Shares in MJ Gleeson plunge as warns annual profit will miss forecast

MJ Gleeson PLC on Tuesday warned that annual operating profit will be below market expectations reflecting lower gross margin at Gleeson Homes and fewer land sales than hoped.

In response, shares in the Sheffield, England-based housebuilder dropped 21% to 410.10 pence in London on Tuesday morning.

MJ Gleeson said it expects operating profit at Gleeson Homes for the financial year ending June 30 to be around 15% to 20% below current expectations.

RBC Capital Markets said Visible Alpha consensus for operating profit at Gleeson Homes is £28.1 million.

In the year that ended June 30, 2024, Gleeson Homes reported an operating profit of £30.3 million. The Land division posted an operating profit of £2.2 million.

MJ Gleeson said the pace of the housing market recovery has not been sufficient to offset the cumulative impact on Gleeson Homes’ gross margin of a number of headwinds through the year.

These include increased build costs, flat selling prices, the continued use of incentives and several bulk sale transactions. As a result, Gleeson Homes gross margin for the year will be around one percentage point lower than previously expected, the firm said.

The company had counted on a profit contribution from the disposal of one of Gleeson Homes’ land holdings in East Yorkshire. However, this is now not expected to proceed.

Looking ahead, a number of factors will continue to hurt Gleeson Homes into financial 2026, the firm cautioned, including planning delays which will see the business selling from fewer sites than previously forecast.

Gleeson Homes’ gross margin in financial 2026 also is expected to be about one percentage point lower than market expectations.

The firm said Gleeson Land has completed three transactions to date and is continuing work on a further seven disposals anticipated to complete before the year end.

Copyright 2025 Alliance News Ltd. All Rights Reserved.