MJ Gleeson (GLE) H1 2025 earnings summary

Executive summary

• Delivered a robust first half with 801 homes sold (up 4.2% year-over-year) and revenue rising up to £158 million, despite subdued market conditions and margin pressures from incentives and cost inflation.

• Gleeson Land completed no sales in H1 but achieved three planning consents in January, strengthening the pipeline and supporting confidence for H2.

• Net reservation rates improved 45% in early 2025, indicating demand recovery and supporting a positive outlook.

• Forward order book for homes grew, with increases up to 6.8% year-over-year.

• Board remains confident in meeting market expectations for FY2025, targeting sector-leading growth.

Financial highlights

• Group revenue rose 4.2% to £157.9m; profit before tax fell 50% to £3.6m, mainly due to lower operating margin in homes and no land sales.

• Gleeson Homes operating profit was £9.1m (down 10.8% YoY), with an operating margin of 5.8%.

• Overhead costs reduced by 6.9% to £23.1m, reflecting a 5.5% reduction in headcount.

• Net debt at period end was £18.1m, slightly lower than last year; net assets at £297.2m as of 31 December 2024.

• Interim dividend maintained at 4p per share, with a cover policy of 3-5x earnings.

Outlook and guidance

• Margins expected to recover in H2 as higher-margin sites complete and incentives moderate.

• Confident in achieving 4-8 land sales in H2, underpinned by recent planning consents and portfolio growth.

• Net reservation rates up 45% in early 2025, supporting demand recovery and positive FY outlook.

• Targeting 100 sales outlets in the medium term and at least 3,000 units p.a. in a stable market.

• Build cost inflation forecast at 2-3% over the next six months, mainly from labor.