REG - MJ Gleeson Plc - Results for the half year ended 31 December 2024
11/02/2025 07:15
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RNS Number : 5937W MJ Gleeson PLC 11 February 2025
11 February 2025
Results for the half year ended 31 December 2024
Strongly positioned for a market recovery
Graham Prothero, Chief Executive Officer, commented:
"I am pleased to report a robust performance during the six months to 31
December 2024, despite the market remaining subdued, with Gleeson Homes
completing the sale of 801 homes, more than the first half last financial
year. Gleeson Homes is making good progress against its growth strategy,
opening 8 new build sites and 11 new sales outlets, and we remain confident of
growing by circa 10 sales outlets per annum from next year onwards.
Gleeson Land is progressing a number of significant opportunities which we
expect to complete during the second half. The business is starting to reap
the rewards from its restructured operations and market-leading research and
data analytics capabilities, and will continue to grow its portfolio of sites
in the second half and beyond. We are already seeing the benefit of the
changes to the NPPF, with three planning consents achieved post period end.
At Gleeson Homes, there are early indications of an improving selling season
with much stronger net reservation rates in the first four weeks. More
importantly, we are pleased with the progress of our site opening programme
which will drive sustained growth over the medium-term."
H1 24/25 H1 23/24 Change
Revenue
Gleeson Homes £156.6m £142.3m 10.0%
Gleeson Land £1.3m £9.2m (85.9%)
Total £157.9m £151.5m 4.2%
Operating profit by division
Gleeson Homes £9.1m £10.2m (10.8%)
Gleeson Land (£1.9m) £1.0m (290.0%)
Group operating profit £5.1m £8.8m (42.0%)
Group profit before tax £3.6m £7.2m (50.0%)
Net debt (£18.1m) (£18.7m) £0.6m
ROCE(1) 8.0% 9.0% (100bp)
EPS (basic) 4.8p 9.6p (50.0%)
Dividend per share 4.0p 4.0p -
1 Return on capital employed is calculated based on earnings before
interest and tax and exceptional items (EBIT), expressed as a percentage of
the average of opening and closing net assets for the prior 12 months after
deducting deferred tax and cash and cash equivalents net of borrowings.
Gleeson Homes:
· 801 homes sold (H1 23/24: 769)
o Net reservation rate increased to 0.55 per site per week (0.44 excluding
multi-unit orders), compared to 0.41 per site per week last year (0.39
excluding multi-unit orders)
· Average selling prices increased by 4.8% to £193,900 (H1 23/24: £185,000)
o Underlying net selling prices on open-market sales increased by 0.8%
year-on-year
· Gross margin on home sales of 20.6% (H1 23/24: 24.5%) reflecting flat pricing,
sales incentives and extended prelims
· Administrative expenses reduced by 6.9% to £23.1m (H1 23/24: £24.8m)
· Gleeson Partnerships secured a second agreement during the first half and
continues to target one per region by the year-end
· Strongly positioned for a market recovery, serving an under-supplied market
segment with resilient underlying demand and continuing affordability
o 11 new sales outlets opened (H1 23/24: two outlets opened)
o Increased forward order book of 597 plots (30 June 2024: 559 plots)
o Land pipeline(1) 18,731 plots on 174 sites (30 June 2024: 19,138 plots on 179
sites)
Gleeson Land:
· No land sales completed (H1 23/24: one land sale)
o £1.3m revenue reflects accounting for a collaborative land swap with a joint
venture partner
· Five sites being marketed or in a sales process (H1 23/24: four sites)
o Marketing commenced on a further three sites in January
· Planning achieved on two sites during the first half (H1 23/24: four sites)
o Planning secured on a further three sites in January including the division's
first grey-belt site
· Continued focus on enhancing the depth and quality of the portfolio(2) of 73
sites (30 June 2024: 71 sites)
o Bid and win rates doubled, to 5-6 bids per month and c.1/3 success rate
Current trading and outlook:
· The Group is seeing encouraging signs of a recovery in demand
o Net reservation rates increased by 45% to 0.77 in the four weeks to 31 January
2025 (2024: 0.53 in the four weeks to 2 February 2024)
o Strong start to the second half for Gleeson Land, having secured planning
permission on three sites in January
· The positive start to the second half, as well as the encouraging momentum
generated in the first half, provide the Board with confidence in meeting
current market expectations(3), including Gleeson Land completing between four
and eight site sales in H2
· Longer-term, the Company remains well positioned to deliver sector-leading
growth underpinned by Gleeson Homes' programme of new site openings and a more
stable planning environment for Gleeson Land
( )
(1) Pipeline refers to sites either purchased, contracted to purchase subject
to planning or with terms agreed to be contracted.
(2) Portfolio refers to sites under contract or owned.
(3) Analyst consensus for FY2025 can be found
at: https://www.mjgleesonplc.com/investors/analyst-coverage/
(https://www.mjgleesonplc.com/investors/analyst-coverage/)
Analyst presentation
A presentation by Graham Prothero, CEO, and Stefan Allanson, CFO, will be held
at 9:30am this morning at the offices of Hudson Sandler, 25 Charterhouse
Square, London, EC1M 6AE.
The presentation will also be webcast https://brrmedia.news/GLE_IR_25
(https://brrmedia.news/GLE_IR_25) . A recording of this will be available
after the event on the Company's website.
About MJ Gleeson:
MJ Gleeson plc comprises two divisions: Gleeson Homes and Gleeson Land.
