MJ Gleeson (GLE) Investor update summary

Financial performance and market conditions

• Revenue grew 12.1% to £410m, but group operating profit fell due to site delays and margin compression.

• Gleeson Homes sold 10% more homes, with 1,968 completions, including 320 partnership units.

• Operating margins declined to 5.0% due to build cost inflation (4.5%) outpacing selling price increases (2.2%).

• Incentives averaged just below 5%, and selling price inflation was anemic at about 1% annualized.

• Net debt remained negligible, and the balance sheet is strong with net borrowings of £2.6m.

Operational improvements and restructuring

• Completed Project Transform, restructuring into four principal regions and strengthening leadership.

• Land buying process reformed, shifting focus to more densely populated areas and rationalizing the land portfolio.

• Walked away from 13 sites that no longer fit criteria, improving pipeline quality.

• Successfully transitioned to the NHBC, HBF customer scoring system, achieving a four-star rating in 2025 and currently trading at five-star.

• Addressing legacy site adoptions with a dedicated team, expecting resolution over three to four years.

Market outlook and strategy

• Market remains subdued due to high property supply, rising mortgage rates, and cost of living pressures.

• Partnership strategy gaining traction, with first completions and evolving deal structures to improve returns.

• Land market remains active but cautious, with longer transaction times and moderated pricing.

• Focused on enhancing product, customer experience, and brand perception using data-driven insights.

• Board expects FY 2027 results in line with current market expectations, maintaining a prudent dividend policy.