Housebuilder MJ Gleeson has reported a slowdown in land acquisition after announcing that a significant transaction will not be finalized in its current financial year. The Yorkshire-based company's Gleeson Land division is working to complete a deal that represents roughly half of its total projected plots for the year. However, the firm now expects the deal to miss the current financial year, alongside two smaller transactions that will also be postponed.
Financial Impact
The delays are anticipated to reduce adjusted group profit before tax by approximately £7.5 million compared to current market expectations. MJ Gleeson attributed the setback to national housebuilders reassessing their land buying strategies amid the prevailing market environment. Despite these challenges, the company noted that demand for high-quality sites remains robust.
CEO Commentary
Chief Executive Graham Prothero stated: "The Gleeson Land team have cleared almost all technical hurdles to facilitate the disposal of the major site, and it is frustrating that completion will now fall into the next financial year. The progress to date should not be underestimated and represents a strong performance by the team."
Prothero added: "There is no doubt that housebuilders in the south of England are reviewing and reappraising their land buying strategies, and we anticipate these conditions will continue through the next financial year. The good news is that there is continuing demand for the highest quality developments, which is where Gleeson Land is now focused with a portfolio of prime sites. Transactions will take longer, but we are confident that sales of prime sites will continue."
Market Context
MJ Gleeson's update arrives as Bellway, one of the UK's largest housebuilders, cautioned about an uncertain housing market outlook, citing global issues that are affecting buyer confidence. Bellway reported a slowdown in customer demand in recent weeks, which has led to its own cautious approach to land purchases.
Gleeson plans to release a full-year trading update on July 10.