Gleeson Homes is the leading low-cost, affordable housebuilder with the vision
of "Building Homes. Changing Lives." Focusing on areas where affordable
housing is most needed in the Midlands and North of England, Gleeson Homes'
average selling price was £193,900, 34% lower than other housebuilders
average selling price of £291,700 in the same geographic regions. This means
that a couple earning the National Living Wage can afford to buy a home on any
Gleeson Homes development.
Gleeson Land, which operates across the South of England and the Midlands, is
the Group's land promotion division. To deliver on its vision of "Promoting
Land. Unlocking Value", the division carefully identifies sustainable
development opportunities which it then promotes through the residential
planning system and sells on behalf of the landowner. Gleeson Land is a
pioneer of data analytics in the land promotion space, which it leverages to
secure new promotion agreements and deliver successful planning outcomes.
In July 2023, the Company held a Capital Markets Day titled 'Putting in place
the foundations for growth', where it set a medium-term target within a stable
market environment to reach 3,000 annual completions.
More details on the Company can be found at: https://www.mjgleesonplc.com/
(https://www.mjgleesonplc.com/)
Enquiries:
MJ Gleeson plc +44 1142 612 900 or via Hudson Sandler
Graham Prothero, Chief Executive Officer
Stefan Allanson, Chief Financial Officer
Hudson Sandler +44 207 796 4133 / gleeson@hudsonsandler.com
(mailto:gleeson@hudsonsandler.com)
Mark Garraway
Harry Griffiths
Singer Capital Markets +44 20 7496 3000
Shaun Dobson
Charles Leigh-Pemberton
Investec +44 207 597 4000
Ben Griffiths
David Anderson
Tom Brookhouse
This announcement is released by MJ Gleeson plc and contains inside
information for the purposes of Article 7 of the Market Abuse Regulation (EU)
596/2014 (MAR), and is disclosed in accordance with the Company's obligations
under Article 17 of MAR. Upon the publication of this announcement, this
information is considered to be in the public domain.
For the purposes of MAR and Article 2 of Commission Implementing Regulation
(EU) 2016/1055, this announcement is being made on behalf of the Company by
Stefan Allanson, Chief Financial Officer.
LEI: 21380064K7N2W7FD6434
CHIEF EXECUTIVE'S STATEMENT
I am pleased to report on an encouraging first half performance, particularly
in Gleeson Homes which grew sales volumes notwithstanding continued market
pressures and challenges.
Gleeson Homes sold 801 homes during the period (H1 23/24: 769), with net
reservations increasing to 0.55 per site per week (0.44 excluding multi-unit
orders), compared to 0.41 per site per week (0.39 excluding multi-unit orders)
in the half year to 31 December 2023, reflecting a modest recovery in demand.
Underlying net selling prices on open market reservations were broadly flat
compared with the prior half year period reflecting slightly higher gross
prices offset by slightly higher incentives.
Gleeson Homes enters the second half of the year with a strengthened forward
order book of 597 plots (30 June 2024: 559 plots), including a second
partnership agreement signed during the period.
We have seen an encouraging start to the important spring selling season with
net reservations per site over the last four weeks up 45% on the same period
last year.
Net reservations per site per week excluding multi-unit orders
Six months to Four weeks to
31 December 2 February
FY25 0.44 0.77
FY24 0.39 0.53
Whilst we anticipate the market will continue to recover over the coming
months, helped by further interest rate cuts, the timing and trajectory of
that recovery remains uncertain.
The ability of Housing Associations to enter into partnerships and multi-unit
purchases remains constrained, as they are unable to commit to transactions
pending the Government's new funding settlement. Nevertheless, we continue to
secure small volume sales and anticipate agreeing further multi-unit sales and
partnership agreements in the second half of the financial year and beyond.
We ended the period with net debt of £18.1m (31 December 2023: £18.7m) which
reflects the opening of eight new build sites and investment in build activity
on established sites ahead of the important spring selling season.
We continue to tightly manage costs whilst ensuring we have capacity to open
new sites and deliver strong rates of growth as the market recovers.
Gleeson Partnerships
We launched Gleeson Partnerships during the year ended 30 June 2024 and are
pleased to have signed our first partnership deals with Home Group and Citra
Living (Lloyds Living). As referenced, the funding environment is currently
constrained which reduces the ability of Housing Associations to transact, but
we are in discussion on multiple agreements.
The introduction of a partnerships capability enables Gleeson Homes to develop
suitable sites on a 'capital-light' basis with partner funding contributing to
the acquisition of the site and its required infrastructure. This will enable
the division to secure larger sites which are typically more efficient to
develop through leveraging operating, marketing and sales synergies, economies
of scale for materials and offering long-term certainty to subcontractors. The
secured sales reduce market risk and the provision of forward funding on a
partnership site leads to an improved return on capital.
Pending the Government's new funding settlement for Housing Associations, we
expect to see our partnership business gain momentum, contributing more to
Group performance from FY2026 and beyond. We also expect the scale of our
partnership sites to increase over the coming years.
Quality and affordability
Gleeson Homes is focused on providing high-quality, affordable homes and an
exceptional customer experience. We are pleased to have maintained our 5-star
customer recommendation score in each of the regions in which we operate.
Continuous improvement based on customer feedback has been a key focus, with a
strong emphasis on enhancing handover quality and addressing defects promptly,
so that we consistently deliver a positive experience. We recognise that
buying a Gleeson home is a significant life decision and we remain committed
to meeting and exceeding our customers' expectations.
