MJ Gleeson on track after solid first half

MJ Gleeson said it was on-track to complete 2,000 houses by the end of the financial year in its interim results on Thursday, as its revenue rose 21.7% to £173.5m.

The London-listed low-cost housebuilder said profit before tax for the six months ended 31 December was 21.7% higher year-on-year at £24.7m, while earnings per share rose 22% to 34.4p.

Its board said the company was set to end the year ahead of current market expectations, as it declared an interim dividend of 6p, up from 5p at the interim point a year ago.

In its Gleeson Homes unit, the company sold 932 homes in the first half, which was up 14.9% on the pre-pandemic period ended 31 December 2019m but down 2% year-on-year, given the 2021 period was “flattered” by delayed completions carried over from the first Covid-19 lockdown.

Gleeson said 55% of its sales were through the Help to Buy scheme, down from 69% last year, while its average selling price was up 14.7% at £161,200.

Operating profit in Gleeson Homes increased 9.8% to £22.5m, as the firm opened eight new sites, with 17 more expected to open in the second half.

The division’s land pipeline stood at 16,242 plots, up from 15,863 plots at the end of June.

In the Gleeson Land operation, the company completed three land sales in the first half, down from four year-on-year, with another three sites currently being marketed.

Gleeson reported “strong demand” for consented sites, as it added three new sites to its portfolio, which now totalled 71 sites, in line with June’s numbers.

“The group performed strongly during the first half and this result, and indeed our performance throughout the pandemic, is evidence of the underlying strength of the business,” said chief executive officer James Thomson.

“We expect Gleeson Homes to deliver 2,000 homes this financial year and Gleeson Land to complete further sales in the second half of the financial year.

“Consequently, in the absence of any further Covid-19 or supply chain related disruption, the board is confident that results for the full year to 30 June 2022 will be ahead of market expectations.”

Thomson said demand for Gleeson’s affordable homes was continuing unabated, while the company’s focus on investing in its workforce, organisational structure, training and processes meant the business, supported by its “robust” financial position, was “very well positioned” to achieve further controlled growth.

“We expect to announce our next medium-term strategic targets at the time of the full-year results.

“Working in cooperation with local and national government to ensure the continued delivery of low-cost affordable homes for first time buyers, we can look to the next stage of the group's development with confidence.”

At 0939 GMT, shares in MJ Gleeson were up 0.99% at 733.2p.