MJ Gleeson battles to record H1 profit

The Sheffield-headquartered property group reported a pre-tax profit of £7.2m in its half-year results, 55% down year-on-year as sales by its homes division fell.

For the six moths to 31 December 2023, Gleeson Homes brought in £142.3m, down from £166.7m for the corresponding period 12 months earlier.

By contrast, Gleeson Land more than doubled its turnover, bringing in £9.2m, up from £4.3m.

The company said that changes made are having an effect.

Graham Prothero, chief executive, said: “The results for the half year reflect a robust performance given conditions in the housing market during 2023. Gleeson Homes entered the second half of the year with a strong forward order book and we are seeing encouraging signs of recovery in reservation rates.

“In common with others within the sector, we experienced margin pressures arising from increased sales incentives, extended site durations and multi-unit sales. This has been exacerbated by additional costs on a number of older sites, which were brought to light by new management teams put in place following the organisational restructuring implemented last year.

“We have substantially tightened and standardised our operating and reporting processes and cost disciplines. I am pleased with the response from the teams and the new rigour in these areas as we implement these changes.”

Gleeson Homes sold 769 dwellings. It opened three new sites and has a land pipeline for 18,000 homes.

Gleeson Land secured four consents, has four sites being marketed or in a sales process and completed one sale. It has a portfolio of 70 sites.

Prothero continued: “Gleeson Land continues to see strong interest from a range of both large and regional developers although the challenge of achieving planning has increased in the context of the revised NPPF and political sensitivities in an election year. We have made good progress in implementing the new structure set out at our Capital Markets Day in July 2023.

“Against the backdrop of improving mortgage rates, we are seeing positive signs of a recovery in demand. We expect this to continue into the seasonally busier selling period over the coming weeks and months. Gleeson Homes continues to negotiate selective multi-unit sales and expects to enter into further agreements over the coming months for delivery in both the current and next financial year.

“The business has traded well in difficult conditions and is well-placed to capitalise on a recovery in the market and resume its exciting growth strategy.”