Mortgage rates and the cost of home ownership reduced during 2024, whilst
rental costs continued to rise. The cost of owning a Gleeson home at current
mortgage rates is significantly lower than the cost of renting, and the
benefits of home ownership are clear. The cost of a typical Gleeson 2 bed home
is c.£700 per month, against c.£900 in rent for the equivalent property.
The majority of Gleeson homes continue to be affordable for a couple working
full time and earning the National Living Wage, which will increase by 6.7% on
1 April 2025.
Gleeson homes are built to be energy efficient, using approximately half the
energy to heat and power when compared to existing housing stock. This results
in materially lower running costs for our customers (an average annual saving
of £870 on a Gleeson 3 bed home) while also providing the health and
wellbeing advantages associated with living in a modern, well-insulated home.
In our ongoing commitment to customer affordability, we are working closely
with lenders and Homes England, to provide affordable housing options for our
customers. We have introduced new shared ownership opportunities at selected
sites which, alongside our other product offerings, will continue to support
first time buyers on their journey to homeownership.
Planning, sites and growth
The current planning system continues to prove challenging, with
under-resourced planning departments and roadblocks such as nutrient
neutrality, however, we are starting to see early signs of improvement and are
encouraged by the commitment from the Government to address the key issues.
The revised National Planning Policy Framework ("NPPF"), announced in December
2024, starts to address some of the fundamental challenges to achieving the
Government's ambitious housing targets.
Whilst challenges persist, our land teams in both Gleeson Homes and Gleeson
Land have a proven track record of success. Both businesses maintain robust
pipelines, ensuring their resilience and ability to navigate changing market
conditions.
Gleeson Homes' pipeline includes 95 sites with a potential 11,085 plots
expected to open over the next few years. Whilst we anticipate our total
number of sales outlets will reduce this year as more sites reach completion,
we expect to consistently open approximately ten net new outlets each year
from next year onwards.
Gleeson Land successfully secured planning permission on two sites in the
period, including one through appeal, and has secured planning permission on a
further three sites since the period end. We have enjoyed significant success
in strengthening the portfolio, entering into promotion agreements on five new
sites in the period. We are encouraged by the recent performance of our
refocused operational structure and this, combined with our market leading
research and data analytics capabilities, will enable us to consistently grow
the quality and size of Gleeson Land's portfolio of sites.
Selling prices, build costs and margins
Gleeson Homes' reported average selling prices increased by 4.8% to £193,900
driven by 0.8% higher underlying selling prices on open-market sales and 4.0%
higher average prices from the mix of multi-unit sales and house types.
As market conditions improve, we anticipate there will be opportunities to
reduce the level of discounts and incentives offered, whilst continuing to
selectively increase prices.
Build cost inflation was modest during the period at circa 1%, with material
cost increases being slightly higher than labour rate increases. We anticipate
build cost inflation over the next six months to increase to between 2% and 3%
driven in part by the increase in National Insurance costs from April 2025.
Gross margins in the first half were, as anticipated, lower than previous
years but are expected to recover in the second half and beyond due to the mix
of sites with lower margins closing and new sites with higher margins opening.
A sustainable proposition
We are committed to providing exceptional value for our customers. I am proud
that a working couple earning the National Living Wage can afford to purchase
a high-quality home on any one of our developments. This demonstrates our
commitment to our vision of "Building Homes. Changing Lives" and our mission
of delivering affordable, quality homes, where they are needed, for the people
who need them most. This approach aligns with UN Sustainable Development Goal
11 (Sustainable cities and communities) by promoting access to "safe and
affordable housing" for all.
We are committed to decarbonising our operations, supply chain and the in-use
emissions of our homes. We are setting near-term targets for 2032, and a
commitment to net-zero by 2050 for scope 1, 2 and 3 emissions. We are
currently working with the Science Based Targets initiative (SBTi) to have
these targets validated.
In response to the Future Homes Standard and changes in Building Regulations,
we are now installing air source heat pumps in all of the homes we commenced
after 15 June 2023 which means that our homes are net-zero ready. We are also
actively transitioning to lower carbon materials where feasible. This includes
using concrete bricks or reconstituted stone instead of traditional kiln-fired
clay bricks and using fuel efficient technologies for our construction
processes on site, including forklifts and generators.
Finally, we are proud to have retained our accreditation from the Fair Tax
Foundation again this year. We remain the only listed housebuilder to be
accredited with the Fair Tax Mark, which certifies that we pay our fair share
of tax in the right place, at the right time and are honest and transparent in
our disclosures.
Building safety
The Group is fully committed to swiftly remediating life-critical fire-safety
issues and has a dedicated full-time senior resource overseeing progress on
building safety issues. Monthly update meetings are held by the Executive
leadership team, and reports on progress are presented to the Board at every
meeting.
We were prompt in contacting all building owners and management companies and
we are actively pursuing resolution of all potentially affected buildings. We
are progressing safety assessments and remediation on the majority of
buildings. We expect work to have completed on seven buildings by 30 June 2025
and are proactively engaging on the remaining projects.
The overall provision has been assessed and remains appropriate with total
provisions of £12.3m as at 31 December 2024. The timing of expected cash
spend reflects our desire to complete remediation work as quickly as possible
against the challenges of obtaining access to some buildings and completion of
works.
Financial Performance
Group results
Revenue increased by 4.2% to £157.9m (H1 23/24: £151.5m) with gross profit
decreasing by 15.9% to £31.8m (H1 23/24: £37.8m). The Group's operating
profit decreased by 42.0% to £5.1m (H1 23/24: £8.8m), principally reflecting
the lack of completed sales in Gleeson Land. Following a net interest charge
of £1.5m (H1 23/24: £1.5m), profit before tax decreased by 50.0% to £3.6m
(H1 23/24: £7.2m).
