Housebuilder and land trader reports ‘subdued’ summer but says it expects autumn pick up in sales
Housebuilder and land trader MJ Gleeson yesterday reported a 43% drop in its pre-tax profit for the year to June as “difficult market conditions” hit sales of both homes and development sites.
The low-cost housebuilder said pre-tax earnings fell to £31.5m from £55.5m in 2022 as turnover dropped by over 12% to £328m.
The firm added it had seen “subdued” sales over the summer since the end of the financial year, but now expected reservations to pick up in the autumn, given a “steadying” mortgage market, sales and marketing initiatives, and bulk sales.
Gleeson had already reported in June that the number of homes sold in its 2023 financial year dropped by 14% to 1,723 after the fall out from the economic turmoil in the wake of the mini-Budget last September. It said that turnover in the housebuilding arm fell 4% to £321m, with the drop in completions partly offset by a rise in average sales prices.
However, the results showed that the impact on Gleeson’s land trading business was even more severe, with turnover at Gleeson Land dropping by 81% to £7.5m, causing profit to plummet by 91% to just £1m.
Gleeson said the drop was due to “a more cautious approach from housebuilders and congestion in the planning system, exacerbated by the local elections in May, which delayed a number of sites, particularly in the final quarter of the financial year”.
A restructuring exercise conducted earlier this year, in which the firm’s nine regions were cut down to just six, will save the company £3.2m a year, at a one-off cost of £1m.
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