG Trustees Limited held 300,046 ordinary shares as
trustees of the Employee Share Purchase Plan.
Name of shareholder
Number
of shares
Proportion
of total
North Atlantic Value LLP
13,655,000
25.80%
Schroder Investment Management
Limited
Mrs J C Cooper & spouse*
7,365,620
2,815,365
13.93%
5.32%
* of which 542,800 are held in discretionary trusts of which she is a Trustee.
Plant and equipment
Information relating to changes in plant and equipment is given
in note 12 to the financial statements.
Creditor payment policy
Payment terms are agreed with the Group’s suppliers and every
effort is made to adhere to these terms. Payments are made
when it can be confirmed that goods and/or services have been
provided in accordance with the relevant contractual conditions.
The Group’s average trade creditor payment period at 30 June
2013 was 57 days (2012: 50 days).
Disclosure of information to Auditor
The Directors who held office at the date of approval of this
Directors’ Report confirm that, so far as they are each aware,
there is no relevant audit information of which the Auditor is
unaware, and each Director has taken all the steps that he ought
to have taken as a Director to make himself aware of any
relevant audit information and to establish that the Auditor is
aware of that information.
Christopher Mills
13,655,000 a 13,927,000 a 14,450,640 a
(a) Shares are held in name of North Atlantic Value LLP, of which Christopher
Mills is a Member.
Takeovers directive
Pursuant to s.992 of the Companies Act 2006 which implements
the EU Takeovers Directive, the Company is required to disclose
Page 20
MJ Gleeson Group plc
certain additional information. The following gives those
disclosures which are not covered elsewhere in this Annual Report.
The structure of the Company’s share capital is shown on page
20 and within note 30. The rights of shareholders are set out in
the Company’s Articles of Association (the “Articles”). The
holders of ordinary shares are entitled to receive the Company’s
reports and accounts, to attend and speak at general meetings
of the Company, to exercise voting rights in person or by
appointing a proxy, and to receive a dividend where declared or
paid out of profits available for such a purpose.
The Company’s Articles give the Board power to appoint Directors
and also require Directors to retire and submit themselves for
election at the following Annual General Meeting. A Director who
retires in this way is eligible for election, but is not taken into
account when deciding how many Directors should retire by
rotation at the Annual General Meeting. Pursuant to the Articles,
at every Annual General Meeting, at least one-third of the
current Directors must retire by rotation. The Articles themselves
may be amended by special resolution. Once again, at this year’s
Annual General Meeting, all Directors will, voluntarily, offer
themselves for re-election in the interests of good corporate
governance.
The Board of Directors is responsible for the management of the
business of the Company and may exercise all the powers of the
Company subject to the provisions of the Company’s Memorandum
and Articles. The Articles contain specific provisions and
restrictions regarding the Company’s power to borrow money.
Powers relating to the issuing and buying back of shares are also
included in the Articles and shareholders are asked to renew such
powers each year at the Annual General Meeting.
The agreements that alter or terminate upon a change of control
of the Company following a takeover have been identified as the
M J Gleeson Group plc Share Purchase Plan, the M J Gleeson Group
plc Performance Share Plan, and the Bond Facility Agreement
provided by Zurich Insurance plc. In the event of a takeover of the
company the share option schemes/plans would vest and the bank
and bond facility agreements would potentially lapse.
Auditor
KPMG Audit Plc was re-appointed by the members at the last
Annual General Meeting and is considered to be independent.
KPMG Audit Plc has instigated an orderly wind down of business.
The Board has decided to put KPMG LLP forward to be appointed
as Auditor and a resolution concerning their appointment and
fixing their remuneration will be put to the forthcoming Annual
General Meeting to be held on 13 December 2013.
Annual General Meeting
The Notice of the Annual General Meeting to be held on
13 December 2013, together with details of the Resolutions to
be considered, is set out in a separate circular.
Special business
As special business at the Annual General Meeting, the Directors
will seek shareholders’ approval of Resolutions as follows:
1. Resolution 11 seeks shareholders’ authority for the allotment
of Ordinary shares up to an aggregate maximum nominal
amount of £351,535 (being the nominal amount equal to one
third of the issued share capital of the Company) in
substitution for all existing authorities. This authority will
expire at the conclusion of the next Annual General Meeting
or 31 December 2014 whichever is earlier.
2. Resolution 12 asks shareholders to waive their pre-emption
rights for a further year in respect of any rights issue and in
respect of the allotment of shares having a maximum
aggregate nominal value of £52,880 which is equivalent to
approximately 5% of the Company’s issued equity share capital
as at 27 September 2013.
3. Resolution 13 has been prepared in connection with the
renewal of the general authority to the Company to make
market purchases of its own shares having a maximum
aggregate nominal value of £105,755, being equivalent to
approximately 10% of the issued share capital as at
27 September 2013. The Directors would exercise this
authority only if they believed that to do so would be in the
interests of shareholders generally and would be likely to
result in an increase in earnings per share. Any EPS targets
included in employee share incentive schemes will be adjusted
to take account of any buyback.
4. Resolution 14 asks shareholders’ approval to call General
Meetings other than Annual General Meetings on not less than
14 clear days’ notice.
5. Resolution 15 seeks shareholders’ authority to amend the
Company’s Performance Share Plan, details of which are set
out in the AGM Circular.
By order of the Board
Alan Martin
Company Secretary
27 September 2013
Page 21
MJ Gleeson Group plc
Directors’ Remuneration Report
introduction
This report has been prepared in accordance with the Large and
Medium-Sized Companies and Groups (Accounts and Reports)
Regulations 2008. The report also meets the relevant
requirements of the Listing Rules of the Financial Conduct
Authority and describes how the Board has applied the principles
relating to Directors’ remuneration.
The Act requires the Auditors to report to the Company’s
members on the elements of the Remuneration Report that
require audit and to state whether in their opinion the report
has been properly prepared. To facilitate this, the report has
been divided into separate sections for audited and unaudited
information. Shareholders’ approval of this report will be sought
at the forthcoming Annual General Meeting.
iNFORMATiON NOT SuBJECT TO AuDiT
Remuneration Committee
The Remuneration Committee (the “Committee”) is a Board
Committee consisting entirely of Non-Executive Directors. The
following Directors were members of the Committee during the
year ended 30 June 2013:
Ross Ancell (Chairman)
Colin Dearlove
The Secretary of the Committee is Alan Martin, Company Secretary.
The Committee is responsible for recommending to the Board the
Group’s remuneration policy for the Executive Directors and such
other key employees as the Board may designate. The Committee
is also responsible for determining targets for any performance-
related pay schemes, the policy and scope of pension
arrangements and service agreements, termination payments
and compensation commitments for the Executive Directors. In
addition, the Committee gives guidance to the Chief Executive
Officer on pay policy matters for the Group as a whole. The terms
of reference of the Committee are available on the Group’s
website, or on request from the Company Secretary, and will also
be available at the location of the Annual General Meeting for a
period of 15 minutes in advance of the Meeting.
The Committee meets formally up to three times a year and at
such other times as the Chairman of the Committee shall require.
The Committee consults the Chairman of the Company, the Chief
Executive Officer and the Head of Human Resources concerning
its proposals. These individuals are not involved in the decisions
regarding their own remuneration. During the year, the
Committee received external professional advice from Towers
Page 22
Watson on remuneration issues and BDO LLP on share scheme
issues. Both Towers Watson and BDO LLP were selected and
appointed by the Remuneration Committee.
No one other than a Committee member is entitled to be present
at meetings unless invited by the Chairman of the Committee.
In formulating its recommendations, the Committee considered
pay and employment conditions throughout the Group and
complied with the Code.
The Committee met three times during the year and all members
were in attendance.
Remuneration policy
It is the Group’s policy to:
• set the remuneration of Executive Directors at a level which
will attract and retain executives of appropriate ability,
experience and integrity to manage the affairs of the Group;
• reward Executive Directors and senior managers below Board
level appropriately for their contributions to the success of the
Group but with reference to mid-market remuneration levels
offered by similar companies within the sector;
• ensure that a significant proportion of the Executive Directors’
overall remuneration is performance-related so that their
interests are more closely aligned with those of the shareholders;
• ensure that the performance targets in the short and long-term
incentive plans are challenging and are likely to result in
significantly enhanced total shareholder return; and
• ensure that regular contact is maintained with the principal
shareholders regarding remuneration matters.
The Committee believes that its policy is appropriate for the
Group and has no intention to amend it in the current year.
Nevertheless, the policy will be kept under regular review.
Basic salary
The Committee reviews and makes recommendations regarding
the basic salary of the Executive Directors to the Board annually.
In making its recommendations, the Committee has regard to the
salaries paid to executives of comparable companies in the
housebuilding sector. Consideration is also given to the wider
remuneration environment, particularly in companies of a similar
size, and the performance and responsibilities of the Executive
Directors. Basic salary is the only element of remuneration that
is pensionable.
Benefits in kind
Benefits in kind comprise free family medical insurance, a fuel
card and a company car or a car allowance.
MJ Gleeson Group plc
Performance-related remuneration
Annual bonus
For the year ended 30 June 2013, the Executive Directors who
held office throughout that year participated in an annual bonus
scheme under which they may potentially receive 100% of their
respective base salaries for achieving target performance. In
addition, a further 5% of profits in excess of target performance
will be payable to the Executive Directors. The targets and range
over which the bonus vests are set by the Committee and are
designed to be challenging and to produce an equitable
distribution of additional profits earned by superior performance
between the executive team and shareholders. The performance
measures for the year ended 30 June 2013 were determined by
the Committee to be based on achieving a certain level of
consolidated profit before tax and also achieving a closing cash
balance above a certain level.
For senior managers below Board level, similar bonus arrange-
ments are in place in order to incentivise and potentially reward
them through their ability to improve the performance of their
respective business units.
Performance Share Plan
The M J Gleeson Group plc Performance Share Plan (the “Plan”) was
approved by shareholders in 2007. The Plan generally provides for
provisional awards of shares worth up to 200% of an executive’s
basic salary each year. In December 2010, Jolyon Harrison and Alan
Martin were awarded shares worth 100% of base salary, with senior
managers being awarded shares worth up to 50% of their base salary.
The awards will vest in full in December 2013, on the third
anniversary of the date of award, as the performance target, being
a total shareholder return (“TSR”) target of £2.10 by 30 June 2013,
has been met in full. In November 2012, Jolyon Harrison was
awarded shares worth 200% of base salary. For this award to vest
in November 2015, the Committee resolved to impose a target for
TSR over the three financial years from 1 July 2012 to 30 June 2015.
Current outstanding awards are shown within the table on page 25.
Share are Purchase Plan
Employees are encouraged to participate in the success of the
Group by way of a Share Purchase Plan, in which all
employees, including the Executive Directors, with more than
one year’s service are entitled to participate. The Plan permits
up to 5% of salary (up to a maximum of £125 per month) to be
invested in the Company’s shares, which the Company matches
on a one share for every three purchased by the employee.
Shares procured under the scheme must be held for at least three
years. Jolyon Harrison and Alan Martin both participated in
this scheme.
Pensions
Jolyon Harrison and Alan Martin are both members of the
Company’s defined contribution pension scheme, which is open
to all qualifying employees. The Company contributes a
percentage of basic salary to the scheme.
External appointments
At the discretion of the Board, Executive Directors are allowed
to act as Non-Executive Directors of other companies and retain
any fees relating to those posts.
During the year Jolyon Harrison served as a Non-Executive
Director of an independent private group of companies in respect
of which he is entitled to a fee of £30,000 which he will be
allowed to retain.
Performance graph
The graph below shows a comparison of the total shareholder return
for the Company for each of the last five financial years set against
the total shareholder return for the FTSE Small Cap Index, of which
the Company is a member, and a comparator index of listed
housebuilders. The Comparator Group consists of a group of listed
housebuilders comprising Barratt Developments, Bellway, Bovis
Homes, Crest Nicholson, Persimmon, Redrow, Taylor Wimpey and
Telford Homes.
MJ Gleeson & index
Comparison:
30 June 2008 to
30 June 2013
MJ Gleeson Group
FTSE Small Cap
Housebuilders
400
350
300
250
200
150
100
50
0
Jun-08
Jun-09
Jun-10
Jun-11
Jun-12
Jun-13
Page 23
MJ Gleeson Group plc
Directors’ Remuneration Report continued
Service contracts
In accordance with the Code, it is the policy of the Company that the service contracts of all Directors appointed to the Board will be
rolling and have notice periods of one year or less unless it is necessary to offer a longer period initially. In line with this policy, all of
the Executive Directors, who served during the year, had service contracts that may be terminated by the Company with a notice period
of one year.
If the Company exercises its right of termination for any reason (other than in circumstances of misconduct), it will generally pay the
Director concerned all remuneration and benefits to which he is entitled for any unexpired period of notice, plus any accrued bonus.
Details of the contracts of the Executive Directors who served during the year are set out below:
Director
Jolyon Harrison
Alan Martin
Date of
latest service
contact
Date
appointed
to the Board
Date last
re-elected
Date next
due for
re-election
23/10/2009
01/07/2010
07/12/2012
13/12/2013
01/01/2009
01/01/2009
07/12/2012
13/12/2013
Non-Executive Directors
In the past, each of the Non-Executive Directors has been appointed for a three-year period. In future, as each Non-Executive Director’s
letter of appointment approaches renewal, the term of appointment will be for one year. Non-Executive Directors’ remuneration is
set by the Board and is benchmarked against the remuneration paid to Non-Executive Directors of similar organisations. The fees paid
to the Non-Executive Directors during the year ended 30 June 2013 are set out in the table on page 25 and comprise the whole of their
remuneration. They are not entitled to participate in any of the employee benefit schemes and are not eligible to join the pension
scheme. Save for any fees due for any unexpired period of notice or term of appointment, no compensation is due on termination of
their appointment.
Details of their letters of appointment are set out below:
Director
Date
appointed to
the Board
Date first
elected by
the members
Date of
most recent
letter of
appointment
Date of
expiry
Date last
re-elected
Date next
due for
re-election
Period since
first elected
(complete
years)
Dermot Gleeson
27/11/1975
04/02/1976
01/10/2012
30/09/2013
07/12/2012
13/12/2013
Ross Ancell
01/10/2006
10/01/2007
25/09/2012
30/09/2013
07/12/2012
13/12/2013
Colin Dearlove
03/12/2007
12/12/2008
25/09/2012
02/12/2013
07/12/2012
13/12/2013
Christopher Mills
01/01/2009
11/12/2009
10/01/2013
31/12/2013
07/12/2012
13/12/2013
37
6
4
3
The notice period for the Chairman, Dermot Gleeson, is six months. The letters of appointment for the other Non-Executive Directors
provides for a notice period of one month.
Page 24
MJ Gleeson Group plc
Total
2013
£000
80
651
400
30
30
25
Total
2012
£000
81
582
349
30
30
25
iNFORMATiON SuBJECT TO AuDiT
Directors’ emoluments
The emoluments of the Directors for the years ended 30 June 2012 and 30 June 2013 are shown below:
Fee/Basic
£000
Bonus
£000
Benefits
in kind
£000
Subtotal
£000
Pension
£000
Chairman
Dermot Gleeson
Executive Directors
Jolyon Harrison
Alan Martin
Non-Executive Directors
Ross Ancell
Colin Dearlove
Christopher Mills
(a) Retired 30 June 2011
Share options and awards
Director
Jolyon Harrison
80
321
185
30
30
25
671
Granted/
awarded
during
year
–
30 June
2012
242,857
–
423,015
Alan Martin
138,888
–
-
262
150
-
-
-
-
20
19
-
-
-
80
603
354
30
30
25
-
48
46
-
-
-
412
39
1,122
94
1,216
1,097
Exercised
during
year
Options
lapsed
30 June
2013
Scheme
TSR
target
Exercise
price
Date from
which option
may be
exercised
–
–
–
–
–
–
242,857
423,015
PSP
PSP
210.00p
350.00p
– 17/12/2013
– 05/11/2015
138,888
PSP
210.00p
– 17/12/2013
• No payment was made in relation to the grant of any awards.
• The middle market price on 30 June 2013 was 292 pence and the range during the year to 30 June 2013 was from 108 pence to
293 pence.
• During the year, a charge of £86,000 (2012: £65,000) was recorded in the Income Statement for share based incentives awarded to
the Executive Directors.
Approval
This Report was approved by the Board on 27 September 2013.
By order of the Board.
Alan Martin
Company Secretary
27 September 2013
Page 25
MJ Gleeson Group plc
Corporate Governance
The Board is committed to the principles of corporate governance contained in the September 2012 Financial Reporting Council’s UK
Corporate Governance Code (the “Code”) and for which the Board is accountable to shareholders and will continue to take a practical
view of the financial implications for their implementation to a group of its size.
Statement of Compliance with the Combined Code
The Company has complied with the Code’s provisions throughout the year.
Board of Directors
The Board is responsible to shareholders for the success of the Group. Its role is to set the strategic and financial framework within
which the Group operates, to monitor and review the performance of each of the business units and to ensure that the risks faced by
the Group are effectively managed. To facilitate this, the Board and its committees are provided with relevant and timely information
in advance of all meetings and when otherwise required. Due to the size and structure of the Group, all significant decisions are taken
at Board level. There is a formal schedule of matters that are reserved for a decision of the Board or its committees; these include the
approval of:
• strategy and financial policy;
• banking arrangements and any changes to them;
• interim and annual financial statements;
• risk management and internal control policy;
• major capital expenditure;
• acquisition of land;
• acquisitions and disposals;
• Board structure and composition;
• terms of reference of the Board’s sub-committees;
all of which were considered by the Board during the year.
At the date of this report, the Board comprises six Directors, four of whom are Non-Executive. Neither the Non-Executive Chairman,
Dermot Gleeson, who has previously served in an Executive capacity, nor Christopher Mills, who represents a major shareholder, North
Atlantic Value LLP, are not considered to be “independent” within the definition of that term contained in the Code. All other Non-
Executive Directors are independent. The Directors’ biographies are set out on pages 18 and 19.
Following the introduction of s.175 of the Companies Act 2006 on 1 October 2008 and the authority given by shareholders at the 2008
Annual General Meeting to the Directors to authorise conflicts of interest, the Board has procedures in place to deal with conflicts of
interest. Under s.175, all Directors are under a duty to consider their positions fully at all times. They must advise the Chairman
immediately or, if the Chairman is conflicted, he must advise the Senior Independent Director. If a conflict is identified, permission or
refusal to authorise a conflict is given by the non-conflicted Directors subject to the appropriate quorum requirement being met without
counting the conflicted Director. The Board may vary or terminate the authorisation should the facts change or should the Board feel
it is no longer appropriate for such authorisation to be in place. A register of authorisations is maintained by the Company Secretary
which includes date of authorisation, expiry and comments on any special circumstances which might include the requirement of a
conflicted Director to absent himself from Board discussions or be precluded from receiving Board papers.
Ross Ancell is the Senior Independent Non-Executive Director.
Dermot Gleeson, Non-Executive Chairman, has previously been Executive Chairman and, prior to that, has held the post of Chairman and
Managing Director. The Board has considered the guidance set out in the Code and believes that it is in the Company’s best interests that
Dermot Gleeson be retained as Chairman.
Page 26
MJ Gleeson Group plc
The Chairman is responsible for leadership of the Board and ensuring its effectiveness. This role includes ensuring that the Directors
receive accurate, timely and clear information; facilitating the contribution of the Non-Executive Directors; and ensuring constructive
relations between the Executive and Non-Executive Directors.
During the year, the Board met on six occasions. Board packs, which include a formal agenda, are circulated in advance of such meetings.
Attendance by individual Directors at Board meetings and by members at Committee meetings was as follows:
Board
Audit
Committee
Renumeration
Committee
Nomination
Committee
No of scheduled meetings
Attendance
Dermot Gleeson
Ross Ancell
Colin Dearlove
Christopher Mills
Jolyon Harrison
Alan Martin
6
6
6
6
4
6
6
4
*
4
4
*
**
**
3
***
3
3
*
***
**
2
2
2
2
*
*
**
*
Not a member of this Committee.
** Whilst not a member of this Committee, the Director was in attendance at all meetings
*** Whilst not a member of this Committee, the Director was in attendance for the meetings to which he was invited.
The main purpose of these meetings is to permit the Board to receive regular reports on the performance of the Group and address a
wide range of key issues, including health & safety, operational performance, risk management and corporate strategy. Additional Board
meetings may be convened from time to time in response to specific circumstances.
During the course of the year, the Non-Executive Directors met without the Executive Directors present, both with and without the
Chairman being present.
The minutes of all meetings of the Board and of each of its Committees are recorded by the Company Secretary. As well as recording
the decisions taken, the minutes reflect any queries raised by the Directors and record any unresolved concerns.
On joining the Board, arrangements are made for all new Directors to meet their colleagues and other senior management, to ensure
an adequate induction to the Group.
All of the Directors have access to the advice and services of the Company Secretary and may, in furtherance of their duties, take
independent advice, at the Company’s expense. Training is arranged, as required.
On resignation, any concerns raised by an outgoing Director are circulated by the Chairman to the remaining members of the Board.
Directors and Officers’ Insurance is procured through the Company’s Insurance Brokers, Arthur J Gallagher International. The terms
and conditions are reviewed annually.
Page 27
MJ Gleeson Group plc
Corporate Governance continued
The Board continues to support the Malpractice Reporting Policy. The Policy has been communicated internally and is available for
review on the website.
Board evaluation
During the year, under the leadership of the Chairman, the Board undertook an evaluation of its own performance. This was based on
completion of a detailed questionnaire and individual discussions between the Chairman and the Directors. Being a smaller listed
company, it was not considered necessary to have this year’s Board evaluation externally facilitated. Similarly, the Chairman of each
of the Audit, Remuneration and Nomination Committees conducted a performance review of each Board Committee. Ross Ancell, as
the Senior Independent Director, conducted an evaluation of the Chairman’s performance in conjunction with his Non-Executive Director
colleagues and with input from the other Executive Directors. The outcome and conclusions reached from the conduct of these
evaluations were discussed by the Board at its September Board Meeting. It was concluded that the Board, its Committees and the
Chairman continued to perform effectively.
Audit Committee
The Audit Committee (the “Committee”) is a Board Committee consisting entirely of Non-Executive Directors. The following Directors
were members of the Committee during the year ended 30 June 2013:
Colin Dearlove (Chairman)
Ross Ancell
The Chairman invites the Chief Executive Officer and the Chief Financial Officer, and other senior management to attend, along with
the Group’s Auditor, when required.
The Committee’s formal terms of reference, which are reviewed annually, are available on the website and require it to:
• consider the appointment and fees of the Auditor;
• agree the nature and scope of the Audit;
• address the findings of the Audit;
• review and report to the Board on the half yearly and annual financial statements and on the Interim Management Statements;
• address any major accounting issues that arise;
• consider the position with regard to internal control, risk management and Internal Audit; and
• consider the award of any non-audit work to the Auditor.
The Committee meets at least three times a year and is afforded the opportunity to meet with the Auditor in the absence of the
Executive Directors.
The Committee receives a report from the Auditor highlighting any concerns and setting out management’s response to any matters
raised.
The Chief Financial Officer has responsibility for risk management and internal control and attends all Audit Committee meetings to
which he is invited to report on these matters.
During the year under review, the Audit Committee reviewed the independence of the Auditor. This included information about policies
and processes for maintaining independence, monitoring compliance with relevant requirements and ethical guidance, and consideration
of all relationships between the Group and the Auditor and its staff. The Audit Committee concluded that the Auditor was independent.
The Audit Committee approves all non-audit services proposed to be undertaken by the Auditor. During 2013, in accordance with its
terms of reference, the Audit Committee approved the continuing appointment of KPMG as tax advisors to the Group.
Page 28
MJ Gleeson Group plc
Remuneration Committee
Details of the Remuneration Committee are given in the Directors’ Remuneration Report which is set out on pages 22 to 25.
Nomination Committee
The Nomination Committee (the “Committee”) is a Board Committee consisting entirely of Non-Executive Directors. The following
Directors were members of the Committee during the year ended 30 June 2013:
Dermot Gleeson (Chairman)
Ross Ancell
Colin Dearlove
The Committee’s formal terms of reference, which are reviewed annually, are available on the website and require it to:
• regularly review the structure, size and composition of the Board and to make recommendations regarding any adjustments that are
considered to be necessary;
• identify and nominate for consideration candidates for any Board vacancies that may arise;
• put in place plans for succession, in particular to the Chairman and Chief Executive; and
• make recommendations regarding the continued service (or not) of the Executive and Non-Executive Directors.
All Board appointments and re-appointments are considered by the Nomination Committee. In considering any new appointments to
the Board, the balance of skills, knowledge and experience on the Board are evaluated, together with the role to be filled and the
capabilities required to do so. All appointments are made on merit. There have been two scheduled meetings of the Committee, during
one of which its annual review of the Board was carried out.
investor relations
There is dialogue with institutional shareholders, including presentations following the publication of the Interim and Final Results and,
as appropriate, at other times during the year. Feedback from these meetings is provided to the Board.
The Board also welcomes the interest of private investors and believes that, in addition to the Annual Report and the Company’s
website, the Annual General Meeting (“AGM”) is an ideal forum at which to communicate with investors and encourage their
participation. At the AGM, the Chairman, together with the Chairmen of the Audit, Remuneration and Nomination Committees, will be
available to answer any relevant questions.
The text of the resolutions to be considered at the AGM appears in the Notice of Meeting. All proxy cards are to be returned to the
Company’s registrar which will collate the results and report to the Board. The number of proxy votes cast for and against each resolution
will be announced at the AGM and will also be set out in the subsequent Regulatory News Service announcement, a copy of which will
be made available on the website.
