4th Jul 2025 08:43
(Alliance News) - MJ Gleeson PLC on Friday warned pretax profit in financial 2026 will be at the lower end of current market expectations, its second disappointing trading update in a month.
In response, shares in the Sheffield, England-based housebuilder dropped 5.1% to 368.35 pence each in London on Friday morning.
MJ Gleeson said the UK housing market "lacks confidence and remains subdued and the board does not see a short-term catalyst for any substantial improvement".
Continuing capacity issues in the UK planning system have delayed site openings and Gleeson Homes will operate from fewer sites than anticipated in the current year, the firm said.
Overall, the company expects pretax profit before exceptional items for the financial year to June 2026 to be at or around GBP24.5 million, the lower end of current market expectations, and below Bloomberg consensus of GBP26.2 million.
The company left expectations for financial 2025 unchanged.
For the financial year that ended June 30, 2025, MJ Gleeson expects to deliver pretax profit before exceptional items within current market expectations which range from GBP21.0 million to GBP22.5 million.
In the financial year to June 30, 2024, MJ Gleeson reported pretax profit before exceptional items of GBP24.8 million.
In June, the company warned it expected operating profit at Gleeson Homes for the financial year ending June 30 to be around 15% to 20% below current expectations.
The gloomy news had sent shares in the housebuilder down more than 20%.
On Friday, the company said Gleeson Homes is expected to report an operating profit within current market expectations of GBP21.7 million and GBP23.0 million.
Gleeson Homes completed the sale of 1,793 homes in the financial year to June 30 compared to 1,772 homes a year prior.
Gross margin at the division came under pressure through the financial year due to the cumulative impact of a number of headwinds, the firm said.
These reflected external pressures such as increased build costs and flat selling prices, along with the cost of mitigating actions including the continued use of incentives and several bulk sale transactions.
Additionally, issues around process and compliance with procedures within the business, which were resulting in cost overruns, had been identified in the summer of 2024.
MJ Gleeson said immediate actions did not fully address these and a comprehensive review of the business, was initiated in the autumn.
The review identified the need to implement some organisational and management changes.
As a result, Mark Knight has stepped down as chief executive of Gleeson Homes and left the business.
The Northern division will continue to be run by Andy Davies. The Central division will be run by Scott Stothard, who is joining the business from Vistry Group PLC, where he was divisional chair.
Simon Topliss, previously Gleeson Homes finance director, has been appointed to the newly created role of chief operating officer, with responsibility for central functions, driving performance and governance.
In addition, Fiona Goldsmith, currently interim chair, has been appointed as chair with immediate effect.
Nicola Bruce has been appointed senior independent director with immediate effect.
The "strengthened management structure is expected to lead to a marked improvement in performance and delivery, improving pace and quality of build and management and control of costs", MJ Gleason asserted.
The restructuring will lead to an exceptional charge of around GBP1.2 million in financial 2025 results.
Chief Executive Graham Prothero said: "This was a challenging year for Gleeson.
"As well as external factors, it had become clear that our commercial delivery was not where we needed it to be. Over the last nine months we have therefore been implementing at pace management changes which will significantly benefit the business through FY2026 and beyond."
By Jeremy Cutler, Alliance News reporter
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