MJ Gleeson trading update after management restructure

MJ Gleeson has published a company trading update for the year ended 30 June 2023 (FY2023). 

The Group ended the year with cash balances of £5.2 million and no debt (30 June 2022: £33.8 million cash and no debt).  

“This was a pleasing outcome given the significant investment during the period in bringing forward a higher proportion of new homes starts,” said Gleeson. 

Sheffield-headquartered Gleeson was founded in 1903. Today, it is led by CEO Graham Prothero, whose previous senior appointments were at Vistry Group and Galliford Try. 

The company has two distinct businesses – Gleeson Homes and Gleeson Land. 

“We are pleased with the year’s performance in a challenging economic environment. We have taken advantage of the quieter market to restructure Gleeson Homes, putting the business in great shape to grow as the market recovers,” said Prothero. 

Gleeson will report its full year results on 14 September 2023.  

Gleeson Homes 

• 1,723 homes sold in FY2023 (FY2022: 2,000).  
• Property price average: £186,200 (FY2022: £167,300 = +11.3%). 
• Buyer demographic: 50% first-time buyers (FY2022: 71%); 20% over-55s (FY2022: 10%). 
• Reservation rates: 0.64 net per site per week (FY2022: 0.62). 
• Forward order book: 665 plots (31 December 2022: 319; 30 June 2022: 618). 
• 82 opened build sites (30 June 2022: 87). 
• *Gleeson Homes restructure: nine regional management teams scaled back to six. 

*Gleeson said its Homes division restructure saw annualised administrative overhead cost savings of £3.2 million, at a one-off cost of £1 million (realised from FY2024 onwards). 

On homes sold in FY2023, Gleeson said this was in part due to economic downturn and high interest rates impacting buyer confidence. 

It said “resilient” property prices helped to offset material and labour cost increases. 

The Board expects demand from first-time buyers to continue but anticipates ‘increased’ interest from other “value-driven buyers”. 

Its pipeline of owned/conditionally purchased sites rose 3.3% to 17,375 plots on 173 sites as of 30 June 2023; 9,701 plots on 84 sites have been conditionally purchased, subject to receiving planning permission. 

Gleeson Land 

• New managing director, Guy Gusterson, appointed. 
• Three sites sold with the potential for 413 plots. 
• Six sites with/resolution to grant planning, delivering 1,400 plots (30 June 2022: three sites, 1,206 plots). 
• 18 sites awaiting decision (30 June 2022: 16 sites), potential to deliver 4,285 plots (30 June 2022: 3,559). 

The portfolio also comprises 70 sites, with the potential to deliver 17,831 plots, and 25 acres of commercial land. 

It said mid-size and regional builders remain active land buyers amid planning delays and economic uncertainty.  

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