Detailed reviews of the performance and financial position of the Group’s operations are included in the Directors’ Report and Business
Review. The Board uses these, together with the Chairman’s Statement and this Report on Corporate Governance, to present a balanced
and understandable account of the Group’s position and prospects.
Page 29
MJ Gleeson Group plc
MJ Gleeson Group plc
Corporate Governance continued
Risk management and internal control
The Directors acknowledge their responsibility for the Group’s risk management procedures and systems of internal controls and for
reviewing their effectiveness. It should be recognised that all such systems and procedures are designed to manage rather than eliminate
the risk of failure to achieve business objectives, and can only provide reasonable, rather than absolute, assurance against material
misstatement or loss. Risk management and internal control within the Group’s operating units is delegated to the management
responsible for the operating unit, with the Board retaining ultimate responsibility.
The Board is of the view that there is an adequate ongoing process for identifying, evaluating and managing the Group’s significant
risks, which satisfies the internal control guidance for Directors detailed in provision C.2.1 of the Code. This process takes the form of
a formal Risk Management Policy supported by financial and management controls that are operated Group-wide and which are subject
to both internal review by the Chief Financial Officer and external review as part of the statutory audit carried out by the Auditor.
The Group’s system of internal control includes the following processes:
• The Board and management committees meet regularly to monitor performance against key performance indicators which include
cash management and financial and operational measures. A variety of financial and non-financial reports is produced to facilitate
this review process.
• The Board has established defined lines of authority to ensure that significant decisions are taken at an appropriate level.
• The Group employs individuals of appropriate calibre and provides any training that is necessary to enable them to perform their
role effectively. Key objectives and opportunities for improvement are identified through annual performance and development
reviews.
• Each business function has defined procedures and controls to identify and minimise business, operational and financial risks. These
procedures include segregation of duties, provision of regular performance information and exception reports, approval procedures
for key transactions and the maintenance of proper records. Compliance with these procedures and controls is certified annually by
management.
• The Group’s programme of insurance covers the major risks to the Group’s assets and business and is reviewed annually.
• The Chief Financial Officer has responsibility for the internal audit process and reports to the Audit Committee on such matters.
• Procedures are in place that require operating unit management to refer all investment and divestment decisions that exceed
prescribed limits in the first instance to the Group Capital Committee and then thereafter to the Board, for approval.
Regular reviews are undertaken in order to identify any changes in procedure that may be required in the light of changing
circumstances.
The overall Risk Management and Internal Control process is reviewed by both the Audit Committee and the Board. The Board also
confirms that the formal risk management process was reviewed during the year and continued to operate up to the date of approval
of these Accounts.
Page 30
MJ Gleeson Group plc
Statement of Directors’ Responsibilities
STATEMENT OF DiRECTORS' RESPONSiBiLiTiES iN RESPECT OF THE ANNuAL REPORT AND THE FiNANCiAL STATEMENTS
The Directors are responsible for preparing the Annual Report and the group and parent company financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare group and parent company financial statements for each financial year. Under that law
they are required to prepare the group financial statements in accordance with IFRSs as adopted by the EU and applicable law and
have elected to prepare the parent company financial statements on the same basis.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and parent company and of their profit or loss for that period. In preparing each of the group
and parent company financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRSs as adopted by the EU; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the parent
company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company’s
transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure
that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Directors’ Report, Directors’ Remuneration
Report and Corporate Governance Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s
website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
Responsibility statement of the Directors in respect of the annual financial report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a
whole; and
• the Directors' report includes a fair review of the development and performance of the business and the position of the issuer and
the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties
that they face.
By order of the Board
J Harrison
Director
27 September 2013
A Martin
Director
Page 31
MJ Gleeson Group plc
Independent Auditor’s Report
iNDEPENDENT AuDiTOR’S REPORT TO THE MEMBERS OF M J GLEESON GROuP PLC
We have audited the financial statements of MJ Gleeson Group plc for the year ended 30 June 2013 set out on pages 34 to 67. The
financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the EU and, as regards the parent company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them
in an Auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members, as a body, for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of Directors and Auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 31, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit, and express an
opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at
www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 30 June 2013
and of the group’s profit for the year then ended;
• the group financial statements have been properly prepared in accordance with IFRSs as adopted by the EU;
• the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the EU and as applied
in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the
group financial statements, Article 4 of the IAS Regulation.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
• the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act
2006;
• the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent
with the financial statements; and
• information given in the Corporate Governance Statement set out on pages 26 with respect to internal control and risk management
systems in relation to financial reporting processes and about share capital structures is consistent with the financial statements.
Page 32
MJ Gleeson Group plc
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received
from branches not visited by us; or
• the parent company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit; or
• a Corporate Governance Statement has not been prepared by the company.
Under the Listing Rules we are required to review:
• the Directors’ statement, set out on page 13, in relation to going concern;
• the part of the Corporate Governance Statement on page 26 relating to the company’s compliance with the nine provisions of the
UK Corporate Governance Code specified for our review; and
• certain elements of the report to shareholders by the Board on Directors’ remuneration.
Chris Hearld (Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants
1 The Embankment
Neville Street
Leeds LS1 4DW
27 September 2013
Page 33
MJ Gleeson Group plc
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2013
2013
2013
Before Exceptional
items
Note 4
exceptional
items
2013
Note
£000
£000
£000
2012
Before
exceptional
items
Restated
Note 11
£000
2012
2012
Exceptional
items
Note 4
Restated
Note 11
£000
£000
Continuing operations
Revenue
Cost of sales
Gross profit
60,656
-
60,656
40,807
-
40,807
(43,641)
1,028
(42,613)
(32,233)
2,879
(29,354)
17,015
1,028
18,043
8,574
2,879
11,453
Administrative expenses
Profit on sale of investment properties
(12,034)
-
-
-
(12,034)
(8,906)
-
101
76
-
(8,830)
101
Operating profit/(loss)
4,981
1,028
6,009
(231)
2,955
2,724
Financial income
Financial expenses
Profit before tax
Tax
7
7
8
417
(647)
-
-
417
(647)
4,751
1,028
5,779
321
(19)
71
-
-
321
(19)
2,955
3,026
82
4,238
4,320
(130)
-
(130)
Profit/(loss) for the year from continuing operations
4,833
5,266
10,099
(59)
2,955
2,896
Discontinued operations
Profit for the year from discontinued operations
(net of tax)
3
Profit for the year attributable to
equity holders of the parent company
Other comprehensive income
Share of joint venture's cashflow hedges
Total comprehensive income for the year attributable
to equity holders of parent company
Earnings per share attributable to
equity holders of parent company
Basic
Diluted
Earnings per share from
continuing operations
Basic
Diluted
10
10
10
10
The notes on pages 40 to 67 form part of these financial statements.
Page 34
1,344
11,443
118
11,561
21.69p
21.46p
19.14p
18.94p
710
3,606
(3)
3,603
6.86p
6.86p
5.51p
5.51p
Consolidated Statement of Financial Position
at 30 June 2013
MJ Gleeson Group plc
Non-current assets
Plant and equipment
Investment properties
Investments in joint ventures
Loans and other investments
Investments in subsidiaries
Trade and other receivables
Deferred tax assets
Current assets
Inventories
Trade and other receivables
UK corporation tax
Cash and cash equivalents
Assets classified as held for sale
Total assets
Non-current liabilities
Loans and borrowings
Provisions
Current liabilities
Loans and borrowings
Trade and other payables
Provisions
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Total equity
Group
2013
£000
Group
2012
£000
Company
2013
£000
Company
2012
£000
Note
12
13
14
15
16
18
26
17
18
28
19
22
24
22
23
24
30
1,467
748
15
922
748
15
4,896
4,896
-
7,797
5,032
-
5,369
725
39
-
-
4,896
32,062
-
407
47
-
-
4,896
30,200
-
420
19,955
12,675
37,404
35,563
96,820
13,401
-
9,936
-
76,495
11,183
15
13,862
1,990
-
-
66,535
58,636
-
3,583
-
-
9,011
-
120,157
103,545
70,118
67,647
140,112
116,220
107,522
103,210
(1,885)
(85)
(1,970)
-
(219)
(219)
(308)
-
-
-
-
-
-
-
-
-
(25,509)
(15,249)
(22,220)
(22,425)
(236)
(358)
-
(100)
(26,053)
(15,607)
(22,220)
(22,525)
(28,023)
(15,826)
(22,220)
(22,525)
112,089
100,394
85,302
80,685
1,058
6,343
120
1,055
6,114
120
1,058
6,343
120
1,055
6,114
120
104,568
93,105
77,781
73,396
112,089
100,394
85,302
80,685
The financial statements were approved by the Board of Directors on 27 September 2013 and were signed on its behalf by:
J Harrison
Director
A Martin
Director
The notes on pages 40 to 67 form part of these financial statements.
Page 35
MJ Gleeson Group plc
Consolidated Statement of Changes in Equity
for the year ended 30 June 2013
GROuP
At 1 July 2011
Total comprehensive income for the period
Profit for the period
Other comprehensive income
Cashflow hedges
Total comprehensive income for the period
Transactions with owners, recorded directly in equity
Contributions and distributions to owners
Share issue
Own shares disposed
Share-based payments
Dividends
Transactions with owners, recorded directly in equity
At 30 June 2012
Total comprehensive income for the period
Profit for the period
Other comprehensive income
Cashflow hedges
Total comprehensive income for the period
Transactions with owners, recorded directly in equity
Contributions and distributions to owners
Share issue
Purchase of own shares
Share-based payments
Dividends
Transactions with owners, recorded directly in equity
Share
capital
£000
Share
premium
account
£000
Capital
redemption
reserve
£000
Retained
earnings
£000
Note
Total
£000
1,054
6,039
120
91,940
99,153
-
-
-
1
-
-
-
1
-
-
-
75
-
-
-
75
-
-
-
-
-
-
-
-
3,606
3,606
(3)
(3)
3,603
3,603
-
39
149
76
39
149
(2,626)
(2,626)
(2,438)
(2,362)
1,055
6,114
120
93,105
100,394
-
-
-
3
-
-
-
3
-
-
-
229
-
-
-
229
-
11,443
11,443
-
-
-
-
-
-
-
118
118
11,561
11,561
-
(15)
181
(264)
(98)
232
(15)
181
(264)
134
9
9
At 30 June 2013
1,058
6,343
120
104,568
112,089
Page 36
MJ Gleeson Group plc
Share
capital
£000
Share
premium
account
£000
Capital
redemption
reserve
£000
Retained
earnings
£000
Note
Total
£000
1,054
6,039
120
72,327
79,540
-
-
1
-
-
-
1
-
-
75
-
-
-
75
-
-
-
-
-
-
-
3,739
3,739
3,739
3,739
-
(193)
149
76
(193)
149
(2,626)
(2,626)
(2,670)
(2,594)
1,055
6,114
120
73,396
80,685
-
-
3
-
-
-
3
-
-
229
-
-
-
229
-
-
-
-
-
-
-
4,352
4,352
4,352
4,352
-
116
181
(264)
33
232
116
181
(264)
265
9
9
COMPANy
At 1 July 2011
Total comprehensive income for the period
Profit for the period
Total comprehensive income for the period
Transactions with owners, recorded directly in equity
Contributions and distributions to owners
Share issue
Purchase of own shares
Share-based payments
Dividends
Transactions with owners, recorded directly in equity
At 30 June 2012
Total comprehensive income for the period
Profit for the period
Total comprehensive income for the period
Transactions with owners, recorded directly in equity
Contributions and distributions to owners
Share issue
Own shares disposed
Share-based payments
Dividends
Transactions with owners, recorded directly in equity
At 30 June 2013
1,058
6,343
120
77,781
85,302
Page 37
MJ Gleeson Group plc
Consolidated Statement of Cashflow
for the year ended 30 June 2013
Operating activities
Profit before tax from continuing operations
Profit before tax from discontinued operations
Depreciation of plant and equipment
Impairment of investments in subsidiaries
Reinstatement of investments in subsidiaries
Share-based payments
Profit on sale of investment properties
Profit on sale of assets held for sale
Share of loss/(profit) of joint ventures (net of tax)
14
Capitalisation of available for sale assets
Financial income
Financial expenses
Dividends received
Operating cash flows before movements in
working capital
Increase in inventories
(Increase)/decrease in receivables
Increase/(decrease) in payables
Increase in amounts due from subsidiary undertakings
Group
2013
Note
£000
Group
2012
Restated
Note 11
£000
Company
2013
Company
2012
£000
£000
5,779
1,354
3,026
734
4,359
-
3,886
-
3
7,133
3,760
4,359
3,886
12
597
-
-
181
-
(1,372)
107
(2,443)
(570)
647
(117)
229
-
-
149
(101)
(341)
(3)
-
27
138
(1,000)
181
-
-
-
-
21
800
-
149
-
-
-
-
(561)
(1,081)
(1,175)
19
-
133
13
(4,117)
(4,760)
4,163
3,151
(1,360)
(1,066)
(20,325)
(6,998)
(2,075)
9,490
-
810
(5,545)
-
8
(319)
-
53
(23)
-
(7,979)
(11,003)
Cash utilised in operating activities
(8,747)
(8,582)
(9,650)
(12,039)
Tax received
Interest paid
19
(133)
-
(13)
6
(133)
-
(13)
Net cash flows from operating activities
(8,861)
(8,595)
(9,777)
(12,052)
Page 38
MJ Gleeson Group plc
Group
2013
Note
£000
Group
2012
Restated
Note 11
£000
Company
2013
Company
2012
£000
£000
3,314
7,209
157
-
345
117
-
156
665
-
12
(1,144)
(893)
-
-
-
68
-
-
-
1,169
4,117
(21)
(1,000)
-
-
-
-
1,086
4,760
(16)
-
1
investing activities
Proceeds from disposal of assets held for sale
Proceeds from disposal of available for sale assets
Proceeds from disposal of investment properties
Interest received
Dividends received
Purchase of plant and equipment
Investments in subsidiaries
Repayment of loans to joint ventures and other investments
Net cash flows from investing activities
2,789
7,205
4,265
5,831
Financing activities
Increase in loans and borrowings
Proceeds from issue of shares
Purchase of own shares
Own shares disposed
Dividends paid
22
2,193
232
(15)
-
-
76
-
39
9
(264)
(2,626)
-
232
-
116
(264)
-
76
(193)
-
(2,626)
Net cash flows from financing activities
2,146
(2,511)
84
(2,743)
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
(3,926)
13,862
(3,901)
17,763
(5,428)
9,011
(8,964)
17,975
Cash and cash equivalents at end of year
28
9,936
13,862
3,583
9,011
Page 39
MJ Gleeson Group plc
Notes to the Financial Statements
for the year ended 30 June 2013
1. ACCOuNTiNG POLiCiES
M J Gleeson Group plc ("the Company") is a company incorporated in the United Kingdom.
