Gleeson increases completions but warns on viability challenges

Gleeson has reported an increase in completions, the housebuilder said in a trading update this morning.

The firm said its Gleeson Homes division completed 1,968 homes in the year to 30 June, up 10% on the 1,793 sold the previous year.

The group said it is on track to deliver adjusted group pre-tax profit in line with market expectations of around £10.1m within a range of £8.9m to £11m.

But this figure excludes exceptional restructuring costs, impairments and other provisions totalling between £12m and £15m.

It said the impact on build cost inflation arising from the ongoing conflict in the Middle East “has been less severe than anticipated”.

However, it added: “We expect that inflationary pressure will continue, compounding the effect of the myriad of regulatory and tax burdens recently imposed on residential development. Together these continue to challenge viability and are likely to restrict near-term margin recovery.”

Gleeson’s land business saw three transactions being delayed into the next year, meaning it will make a small operating loss. It completed the sale of five sites, down from seven the previous year. Its portfolio includes five sites with planning permission which have the potential to deliver 2,553 plots, up from 1,343 a year ago.

It said: “The timing of site sales through the year remains uncertain in a cautious land market.”

The firm will release its full-year results on 15 September.