The tax charge for the period was £0.8m (H1 23/24: £1.6m) reflecting an
effective rate of 23.0% (H1 23/24: 22.7%). Profit after tax for the period was
£2.8m (H1 23/24: £5.6m).
Total shareholders' equity was £297.2m as at 31 December 2024 compared to
£287.2m as at 31 December 2023. This equates to net assets per share of 508.7
pence (31 December 2023: 492.0 pence).
The Group had net debt as at 31 December 2024 of £18.1m (31 December 2023:
£18.7m net debt, 30 June 2024: net cash of £12.9m). The Group's £135m
borrowing facility was drawn by £18.9m at the period end (30 June 2024:
£nil), split between an overdraft balance of £2.9m and borrowings of
£16.0m, with £0.8m of cash held by solicitors on our behalf.
Gleeson Homes
Revenue increased by 10.0% to £156.6m (H1 23/24: £142.3m), as a result of
the increase in volumes and selling prices. Revenue also included £1.2m from
one land sale during the period (H1 23/24: £nil).
The average selling price for homes sold in the period increased by 4.8% to
£193,900 (H1 23/24: £185,000), reflecting underlying selling price increases
of 0.8% and the mix impact of multi-unit sales, site locations, beds and
garages which increased average reported selling prices by 4.0%.
The number of homes sold in the period increased by 4.2% despite the market
remaining subdued, at 801 homes (H1 23/24: 769 homes sold). Of the homes sold
during the first half-year, 12% were sold under private multi-unit sale
agreements with three carefully selected partners (H1 23/24: 22%).
Gross profit on homes sold decreased by 8.6% to £31.9m (H1 23/24: £34.9m).
As anticipated, gross margin on home sales in the period reduced by 390 basis
points to 20.6% (H1 23/24: 24.5%). Reported gross margin including £0.2m of
profit from one land sale was 20.5% (H1 23/24: 24.5%). The lower gross margin
on home sales in the period reflects build cost inflation which was not offset
by selling price increases on open-market sales, the impact of discounts on
multi-unit transactions, continued extensions to site durations and cost
increases on older sites nearing completion. Gross margins are expected to
start recovering during the second half as sites close and a higher proportion
of sales are delivered from higher margin sites.
Administrative expenses decreased by 6.9% to £23.1m (H1 23/24: £24.8m)
reflecting lower headcount and tight control of overhead costs.
Operating margin on homes sold decreased by 140 basis points to 5.8% (H1
23/24: 7.2%), with operating profit falling by 10.8% to £9.1m (H1 23/24:
£10.2m).
Gleeson Homes purchased eight sites during the period (H1 23/24: eight sites).
The pipeline of owned plots increased during the period by a net 226 plots to
7,646. The total pipeline of owned and conditionally purchased plots decreased
to 18,731 plots on 174 sites as at 31 December 2024 (30 June 2024: 19,138
plots on 179 sites). During the period, 10 new sites were added to the
pipeline, whilst 15 sites were completed or did not proceed to purchase. Our
land pipeline represents over 10 years of home sales.
Gleeson Homes opened eight new build sites during the first half and was
building on 79 sites as at 31 December 2024 (31 December 2023: 76 sites) and
selling from 65 active sales outlets (31 December 2023: 64 sites).
The division entered the second half with a forward order book of 597 plots
(30 June 2024: 559 plots, 31 December 2023: 586), of which 453 are expected to
complete in the second half.
Gleeson Land
As previously flagged, the division did not complete any land sales in the
first half (H1 23/24: one land sale). The revenue in the period reflects a
land swap with a collaborative partner in which the division took 100% control
of one agreement in exchange for relinquishing its interests in another
agreement.
The division reported a gross loss for the period of £0.3m (H1 23/24: gross
profit of £2.9m) reflecting a small increase in inventory provisions.
Overheads during the period were £1.6m (H1 23/24: £1.9m) resulting in an
operating loss for the first half of £1.9m (H1 23/24: operating profit of
£1.0m).
As at 31 December 2024, four sites were being actively progressed for sale,
which have the potential to deliver 973 plots (31 December 2023: one site
being actively progressed, 87 plots). A further site was being marketed with
the potential to deliver 140 plots (31 December 2023: three sites being
marketed, 300 plots). Marketing commenced on a further three sites in January
2025.
As at 31 December 2024, there were eight sites in the portfolio with either
planning permission or a resolution to grant permission for a total of 1,382
plots (30 June 2024: seven sites, 1,473 plots). Planning permission or
resolution to grant was achieved on two sites during the period.
There are a further 11 sites where the division is currently awaiting a
decision on planning applications or appeals (30 June 2024: 11 sites). Three
of these sites were granted planning permission in January 2025.
We continue to invest in Gleeson Land's portfolio, with five high-quality
sites secured under promotion agreements in the period which have the
potential to deliver 1,060 plots. Agreements on a significant number of other
well-located sites are currently being progressed and are expected to exchange
and be added to the portfolio in the second half of the financial year.
The portfolio, in which the Group has a beneficial interest of 88%, comprised
73 sites with the potential to deliver 17,434 plots (30 June 2024: 71 sites,
16,911 plots).
Dividends
Considering these results and the current outlook, the Board is declaring an
interim dividend of 4.0 pence per share (H1 23/24: 4.0 pence per share) in
line with the Company's policy of covering total full year dividends with
earnings between three and five times, which remains in place.
