MJ Gleeson Announces Mixed Financial Results Amid Challenging Housing Market Conditions
Sheffield-based housebuilder MJ Gleeson has reported a "robust performance in a subdued market" for the first half of its financial year, with revenues climbing but profits experiencing a significant decline. The Yorkshire firm, which specialises in constructing homes at the lower end of the housing market, released its half-year results, revealing a complex financial landscape marked by growth in sales but pressure from increasing costs.
Financial Performance Highlights
Turnover for MJ Gleeson increased by 9.6% to £173.1 million during the period, demonstrating strong sales activity. However, operating profit fell by 17.6% to £4.2 million, highlighting the impact of rising expenses and market challenges. The company sold 848 homes, up from 801 in the same period last year, and saw a significant increase in its net reservation rate. Average selling prices for its homes rose by 2.5% to £198,800, reflecting modest price growth in a competitive environment.
Divisional Performance and Market Insights
The Gleeson Partnerships arm, focused on building affordable homes for housing associations and private rental investors, secured three further agreements and delivered its first homes, indicating progress in this segment. In contrast, the Gleeson Land division faced a tougher period, falling to a loss despite three land sale transactions and five sites being marketed or in a sales process. The company noted it is "cautiously encouraged by early signs of a recovery in open market demand," with reservation rates in recent weeks improving from the end of 2025, though not yet reaching last year's levels.
Costs and Future Outlook
MJ Gleeson implemented further changes in January to complete a restructuring of the company, which will lead to costs of up to £4.5 million. These costs will be recognised as exceptional during the second half of the financial year. Chief Executive Officer Graham Prothero commented on the full-year outlook, stating, "For the full year, whilst current market expectations remain achievable, a strong Spring selling season remains fundamental to our assumptions in delivering on those expectations and we need to see the recovery gain further momentum."
Prothero added, "Margins continue to be pressured as net selling price increases are outpaced by build costs, and we experience increasing regulatory and tax headwinds. We will update our guidance in April 2026 with the benefit of greater trading visibility through to the year end. With the right structure and leadership in both businesses, the Group is in a strong position to deliver on its medium-term strategic objectives."
Industry Context
Gleeson's results come during a week of significant announcements from companies in the housebuilding sector. The UK's largest housebuilder, Barratt Redrow, posted falling half-year profits, citing "significant uncertainty" from the late autumn Budget, alongside a lack of homebuyer confidence and spending power. This follows news from Newcastle firm Bellway, which revealed growth in house completions and an increase in its average price, underscoring varied performances across the industry.
The housing market remains a focal point for economic discussions, with firms like MJ Gleeson navigating a landscape of rising costs, regulatory pressures, and fluctuating demand. As the company looks ahead to the Spring selling season, its ability to balance revenue growth with profit margins will be crucial in achieving its strategic goals in a challenging environment.
