Positive outlook for housebuilder as activity levels bounce back

Sheffield-headquartered house builder MJ Gleeson has seen build and sales activity at its Gleeson Homes division return to pre-Covid levels.

During the second lockdown all the listed company’s sites continued to build and sell within Covid-secure protocols and the business expects this to continue in the newly established three-tier system of restrictions.

Commenting at the company’s AGM today, chairman Dermot Gleeson, said: “Demand for Gleeson’s low-cost homes remains strong and selling prices continue to increase.

“The average selling price on new reservations since the start of the financial year has been 9% higher than in the same period last year.

“Land continues to be available at sensible prices and the pipeline remains strong.

“Gleeson Homes has a land pipeline of 13,938 plots with a gross development value of £2bn, of which 7,298 plots are owned and 6,640 are conditionally purchased.

“The division currently has 80 active build sites, compared with 64 active build sites this time last year.

“We have opened 11 new build sites since the start of the financial year. We expect to open at least another 14 new build sites before the end of the financial year.

“The division currently has 65 active sales sites, similar to the 64 sales sites this time last year, but we expect to be actively selling on all our current build sites before the end of the financial year.”

He added the Board expects Gleeson Homes to record an increase in sales revenue for the half year to 31 December 2020 of more than 15% compared with the same period last year.

And he said record new site openings, strong demand driven by the need for low-cost quality homes for first-time buyers mean the Board expects Gleeson Homes’ results for the year to exceed current expectations.

He said the Gleeson Strategic Land division has seen activity continue to pick up since the start of the current financial year.

“The division’s land pipeline currently consists of 72 sites which have the potential to deliver approximately 23,560 plots,” he said. “The portfolio includes 12 sites which now have planning permission.

“Importantly, the division is actively working on the sale of seven sites. Most of these transactions are at an advanced stage. 

“This level of activity underpins our confidence that the full year outturn in Gleeson Strategic Land will be in line with expectations.

“Overall, driven by the strong performance in Gleeson Homes and the encouraging level of activity in Gleeson Strategic Land, the Board now expects the Group to deliver a result for the full year ahead of current expectations.”