The interim dividend will be paid on 4 April 2025 to shareholders on the
register at close of business on 7 March 2025.
Summary & Outlook
· The Group is seeing encouraging signs of a recovery in demand
o Net reservation rates increased by 45% to 0.77 in the four weeks to 31 January
2025 (2024: 0.53 in the four weeks to 2 February 2024)
o Strong start to the second half for Gleeson Land, having secured planning
permission on three sites post period end
· The positive start to the year, as well as the encouraging momentum generated
in the first half, provide the Board with confidence of meeting current market
expectations
· Longer-term, the Company remains well positioned to deliver sector-leading
growth underpinned by Gleeson Homes' programme of new site openings and a more
stable planning environment for Gleeson Land
Graham Prothero
Chief Executive Officer
Condensed Consolidated Income Statement
for the six months to 31 December 2024
Note Unaudited Unaudited Audited
Six months to 31 December 2024
Six months to 31 December 2023
Year to
30 June
2024
£000 £000 £000
Revenue 157,850 151,463 345,345
Cost of sales (126,060) (113,639) (260,811)
Gross profit 31,790 37,824 84,534
Administrative expenses (26,761) (29,230) (56,233)
Other operating income 80 166 252
Operating profit 5,109 8,760 28,553
Finance income 69 90 109
Finance expenses (1,543) (1,622) (3,813)
Profit before tax 3,635 7,228 24,849
Tax 3 (836) (1,638) (5,543)
Profit for the period 2,799 5,590 19,306
Earnings per share
Basic 5 4.80 p 9.60 p 33.13 p
Diluted 5 4.78 p 9.59 p 33.04 p
Condensed Consolidated Statement of Comprehensive Income
for the six months to 31 December 2024
Unaudited Unaudited Audited
Six months to 31 December 2024
Six months to 31 December 2023
Year to
30 June
2024
£000 £000 £000
Profit for the period 2,799 5,590 19,306
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Change in value of shared equity receivables at fair value 61 116 171
61 116 171
Other comprehensive income for the period (net of tax)
2,860 5,706 19,477
Total comprehensive income for the period
Condensed Consolidated Statement of Financial Position
at 31 December 2024
Unaudited Unaudited Audited
31 December 2024
31 December 2023
30 June
2024
Note
£000 £000 £000
Non-current assets
Property, plant and equipment 8,194 10,874 9,269
Trade and other receivables 101 - 243
Deferred tax assets 637 1,127 317
8,932 12,001 9,829
Current assets
Inventories 6 370,524 358,051 345,234
Trade and other receivables 6,829 8,372 9,283
UK corporation tax 1,982 872 767
Cash and cash equivalents 7 - - 12,934
379,335 367,295 368,218
Total assets 388,267 379,296 378,047
Non-current liabilities
Trade and other payables 9 (7,153) (6,634) (6,614)
Provisions 8 (8,486) (5,733) (10,073)
(15,639) (12,367) (16,687)
Current liabilities
Loans and borrowings 7 (16,000) (13,000) -
Bank overdraft 7 (2,058) (5,736) -
Trade and other payables 9 (52,934) (53,389) (60,594)
Provisions 8 (4,466) (7,558) (3,024)
(75,458) (79,683) (63,618)
Total liabilities (91,097) (92,050) (80,305)
Net assets 297,170 287,246 297,742
Equity
Share capital 10 1,169 1,167 1,168
Share premium 15,843 15,843 15,843
Own shares 10 (229) (469) (456)
Retained earnings 280,387 270,705 281,187
Total equity 297,170 287,246 297,742
Condensed Consolidated Statement of Changes in Equity
for the six months to 31 December 2024
Share capital Retained earnings Total
Share premium Own shares equity
£000 £000 £000 £000 £000
At 1 July 2023 (audited) 1,167 269,749 286,016
15,843 (743)
Profit for the period - - - 5,590 5,590
Other comprehensive income - - - 116 116
Total comprehensive income for the period - - - 5,706 5,706
Purchase of own shares - - (79) - (79)
Utilisation of own shares - - 353 (353) -
Share-based payments - - - 554 554
Movement in tax on share-based payments taken directly to equity - 297 297
- -
Dividends - - - (5,248) (5,248)
Transactions with owners, recorded directly in equity - (4,750) (4,476)
- 274
At 31 December 2023 (unaudited) 1,167 15,843 (469) 270,705 287,246
Profit for the period - - - 13,716 13,716
Other comprehensive income - - - 55 55
Total comprehensive income for the period - - - 13,771 13,771
Share issue 1 - - - 1
Purchase of own shares - - (27) - (27)
Utilisation of own shares - - 40 (40) -
Share-based payments - - - (336) (336)
Movement in tax on share-based payments taken directly to equity - (581) (581)
- -
Dividends - - - (2,332) (2,332)
Transactions with owners, recorded directly in equity 1 (3,289) (3,275)
- 13
At 30 June 2024 (audited) 1,168 15,843 (456) 281,187 297,742
Profit for the period - - - 2,799 2,799
Other comprehensive income - - - 61 61
Total comprehensive income for the period - - - 2,860 2,860
Share issue 1 - - - 1
Purchase of own shares - - (27) - (27)
Utilisation of own shares - - 254 (193) 61
Share-based payments - - - 327 327
Movement in tax on share-based payments taken directly to equity - 294 294
- -
Dividends - - - (4,088) (4,088)
Transactions with owners, recorded directly in equity 1 - 227 (3,660) (3,432)
At 31 December 2024 (unaudited) 1,169 15,843 (229) 280,387 297,170
Condensed Consolidated Statement of Cash Flow
for the six months to 31 December 2024
Unaudited Unaudited Audited
Six months to 31 December 2024
Six months to 31 December 2023
Year to
30 June
2024
£000 £000 £000
Operating activities
Profit before tax 3,635 7,228 24,849
Depreciation of property, plant and equipment 2,160 2,354 4,621
Share-based payments 327 554 218
