Gleeson ‘on track’ to increase profit despite ‘lack of conviction’ in market

MJ Gleeson has said it is on track to meet its financial forecast for the 2024/25 financial year, with a projected pre-tax profit of £28.1m.

Gleeson’s pre-tax profit slipped by 21% last year, dropping from £31.5m in 2022/23 to £24.8m in 2023/24.

In a trading update ahead of its annual general meeting today, the housebuilder and land trader said that due to a ‘lack of conviction’ in the market over the autumn, it expects its financial results to be more heavily skewed towards the second half of the financial year than usual. 

Gleeson also welcomed last week’s base rate reduction from 5% to 4.75% and expects it to bolster buyer confidence in “the important Spring selling season”. 

Between 1 July and 1 November, the average number of homes sold or reserved per week per site rose to 0.56, up from 0.45 in the same period last year.

Gleeson expects to deliver 1,862 homes over the financial year, as it gears up to get annual completions up to 3,000 homes following last year’s restructuring. The restructure saw 15% of the company’s job roles cut to reduce overhead costs by £4m a year.

The update said Gleeson Homes continues to experience margin pressure due to increased use of sales incentives, the impact of multi-unit sales, increased build costs and limited relief from increasing selling prices.

Gleeson Homes has opened seven sales sites so far during the current financial year. The division aims to open a total of 27 sales sites by the end of the year, a significant increase compared to the four sites opened in 2023/24.

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However, Gleeson Homes will have a lower average number of active sites than last year, with fewer sites operating in the first half of the year compared to the second half. From 2025/26, it will target a net 10 new sales sites per year. 

The trading update for Gleeson Land said the reform of the National Planning Policy Framework is expected to have a positive impact on the timing of certain sites.

The housebuilder also said that ongoing strong demand for consented land from both large and medium-sized developers has bolstered the board’s confidence that Gleeson Land will achieve a full-year result significantly ahead of last year. 

Several substantial sales are expected to be completed in the second half of the financial year.