2 'secret' small-cap stocks offering value and growth

Shares in MJ Gleeson(LSE: GLE) were up 5% in early trading this morning as the community regeneration housebuilder and strategic land specialist delivered yet another strong performance in its latest financial year.

66% dividend hike

The Sheffield-based group delivered a 17% improvement in pre-tax profits for the financial year ending 30 June, to £33m, with revenues 13% higher at £160m. The strong financial performance gave management the confidence to raise the full-year dividend to 24p - a massive 66% increase on the previous year.

Gleeson's twin-track strategy of developing low-cost homes for open market sale in the North of England, along with strategic land sales in the South, delivered another excellent year of increased volumes, margins, profit, and cash.

Demand exceeds supply

The Gleeson Homes division achieved its milestone target of 1,000 unit sales, and has set a new target of 2,000 unit sales per annum within the next five years. Affordability remains very attractive and demand exceeds supply, with buyers queuing on site-opening days.

Not to be outdone, the group's Gleeson Strategic Land division also had a record year, as it continues to benefit from strong demand for consented land in prime locations from both medium-sized and large housebuilders. The division has a strong pipeline of sites, predominantly in the South of England, which have the opportunity of developing 21,505 plots, and anticipates continuing to enjoy a high level of success in promoting commercially attractive sites through the planning system.

Oozing confidence

The company still has plenty of land on which to build, and demand and affordability of Gleeson Homes continues to be strong. The Gleeson Strategic Land portfolio also remains in good shape, with strong demand from other housebuilders.

The very substantial uplift in the dividend seems to suggest that management is just oozing confidence at the moment, and I believe Gleeson's shares look great value currently trading on a very modest price-to-earnings ratio of 12.

Stake your claim

Another regeneration specialist that I believe offers investors excellent value at the moment is Inland Homes(LSE: INL). The Buckinghamshire-based group is due to announce its full-year results later this week, but I reckon right now could be a great time for investors to stake a claim ahead of Thursday's announcement.

The AIM-listed business is a leading brownfield regeneration specialist and housebuilder with a particular focus on the South and South East of England. It's been an extremely active and successful year for the group, with the business growing both financially and operationally.

In-house construction team

A new in-house construction team has enabled Inland to increase its housebuilding and contracting operations significantly, providing more certainty over the timing of cash flows and profit recognition, as well as better control over construction costs. This investment is now beginning to bear fruit, with the number of open market unit completions increasing by 28% during the last financial year.

With a healthy land bank of 6,776 plots and a short-term development pipeline with a gross development value of £1.34bn, the group seems well placed to continue the growth in housebuilding and land sales delivered over the last year. Trading on a forward price-to-earnings multiple of just 7.7, I reckon Inland Homes could be one of today's best small-cap secrets.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has recommended Inland Homes. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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