Profit on redemption of shared equity receivables (63) (139) (182)
Decrease in provisions including exceptional items (145) (188) (382)
Loss on disposal of property, plant and equipment 110 146 466
Finance income (69) (90) (109)
Finance expenses 1,543 1,622 3,813
Operating cash flows before movements in working capital 7,498 11,487 33,294
Increase in inventories (25,290) (13,425) (608)
Decrease in receivables 3,021 6,100 4,224
Decrease in payables (7,426) (17,185) (9,323)
Cash (used in)/generated from operating activities (22,197) (13,023) 27,587
Tax paid (2,077) (2,002) (5,572)
Finance costs paid (1,211) (2,045) (4,029)
Net cash flow (deficit)/surplus from operating activities (25,485) (17,070) 17,986
Investing activities
Proceeds from disposal of shared equity receivables 189 508 678
Interest received 67 13 31
Purchase of property, plant and equipment (895) (1,479) (2,039)
Net cash flow deficit from investing activities (639) (958) (1,330)
Financing activities
Increase of loans and borrowings 16,000 13,000 -
Net proceeds from issue of shares - - 1
Purchase of own shares (27) (79) (106)
Dividends paid (4,088) (5,248) (7,580)
Principal element of lease payments (753) (540) (1,196)
Net cash flow surplus/(deficit) from financing activities 11,132 7,133 (8,881)
Net (decrease)/increase in cash and cash equivalents (14,992) (10,895) 7,775
Cash and cash equivalents at beginning of period 12,934 5,159 5,159
Bank (overdraft)/cash and cash equivalents at end of period (2,058) (5,736) 12,934
Notes to the Condensed Consolidated Financial Statements
for the six months to 31 December 2024
1. Basis of preparation and accounting policies
This condensed consolidated interim financial report ("the Interim Report")
for the six months ended 31 December 2024 has been prepared in accordance with
UK-adopted International Accounting Standards in conformity with the
requirements of the Companies Act 2006. The Interim Report has been
prepared on the basis of the policies set out in the Annual Report and
Accounts for the year ended 30 June 2024 and in accordance with Accounting
Standard IAS 34 "Interim financial reporting" and the Disclosure Guidance and
Transparency Rules sourcebook of the UK's Financial Conduct Authority. The
Interim Report does not constitute financial statements as defined in Section
434 of the Companies Act 2006 and is neither audited nor reviewed.
The interim financial statements need to be read in conjunction with the
consolidated financial statements for the year ended 30 June 2024, which were
prepared in accordance with UK-adopted International Financial Reporting
Standards. A copy of the Annual Report and Accounts for the year ended 30
June 2024 is available either on request from the Group's registered office, 6
Europa Court, Sheffield Business Park, Sheffield, S9 1XE, or can be downloaded
from the corporate website, www.mjgleesonplc.com.
The comparative figures for the financial year ended 30 June 2024 are not the
Group's statutory accounts for that financial year. Those accounts have been
reported on by the auditors of the Company and the Group and delivered to the
Registrar of Companies. The report of the auditors was (i) unqualified, (ii)
did not include a reference to any matters which the auditor drew attention to
by way of emphasis without qualifying their report and (iii) did not contain
statements under Section 498 (2) or (3) of the Companies Act 2006.
During the period, the Group has adopted the following new and revised
standards and interpretations that have had no material impact on these
condensed consolidated financial statements:
· Amendments to IAS 1, IFRS 16, IAS 7 and IFRS 7.
The preparation of condensed consolidated interim financial statements
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may subsequently differ from
these estimates. In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation uncertainty were
the same as those that applied to the consolidated financial statements for
the year ended 30 June 2024.
The accounting policies, method of computation, and presentation adopted are
consistent with those of the Annual Report and Accounts for the year ended 30
June 2024.
Going concern
The Group has a committed facility with Lloyds Bank plc and Santander UK plc.
The facility has a limit of £135m, which expires in October 2026 with two
further uncommitted one-year extension options. At 31 December 2024, the
Group's net debt balance was £18.1m (30 June 2024: net cash of £12.9m).
The Group's financial forecasts reflect a cautious view on the outlook based
on current market conditions and the degree of macro-economic risk.
These forecasts have been subject to a range of sensitivities including a
severe but plausible scenario together with the likely effectiveness of
mitigating actions. The assessment considered the combined impact of a number
of realistically possible, but severe and prolonged changes to principal
assumptions from a downturn in the housing and land markets including:
1. Basis of preparation and accounting policies (cont.)
Going concern (cont.)
· a reduction in Gleeson Homes volumes of approximately 20%;
· a permanent reduction in Gleeson Homes selling prices of 5%; and
· a delay on the timing of Gleeson Land transactions and a 15% fall in land
selling values.
Under these sensitivities, after taking certain mitigating actions, the Group
continues to have a sufficient level of liquidity, operate within its
financial covenants and meet its liabilities as they fall due.
