REG - MJ Gleeson Plc - AGM Trading Update

MJ GLEESONAnnouncement

18/11/2022 07:00

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RNS Number : 8288G  MJ Gleeson PLC  18 November 2022

 MJ Gleeson plc

(GLE.L)

 

AGM Trading Update

 

MJ Gleeson plc (GLE.L), the low-cost housebuilder and land promoter, is
holding its Annual General Meeting (AGM) later today at which Dermot Gleeson,
Chairman, will make the following comments:

"In September we announced record revenue and profits for the year to 30 June
2022 and said that we were well-positioned to deliver further profitable
growth in the current financial year, notwithstanding the outlook for the
broader economy.

Shareholders will be well-aware that since then much has changed. The market
volatility and sharp increase in interest rates following the mini budget
impacted buyer confidence and caused a significant slowdown in demand.

Gleeson Homes cancellation rates which for the first ten weeks of the year
were 20% have, over the past six weeks, increased to 41%. Net reservation
rates have reduced, over the past six weeks, to 0.26 per site per week against
0.42 for the same period last year.

Whilst it is far too early to call a recovery, we were encouraged by
yesterday's Autumn Statement.  We would expect to see the re-emergence of
buyer confidence as the wider macro volatility subsides. What is more, there
are good reasons to hope that an improving outlook for longer term interest
rates will result in greater mortgage availability and affordability.

The average selling price on new reservations since the start of the financial
year was £186,500, an underlying 9.0% higher than the same period last year.
Despite these higher prices, our homes remain attractive to first time buyers
and a couple on the National Living Wage can still afford to buy a Gleeson
home on any one of our development sites.  Furthermore, we are now seeing
interest from customers who might previously have considered a more expensive
property built by another developer but who, in the current environment, are
attracted by Gleeson's more affordable price points.

Land continues to be available at sensible prices and the pipeline remains
strong. Gleeson Homes has a land pipeline of 16,484 plots with a gross
development value of £3.1 billion, of which 8,607 plots are owned and 7,877
are conditionally purchased.

The division currently has 88 active build sites, compared with 82 active
build sites this time last year and is actively selling on 68 sites, compared
with 60 sites this time last year.

We note the commentary from a number of housebuilders regarding their
intentions to reduce land buying in the short-term. Gleeson Land has completed
the sale of one site since the start of the financial year. A further four
sites are being actively progressed to sale. The division's land pipeline
currently consists of 71 sites which have the potential to deliver
approximately 18,775 plots. The portfolio includes 4 sites, with the potential
to deliver 1,269 homes, which have planning permission or resolution to grant.

The issues with the congested planning system have continued to delay a number
of site consents, but we anticipate that a number of these sites will obtain
consents during the second half of the current financial year.

For the Group as a whole, the outlook for the current financial year is
dependent upon the pace of recovery in the housing market. Having reviewed a
number of scenarios, the Board believes that Gleeson Homes could deliver
volumes anywhere in the range between 1600 and 2000 units.

We will provide a further update on 13 January 2023 following the conclusion
of H1 FY2023."

 

18 November 2022

 

This announcement contains inside information. The person responsible for
arranging the release of this announcement on behalf of the company is Stefan
Allanson, Chief Financial Officer.

 

LEI: 21380064K7N2W7FD6434

 

Enquiries:

                                                              Tel: 01142 612900

   MJ Gleeson plc
   James Thomson       Chief Executive Officer
   Stefan Allanson         Chief Financial Officer

 Hudson Sandler
 Mark Garraway                                              Tel: 07771 860 938
 Charlotte Cobb                                             Tel: 07795 422131

 Singer Capital Markets
 Shaun Dobson                                               Tel: 020 7496 3000
 Rachel Hayes

 Liberum
 Neil Patel                                                 Tel: 020 3100 2222

 

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