Booming Gleeson says full-year results to beat forecasts

MJ Gleeson said it will report results for the year to June “significantly ahead” of expectations, the company announced in a trading update this morning.

The firm, which specialises in building low-cost homes and buying up land for development, increased the number of homes it sold by 10.4% on the previous financial year, hitting its medium-target of building 2,000 homes per year.

Analysts are expecting reveneue to be around £375m to £380m, up from last year’s £289m, with pre-tax profit set to be around £53m, up from £41.7m last time.

Gleeson said its sales for the first six months of 2022 were up 24% on the same period last year, with 1,068 homes snapped up by customers. It ended the financial year with cash balances of £33.8m – £500,000 down on the last financial year – and no debt.

Chief executive James Thomson said Gleeson had started the new financial year in “a strong position”. The company’s board is now forecasting its annual results for the year to June to be “significantly ahead of market expectations.”

“Notwithstanding the ongoing congestion in the planning system and the wider macro-economic environment, the Board believes that the scale of pent-up demand for low-cost homes will continue to drive significant growth into 2023 and beyond,” Thomson added.

The firm will go into the new financial year with 87 active sites, having opened 23 new build sites during the year to June.

The average selling price of a Gleeson home rose 14.7% in 2022 to £167,300, while the time taken for homes to be reserved after plot release declined from 49 days in 2021 to 34 days in the 2022 financial year.

Gleeson, which has committed to the Department for Levelling Up, Housing and Communities cladding remediation pledge, expects to complete a review of buildings it has historically been involved in developing by the end of the summer.

When it signed the pledge, the company’s board said it was not aware of any life-critical fire safety issues in respect of the 15 buildings which fit the pledge criteria.

The firm will unveil its annual results on 15 September.