Based on the results of the analysis undertaken, the Directors have a
reasonable expectation that the Group has adequate resources available to
continue in operation for the foreseeable future and operate in compliance
with the Group's bank facilities and financial covenants. As such, the Interim
Report for the Group has been prepared on a going concern basis.
2. Segmental analysis
The Group is organised into the following two operating divisions under the
control of the Executive Board, which is identified as the Chief Operating
Decision Maker as defined under IFRS 8 "Operating segments":
· Gleeson Homes
· Gleeson Land
The revenue in the Gleeson Homes segment relates to the sale of residential
properties and ad hoc land sales. All revenue for the Gleeson Land segment
relates to the sale of land interests. All of the Group's operations are
carried out entirely within the United Kingdom. Segmental information about
the Group's operations is presented below:
Unaudited Unaudited Audited
Six months to 31 December 2024
Six months to 31 December 2023
Year to
30 June
2024
Note £000 £000 £000
Revenue
Gleeson Homes 156,591 142,268 329,006
Gleeson Land 1,259 9,195 16,339
Total revenue 157,850 151,463 345,345
Divisional operating profit/(loss)
Gleeson Homes 9,126 10,197 30,301
Gleeson Land (1,897) 986 2,151
7,229 11,183 32,452
Group administrative expenses (2,120) (2,423) (3,899)
Group operating profit 5,109 8,760 28,553
Finance income 69 90 109
Finance expenses (1,543) (1,622) (3,813)
Profit before tax 3,635 7,228 24,489
Tax 3 (836) (1,638) (5,543)
Profit for the period 2,799 5,590 19,306
2. Segmental analysis (cont.)
Balance sheet analysis of business segments:
Unaudited 31 December 2024
Assets Liabilities Net assets/ (liabilities)
£000 £000 £000
Gleeson Homes 347,961 (69,497) 278,464
Gleeson Land 36,625 (855) 35,770
Group activities 3,681 (2,687) 994
Net debt - (18,058) (18,058)
388,267 (91,097) 297,170
Unaudited 31 December 2023
Assets Liabilities Net assets/ (liabilities)
£000 £000 £000
Gleeson Homes 340,655 (68,437) 272,218
Gleeson Land 35,834 (1,864) 33,970
Group activities 2,807 (3,013) (206)
Cash and cash equivalents - (18,736) (18,736)
379,296 (92,050) 287,246
Audited 30 June 2024
Assets Liabilities Net assets/ (liabilities)
£000 £000 £000
Gleeson Homes 329,927 (76,029) 253,898
Gleeson Land 34,158 (2,582) 31,576
Group activities 1,028 (1,694) (666)
Cash and cash equivalents 12,934 - 12,934
378,047 (80,305) 297,742
3. Tax
The results for the six months to 31 December 2024 include a tax charge of
23.0% of profit before tax (31 December 2023: 22.7%, 30 June 2024: 22.3%),
representing the best estimate of the average annual effective tax rate
expected for the full year, including residential property developer tax and
land remediation relief, applied to the pre-tax income for the six month
period.
4. Dividends
Unaudited Unaudited Audited
Six months to
Six months to 31 December 2023
Year to
30 June
31 December 2024
2024
£000 £000 £000
Amounts recognised as distributions to equity holders:
Final dividend for the year ended 30 June 2023 of 9.0p - 5,248 5,248
Interim dividend for the year ended 30 June 2024 of 4.0p - - 2,332
Final dividend for the year ended 30 June 2024 of 7.0p 4,088 - -
4,088 5,248 7,580
On 6 February 2025 the Board approved an interim dividend of 4.0 pence per
share at an estimated total cost of £2,336,000. The dividend has not been
included as a liability as at 31 December 2024.
5. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings Unaudited Unaudited Audited
Six months to 31 December 2024
Six months to 31 December 2023
Year to
30 June
2024
£000 £000 £000
Profit for the period 2,799 5,590 19,306
Number of shares Unaudited Unaudited Audited
31 December 31 December 30 June 2024
2024
2023
No. 000 No. 000 No. 000
Weighted average number of ordinary shares for the purposes of
basic earnings per share 58,339 58,246 58,281
Effect of dilutive potential ordinary shares:
Share-based payments 229 41 154
Weighted average number of ordinary shares for the purposes of
diluted earnings per share 58,568 58,287 58,435
Unaudited Unaudited Audited
Six months to 31 December Six months to 31 December Year to
2024
2023
30 June
2024
pence pence pence
Basic earnings per share 4.80 9.60 33.13
Diluted earnings per share 4.78 9.59 33.04
6. Inventories
Unaudited Unaudited Audited
31 December 2024 31 December 2023 30 June
2024
£000 £000 £000
Land held for development 133,019 112,191 113,801
Work in progress 237,505 245,860 231,433
370,524 358,051 345,234
Net realisable value provisions held against inventories at 31 December 2024
were £6,871,000
(31 December 2023: £5,696,000, 30 June 2024: £8,380,000). The amount of
inventory write-down recognised as an expense in the period was £667,000 (H1
23/24: £909,000, FY2024: £4,119,000) and the amount of reversal of
previously recognised inventory write-down was £47,000 (H1 23/24: £384,000,
FY2024: £656,000). The cost of inventories recognised as an expense in cost
of sales was £125,106,000 (H1 23/24: £113,133,000, FY2024: £259,815,000).