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”) and equity account
the Group’s interest in joint ventures.
Statement of compliance
Both the Company financial statements and the Group financial statements have been prepared and approved by the Directors in accordance
with International Financial Reporting Standards as adopted by the EU ("IFRSs").
Basis of preparation
Assets and liabilities in the financial statements have been valued at historic cost except where otherwise indicated in these accounting policies.
Judgements made by management in the application of IFRSs, that have significant effect on the financial statements and estimates, include the
carrying value of land held for development, work-in-progress, investments in subsidiaries, loans to joint ventures, amounts recoverable on
contracts and trade receivables.
The Company has taken advantage of section 408 of the Companies Act 2006 and consequently the Income Statement of the parent company is
not presented as part of these accounts. The profit of the parent company for the financial year amounted to £4,342,000 (2012: £3,738,000).
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and all its subsidiary undertakings. Joint ventures
are accounted for using the equity method of accounting.
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and
operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable
or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the
date that control commences until the date that control ceases.
On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair value. Any excess of the fair value
of consideration given for the acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. In circumstances
where the fair values of the identifiable net assets exceed the cost of acquisition, the excess is immediately recognised in the Income Statement.
Revenue recognition
Revenue represents the fair value of work done on contracts performed during the year on behalf of customers or the value of goods and services
delivered to customers. Revenue is recognised as follows:
• Revenue from homes sales, other than construction contracts, is recognised when contracts to sell are completed and title has passed.
• Revenue from property and land sales is recognised at the earlier of when contracts to sell are completed and title has passed or when
unconditional contracts to sell are exchanged.
• Revenue from rental income from investment properties is recognised as the Group becomes entitled to the income.
• Revenue from construction services activities represents the value of work carried out during the year, including amounts not invoiced.
Revenue and margin on construction contracts are recognised by reference to the stage of completion of the contract at the accounts date. The
stage of completion is determined by valuing the cost of the work completed at the accounts date and comparing this to the total forecasted
cost of the contract. Full provision is made for all forecasted losses. Variations in contract work, claims and incentive payments are included to
the extent that it is probable that they will result in revenue and that they are capable of being reliably measured.
Prudent provision against claims from customers or third parties is made in the year in which the Group becomes aware that a claim may arise.
Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses,
including revenues and expenses that relate to transactions with any of the Group's other components. All operating segments' operating results
are reviewed regularly by the Chief Executive Officer to make decisions about resources to be allocated to the segment and to assess its
performance, and for which discrete financial information is available. Inter-segment pricing is determined on an arm’s length basis. Segment
results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment
capital expenditure is the total cost incurred during the period to acquire plant and equipment.
Page 40
MJ Gleeson Group plc
impairment: Financial assets
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence
that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the
asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, if no
impairment loss had been recognised.
impairment: Non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of
impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable amount. Impairment losses are recognised
in profit or loss.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, if no
impairment loss had been recognised.
Exceptional items
Items that are both material in size and unusual or infrequent in nature are presented as exceptional items in the Income Statement. The
Directors are of the opinion that the separate recording of exceptional items provides helpful information about the Group's underlying business
performance. Examples of events that may give rise to the classification of items as exceptional are the restructuring of existing and newly-
acquired businesses, gains or losses on the disposal of businesses or individual assets, and asset impairments, including land, work-in-progress
and amounts recoverable on construction contracts.
Restructuring costs
Restructuring costs are recognised as exceptional items in the Income Statement when the Group has a detailed plan that has been communicated
to the affected parties. A liability is accrued for unpaid restructuring costs.
Leasing
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments
made under operating leases (net of any incentives received from the lessor) are charged to the Income Statement on a straight-line basis over
the period of the lease.
Financial income and expenses
Financial income comprises interest income on funds invested, dividend income and the unwinding of discounts on deferred receipts. Interest
income is recognised as it accrues, using the effective interest method. Dividend income is recognised in the income statement on the date that
the Group’s right to receive payment is established.
Financial expenses comprise interest expense on borrowings and unwinding of the discount on deferred payments and provisions. All borrowing
costs are recognised in the income statement using the effective interest method.
Plant and equipment
Depreciation is charged so as to write off cost of assets over their estimated useful lives, using the straight-line method, on the following bases:
Plant and machinery
between 3 and 6 years
Depreciation of these assets is charged to the Income Statement.
investment properties
Investment properties, which are largely ground rent properties held to earn rentals and/or for capital appreciation, are stated at their fair
values at the balance sheet date. Gains or losses arising from changes in the fair values of investment properties are included in the Income
Statement in the period in which they arise.
Page 41
MJ Gleeson Group plc
Notes to the Financial Statements continued
The Group's freehold investment properties are carried at Directors' valuation. The following assumptions have been used to determine the fair
value:
i) a review of the current prices of similar properties in the same location and condition;
ii) a review of the current and future rental income for current and future leases and the cash outflows that are expected in respect of these
properties; and
iii) a review of submitted offers where the properties were being marketed for sale.
Assets classified as held for sale
Assets classified as held for sale, represent a joint venture investment where the sale process has commenced and a sale within the next 12
months is expected. The assets are reviewed for impairment on classification as available for sale and any impairment is charged to the Income
Statement. The assets are reviewed again for impairment at the year end and any impairment is charged to the Income Statement.
Joint ventures
A joint venture is an entity over which the Group is in a position to exercise joint control through participation in the financial and operating
policy decisions of the venture. The joint venture entity operates in the same way as other enterprises, except that a contractual arrangement
between the venturers establishes joint control over the economic activity of the entity. Joint ventures are accounted for using the equity
method of accounting. The Group's share of the results of joint ventures is reported in the Income Statement as part of the operating profit and
the net investment disclosed in the Balance Sheet. Revaluation gains and losses which arise on investment properties are recognised in the
Income Statement in share of joint venture results net of any related deferred tax.
Loans and other investments
Loans are originally stated at fair value and subsequently carried at amortised cost less impairment. Other investments are stated at fair value,
with any resultant gains or losses taken to equity.
inventories
Inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion and the estimated costs necessary to make the sale. Deferred land purchases are included in
inventories at their net present value at original purchase date. Land options are included in inventories at the lower cost or net realisable
value.
Amounts due from construction contract customers
Amounts due from construction contract customers represent the value of work carried out at the balance sheet date, less a provision for
foreseeable losses less progress billings (see revenue recognition accounting policy).
Available for sale financial assets
Available for sale financial assets due after more than one year, which represent receivables in respect of shared equity properties, are recorded
at fair value, being the amount receivable by the Group discounted to present day values. Gains and losses arising from changes in fair value
with respect to impairment losses, cashflows and interest are recognised in profit in the year. The difference between the amount receivable
by the Group and the initial fair value is credited over the deferred term to finance income, with the financial asset increasing to its full cash
settlement value on the anticipated receipt date. Credit risk is accounted for in determining fair values and appropriate discount factors are
applied. The Group holds a second charge over property sold under shared equity schemes.
Trade receivables
Trade receivables are initially measured at fair value. Appropriate allowances for estimated irrecoverable amounts are recognised in the Income
Statement when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the
asset's carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial
recognition.
Derivative financial instruments
Derivative financial instruments (interest rate swaps) are used in joint ventures to hedge long term interest rate risk. These are recorded in the
joint venture at fair value. The fair value of interest rate swaps is the Group share of the estimated amount that the joint venture would receive
or pay to terminate the swap at the balance sheet date, taking into account current interest rates and the current creditworthiness of the swap
counterparties. The gain or loss on remeasurement to fair value is recognised immediately in the Income Statement of the joint venture. However,
where derivatives qualify for hedge accounting, recognition of the effective part of the hedge of any gain or loss on the derivative financial
instrument is recognised directly in the hedging reserve of the joint venture. Any ineffective portion of the hedge is recognised immediately in
the Income Statement of the joint venture. The recycling of cash flow hedged when the swaps are crystallised is recognised as a movement in
other comprehensive income.
Page 42
MJ Gleeson Group plc
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits, other short-term highly liquid investments that are readily convertible to a
known amount of cash and are subject to an insignificant risk of changes in value, and bank overdrafts. The Group had no bank overdrafts at the
year end.
Discontinued operations
A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of
operations or is a subsidiary acquired exclusively with a view to resale, that has been disposed of or has been abandoned.
Discontinued operations are presented in the Income Statement (including the comparative period) as a single line entry recording the gain or
loss of the discontinued operation and the gain or loss recognised on the remeasurement to fair value less costs to sell. If the discontinued
operations are sold, the net gain or loss from the sale is also recognised in the single line entry.
Loans and borrowings
Loans and borrowings are initially measured at cost and are subsequently reviewed to ascertain whether a fair value adjustment is required.
Trade and other payables
Trade and other payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate
method.
Tax
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the Income Statement except to the extent that it
relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet
date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying values of assets and liabilities for financial reporting purposes and the
values used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial
recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination; and differences relating
to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future and the Group can control the timing of
the reversal. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can
be utilised.
Employee benefits
Obligations for contributions to defined contribution pension schemes are charged to the Income Statement in the period to which the contributions
relate.
Share options
The share option schemes allow employees to acquire shares in the ultimate parent company; these awards are granted by the ultimate parent
company. The fair value of options granted is recognised as an employee expense, with a corresponding increase in equity. The fair value is
measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value
of the options granted is measured using the Monte Carlo valuation model, taking into account the terms and conditions upon which the options
were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest, except where forfeiture
is due only to share prices not achieving the threshold for vesting. The cost of the share-based award relating to each subsidiary is calculated,
based on an appropriate apportionment, at the date of grant and recharged through intercompany.
Own shares held by Employee Benefit Trusts
The Group has elected to treat the Employee Benefit Trusts (“EBT”) as separate legal entities and as subsidiaries of the parent. Any loan made
to the EBT is accounted for as an intercompany loan with the parent. These shares are not treasury shares as defined by the London Stock
Exchange.
Dividends
Dividends are recorded in the Group's financial statements when paid. Final dividends are recorded in the Group's financial statements in the
period in which they receive shareholder approval.
Page 43
MJ Gleeson Group plc
Notes to the Financial Statements continued
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions
are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which
form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and future periods.
The key judgement and sources of estimation uncertainty at the balance sheet date are:
Land and work-in-progress
Valuations which include an estimation of costs to complete and remaining revenues are carried out at regular intervals throughout the year,
during which site development costs are allocated between units built in the current year and those to be built in future years. These assessments
include a degree of inherent uncertainty when estimating the profitability of a site and in assessing any impairment provisions which may be
required.
The Group conducted a review of inventory and, following cost savings and improvements in sales values, impairments which had been made in
a prior year were reversed to the extent that they were no longer required. The review was conducted on a site by site basis, using valuations
that incorporated selling price, based on local management and the Board’s assessment of market conditions existing at the balance sheet date.
investments and investments in subsidiaries
Investments and investments in subsidiaries are stated at the lower of cost and net realisable value, which is dependent upon management's
assessment of future trading activity and is therefore subject to a degree of inherent uncertainty.
