REG - MJ Gleeson Plc - FY2024 Trading Update

MJ GLEESONAnnouncement

11/07/2024 07:00

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RNS Number : 9446V  MJ Gleeson PLC  11 July 2024

11 July 2024

MJ Gleeson plc

("Gleeson", "the Company" or "the Group")

 

FY2024 trading update

 

Results expected to be broadly in line with expectations following Gleeson
Homes' robust performance and Gleeson Land planning delays

 

Gleeson Partnerships signs first agreement

 

MJ Gleeson plc, the leading low-cost housebuilder and land promoter, issues a
trading update for the year ended 30 June 2024 (the "Period").

 

Trading Update

 

Gleeson Homes

 

Gleeson Homes delivered a robust performance, completing the sale of 1,772 new
homes during the Period, an increase of 2.8% on the prior year (FY2023: 1,723
homes sold). Of the 1,772 new homes sold, 346 were sold via multi-unit sale
agreements.

 

The division is expected to report an operating profit of circa £30 million,
ahead of market expectations.

 

Net reservation rates* over the last six months averaged 0.63 per site per
week (H2 FY2023: 0.67). Excluding multi-unit agreements, net reservation rates
improved to 0.50 per site per week (H2 FY2023: 0.42) net of an improved
cancellation rate of 18%.

 

Gleeson Homes holds a forward order book of 559 plots (30 June 2023: 665
plots).

 

The division opened 10 new build sites during the year, starting the new
financial year with 79 build sites (30 June 2023: 82 sites) of which 62 are
actively selling (30 June 2023: 71 sites).

 

As a result of our strong focus on quality, we were pleased to achieve 5-star
customer recommendation status in all six of our operating regions.

 

Gleeson Land

 

Notwithstanding the continuing challenges in the planning system Gleeson Land
sold four sites during the year. The timing of the general election, which
coincided with the period-end, resulted in the deferral of a significant
disposal which is now expected to be completed in FY2025.

 

Gleeson Land is expected to report an operating profit of circa £2m, below
market expectations.

 

Gleeson Land's portfolio of sites as at 30 June 2024 includes seven sites with
either planning permission or resolution to grant and which have the potential
to deliver 1,473 plots (30 June 2023: 6 sites, 1,400 plots).

 

Balance Sheet

 

The Group ended the year with a net cash position of £12.9m (30 June 2023:
£5.2m).

 

Partnerships

 

At the Company's Capital Markets Day on 7 July 2023, the business set out a
refreshed strategy including a pathway to materially scale-up Gleeson Homes,
including an objective of delivering 3,000 new homes per annum in the
medium-term and exploring opportunities to deliver homes in partnership with
blue-chip third parties.

 

The Company is pleased to announce that Gleeson Homes entered into its first
partnership agreement, with further transactions under negotiation, and has a
broad pipeline of opportunity. The Company will host a briefing on its
partnerships' strategy in due course.

 

Outlook

 

Gleeson Homes' sales rate over the last six months was steady but less
vigorous than expected as a consequence of deferred expectations around
interest and mortgage rate reductions. Looking ahead, the Board expects that,
as rates start to fall, demand for new homes will strengthen through FY2025.

 

The Board remains confident of its medium-term objective as growth accelerates
into FY2026 from the multiple outlet openings scheduled in FY2025.

 

With a good number of prospects, and in a more stable operating environment,
Gleeson Land is confident of a strong performance in FY2025.

 

Graham Prothero, CEO of MJ Gleeson plc, commented:

"We have delivered a solid overall performance with Gleeson Homes exceeding
expectations in what has been a challenging year.

"We are making progress against our key strategic priority of significantly
scaling up our operations over the medium-term. Looking ahead, we are
anticipating an increase in demand for new homes as interest rates begin to
come down and consumer confidence returns. We also expect Gleeson Land to
complete on a number of significant land disposals in the months ahead.

"The agreement of our first partnership site is an exciting development. We
are encouraged by the number of discussions currently underway with further
potential partners and look forward to updating the market on progress in due
course.

"We also welcome the Chancellor's comments regarding mandatory housing
targets, planning reform and other measures to increase substantially the
supply of new homes. There is much to do if aspiration is to become reality,
but the determination that we have seen since the election to get things done
marks a positive change in approach. Gleeson is ready to play its part in
delivering much needed affordable homes."

 

*Reservation rates for all periods based on sales sites with homes available
for sale. Reservation rates in previous announcements were based on sales
sites including those with no homes available for sale but where the site had
not yet completed the sale of the final home.

 

Analyst conference call

A conference call for analysts will be held at 08:00 this morning. To dial-in,
please use the below details:

·      UK-Wide: +44 (0) 33 0551 0200

·      UK Toll Free: 0808 109 0700

·      Code: MJ Gleeson

 

Notice of Results

 

The Company will report its audited full year results on Wednesday 18
September 2024. A presentation for analysts will be held that morning at the
offices of Hudson Sandler, 25 Charterhouse Square, London, EC1M 6AE, and will
also be webcast.

 

- Ends -

 

Enquiries:

 MJ Gleeson plc                            Tel: +44 1142 612 900
 Graham Prothero, Chief Executive Officer
 Stefan Allanson, Chief Financial Officer

 Hudson Sandler (Financial PR)             Tel: +44 20 7796 4133
 Mark Garraway                             Tel: +44 7771 860 938
 Harry Griffiths                           Tel: +44 7860 630 046
 India Laidlaw                             Tel: +44 7801 252 015

 Investec Bank plc (Joint Broker)          Tel: +44 207 597 4000
 Ben Griffiths

 Marc Potel
 Tom Brookhouse
 Sara Wallace

 Singer Capital Markets (Joint Broker)     Tel: +44 20 7496 3000
 Shaun Dobson
 Charles Leigh-Pemberton
 Alaina Wong

 

About MJ Gleeson:

MJ Gleeson plc comprises two divisions: Gleeson Homes and Gleeson Land.

Gleeson Homes is the leading low-cost, affordable housebuilder. Its
two-bedroom homes start from circa £100,000. Gleeson's vision is "Building
Homes. Changing Lives", prioritising areas where people need affordable
housing the most. Our aim is to ensure that on all of our developments, a
material proportion of the homes are affordable to a couple earning the
National Living Wage. Buying a Gleeson home typically costs less than renting
a similar property. All Gleeson homes are traditional brick built semi or
detached homes. Gleeson offers a wide mix of two-, three- and four-bedroom
layouts.

Gleeson Land is the Group's land promotion division, which identifies
development opportunities and works with stakeholders to promote land through
the residential planning system.

As a high-quality, affordable housebuilder, Gleeson has strong and inherent
sustainability credentials. Its social purpose underpins the Company's
strategy and Gleeson measures itself closely against UN SDGs 5, 8, 11, 12, 13
and 15.

More details on the Company's approach to sustainability can be found at:
mjgleesonplc.com/sustainability
(https://www.mjgleesonplc.com/sustainability/sustainability/)

 

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