7. Net (debt)/cash
Unaudited Unaudited Audited
31 December 2024 31 December 2023 30 June
2024
£000 £000 £000
(Bank overdraft)/cash and cash equivalents (2,058) (5,736) 12,934
Bank borrowings (16,000) (13,000) -
Net (debt)/cash (18,058) (18,736) 12,934
Lease liabilities (4,623) (5,293) (5,076)
Net (debt)/cash including lease liabilities (22,681) (24,029) 7,858
At 31 December 2024, monies held by solicitors on behalf of the Group and
included within cash and cash equivalents were £878,000 (31 December 2023:
£989,000, 30 June 2024: £2,253,000).
Unaudited 31 December 2024
Cash and cash equivalents Cash/(debt) net of borrowings Lease liabilities Total
Borrowings
£000 £000 £000 £000 £000
Net cash/(debt) at 1 July 2024 12,934 - 12,934 (5,076) 7,858
Cash flows (14,992) (16,000) (30,992) 868 (30,124)
New leases - - - (305) (305)
Lease disposals - - - 5 5
Finance expense - - - (115) (115)
Net debt at 31 December 2024 (2,058) (16,000) (18,058) (4,623) (22,681)
8. Provisions
Dilapidations Building Total
£000 safety £000
£000
As at 1 July 2024 699 12,398 13,097
Provisions utilised during the period - (145) (145)
As at 31 December 2024 699 12,253 12,952
Unaudited Unaudited Audited
31 December 2024 31 December 2023 30 June
2024
£000 £000 £000
Current provisions 4,466 7,558 3,024
Non-current provisions 8,486 5,733 10,073
12,952 13,291 13,097
Dilapidations
The dilapidations provision covers the Group's leased property estate. The
expected provision needed at the end of each lease is capitalised at the
inception of the lease and recognised on a straight-line basis through
depreciation over the term of the lease. There is no material uncertainty in
either the timing or amount.
8. Provisions (cont.)
Building safety
The building safety provision includes estimated costs to remediate
life-critical fire-safety issues on buildings over 11 metres which the Group
had some involvement in developing over the last 30 years.
A provision of £12.4m was in place at 30 June 2024 in respect of the 17
buildings which had been identified as requiring remediation works, of which
£0.1m has been utilised during the period, reducing the balance to £12.3m at
31 December 2024. We conduct regular reviews of the provision, taking into
account the most recent inspections and any other relevant information.
On one building the work has been completed awaiting invoice, and for six
further buildings we expect to complete remedial works before the end of the
financial year.
9. Trade and other payables
Trade and other payables includes £12,762,000 of deferred payables on the
purchase of land by the Gleeson Homes division (31 December 2023:
£10,850,000, 30 June 2024: £9,300,000), of which £4,102,000 is due in more
than one year (31 December 2023: £2,787,000, 30 June 2024: £3,133,000).
10. Share capital and reserves
Unaudited Unaudited Audited
31 December 2024 31 December 2023 30 June
2024
Issued and fully paid 2p ordinary shares:
Number 58,428,126 58,381,973 58,381,973
£000 1,169 1,167 1,168
Own shares reserve
The own shares reserve represents the cost of shares in MJ Gleeson plc
purchased in the market or issued by the Company and held by the Employee
Benefit Trusts ("EBT") on behalf of the Company in order to satisfy
share-based payments and other share awards that have been granted by the
Company.
Unaudited Unaudited Audited
31 December 2024 31 December 2023 30 June
2024
Own shares held by the EBT
Number 51,957 115,018 110,873
£000 229 469 456
11. Contingent liabilities
As set out in note 8, the Group is progressing its review of all of its
historic building contracts for buildings over 11 metres in which, over the
last 30 years, the Group had some involvement in developing. All of these
buildings, including any external wall systems or cladding, were signed off by
approved inspectors as compliant with the relevant building regulations at the
time of their completion.
There are certain legacy activities of the Group where claims arise under
historic contracts in Gleeson Construction Services Limited which were carried
out in the ordinary course of activities.
The interim financial statements have been prepared based on currently
available information and the current best estimate of the extent and future
costs of work required, or in resolving known historic claims.
12. Related party transactions
There have been no material changes to the related party arrangements as
reported in note 27 of the Annual Report and Accounts for the year ended 30
June 2024.
13. Seasonality
In common with the rest of the UK housebuilding industry, activity occurs all
year round, although the trend of reservations usually means that Gleeson
Homes' completions are higher in the second half of the year. There is no
seasonality in the Gleeson Land division, although it typically completes the
sale of more sites in the second half of the financial year.
14. Group risks and uncertainties
The Directors consider that the principal risks and uncertainties which could
have a material impact on the Group's performance remain consistent with those
set out in the Strategic Report on pages 38 to 43 of the Annual Report and
Accounts for the year ended 30 June 2024.
Statement of Directors' Responsibility
for the six months to 31 December 2024
The Directors confirm that, to the best of our knowledge, these condensed
interim financial statements have been prepared in accordance with UK adopted
IAS 34 "Interim financial reporting" and that the interim management report
includes a fair review of information required by DTR 4.2.7 and DTR 4.28,
namely:
a) an indication of important events that have occurred during the first six
months and their impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the remaining six
months of the financial year; and
b) material related party transactions in the first six months and any material
changes in the related party transactions described in the last annual report.
The Board
The Board of Directors of MJ Gleeson plc at 30 June 2024 and their respective
responsibilities can be found on pages 112 to 119 of the MJ Gleeson plc Annual
Report and Accounts for the year ended 30 June 2024. There have been no
changes since that date.
By order of the Board
Stefan Allanson
Chief Financial Officer
11 February 2025
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