Amounts recoverable on contracts and trade receivables
Management has reviewed the recoverability of amounts recoverable on contracts and trade receivables, which is dependent upon management's
assessment of the recoverability of receivables and is therefore subject to a degree of inherent uncertainty.
Available for sale financial assets (shared equity)
Management has reviewed the valuation of the available for sale financial assets in the light of current market conditions, expected house price
inflation, cost of money and the expected time to realisation of the assets and is therefore subject to a degree of inherent uncertainty.
Adoption of new and revised standards
For the year ended 30 June 2013, the Group has adopted the following standards:
IFRS 7 'Financial Instruments: Disclosures' which amends disclosure requirements;
IAS 1 'Presentation of Financial Statements' which amends the presentation of comprehensive income;
IAS 12 'Income Taxes' which is a scope amendment of the recovery of the underlying asset.
Standards not yet applied
There are a number of standards and interpretations issued by the International Accounting Standards Board that are effective for
financial statements after this reporting period. The following have not been adopted by the Group in preparing the accounts for the year ended
30 June 2013:
Standard
IFRS 9 'Financial Instruments' (issued December 2011)*
IFRS 10 'Consolidated Financial Statements' (issued October 2012)*
IFRS 12 'Disclosure of Interests in Other Entities' (issued October 2012)*
IAS 32 'Separate Financial Instruments: Presentation' (issued December 2011)
IAS 36 'Impairment of Assets' (issued May 2013)*
IAS 39 'Financial Instruments: Recognition and Measurement' (issued June 2013)*
Effective for periods
beginning on or after
1 January 2015
1 January 2014
1 January 2014
1 January 2013
1 January 2014
1 January 2014
The application of these standards and interpretations is not expected to have a material impact on the Group’s reported financial performance
or position. However, they may give rise to additional disclosures being made in the financial statements.
* not yet endorsed by the EU
Page 44
MJ Gleeson Group plc
2. SEGMENTAL ANALySiS
IFRS 8 “Operating Segments” requires operating segments to be identified on the basis of discrete financial information about components of the
Group that are regularly reviewed by the Group’s Chief Operating Decision Maker (“CODM”) to allocate resources to the segments and to assess
their performance. The Directors have concluded that the discontinued operations which consist of the Gleeson Capital Solutions, the Gleeson
Commercial Property Development and the Gleeson Construction Services divisions no longer fall under this definition and the segmental
information has been restated to reflect this change. Further details of the restatement are given in Note 11. The CODM is regarded as the Board
of Directors of the Group.
For management purposes, the Group is organised into the following two operating divisions:
• Gleeson Homes
• Gleeson Strategic Land
Segment information about the Group's operations, including joint ventures, is presented below:
Revenue
Continuing activities:
Gleeson Homes
Gleeson Strategic Land
Discontinued activities:
Total revenue
Profit on activities
Gleeson Homes
Gleeson Strategic Land
Group Activities
Financial income
Financial expenses
Profit before tax
Tax
Profit for the year from continuing operations
Profit for the year from discontinued operations (net of tax)
Profit for the year attributable to equity holders of the parent company
2013
Note
£000
2012
Restated
Note 11
£000
47,940
12,716
60,656
32,634
8,173
40,807
3
1,146
1,168
61,802
41,975
4,007
3,450
7,457
(1,448)
417
(647)
5,779
4,320
10,099
3
1,344
11,443
306
3,655
3,961
(1,237)
321
(19)
3,026
(130)
2,896
710
3,606
All rental income from investment properties, totalling £4,000 (2012: £4,000), is reported within the Gleeson Homes segment. The revenue in
the Gleeson Homes segment relates to the sale of residential properties and land. All revenue for Gleeson Strategic Land segment is in relation
to the sale of land.
Page 45
MJ Gleeson Group plc
Notes to the Financial Statements continued
Balance sheet analysis of business segments:
Gleeson Homes
Gleeson Strategic Land
Group Activities / Discontinued Operations
Net cash
Other information:
Continuing operations:
Gleeson Homes
Gleeson Strategic Land
Group Activities
2013
2013
2013
Assets
£000
Liabilities
£000
Net assets
£000
92,190
31,471
6,515
9,936
(18,314)
(5,442)
(4,267)
-
73,876
26,029
2,248
9,936
2012
Restated
Note 11
Assets
£000
65,783
26,907
9,668
13,862
2012
Restated
Note 11
Liabilities
£000
2012
Restated
Note 11
Net assets
£000
(7,315)
(3,077)
(5,434)
-
58,468
23,830
4,234
13,862
140,112
(28,023)
112,089
116,220
(15,826)
100,394
2013
Capital
additions
£000
2013
Depre-
ciation
£000
2012
Capital
additions
£000
1,122
1
21
1,144
565
5
27
597
866
11
16
893
2012
Depre-
ciation
£000
205
3
21
229
All the Group’s operations are carried out in the United Kingdom.
Page 46
MJ Gleeson Group plc
3. DiSCONTiNuED OPERATiONS
The Group disposed of certain assets and liabilities of the Gleeson Engineering Division of Gleeson Construction Services to Black and Veatch
Limited (“B&V”) in a prior period and treated this as a discontinued operation.
The Group disposed of certain assets and liabilities of the Gleeson Building Division of Gleeson Construction Services to GB Building Solutions Ltd,
in a prior period. Following the completion of rectification work on behalf of insurers, this division was reclassified as discontinued.
During the year, the Group disposed of the remaining joint venture investment in the Gleeson Capital Solutions division. There is no further
business within the division and it is treated as discontinued.
During the year, the Gleeson Commercial Property Development division was no longer considered significant within the Group and is treated as
discontinued.
Gleeson
Commercial
Property
Develop-
ments
Gleeson
Capital
Solutions
Gleeson
Construc-
tion
Services
Note
2013
£000
2013
£000
Revenue
Cost of sales
Gross profit
Administrative expenses
Profit on sale of assets
held for sale
Share of profit of joint
ventures (net of tax)
Operating profit/(loss)
Financial income
7
Profit/(loss) before tax
Tax
Profit/(loss) for the year
from discontinued operations
-
-
-
52
1,372
(107)
1,317
153
1,470
-
1,470
2
-
2
-
-
-
2
-
2
5
7
Earnings per share: impact of discontinued operations
2013
£000
1,144
(1,106)
38
(156)
-
-
(118)
-
(118)
(15)
Gleeson
Commercial
Property
Develop-
ments
Restated
Note 11
2012
£000
Gleeson
Capital
Solutions
Restated
Note 11
2012
£000
-
-
-
67
341
3
411
240
651
-
3
2
5
178
-
-
183
-
183
-
Gleeson
Construc-
tion
Services
Restated
Note 11
2012
£000
1,165
(1,082)
83
(183)
-
-
(100)
-
(100)
(24)
Total
Restated
Note 11
2012
£000
1,168
(1,080)
88
62
341
3
494
240
734
(24)
Total
2013
£000
1,146
(1,106)
40
(104)
1,372
(107)
1,201
153
1,354
(10)
(133)
1,344
651
183
(124)
710
Basic
Diluted
The cashflow statement includes the following relating to operating loss on discontinued operations:
Operating activities
Investing activities
Note
10
10
2013
p
2.55
2.52
2013
£000
(30)
3,642
3,612
2012
Restated
Note 11
p
1.35
1.35
2012
Restated
Note 11
£000
(1,553)
7,465
5,912
Page 47
MJ Gleeson Group plc
Notes to the Financial Statements continued
4. ExCEPTiONAL iTEMS
impairment of inventories and contract provisions
At 30 June 2013, the Group conducted a review of the net realisable value of the land and work-in-progress carrying values of its sites in the light
of the condition of the UK housing market. Where the estimated net present realisable value is greater than the carrying value within the Balance
Sheet, the Group has partially reversed the impairment previously made.
Restructuring costs
During the year, the Group reversed £Nil (2012: £76,000) in relation to onerous lease provisions provided for and treated as exceptional in prior
years.
Deferred tax on tax losses
During the year, the Group recognised £4,238,000 (2012: £Nil) of previously unrecognised deferred tax asset in relation to tax losses available to
offset against future profits.
Exceptional income may be summarised as follows:
Re-instatement of inventories and contract provisions
Reversal of restructuring costs
Tax
2013
£000
1,028
-
4,238
5,266
2012
£000
2,879
76
-
2,955
In the year ended 30 June 2013, £1,028,000 (2012: £2,955,000) of exceptional income was reported in the Gleeson Homes division and £4,238,000
(2012: £Nil) as tax.
5. ExPENSES AND AuDiTOR’S REMuNERATiON
Profit for the year is stated after charging/(crediting):
Staff costs
Depreciation of plant and equipment (continuing operations)
Profit on sale of investment properties
Rental income from investment properties
Auditor’s remuneration for:
• Audit of these financial statements
• Audit of financial statements of subsidiaries pursuant to legislation
• Taxation services
• Other services
Note
6
2013
£000
9,056
597
-
(4)
10
55
35
38
2012
£000
6,636
229
(101)
(4)
10
50
39
65
Page 48
6. STAFF COSTS
Wages and salaries
Redundancy
Share-based payments
Social security costs
Other pension costs
Note
25
Group
2013
£000
7,572
19
181
817
467
9,056
Group
2012
£000
5,560
16
149
595
316
6,636
The average monthly number of employees (including Directors) during the year was:
Gleeson Homes
Gleeson Strategic Land
Group Activities
MJ Gleeson Group plc
Company
2013
£000
Company
2012
£000
788
7
34
86
61
976
Group
2013
No.
182
9
10
201
789
-
34
100
61
984
Group
2012
No.
111
8
11
130
The average number of people employed by the Company (including Directors) during the year was 10 (2012: 11).
Directors' remuneration
Full details of the Directors' remuneration is provided in the audited part of the Directors' Remuneration Report on pages 22 to 25.
7. FiNANCiAL iNCOME AND ExPENSES
Group
Financial income
Interest on bank deposits
Interest on joint venture loans
Other interest
Unwinding of discount on deferred receipts
Financial expenses
Interest on bank overdrafts and loans
Bank charges
Interest and unwinding of discount on deferred payments
Continuing operations
Discontinued operations
Total
2013
£000
45
-
-
372
417
(3)
(130)
(514)
(647)
2012
Restated
Note 11
£000
199
-
1
121
321
-
(13)
(6)
(19)
2013
£000
-
153
-
-
153
-
-
-
-
2012
Restated
Note 11
£000
2013
2012
£000
£000
-
240
-
-
240
-
-
-
-
45
153
-
372
570
(3)
(130)
(514)
(647)
199
240
1
121
561
-
(13)
(6)
(19)
Net financial (expense)/income
(230)
302
153
240
(77)
542
Note 21 discloses any further exposure for the Group to interest rate risk.
Page 49
MJ Gleeson Group plc
Notes to the Financial Statements continued
8. TAx
Group
Current tax:
Adjustment in respect of prior years
Deferred tax:
Current year (credit)/expense
Adjustment in respect of prior years
Impact of rate change
Corporation tax expense/(credit) for the year
Joint ventures tax credit for the year
Total tax
26
26
26
Continuing operations
Discontinued operations
Total
2013
Note
£000
2012
Restated
Note 11
£000
2013
£000
2012
Restated
Note 11
£000
2013
2012
£000
£000
(12)
(12)
(4,336)
-
28
(4,320)
-
(4,320)
(15)
(15)
97
(8)
56
130
-
130
8
8
-
-
2
10
-
10
-
-
18
-
6
24
(9)
15
(4)
(4)
(4,336)
-
30
(4,310)
-
(4,310)
(15)
(15)
115
(8)
62
154
(9)
145
Reductions in the UK corporation tax rate from 26% to 24% (effective from 1 April 2012) and to 23% (effective 1 April 2013) were substantively
enacted on 26 March 2012 and 3 July 2012 respectively. Further reductions to 21% (effective from 1 April 2014) and 20% (effective from 1 April
2015) were substantively enacted on 2 July 2013. The weighted average rate of corporation tax was 23.75% (2012: 25.50%) of the estimated
assessable profit for the year.
