Low cost housebuilder MJ Gleeson is expecting a better performance in the coming months after it sold more homes but saw its profits fall in the second half of last year.
The Sheffield firm has released results for the six months to December 31 in which its revenues increased by 10% to £156.6m. But over the same period, the company’s profit before tax halved to £3.6m when compared to the same period last year.
Gleeson’s land division did not make any transactions in the period but the company said it is expecting to complete a number of deals in the coming months and added that Government changes to the planning system were already helping its performance.
Housebuilders around the country have endured a difficult period in recent years as higher interest rates and wider issues in the UK economy have dampened demand for new homes. Companies including Bellway and Persimmon have been pointing to the start of a recovery in recent weeks, however, with sales at the end of last year reversing a period of decline.
Gleeson said that it had completed 801 sales in the second half of 2024, up from 769 in the same period a year earlier. Its net reservation per site also increased and average selling prices went up 4.8% to £193,900.
The company saw a significant fall in margins, however, due in part to sales incentives being offered to buyers. Gleeson said that it was “strongly positioned for a market recovery, serving an under-supplied market segment with resilient underlying demand and continuing affordability”.
Chief executive Graham Prothero said: “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 eight 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.”
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
