MJ Gleeson (GLE) H2 2024 earnings summary

Executive summary

• Full-year results aligned with expectations, with resilient performance despite a challenging market and strong operational results from Gleeson Homes, including improved sales rates and a restored 5-star customer recommend score.

• 1,772 homes sold, up 2.8% year-over-year, with the first partnership transactions agreed and a focus on scaling both divisions to triple profitability medium-term.

• Gleeson Land faced planning headwinds and delays, with performance expected to be weighted to the second half of the year.

• Recovery in open market sales observed, with net reservation rates up 28% year-over-year for the first 10 weeks.

• Partnerships and land pipeline growth are key strategic focuses, supporting medium-term growth targets.

Financial highlights

• Group revenue £345.3m, up 5.2% year-over-year, with both divisions contributing; Gleeson Homes revenue £320.8m (down 2.6%), Gleeson Land revenue £16.3m (up 117.3%).

• Group operating profit £28.6m (down 14.9%), profit before tax £24.8m (down 21.3%), and net income £19.3m (down from £25.0m); basic EPS 33.1p.

• Interest costs rose to £3.8m due to refinancing and higher borrowings.

• Cash generated from operations £27.6m, closing cash £12.9m.

• Final dividend of 7p per share, total 11p for the year, covered 3x by earnings.

Outlook and guidance

• Confident in full-year performance, with recovery underway but cautious sentiment expected through autumn.

• Medium-term target of at least 3,000 homes sold per annum remains, supported by land pipeline and partnerships.

• Sales outlets expected to remain flat this year, then grow by 10 net outlets per year, with over 20 build sites and 60–65 sales outlets by June 2025.

• Forward order book for open market sales up 12.3% year-over-year.

• Dividend cover to remain between 3 and 5 times.