TIDMGLE
RNS Number : 2691F
MJ Gleeson PLC
07 July 2023
7 July 2023
MJ Gleeson plc (GLE.L)
("Gleeson" or "the Company")
Trading Update, Capital Markets Day and Notice of Results
-- Full year results ("FY2023") expected to be in-line with expectations
-- Shift in buyer demographics underpins encouraging prospects for FY2024
-- Capital Markets Day today sets out longer-term growth agenda
Trading Update
MJ Gleeson plc (GLE.L), the low-cost housebuilder and land
promoter, today provides an update for the year ended 30 June 2023
("FY2023").
Gleeson Homes
Gleeson Homes completed the sale of 1,723 homes during FY2023
(FY2022: 2,000 homes sold). During the second half of the year, 829
homes were sold (H2 FY2022: 1,068 homes sold), reflecting the
downturn in the wider economy and the immediate impact on buyer
confidence as a result of higher interest rates. The 1,723
completions included 115 homes sold out of 377 contracted
reservations under four multi-unit sale agreements.
Selling prices were resilient, underpinned by a shortage of
supply, and helped to offset material and labour cost increases
experienced across the sector in the period. The average selling
price of Gleeson homes sold during the year increased by 11.3% to
GBP186,200 (FY2023: GBP167,300).
There was a significant shift in buyer demographics in the
second half, with first-time buyers accounting for c. 50% of
open-market reservations (FY2022: 71%), whilst over 20% of sales
were to purchasers over 55 years old (FY2022: 10%).
We have successfully concluded the restructuring of Gleeson
Homes from nine regional management teams to six and moved to a
standardised operating structure. The process resulted in
annualised administrative overhead cost savings of GBP3.2m, at a
one-off cost of GBP1.0m. These savings will be realised from FY2024
onwards.
Purchasing a Gleeson home has become increasingly attractive to
customers who would have previously bought a more expensive home,
but who are attracted by Gleeson's affordable price points and
equally high quality. At the same time, a couple working full time
earning the National Living Wage can afford to buy a home on any
Gleeson site.
Reservation rates over the last 6 months improved to 0.64 net
reservations per site per week against 0.62 net reservations per
week over the comparable period last year. Excluding the four
multi-unit sale agreements, the reservation rate was 0.44 per site
per week net of 19% cancellations.
We enter the new financial year with a stronger forward order
book of 665 plots (31 December 2022: 319 plots, 30 June 2022: 618
plots).
Outlook
Gleeson Homes opened 3 new build sites during the year, starting
the new financial year with 82 sites (30 June 2022: 87 build sites)
of which 71 are actively selling (30 June 2022: 61 sales
sites).
Land continues to be available at sensible prices. The pipeline
of owned and conditionally purchased sites increased by 3.3% to
17,375 plots on 173 sites as at 30 June 2023, of which 9,701 plots
on 84 sites have been conditionally purchased subject to receiving
planning permission.
Looking ahead, whilst the Board believes that demand from
first-time buyers will continue at the levels seen through the last
few months, it anticipates that interest from other value-driven
buyers will increase as purchasers look to take advantage of
Gleeson's more affordable price points and high quality.
Gleeson Land
During the year, Gleeson Land appointed a new Managing Director,
Guy Gusterson.
The business sold 3 sites with the potential to deliver 413
plots for housing development.
The portfolio of sites at 30 June 2023 included six sites with
either planning permission or resolution to grant and which have
the potential to deliver 1,400 plots for housing development (30
June 2022: three sites, 1,206 plots). The portfolio also includes
18 sites awaiting a planning decision (30 June 2022: 16 sites) with
the potential to deliver 4,285 plots for housing development (30
June 2022: 3,559 plots).
The portfolio comprises 70 sites, with the potential to deliver
17,831 plots, and 25 acres of commercial land.
Outlook
Whilst planning delays and economic uncertainty are causing some
larger housebuilders to hesitate in completing land purchases,
mid-size and regional housebuilders remain active buyers of
high-quality consented land.