The charge for the year can be reconciled to the profit per the Income Statement as follows:
Profit before tax on continuing operations
Profit before tax from discontinued operations
Joint venture tax credit for the year
Profit before tax
Tax charge at standard rate
Tax effect of:
Non-taxable income
Expenses that are not deductible in determining taxable profits
Utilisation of tax losses not previously recognised
Recognition of tax losses not previously recognised
Changes in tax rates
Adjustments in respect of prior years
Tax (credit)/charge and effective tax rate for the year
9. DiViDENDS
Amounts recognised as distributions to equity holders in the year:
Interim dividend for the year ended 30 June 2013 of 0.5p (2012: nil p) per share
Special dividend paid on 16 December 2011 of 5p per share
2012
%
2013
2013
%
Note
3
14
£000
5,779
5,779
1,354
-
1,354
7,133
2012
Restated
Note 11
£000
3,026
3,026
734
(9)
725
3,751
1,694
23.8
957
25.5
(326)
119
(1,605)
(4,235)
30
13
(4,310)
(4.6)
1.7
(22.5)
(59.4)
0.4
0.2
(60.4)
(125)
45
(771)
-
62
(23)
145
2013
£000
264
-
264
(3.3)
1.2
(20.6)
-
1.7
(0.6)
3.9
2012
£000
-
2,626
2,626
Proposed final dividend proposed for the year ended 30 June 2013 of 2p per share (2012: nil p per share)
1,058
-
Page 50
10. EARNiNGS PER SHARE
From continuing and discontinued operations
The calculation of the basic and diluted earnings per share is based on the following data:
Earnings
Earnings for the purposes of basic earnings per share, being net profit
attributable to equity holders of the parent company
Profit from continuing operations
Profit from discontinued operations
Profit for the purposes of basic and diluted earnings per share
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share
Effect of dilutive potential ordinary shares:
Share options
Weighted average number of ordinary shares for the purposes of diluted earnings per share
From continuing operations
Basic
Diluted
From discontinued operations
Basic
Diluted
From continuing and discontinued operations
Basic
Diluted
MJ Gleeson Group plc
2013
£000
2012
Restated
Note 11
£000
10,099
1,344
11,443
2,896
710
3,606
2013
No. 000
2012
No. 000
52,758
52,574
564
-
53,322
52,574
2013
p
19.14
2012
Restated
Note 11
p
5.51
18.94
5.51
2013
p
2.55
2.52
2012
Restated
Note 11
p
1.35
1.35
2013
p
21.69
2012
Restated
Note 11
p
6.86
21.46
6.86
Page 51
MJ Gleeson Group plc
Notes to the Financial Statements continued
11. RESTATEMENT
iFRS 5 Discontinued operations
At the period end, the Group considered that all of the operations of the Gleeson Capital Solutions, Gleeson Commercial Property Developments
and the Gleeson Building division of Gleeson Construction Services were discontinued as there was no material on-going trading within the
divisions. The Group has reported the current period results in line with the reclassification and restated the comparatives for the year ended
30 June 2012. This has resulted in the Income Statement, Cashflow, Segmental analysis and Discontinued operations being restated. The revised
Discontinued items are shown in Note 3.
12. PLANT AND EquiPMENT
Cost or valuation
At 1 July 2011
Additions
Disposals
At 30 June 2012
Additions
Disposals
At 30 June 2013
Accumulated depreciation
At 1 July 2011
Charge for the year
Disposals
At 30 June 2012
Charge for the year
Disposals
At 30 June 2013
Net book value
At 30 June 2013
At 30 June 2012
At 1 July 2011
Group
Plant and
machinery
£000
Company
Plant and
Machinery
£000
1,663
893
(24)
2,532
1,144
(6)
3,670
1,405
229
(24)
1,610
597
(4)
2,203
1,467
922
258
713
16
-
729
21
(6)
744
661
21
-
682
27
(4)
705
39
47
52
The Group has recorded a depreciation expense of £597,000 (2012: £229,000), of which £204,000 (2012: £102,000) has been charged in cost of
sales and £393,000 (2012: £127,000) in administrative expenses.
The Company has recorded a depreciation expense of £27,000 (2012: £21,000), all of which has been charged in administrative expenses.
Page 52
13. iNVESTMENT PROPERTy
Group
Cost or valuation
At 1 July 2011
Disposals
At 30 June 2012
At 30 June 2013
Investment properties are included at Directors' valuation.
14. iNTEREST iN JOiNT VENTuRES
Share of results and investment in joint ventures
At 1 July
Share of results for the year
Share of tax expense
Share of (loss)/profit in joint ventures (net of tax) for the year
Cashflow hedges
At 30 June
MJ Gleeson Group plc
Freehold
investment
property
£000
803
(55)
748
748
2012
£000
15
3
(3)
15
2012
£000
(6)
9
2013
£000
(107)
-
2013
£000
15
(107)
107
15
On 30 June 2012, an investment in Leeds Independent Living Accommodation Company Holdings Ltd was considered, under IFRS 5, to be Assets
held for sale (Note 19). Profit for the year from this joint venture has been recorded within discontinued operations.
Share of profit in joint ventures is included within the Gleeson Capital Solutions division.
Aggregate amounts in respect of Group share of joint ventures
Note
2013
£000
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Cashflow hedges
Classified as assets held for sale
19
At 30 June
Revenue
Expenses
Loss before tax
Tax
(Loss)/profit for the year
There are no significant contingent liabilities in the joint ventures.
15
-
-
-
15
-
15
-
15
402
(509)
(107)
-
(107)
2012
£000
1,534
19,215
(275)
(20,341)
133
(118)
15
-
15
2,010
(2,016)
(6)
9
3
Page 53
MJ Gleeson Group plc
Notes to the Financial Statements continued
Joint ventures
Joint venture
Genesis Estates (Manchester) Ltd
Gleeson Black and Veatch Joint
Venture Partnership
The Gleeson Capital Solution Partners
Joint Venture Partnership
Principal activity
Residential property
development
Construction
Percentage of
equity held
Class of
shares
Country of
incorporation
year end
date 2
50%
60% 1
Ordinary
shares
England
26 March
England
30 June
Construction - Engineering
35% 1
England
30 June
1 All decisions have to be taken unanimously by the shareholders.
2 Where the year end date of the joint venture is not coterminous with the Group's, management accounts are used to incorporate the joint venture's share
of results in line with the Group's year end.
15. LOANS AND OTHER iNVESTMENTS
Group loans & other investments
At 1 July
Additions
Repayments
Classified as assets held for sale
At 30 June
Joint venture loans
Other investments
Total
Note
2013
£000
-
-
-
-
-
19
2012
£000
2,006
240
(256)
(1,990)
-
2013
£000
4,896
-
-
-
4,896
2012
£000
4,896
-
-
-
4,896
2013
£000
4,896
-
-
-
2012
£000
6,902
240
(256)
(1,990)
4,896
4,896
On 30 June 2012, an investment in and loan to Leeds Independent Living Accommodation Company Holdings Ltd was considered, under IFRS 5, to
be Assets held for sale (Note 19). Interest receivable on this loan has been recorded within financial income in discontinued operations.
Other investments represent equity in GB Group Holdings Limited, details of which are provided below. There is no interest on the loan and no
specified term.
The Directors consider that the carrying amount of loans and other investments approximates to their fair value.
Company loans & other investments
The Company has no loans.
At 1 July
At 30 June
Other investments
2013
£000
4,896
4,896
2012
£000
4,896
4,896
The other investments represent equity in GB Group Holdings Limited, details of which are provided below.
The Directors consider that the carrying amount of loans and other investments approximates to their fair value.
Page 54
MJ Gleeson Group plc
Note
2013
£000
2012
£000
interest
rate
Terms
-
-
-
-
1,990
12.00%
Joint venture sold in
the year
1,990
(1,990)
-
Joint venture loans
The Group has made the following unsecured loans to:
Group
Leeds Independent Living Accommodation Company Holdings Ltd
Classified as held for sale
19
Joint venture loans are repayable at the earlier of the sale of the investment or the expiry of the term.
GB Building Solutions Limited and GB Group Holdings Limited (“GBGH”)
The Group has £4,896,000 invested in voting and non-voting ordinary shares that in total provide voting rights over 20% of the equity with the
remainder of the voting rights owned equally by the three Executive Directors. The operating and financial policies of GBGH are set by the three
Executive Directors. Dermot Gleeson sits on the Board of GBGH, in an oversight role as Non-Executive Director, to monitor the performance of
GBGH in the light of the Group's investment in it. The shareholding structure and the fact that all significant operational decisions are taken by
the Executive Directors means that the Group, and Dermot Gleeson, are not able to exert any significant influence. The Group can prevent
GBGH from departing from the original business plan, which was to engage in contracting in the construction sector. There are no transactions
of significance between the parties. The asset is treated as an investment because the Group has no significant control or influence over the
company.
Following a review of the of the investment, no indicators of impairment have been identified.
16. iNVESTMENTS iN SuBSiDiARiES
Cost
At 1 July 2011
Impairment in investments
Repayments
At 30 June 2012
Subscription to shares
Impairments
Impairment reversal
At 30 June 2013
Subsidiary
under-
takings
£000
31,001
(800)
(1)
30,200
1,000
(138)
1,000
32,062
The repayments in the prior year reflect the dissolution of dormant subsidiaries within the Group.
Investments in subsidiary undertakings are included in the balance sheet at cost less any provision for diminution in value. At 30 June 2013 and
30 June 2012, the company impaired its investment in Gleeson Constrution Services where the net assets were below the cost of the investment.
Principal subsidiary undertakings
The following are the principal subsidiary undertakings of M J Gleeson Group plc. M J Gleeson Group plc owns 100% of the ordinary share capital
of the subsidiaries, all of which are incorporated in England.
Page 55
MJ Gleeson Group plc
Notes to the Financial Statements continued
Registered in England and Wales and operate in the united Kingdom
Subsidiary
Principal activity
Gleeson Capital Solutions Limited
Provision of bid management
Gleeson Construction Services Limited
Construction services
Gleeson Developments Limited
Gleeson PFI Investments Limited
Gleeson Properties Limited
Gleeson Regeneration Limited
Gleeson Strategic Land Limited 1
House building, housing regeneration and strategic land trading
Investment in equity shares and loan stock of project companies
delivering services under the Government's Private Finance Initiative
Commercial property development
House building and housing regeneration
Strategic land trading
Gleeson Developments (North East) Limited (formerly Norfolk Park)
House building and housing regeneration
A full list of the subsidiary companies within the Group will be filed at Companies House with the Company's Annual Return.
1 Shares held by Gleeson Developments Limited
17. iNVENTORiES
Work-in-progress
18. TRADE AND OTHER RECEiVABLES
Current assets
Trade receivables
Amounts due from construction contract customers
VAT recoverable
Prepayments and accrued income
Amount due from subsidiary undertakings
Non-current assets
Available for sale financial assets
2013
£000
96,820
96,820
2012
£000
76,495
76,495
Company
2013
£000
Company
2012
£000
92
-
-
136
66,307
103
-
-
220
58,313
58,636
Note
20
Group
2013
£000
8,746
677
320
3,658
-
Group
2012
£000
5,564
1,540
489
3,590
-
13,401
11,183
66,535
7,797
5,369
-
-
21,198
16,552
66,535
58,636
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value and includes an allowance for
doubtful debts estimated by the Group's management based on prior experience and their assessment of specific circumstances.
Available for sale financial assets due after more than one year, represent receivables in respect of shared equity properties. These are recorded
at fair value, being the amount receivable by the Group discounted to present day values. The difference between the nominal and the initial
fair value is credited over the deferred term to financial income, with the financial asset increasing to its full cash settlement value on the
anticipated receipt date. Credit risk is accounted for in determining fair values and appropriate discount factors are applied. The Group holds
a second charge over property sold under shared equity schemes.
See note 21 for reference to credit risk associated with trade receivables.
Page 56
MJ Gleeson Group plc
The Company recharges subsidiaries for all staff-related costs, insurance, and interest on intercompany loans. The total costs recharged for the
year totalled £5,511,000 (2012: £5,098,000).
The Company charges interest at Bank of England base rate plus 1% on £73,447,000 (2012: £64,432,000) of the unimpaired intercompany loan
adjusted for bank balances held within the company. At 30 June 2013, the adjusted figure was £67,663,000 (2012: £70,504,000).
19. NON-CuRRENT ASSETS CLASSiFiED AS HELD FOR SALE
At 30 June 2012, the joint venture within the Gleeson Capital Solutions division was presented as available for sale. The joint venture, Leeds
Independent Living Accommodation Company Holdings Ltd, was sold during the year generating a profit of £1,372,000.
Investments in joint ventures
Loans and other investments
The Company does not hold any assets classified as held for sale.
20. CONSTRuCTiON CONTRACTS
Contracts in progress at the balance sheet date:
Amounts due from contract customers included in trade and other receivables
Amounts due to contract customers included in trade and other payables
Contract costs incurred plus recognised profits less recognised losses to date
Less: progress billings
Note
14
15
Note
18
23
Group
2013
£000
-
-
-
Group
2013
£000
677
-
677
Group
2012
£000
-
1,990
1,990
Group
2012
£000
1,540
(60)
1,480
89,501
(88,824)
932,736
(931,256)
677
1,480
At 30 June 2013, retentions held by customers for contract work amounted to £663,000 (2012: £355,000).
Amounts due to contract customers included in trade and other payables represent the balance of advances received on construction contracts
at the year end.
21. FiNANCiAL iNSTRuMENTS
Risk exposure
M J Gleeson Group plc operates a central treasury function providing services to the Group. The treasury function arranges loans and funding,
invests any surplus liquidity and manages financial risk. The treasury function is not a profit centre and no speculative trades are permitted or
executed. It operates within specific policies, agreed by the Board, to control and monitor financial risk within the Group. Prudent and controlled
use of financial instruments is permitted where appropriate, principally to reduce fluctuation in interest costs.
