MJ Gleeson plc
13 January 2023
Trading Update & Notice of Results
("the Company" or "the Group")
MJ Gleeson plc, the low-cost housebuilder and land promoter, provides a trading update for the half-year ended 31 December 2022 (the "period"). The Company will report results for the period on Thursday, 16 February 2023.
Graham Prothero joined the Board as CEO on 1 January 2023, succeeding James Thomson who replaced Dermot Gleeson as Non-Executive Chairman.
Gleeson Homes completed the sale of 894 homes during the half-year, 4.1% fewer than the half-year to 31 December 2021. This reflected the weaker market and considerably higher mortgage costs as a consequence of the mini-budget in September 2022. Despite this, selling prices have remained stable.
Cancellation rates reduced during the six weeks to Christmas, with only 6.5 plot cancellations per week compared to 11.5 plot cancellations per week in the previous six weeks to mid-November. Gross reservations during the seasonally quieter six weeks before Christmas were 22.2 per week, 25% lower than the 29.5 gross reservations per week in the same period last year.
The Company is continuing to successfully secure land which meets strict hurdle rates whilst tightly managing working capital on both land purchases and new build sites until the pace of the market's recovery becomes clearer. Net cash balances at 31 December 2022 were £13.5m (31 December 2021: £38.2m).
Gleeson Homes acquired three sites during the period and opened three new build sites. The division had 87 active build sites (31 December 2021: 83) and was actively selling on 68 sites (31 December 2021: 60) and the Company expects to be selling on circa 66 sites by 30 June 2023.
Gleeson Land sold one site during the period. The business has had several recent planning successes, and a further three sites are being actively progressed for sale. Gleeson Land is continuing to see strong demand for high quality consented land from housebuilders looking beyond the current wider uncertainty in the housing market.
Gleeson Homes enters the second half of the financial year with a forward order book of 319 plots (31 December 2021: 616 plots). However, we are cautiously optimistic of a recovery during 2023, due to a number of factors, including that mortgage rates continue to fall from the highs experienced in October 2022, and the need for low-cost, high-quality homes remains acute. A couple earning the National Living Wage (which is set to increase by 9.7% on 1 April 2023) can still afford to buy a home on any one of our sites. In addition, there continues to be growing interest from new customers who might previously have considered a more expensive property built by another developer but in the current economic environment are attracted by Gleeson's more affordable price points.
As previously stated, the outturn for the current financial year is dependent upon the pace of recovery in the housing market over the coming months. A further update will be provided with the interim results on 16 February 2023.
This announcement contains inside information. The person responsible for arranging the release of this announcement on behalf of the company is Stefan Allanson, Chief Financial Officer.
MJ Gleeson plc Tel: 44 1142 612 900
Graham Prothero Chief Executive Officer
Stefan Allanson Chief Financial Officer
Hudson Sandler Tel: 44 20 7796 4133
Mark Garraway Tel: 44 7771 860 938
Charlotte Cobb Tel: 44 7795 422 131
Singer Capital Markets Tel: 44 20 7496 3000
Liberum Tel: 44 20 3100 2222
About MJ Gleeson:
MJ Gleeson plc is the leading low-cost, affordable housebuilder listed on the London Stock Exchange. Gleeson Homes' customers are typically young, first-time buyers, with a median income of £25,000. Its two-bedroom homes start from around £115,000. Gleeson's vision is "Building Homes. Changing Lives", prioritising areas where people need affordable housing the most.
Buying a Gleeson Home often costs less than renting a similar property. All Gleeson homes are traditional brick built semi or detached homes which include a driveway and front and rear gardens. Gleeson offers a wide mix of layouts with two, three or four bedrooms.
Gleeson Land is the Group's land promotion division, which identifies development opportunities and works with stakeholders to promote land through the residential planning system.
As a high-quality, affordable housebuilder, Gleeson has strong and inherent sustainability credentials. Its social purpose underpins the Company's strategy, and Gleeson measures itself closely against UN SDGs 5, 8, 11, 12, 13 and 15.
More details on the Company's sustainability approach can be found at: mjgleesonplc.com/sustainability/