Group
The Group ended the year with cash balances of GBP5.2m and no
debt (30 June 2022: GBP33.8m cash and no debt). This was a pleasing
outcome given the significant investment during the period in
bringing forward a higher proportion of new homes starts.
The Board expects the results for FY2023 to be in line with
market expectations.
Capital Markets Day
The Company is today hosting a Capital Markets Day at its
Petersmiths Park development in Nottinghamshire which, when
completed, will comprise 305 homes.
Under the banner "Putting in place the foundations for future
growth" Graham Prothero (Chief Executive Officer) and Stefan
Allanson (Chief Financial Officer), along with Mark Knight (Chief
Executive, Gleeson Homes) and Guy Gusterson (Managing Director,
Gleeson Land), will set out a roadmap to significantly scale the
Company's operations over the long term. This will focus in
particular on broadening out Gleeson Homes' proven model, including
exploring opportunities in partnerships, and expanding Gleeson
Land's footprint.
No new material financial information will be disclosed and a
copy of the presentation materials that will be used through the
day will be available on the Company's website.
Graham Prothero, Chief Executive Officer, commented:
"We are pleased with the year's performance in a challenging
economic environment. We have taken advantage of the quieter market
to restructure Gleeson Homes, putting the business in great shape
to grow as the market recovers. I am hugely impressed with the
resilience of our team, who remained focused and committed through
that process to deliver these results. This gives me confidence in
achieving our potential. As we will describe later today at our
Capital Markets Day, the changes we are implementing in the
business for the new financial year will further improve our
competitiveness in the current market, and position us well for
gradual stabilisation in the economy.
"We are also very excited about the longer-term prospects for
the business and look forward to setting out later today why we
believe that Gleeson is well-placed to scale significantly over the
long-term, realising its true potential."
Notice of Results
The Company will report its audited full year results on
Thursday, 14 September 2023. A presentation for analysts will be
held at 09:30 that morning at the offices of Hudson Sandler, 25
Charterhouse Square, London, EC1M 6AE, and will also be
webcast.
ENDS
Enquiries:
MJ Gleeson plc Tel: +44 1142 612900
Graham Prothero, Chief Executive
Officer Stefan Allanson,
Chief Financial Officer
Hudson Sandler Tel: +44 (0) 20 7796 4133
Mark Garraway Tel: +44 (0) 7771 860 938
Harry Griffiths Tel: +44 (0) 7860 630 046
Singer Capital Markets Tel: +44 (0) 20 7496 3000
Shaun Dobson
Liberum Tel: +44 (0) 20 3100 2222
Richard Crawley
About MJ Gleeson:
MJ Gleeson plc is the leading low-cost, affordable housebuilder
listed on the London Stock Exchange. Gleeson Homes' customers are
typically young, first-time buyers, with a median income of
GBP28,000. Its two-bedroom homes start from around GBP116,000.
Gleeson's vision is "Building Homes. Changing Lives", prioritising
areas where people need affordable housing the most.
Buying a Gleeson home typically costs less than renting a
similar property. All Gleeson homes are traditional brick built
semi or detached homes which include a driveway and front and rear
gardens. Gleeson offers a wide mix of two, three and four bedroom
layouts.
Gleeson Land is the Group's land promotion division, which
identifies development opportunities and works with stakeholders to
promote land through the residential planning system.
As a high-quality, affordable housebuilder, Gleeson has strong
and inherent sustainability credentials. Its social purpose
underpins the Company's strategy, and Gleeson measures itself
closely against UN SDGs 5, 8, 11, 12, 13 and 15.
More details on the Company's sustainability approach can be
found at: mjgleesonplc.com/sustainability/
This announcement is released by MJ Gleeson plc and contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) 596/2014 (MAR), and is disclosed in
accordance with the Company's obligations under Article 17 of MAR.
Upon the publication of this announcement, this information is
considered to be in the public domain.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of the Company by Stefan Allanson, Chief Financial
Officer.
LEI: 21380064K7N2W7FD6434
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