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Gleeson puts its social housing maintenance arm up for sale

Housebuilder Gleeson is understood to have put its social housing maintenance arm Powerminster Gleeson Services up for sale.

Gleeson is said to have instructed merchant banking group Close Brothers to find a buyer for the £18.1 million turnover division.

A source told Construction News: “Close Brothers has approached a number of potential buyers, and negotiations continue. The sale is needed to raise cash to support the rest of the business.”

Three separate sources confirmed the move to Construction News, while Close Brothers and Gleeson said they would not comment on market rumours.

Close Brothers handled the management buyout of the building division of Gleeson Construction Services, which led to the formation of GB Building Solutions in August 2005.

PGS carries out repair and maintenance services, predominantly in the social housing sector. The firm has been targeting facilities management roles in the commercial sector.

PGS recorded a turnover of £18.1m in the year to 30 June 2009, down from £18.9m a year earlier.

Pre-tax profit fell to £705,000 from £902,000, but the firm’s order book rose to £169m from £158m. Of the order book, £145m related to long-term PFI FM deals that had been secured in recent years and will be delivered over a 30-year period.

Gleeson, which specialises in building homes in regeneration areas, reported a £300,000 half year pre-tax profit for the six months to 31 December 2009.

Turnover for the half-year increased 17 per cent to £36m, largely thanks to an increase in the average price of a Gleeson home.

But in the previous full-year accounts, Gleeson reported a £54.3m loss on turnover of £55m for the year to 30 June 2009, largely due to write-downs.

The result followed a £20.8m loss the year before, when the housebuilder’s turnover was £94.6m.

Gleeson recently left the commercial market, running-down its Gleeson Commercial Property
Developments with the sale of its last two commercial property developments generating revenue of £3.6m.