REG - MJ Gleeson Plc - Trading Statement

MJ GLEESONAnnouncement

Today 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250704:nRSD7052Pa&default-theme=true

RNS Number : 7052P  MJ Gleeson PLC  04 July 2025

 4 July 2025

 

MJ Gleeson PLC

("the Group" or "the Company")

 

Trading update: FY2025 concluded in line with market expectations

Gleeson Homes management changes to enhance performance and delivery

MJ Gleeson plc announces a trading update in respect of the year ended 30 June
2025 (FY2025) and a series of organisational and management changes to enhance
operational performance and commercial delivery at its Gleeson Homes division.

Trading update

Group

The Group is expected to deliver a profit before tax and exceptional items for
FY2025 within  current market expectations which range from £21.0m to
£22.5m.

Gleeson Homes

Gleeson Homes completed the sale of 1,793 homes (FY2024: 1,772 homes) of which
205 were sold via multi-unit sales (FY2024: 346).

The division is expected to report an operating profit within current market
expectations which range from £21.7m and £23.0m.

Net reservation rates over the last six months averaged 0.88 per site per
week (H2 FY2024: 0.63). Excluding multi-unit agreements, net reservation rates
improved significantly to 0.64 per site per week (H2 FY2024: 0.50) net of an
improved cancellation rate of 14% (H2 FY2024: 18%).

Three partnership deals covering 175 homes were agreed during the second half,
a creditable achievement in a weak market with activity depressed by
uncertainty over housing association funding.

Gleeson Homes holds a forward order book of 845 plots (30 June 2024: 559
plots).

The division opened 13 new build sites during the year and started the new
financial year with 68 build sites (30 June 2024: 79 sites) of which 57 are
active sales sites (30 June 2024: 62 sites).

The anticipated sale of one of Gleeson Homes' extensive land holdings in East
Yorkshire did not proceed and a number of options to optimise the efficiency
of our working capital in this region are being reviewed.

Gleeson Land

Gleeson Land completed 7 disposals during the year and is expected to report
an operating profit at the lower end of market expectations which range from
£7.0m to £8.4m. The remaining 3 disposals which were anticipated to complete
before the year end are now expected to complete in H1 FY2026.

Gleeson Land's portfolio of sites as at 30 June 2025 includes eight sites with
either planning permission or resolution to grant and which have the potential
to deliver 1,343 plots (30 June 2024: seven sites, 1,473 plots).

Balance Sheet

Due to timing issues, the Group ended the year with a net debt position of
£0.8m (30 June 2024: net cash position of £12.9m).

Gleeson Homes reorganisation

Gleeson Homes' gross margin had come under pressure through the year due to
the cumulative impact of a number of headwinds.  These reflected external
pressures such as increased build costs and flat selling prices, along with
the cost of mitigating actions including the continued use of incentives and
several bulk sale transactions.  Planning delays, which pushed back the
opening of new higher-margin sites, the absence of an anticipated wider market
recovery and further costs arising from legacy site issues meant that the
margin improvement expected in the second half did not materialise.

Additionally,  issues around process and compliance with procedures within
the business, which were resulting in cost overruns, had been identified in
the summer of 2024.  Immediate actions did not fully address these and a
comprehensive review of the business, under the banner of Project Transform,
was initiated in the autumn.

The review  identified the need to  implement  some organisational and
management changes.

These are designed to shorten reporting lines, empower the divisional
leadership teams and strengthen regional management as well as reinforcing
controls and driving local ownership and accountability.  They will also
substantially improve oversight of processes and compliance from the centre,
supported by enhanced data provision.

The changes, which have largely been implemented and are expected to be fully
concluded in a matter of weeks, include:

Management and reporting lines

Mark Knight has stepped down from his role of Chief Executive of Gleeson Homes
and left the business.

The Northern division will continue to be run by Andy Davies.  The Central
division will be run by Scott Stothard who is joining the business from Vistry
where he was Divisional Chair.  Both Andy and Scott will report to Graham
Prothero.

Simon Topliss, previously Gleeson Homes Finance Director, has been appointed
to the newly created role of Chief Operating Officer, with responsibility for
central functions, driving performance and governance.  Simon will also
report to Graham Prothero.

Organisation

Gleeson Homes will retain its current six regions within two divisions, as
follows:

·    Central division: Greater Manchester & Merseyside, Cumbria,
Midlands and South/West Yorkshire regions

·    Northern division: East Yorkshire and Tees Valley/Tyne & Wear
regions

Greater Manchester / Merseyside and Cumbria, whilst remaining separate
regions, will now be led by a single leadership team which will afford
significant operational synergies.

The strengthened management structure is expected to lead to a marked
improvement in performance and delivery, improving pace and quality of build
and management and control of costs.

As a result of the reorganisation, a cash cost of approximately £1.2m is
expected to be recognised as an exceptional item in the FY2025 accounts.

Outlook

The housing market lacks confidence and remains subdued and the Board does not
see a short-term catalyst for any substantial improvement.

However, as reflected in our robust sales rate, there are customers for
well-located homes at the right price. Meanwhile, housing associations have
been rightly buoyed by the Chancellor's recent announcements around grant
funding and the rent settlement, which improve prospects for our partnership
business.

Continuing capacity issues in the planning system have delayed site openings
and Gleeson Homes will operate from fewer sites than anticipated in the
current year.  However, our strong pipeline and improvements in our own
process give us confidence in our ambitious growth plans.

Gleeson Land's performance in FY2026 is expected to be similar to FY2025 with
delivery weighted to the latter part of the year.  Site acquisition and
planning application activity is high with the tailwind of the improving
medium-term planning environment.

Taking these factors into account, the Board expects that profit before tax
and exceptional items for FY2026 will be at or around £24.5m, the lower end
of current market expectations.

 

Graham Prothero, CEO of MJ Gleeson plc, commented:

"This was a challenging year for Gleeson.

"As well as external factors, it had become clear that our commercial delivery
was not where we needed it to be. Over the last nine months we have therefore
been implementing at pace management changes which will significantly benefit
the business through FY2026 and beyond.

"These changes will also ensure the delivery of our strategic objectives.

"Whilst we do not expect any significant economic recovery in the short-term,
we are maintaining a robust sales rate.  This, along with our remedial
actions, gives me confidence that we have a stronger business which will
deliver our projections for the current year and our significant growth plans
over the medium-term."

 

 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-Worldwide: +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 Thursday 18
September 2025.

 

Enquiries:

MJ Gleeson plc
 
Tel: +44 1142 612 900

Graham Prothero, Chief Executive Officer

Stefan Allanson, Chief Financial Officer

 

Invicomm (Financial PR)
     mjgleeson@invicomm.com

Mark Garraway
               Tel: +44 7771 860938

Kim Looringh-van Beeck
     Tel: +44 20 3422 0208

 

Investec Bank
plc
Tel: +44 20 7597 4000

Ben Griffiths

David Anderson

Marc Potel

Tom Brookhouse

 

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/)

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTUOAURVRUBRUR