Trading Update & Notice of Results
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MJ Gleeson plc, the low-cost housebuilder and land promoter, provides a trading update for the half-year ended 31 December 2023 (the "period") ahead of announcing results on 15 February 2024.
Gleeson Homes completed the sale of 769 homes during the half-year, 14% fewer than the half-year to 31 December 2022, reflecting the weaker conditions experienced across the housing market during 2023. However, Gleeson Homes entered the second half of the financial year with a forward order book of 586 plots (31 December 2022: 319 plots).
Net reservation rates during the half-year period were 0.41 per site per week (half-year to 31 December 2022: 0.36 per site per week).
Additional costs relating to a number of older sites, along with the cumulative impact of current market conditions including extended site durations, sales incentives and multi-unit sales, are now expected to result in full year gross margins falling below expectations by circa 1.5% to 2.0%.
Gleeson Land completed the sale of one site during the half year to 31 December 2023 (H1 2023: three sites sold). We have recently commenced marketing a further four sites.
Reflecting the significant investment in bringing forward a higher proportion of home starts before June 2023 the Group will report net debt of £18.7m at 31 December 2023 (30 June 2023: net cash £5.2m). The cash impact of this investment is expected to unwind over the next two years.
Against the backdrop of stabilising interest rates the Board anticipates a recovery in demand for low-cost housing in the seasonally busier selling period over the coming weeks and months. Gleeson Homes also continues to negotiate further multi-unit sales and expects to enter into agreements over the coming months for delivery of homes in the current and next financial year.
Analyst conference call
A conference call for analysts will be held at 07:45 this morning. To dial-in, please use the below details:
- UK-Wide: +44 (0) 33 0551 0200
- UK Toll Free: 0808 109 0700
- Code: MJ Gleeson
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