Cash and cash equivalents
Cash and cash equivalents comprises cash and short-term deposits with a maturity of three days or less held by the Group and the Company. The
carrying amount of these assets equals their fair value.
Page 57
MJ Gleeson Group plc
Notes to the Financial Statements continued
Credit risk
The Group's principal financial assets are trade and other receivables and investments.
The Group's and Company's credit risk is primarily attributable to its trade and other receivables. The amounts presented in the balance sheet
are net of allowance for doubtful debts, estimated by the Group's management based on prior experience and their assessment of specific
circumstances.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings
assigned by international credit rating agencies.
At 30 June 2013, the Group's most significant customer, a property investor, accounted for £2,836,000 (2012: £4,239,000) of the trade and other
receivables carrying amount and relates to a deferred receipt. The Group's turnover with this customer in the year is £Nil (2012: £4,239,000).
The Group has no other significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.
Trade receivables ageing
The ageing of gross trade receivables at the reporting date was:
Not past due
Past due 0-30 days
Past due 31-120 days
Past due 121-365 days
Past due more than one year
All trade receivables are from UK customers.
Group
2013
£000
7,659
487
44
9
547
8,746
Group
2012
£000
4,618
21
35
60
830
5,564
Company
2013
£000
Company
2012
£000
-
-
-
-
92
92
-
-
-
41
62
103
Trade receivables past due more than one year largely represent retentions within the Gleeson Homes division. The amounts payable are being
finalised and are included at expected realisable value.
In addition to the above, the Company has intercompany receivables which are repayable on demand.
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
Balance at 1 July
Impairment loss recognised
Balance at 30 June
Market risk
The Group has no significant exposure to currency risk or equity risk.
Group
2013
£000
91
(17)
74
Group
2012
£000
Company
2013
£000
Company
2012
£000
84
7
91
91
(17)
74
84
7
91
interest rate risk
The Group closely monitors its exposure to variations in interest rates and, if this is significant as a result of the quantum of debt and level of
interest rates, will hedge the exposure using approved financial instruments such as interest rate swaps. At the year end, the Group had no debt
or related interest rate swaps.
A 1% increase in interest rates would improve the annual income of the Group and Company by £99,000 (2012: £139,000) based on the cash
balance at the year end. A 1% decrease would cause income to fall by the same amount.
In the prior year, one of the Group's joint ventures used interest rate swaps to manage its exposure to interest rate movement on their bank
borrowings. This joint venture was sold in the year and the Group has no interest rate swaps (2012: Group's share of the interest rate swap
contract with notional value of £17,753,000 had fixed interest payments at an average rate of 5.15% for periods up until 2035).
Page 58
MJ Gleeson Group plc
Group share of interest payable by non-recourse funded joint ventures on hedged instruments
Interest payable:
Within one year
Within two to five years
After five years
Group
2013
£000
Group
2012
£000
Company
2013
£000
Company
2012
£000
-
-
-
-
1,038
3,719
9,207
13,964
-
-
-
-
1,038
3,719
9,207
13,964
In the year, the joint venture holding the hedged instruments was sold.
Liquidity risk
The Group entered into a £3,000,000 12 month credit facility with The Co-operative Bank plc on 22 November 2012. The facility was increased
to £5,000,000 on 19 February 2013 and the expiry date extended to 31 January 2014.
In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rates
at the balance sheet date and the periods in which they reprice:
Bank balances
Short term deposits
Net cash
2013
Effective
interest
rate
%
0.00
0.38
2012
Effective
interest
rate
%
0.00-0.50
2.10
2013
Due
within
one year
£000
6,436
3,500
9,936
2012
Due
within
one year
£000
6,862
7,000
13,862
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting
agreements:
Non-derivative financial liabilities
As at 30 June 2013
Trade and other payables 1
As at 30 June 2012
Trade and other payables 1
Carrying Contractual
cash flows
amount
£000
£000
6 mths
or less
£000
6-12 mths
£000
1-2yrs
£000
2-5yrs
£000
More than
5yrs
£000
24,784
(24,803)
(12,599)
(2,622)
(8,597)
24,784
(24,803)
(12,599)
(2,622)
(8,597)
12,094
(12,095)
(7,916)
12,094
(12,095)
(7,916)
(520)
(520)
(3,625)
(3,625)
(985)
(985)
(34)
(34)
-
-
-
-
1
Includes loans and borrowings; excludes amounts due to construction contract customers
The non-derivative financial liabilities of the Company in the current and prior year are predominantly intercompany balances which are payable
on demand. The external balances are payable within 6 months.
Exposure to currency risk
The Group has no exposure to foreign currency risk.
Page 59
MJ Gleeson Group plc
Notes to the Financial Statements continued
Fair values
The fair value of the Group's financial assets and liabilities are not materially different from the carrying values. The following summarises the
major methods and assumptions used in estimating the fair values of financial instruments.
Available for sale financial assets due after more than one year, which represent receivables in respect of shared equity properties, are recorded
at fair value, being the amount receivable by the Group discounted to present day values. Gains and losses arising from changes in fair value
with respect to impairment losses, cashflows and interest are recognised in profit in the year. The difference between the amount receivable
by the Group and the initial fair value is credited over the deferred term to financial income, with the financial asset increasing to its full cash
settlement value on the anticipated receipt date. Credit risk is accounted for in determining fair values and appropriate discount factors are
applied. The Group holds a second charge over property sold under shared equity schemes.
The table below analyses financial instruments measured at fair value, into a fair value hierarchy based on the valuation technique used to
determine fair value.
Level 3: inputs for assets or liability that are not based on observable market data.
Available for sale financial assets
Note
18
2013
Level 3
£000
7,797
7,797
2013
Total
£000
7,797
7,797
2012
Level 3
£000
5,369
5,369
2012
Total
£000
5,369
5,369
interest bearing loans and borrowings
Fair value is based on discounted expected future principal and interest cash flows.
Capital management
In line with the disclosure requirements of IAS 1, Presentation of Financial Statements, the Group regards its capital as being the equity as shown
in the Statement of changes in equity.
Note 30 to the Financial Statements provides details regarding the Company's share capital movements in the period. There were no breaches of
any requirements with regard to any relevant conditions imposed by either the UKLA or the Company's Articles of Association during the period
under review.
The primary objective of the Group's capital management is to ensure that it maintains investor, creditor and market confidence, to support its
business and to maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in the light of changes in economic conditions. To maintain or adjust the
capital structure, the Group may adjust the dividend payment to shareholders and issue or return capital to shareholders.
Neither the Company nor any of the subsidiaries are subject to externally imposed capital requirements.
22. LOANS AND BORROWiNGS
The Group has secured borrowings under the Government's Get Britain Building scheme. Under this scheme, finance is provide for 50% of the
construction cost of the properties. The loan is repayable as homes are sold using 50% of the revenue from the sale of the properties until repaid
in full, with the final payment due on the earlier of 20 business days from the last disposal of property or December 2018. The agreed loan
facility is £2,226,000, of which £2,193,000 was drawn at 30 June 2013 with the balance split between current and non-current liabilites based on
expected repayment date.The loan is in sterling and interest accrues at 3.19%.
Get Britain Building loan
Non-current liabilities
Current liabilities
The Directors consider that the carrying amount of loans and borrowings approximates their fair value.
The Company does not have any loans and borrowings.
Page 60
Group
2013
£000
1,885
308
2,193
Group
2012
£000
-
-
-
23. TRADE AND OTHER PAyABLES
Current liabilities
Amounts due to construction contract customers
Trade payables
Other taxation and social security
VAT payable
Accruals and deferred income
Amount due to subsidiary undertakings
Note
20
Group
2013
£000
-
21,273
377
107
3,752
-
MJ Gleeson Group plc
Group
2012
£000
Company
2013
£000
Company
2012
£000
60
10,797
331
113
3,948
-
-
215
225
107
366
21,307
-
339
195
113
486
21,292
22,425
25,509
15,249
22,220
The Directors consider that the carrying amount of trade payables approximates their fair value. There is no interest charge to the Company for
amounts due to subsidiaries.
24. PROViSiONS
At 1 July 2012
Provisions used during the year
At 30 June 2013
Non-current
Current
Group
Restruc-
turing
costs
£000
100
(100)
-
-
-
-
Group
Group
Onerous
leases
£000
477
(156)
321
85
236
321
Total
£000
577
(256)
321
85
236
321
Restructuring
The restructuring costs are to cover the cost of the redundancies where existing employees could not be retained within the Group.
Onerous leases
Onerous leases relate to sublet and vacant properties. Where the rent receivable on the properties is less than the rent payable, a provision
based on present value of the net cost is made to cover the expected shortfall. The lease commitments range from 1 to 4 years. Market conditions
have a significant impact on the assumptions for future cash flows.
At 1 July 2012
Provisions used during the year
At 30 June 2013
Company
Restruc-
turing
costs
£000
100
(100)
-
Company
Total
£000
100
(100)
-
Page 61
MJ Gleeson Group plc
Notes to the Financial Statements continued
25. EMPLOyEE BENEFiTS
Defined contribution pension plan
The Group operates a defined contribution pension plan. The assets of the pension plan are held separately from those of the Group in funds
under the control of the trustees.
Group
The total pension cost charged to the Income Statement of £371,000 (2012: £316,000) represents contributions payable to the defined contribution
pension plan by the Group at rates specified in the plan rules. At 30 June 2013, contributions of £47,000 (2012: £40,000) due in respect of the
current reporting period had not been paid over to the pension plan. Since the year end, this amount has been paid.
Company
The total pension cost charged to the Income Statement of £81,000 (2012: £61,000) represents contributions payable to the defined contribution
pension plan by the Company at rates specified in the plan rules.
26. DEFERRED TAx
Group
The deferred tax assets recognised by the Group and movements thereon during the current and prior year are as follows:
At 1 July 2011
Charge to income
Impact of rate change
At 30 June 2012
Credit to income
Impact of rate change
At 30 June 2013
An analysis of the deferred tax balances for financial reporting purposes is as follows:
Deferred tax assets
Deferred tax liabilities
Plant and
machinery
£000
Short-term
timing
differences
£000
Losses
£000
798
(89)
(56)
653
99
(27)
725
-
-
-
-
4,238
-
4,238
96
(18)
(6)
72
-
(3)
69
Group
2013
£000
5,032
-
5,032
Total
£000
894
(107)
(62)
725
4,337
(30)
5,032
Group
2012
£000
725
-
725
Reductions in the UK corporation tax rate from 26% to 24% (effective from 1 April 2012) and to 23% (effective 1 April 2013) were substantively
enacted on 26 March 2012 and 3 July 2012 respectively. Further reductions to 21% (effective from 1 April 2014) and 20% (effective from
1 April 2015) were substantively enacted on 2 July 2013. The deferred tax asset is recognised at the year end substantively enacted rate of
23% (2012: 24%).
In the year, the Group has recognised £4,238,000 (2012: £Nil) of previously unrecognised deferred tax asset in relation to tax losses available to
offset against future profits. These losses are recognised to the extent that it is probable that future taxable profits will be available against
which they can be used and the prevailing tax rate at that time. In the prior year, no deferred tax asset was recognised in respect of these losses
due to the uncertain conditions in the housing market at that time.
At the balance sheet date, the Group has gross tax losses of £67,935,000 (2012: £83,089,000) of which £19,858,000 (2012: £Nil) have been
recognised as deferred tax assets. The Group has unrecognised tax losses of £48,077,000 (2012: £83,089,000) available for offset against future
profits. Losses may be carried forward indefinitely against future taxable profits.
Page 62
MJ Gleeson Group plc
Company
The deferred tax assets recognised by the Company and movements thereon during the current and prior year are as follows:
At 1 July 2011
Charge to income
Impact of rate change
At 30 June 2012
Credit to income
Impact of rate change
At 30 June 2013
Plant and
machinery
£000
Short-term
timing
differences
£000
555
(98)
(37)
420
5
(18)
407
12
(12)
-
-
-
-
-
Total
£000
567
(110)
(37)
420
5
(18)
407
At the balance sheet date, the Company had unused tax losses of £7,347,000 (2012: £6,665,000) available for offset against future profits. No
deferred tax asset has been recognised in respect of these losses. Losses may be carried forward indefinitely.
27. OPERATiNG LEASE ARRANGEMENTS
Operating leases: lessee
Minimum lease payments under non-cancellable operating leases
recognised as an expense for the year
Minimum lease payments
Group
2013
£000
Group
2012
£000
421
421
1,240
1,240
At the balance sheet date, the Group had outstanding commitments for minimum lease payments under non-cancellable operating leases, which
fall due as follows:
Within one year
Within two to five years
After five years
Group
2013
Land and
buildings
£000
395
1,058
211
1,664
Group
2012
Land and
buildings
£000
416
1,301
89
1,806
The Company had no minimum lease payments under non-cancellable operating leases.
