18th Nov 2022 09:46
(Alliance News) - MJ Gleeson PLC saw its shares fall sharply on Friday, as it warned of rising cancellations due to a "slowdown" in demand.
The Sheffield, England-based housebuilder and land investor said over the past six weeks, Gleeson Homes cancellation rates increased to 41%, from 20% in the first ten weeks of the year. Net reservation rates reduced to 0.26 per site per week against 0.42 for the same period last year.
Its shares fell 7.5% to 345.88 pence each in London on Friday morning.
"The market volatility and sharp increase in interest rates following the mini budget impacted buyer confidence and caused a significant slowdown in demand," the firm said.
However, MJ Gleeson said it is "encouraged" by Thursday's autumn statement, and it expects buyer confidence to recover as the volatile macroeconomic backdrop calms down.
"There are good reasons to hope that an improving outlook for longer-term interest rates will result in greater mortgage availability and affordability", it added.
It said the outlook for its current financial year will depend upon how quickly the housing market recovers. It believes that Gleeson Homes could deliver volumes anywhere between 1,600 and 2,000 units.
In September, the company had said pretax profit in the year ended on June 30 rose 33% to GBP55.5 million from GBP41.7 million a year prior. Revenue grew 26% to GBP334.6 million from GBP265.8 million.
MJ Gleeson will provide a further update on January 13 after the conclusion of its financial 2023 first-half results.
By Xindi Wei; [email protected]
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