MJ Gleeson sees FY in line despite 'lack of conviction' in market

15th Nov 2024 07:55

(Sharecast News) - Housebuilder MJ Gleeson said on Friday that it remains on track for full-year results in line with market expectations despite a "lack of conviction" in the market, which continued through the Autumn.

In an update ahead of its annual general meeting, the company said the interest rate cut announced by the Bank of England last week was "welcome" and is expected to boost buyer confidence into the important Spring selling season.

For the period form 1 July to 1 November, net reservation rates increased to 0.56 per site per week from 0.45 per site in the same period a year earlier.

It said Gleeson Homes continues to experience margin pressure as a result of the use of higher sales incentives, the impact of multi-unit sales, increased build costs and limited relief from increasing selling prices.

The division has begun its programme of new site openings, having already opened seven new sales sites this financial year. It expects to open a total of 27 sales sites during the year but will be selling overall on a lower average number of sites than last year, with fewer sites in the first half than in the second.

The company said Gleeson Homes will continue "the positive momentum" of site openings from FY2026 targeting a net 10 new sales sites per year.

"As the wider market improves, we remain confident in Gleeson Homes' ability to fulfil this ambitious programme of site openings which will drive the exciting sector-leading growth planned for FY2026 and beyond," it said.

The housebuilder said Gleeson Land "continues to promote several exciting opportunities".

The prospective reform of the National Planning Policy Framework is expected to beneficially impact the timing of certain sites, it said.

"Strong demand for consented land from large and medium-sized developers continues to give the board confidence that Gleeson Land will deliver a full year result materially ahead of last year, with a number of significant sales expected to be completed in H2."