MJ Gleeson (GLE) H2 2025 earnings summary

Executive summary

• Group revenue grew 5.9% to £365.8m, driven by both divisions, but operating profit and profit before tax fell 11.7% to £21.9m due to margin compression in Homes and exceptional costs, partially offset by strong Gleeson Land performance.

• Net reservation rate improved 20% year-over-year, with a 51% increase in the forward order book, reflecting stronger sales momentum and growth in partnership agreements.

• Project Transform restructuring addressed operational weaknesses, streamlined leadership, and standardized processes, with £1.3m in exceptional costs and early positive results.

• 1,793 homes sold, up 1.2% year-over-year, with a 4.3% increase in average selling price to £193,600.

• Market remains stable but lacks conviction, with steady prices, incentives below 5%, and continued operational challenges.

Financial highlights

• Group operating profit before exceptionals was £25.4m, down due to lower Gleeson Homes profit, while Gleeson Land operating profit more than tripled to £7m.

• EPS declined 12.7% to GBX 28.9; PBT was £21.9m, 11.7% lower year-over-year; group overheads flat at £3.9m.

• Gleeson Homes revenue rose 5.8% to £348.2m, with operating profit before exceptionals down 26.4% to £22.3m and operating margin at 6.4%.

• Gross margin in Homes fell 340bps to 20.7%, mainly due to 2.7% build cost inflation, legacy site costs, and higher plot specifications.

• Gleeson Land gross profit more than doubled to £11.1m, with seven transactions completed and ROCE at 17.4%.

Outlook and guidance

• Current year expected to be in line with expectations, with significant growth anticipated from FY2027 as the land pipeline matures.

• Confident in achieving at least 3,000 homes sold per year in the medium term, supported by a robust land pipeline.

• Margin recovery in Homes is expected as incentives reduce and new, higher-margin sites come online.

• Board maintains total dividend at 11.0p per share, with a final dividend of 7.0p.

• Market conditions remain challenging, with no early catalyst for significant recovery, but the business is positioned for stable performance.