Bad timing delays MJ Gleeson’s progress

The early arrival of the general election and the delay in expected interest and mortgage rate reductions has affected the financial performance of MJ Gleeson.

The housebuilder and land promoter said a “significant disposal” in its land division missed being completed by the end of its financial year, June 30, because of the election.

This has caused Gleeson Land’s operating profit to come in below market expectations, at around £2m.

Gleeson Homes has seen a “steady but less vigorous than expected” rate of sales so far in 2024. It put this down as “a consequence of deferred expectations around interest and mortgage rate reductions” and expects demand for new homes to strengthen as rates start to fall.

Graham Prothero, chief executive of MJ Gleeson

Graham Prothero, chief executive of MJ Gleeson plc, said: “We are making progress against our key strategic priority of significantly scaling up our operations over the medium-term. Looking ahead, we are anticipating an increase in demand for new homes as interest rates begin to come down and consumer confidence returns.

“We also expect Gleeson Land to complete on a number of significant land disposals in the months ahead.”

Prothero, who has led the business since January 2023, is optimistic about the new Government’s early announcements on housebuilding, which is a key part of their economic strategy.

“We also welcome the Chancellor’s comments regarding mandatory housing targets, planning reform and other measures to increase substantially the supply of new homes,” he said.

“There is much to do if aspiration is to become reality, but the determination that we have seen since the election to get things done marks a positive change in approach. Gleeson is ready to play its part in delivering much needed affordable homes.”

MJ Gleeson’s share price closed last night at 575p, up 50% in the last 12 months but still around one-third lower than the highs reached in 2021.

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