16 February 2023
MJ GLEESON PLC
Results for the half-year ended 31 December 2022
· Net reservations starting to recover | Demand for consented land remains strong
· Expect to deliver between 1,650 and 1,850 homes in FY2023, subject to pace of recovery
· Organisational restructuring under way to reinforce strong platform for sustainable growth
Graham Prothero, Chief Executive Officer, commented:
“I am delighted to have taken up my role as CEO and, as I continue to embed myself in the business, am hugely impressed with our talented and committed colleagues, our excellent product, exciting land pipeline and, above all, our team’s enthusiasm for our ethos of “Building Homes. Changing Lives.” We have an exciting opportunity to take Gleeson to the next level by delivering sustainable growth over the medium-term, across both our Homes and Land divisions.
At the same time as managing through the lower levels of current market demand, I want to ensure that the Group is in the best possible shape to take advantage of the recovery which we are beginning to see early signs of. Building on the strong platform I have inherited, my focus is on optimising our organisational structure and making us more operationally efficient and fit for further growth. This will also result in significant annualised savings of circa £4 million.
In terms of guidance: confidence, underpinned by improved mortgage rates, is slowly returning to the market, evidenced by improving net reservations. With full-year volumes dependent on the pace of recovery, we now expect to deliver between 1,650 and 1,850 homes.”
| H1 22/23 | H1 21/22 | Change | |||
| Revenue | |||||
| Gleeson Homes | £166.7m | £150.2m | 11.0% | ||
| Gleeson Land | £4.3m | £23.3m | (81.5%) | ||
| Total | £171.0m | £173.5m | (1.4%) | ||
| Operating profit by division | |||||
| Gleeson Homes | £18.2m | £22.5m | (19.1%) | ||
| Gleeson Land | £1.4m | £5.5m | (74.5%) | ||
| Profit before tax | £16.1m | £24.7m | (34.8%) | ||
| Cash net of borrowings | £13.5m | £38.2m | (64.7%) | ||
| ROCE1 | 20.0% | 22.9% | (290bp) | ||
| EPS (basic) | 22.0p | 34 .4p | (36.0%) | ||
| Dividend per share | 5.0p | 6.0p | (16.7%) |
1 Return on capital employed is calculated based on earnings before interest and tax and exceptional items (EBIT), expressed as a percentage of the average of opening and closing net assets for the prior 12 months after deducting deferred tax and cash and cash equivalents net of borrowings.
Gleeson Homes:
· 894 homes sold (H1 21/22: 932), reflecting the lower forward order book at the start of the year and weaker sales following the mini-budget
· Average selling price up 15.6% to £186,400 (H1 21/22: £161,200)
o Underlying selling prices up 11.2%
· Operating profit decreased 19.1% to £18.2m (H1 21/22: £22.5m)
· Three new sites opened (H1 21/22: eight sites opened)
· Land pipeline remains strong at 16,561 plots (June 2022: 16,814 plots)
· Site acquisition, site starts and build activity being carefully managed to maintain growth ambition as market demand recovers
· Restructuring operations to support future growth
Gleeson Land:
· Senior leadership strengthened with appointment of Guy Gusterson to lead future growth
· One land sale completed (H1 21/22: three land sales)
· Three sites in an active sales process (H1 21/22: no sites in a sales process) with strong levels of demand and pricing remaining firm
· A further two sites being marketed (H1 21/22: three sites)
· Successfully secured planning permission on four sites (H1 21/22: none)
· One new site added to the portfolio (H1 21/22: three sites added)
· Portfolio of 71 sites (June 2022: 71 sites)
Current trading and outlook:
· Net reservations in the last four weeks have doubled from the low levels seen before Christmas but remain below the levels typically seen this time of the year
· The Company has narrowed its full year completions target to between 1,650 and 1,850 homes
A presentation by Graham Prothero, CEO and Stefan Allanson, CFO, which will also be webcast, will be held at 9:00am today. To attend virtually:
· by webcast, access via the following link: https://stream.brrmedia.co.uk/broadcast/63cab7fb777efd4a8b51386d
· by telephone, please dial-in using the below details:
o Number: +44 (0) 33 0551 0200
o Code: Gleeson Half Year Results
Enquiries:
| MJ Gleeson plc | Tel: +44 1142 612900 | |
| Graham Prothero | Chief Executive Officer | |
| Stefan Allanson | Chief Financial Officer | |
| Hudson Sandler | Tel: +44 20 7796 4133 | |
| Mark Garraway | Tel: +44 7771 860 938 | |
| Charlotte Cobb | Tel: +44 7795 422 131 | |
| Singer Capital Markets | Tel: +44 20 7496 3000 | |
| Shaun DobsonJames Moat | ||
| Liberum | Tel: +44 20 3100 2222 | |
| Richard Crawley | ||
| Kate Bannatyne |