Plant and equipment leases are entered into for a three year term. Land and building lease terms vary between one to ten years, depending on
market conditions.
In the current year, onerous lease provisions of £156,000 were released (2012: £251,000). See note 24 for details.
Where possible, the Group always endeavours to sub-lease any vacant space on short-term lets. An onerous lease provision is recognised where
the rents receivable over the lease term are less than the obligation to the head lessor. The Group's investment properties are also leased to a
number of tenants for varying terms.
Page 63
MJ Gleeson Group plc
Notes to the Financial Statements continued
Operating leases: lessor
The Group's total future minimum sub-lease receipts expected under non-cancellable sub-leases as at 30 June 2013 is £770,000 (2012: £841,000).
These receipts are included within the minimum rent receivables table below.
The Company has no (2012: £nil) future minimum sub-lease receipts.
Minimum rental income under operating leases recognised as revenue for the year
Group
2013
£000
64
Group
2012
£000
367
Included in the figures above is £60,000 (2012: £363,000) which relates to properties which the Group had previously occupied as operating lease
lessees and have now sublet. The balance of £4,000 (2012: £4,000) relates to investment properties.
At the balance sheet date, the minimum rent receivables under non-cancellable operating leases are as follows:
Within one year
Within two to five years
After five years
28. ANALySiS OF CASH AND CASH EquiVALENTS
At 1 July 2011
Cashflow
At 30 June 2012
Cashflow
At 30 June 2013
29. BONDS AND SuRETiES
Group
2013
Land and
buildings
£000
Group
2012
Land and
buildings
£000
195
575
-
770
70
771
-
841
Group
£000
Company
£000
17,763
17,975
(3,901)
(8,964)
13,862
9,011
(3,926)
(5,428)
9,936
3,583
Group and Company
As at 30 June 2013, the Group had bonds and sureties of £6,798,000 (2012: £4,491,000) provided by financial institutions in support of ongoing
contracts.
The Directors have determined that the Group and Company require no specific provision for bonds, sureties or guarantees for subsidiary
companies.
30. SHARE CAPiTAL
Issued and fully paid Ordinary shares:
At the beginning of the year
Shares issued
At the end of the year
Page 64
2013
No. 000
2013
£000
2012
No. 000
52,730
146
52,876
1,055
3
1,058
52,696
34
52,730
2012
£000
1,054
1
1,055
MJ Gleeson Group plc
Ordinary shares
The Company has one class of Ordinary share which carries no rights to fixed income.
The number of Ordinary shares of 2p in issue as at 30 June 2013 was 52,876,487 (2012: 52,730,235).
At 30 June 2013, the Employee Benefit Trusts ("EBT") held 118,000 (2012: 225,000) shares at a cost of £345,000 (2012: £364,000). The shares are
held in the EBT for the purpose of satisfying options that have been granted under the executive and employee share ownership plans. Of these
ordinary shares, the right to dividend has been waived on none of these shares (2012: Nil).
Details of share options are given in note 31.
31. SHARE-BASED PAyMENTS
During the year to 30 June 2013, the Group had two share-based payment arrangements.
The recognition and measurement principles in IFRS 2 have not been applied to those options granted before 7 November 2002 in accordance
with the transitional provisions in IFRS 1 and IFRS 2.
A summary of the share-based payment arrangements are shown below:
Arrangement
Contractural life
Vesting condition
Share purchase plan
10 years
Performance share plan (PSP)
Grant date 17/12/2010
3 years
Performance share plan (PSP)
Grant date 5/11/2012
3 years
From 1 March 2009, the Group matches shares purchased by employees
on a 1 for 3 basis. Prior to this date the Group matched shares purchased
by employees on a 4 for 3 basis. The shares purchased by the employees
are immediately exercisable. The Group matching shares are only
exercisable after 3 years.
For executive directors and senior executives the award will vest in whole
or in part on or after the third anniversary of the date of grant if
performance conditions have been met. The condition is based on the
total shareholder return on the three financial years from 1 July 2010 to
30 June 2013. None of these shares are currently exercisable.
For the Chief Executive Officer the award will vest in whole or in part on
or after the third anniversary of the date of grant if performance
conditions have been met. The condition is based on the total shareholder
return on the three financial years from 1 July 2012 to 30 June 2015.
None of these shares are currently exercisable.
Settlement basis
Equity
Equity
Equity
Share options granted after 7 November 2002
Fair value is used to measure the value of the outstanding options.
Share purchase plan
The fair value of each share granted in the share purchase plan is equal to the share price at the date of the grant. Shares are granted on a
monthly basis.
Performance share plan
The fair value per option for the performance share plan scheme has been calculated using a modified Monte Carlo model. The inputs into the
model at each grant date and the estimated fair value were as follows: The input for expected dividends has been set at 0% as the award vests
according to the increase in share price after adding back any dividends paid.
Date of grant
The model inputs were:
Share price at grant date
Total shareholders return target
Expected volatility
Expected dividends
Expected life
Risk-free interest rate
Fair value of one option
PSP
17/12/10
PSP
5/11/12
£1.26
£2.10
45%
1.56%
3 years
1.69%
£0.50
£1.52
£3.50
36%
1.50%
3 years
0.27%
£0.23
Page 65
MJ Gleeson Group plc
Notes to the Financial Statements continued
Expected volatility was determined by calculating the historical volatility of the Company's share price. For the 17/12/10 and 5/11/12 schemes
the volatility was measured over the previous 3 years.
Further details of the option plans are as follows:
Date of grant
Outstanding at 1 July 2011
Granted in the year
Forfeited
Exercised
Outstanding at 30 June 2012
Granted in the year
Forfeited
Exercised
Outstanding at 30 June 2013
Remaining contractural life
Weighted average exercise price
Weighted average share price at date of exercise - current year
Weighted average share price at date of exercise - prior year
Share options granted prior to 7 November 2002
Date of grant
Outstanding at 1 July 2011
Exercised
Outstanding at 30 June 2012
Exercised
Outstanding at 30 June 2013
Remaining contractual life
Weighted average exercise price
Weighted average share price at date of exercise - current year
Weighted average share price at date of exercise - prior year
Share pur-
chase plan
Monthly
No. of
shares
77,985
15,197
(2,347)
(9,317)
81,518
13,367
(11)
(25,307)
PSP
17/12/10
No. of
shares
839,049
-
-
-
839,049
-
-
-
PSP
5/11/12
No. of
shares
-
-
-
-
-
423,015
-
-
69,567
839,049
423,015
Rolling
scheme
-
£1.93
£1.23
0.5 years
2.5 years
-
n/a
n/a
-
n/a
n/a
Share pur-
chase plan
Monthly
No. of
shares
1,627
(280)
1,347
(800)
547
Rolling
scheme
-
£1.93
£1.23
32. CAPiTAL COMMiTMENTS
During the year, the Group entered into a contract to provide infrastructure for an owned site resulting in a capital commitment of £799,000 at
30 June 2013 (2012: contract to purchase land for development £1,436,000).
Page 66
MJ Gleeson Group plc
33. RELATED PARTy TRANSACTiONS
identity of related parties
The Group has a related party relationship with its joint ventures and key management personnel.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation.
Transactions with key management personnel
The Group's key management personnel are the executive and non-executive Directors, as identified in the Directors' Remuneration Report on
pages 22 to 25.
Other than disclosed in the Directors' Remuneration Report, there were no other transactions with key management personnel in either the
current or proceeding year.
Provision of goods and services to joint ventures
Grove Village Ltd
Chrysalis (Stanhope) Ltd
AvantAge (Cheshire) Ltd
Leeds Independent Living Accommodation Company Ltd
Sales to related parties were made at market rates.
Purchase of goods and services from joint ventures
There have been no purchases of goods from joint ventures.
Amounts owed by and owed to joint ventures
The amounts owed by joint ventures, including those classified as held for sale, are shown below:
Assets classified as held for sale
Prepayments and accrued income
Note
19
18
2013
£000
-
-
-
163
163
2013
£000
-
31
31
2012
£000
5
4
2
252
263
2012
£000
1,990
98
2,088
The amounts owed to joint ventures at 30 June 2013 totalled £Nil (2012: £Nil).
identity of related parties with which the Company has transacted
The Company receives charges from various suppliers in respect of services for the whole Group. The Company allocates and consequently
invoices these charges to subsidiaries.
Related party transactions:
Subsidiaries
Subsidiaries
Administrative expenses
2013
£000
5,511
5,511
2012
£000
5,098
5,098
Receivables outstanding
Payables outstanding
2013
£000
2012
£000
2013
£000
66,307
58,313
21,307
66,307
58,313
21,307
2012
£000
21,292
21,292
Page 67
MJ Gleeson Group plc
Five Year Review
for the years ended 30 June
Revenue
Operating profit/(loss)
Net finance income
Profit/(loss) before tax
Tax
Profit/(loss) after tax
Discontinued operations
Profit/(loss) for year attributable to
equity holders of the parent company
Total assets
Total liabilities
Net assets
Total dividend per share
Earnings/(loss) per share from continuing operations
Net assets per share
2013
£000
20121
Restated
£000
20111
Restated
£000
20101
Restated
£000
20091
Restated
£000
60,656
40,807
41,210
33,231
40,881
6,009
(230)
2,724
302
899
207
(1,017)
(42,774)
371
792
5,779
3,026
1,106
(646)
(41,982)
4,320
(130)
(123)
255
(2,885)
10,099
2,896
1,344
710
983
528
(391)
(44,867)
3,528
(6,588)
11,443
3,606
1,511
3,137
(51,455)
140,112
116,220
120,517
131,380
140,069
(28,023)
(15,826)
(21,364)
(33,537)
(37,637)
112,089
100,394
99,153
97,843
102,432
p
0.50
19.14
212
p
5.00
5.51
190
p
-
1.87
188
p
15.00
(0.75)
186
p
-
(86.07)
195
1 The 2009 to 2012 results have been restated for the reclassification of the the Gleeson Capital Solutions, Gleeson Commercial Property Developments and
the Gleeson Building division of Gleeson Construction Services as discontinued. The revised Discontinued items are shown in note 3.
Page 68
(992) MJ Gleeson R&A 2013 COVER_Layout 1 12/11/2013 15:48 Page 2
MJ Gleeson Group plc
Community matters
Advisers
Contents
Financial Highlights
Chairman’s Statement
Community Matters
Business Review
Operating Risk Statement
Corporate Social Responsibility Report
Board of Directors
Directors’ Report
Directors’ Remuneration Report
Corporate Governance
Statement of Directors’ Responsibilities
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cashflow
Notes to the Financial Statements
Five Year Review
Advisers
1
2
4
8
14
16
18
20
22
26
31
32
34
35
36
38
40
68
Inside back cover
Forward Thinking
partnerships
page 4
The Gleeson
Community sports
Foundation
page 5
The Gleeson
Apprenticeship
scheme
page 6
low Cost Homes
for local people
page 7
Making a real and
difference to communities
lasting
Front cover image: Hackworth Place, Shildon
BAnKers
The Co-operative Bank
2nd Floor, The Fountain Precinct, Sheffield S1 2JZ
solICITors
Simmons & Simmons
CityPoint, One Ropemaker Street, London EC2Y 9SS
reGIsTereD AuDITors
KPMG Audit Plc
1 The Embankment, Neville Street, Leeds LS1 4DW
sToCKBroKers AnD FInAnCe ADVIsers
N+1 Singer
One Bartholemew Lane, London EC2N 2AX
reGIsTrArs & TrAnsFer oFFICe
Capita Asset Services
The Registry, Bourne House, 34 Beckenham Road
Beckenham, Kent BR3 4TU
reGIsTereD oFFICe
MJ Gleeson Group plc
Sentinel House, Harvest Crescent, Ancells Business Park
Fleet, Hampshire GU51 2UZ
Registered Number
479529
The paper in this report is a FSC certified product, produced with an FSC
mixed sources pulp which is fully recyclable, biodegradable & Chlorine
free. It is manufactured within a mill which complies with the
international environmental ISO 14001 standard.
It has been printed using environmentally friendly vegetable based inks,
formulated on the basis of renewable raw materials, vegetable oils are
non-hazardous from renewable sources. Over 90% of solvents and
developers are recycled for further use and recycling initiatives are in
place for all other waste associated with this production. The printers are
FSC and ISO 14001 certified with strict procedures in place to safeguard
the environment through all their processes and are working on initiatives
to reduce their Carbon Footprint.
Designed and produced by Complete Design Limited.
Printed by Woodrow Press Limited.
ISO 14001
REGISTERED FIRM
MJ GLEESON GROuP PLC
Sentinel House
Harvest Crescent, Ancells Business Park
Fleet, Hampshire GU51 2UZ
Tel: 01252 360 300
Fax: 01252 621 666
Email: enquiries@mjgleeson.com
www.mjgleeson.com