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Highlights

  • Gleeson Homes’ operating profit expected to be 15–20% below current market expectations.

  • Gross margins impacted by build cost inflation, flat prices, incentives, and bulk sales.

  • Planned land disposal delayed; FY2026 outlook also affected by site reductions and planning delays.

MJ Gleeson plc (LSE:GLE) has issued a trading update for the financial year ending 30 June 2025 (FY2025), citing ongoing market and operational challenges that have led to a downward revision in expected performance for its Homes division.

The company reported that the recovery in the housing market has been slower than anticipated and has not been sufficient to offset several pressures affecting Gleeson Homes’ gross margin. These pressures include higher build costs, stagnant selling prices, continued use of buyer incentives, and the impact of several bulk sale transactions. As a result, the gross margin for Gleeson Homes in FY2025 is expected to be approximately 1% lower than previously forecast.

Originally, the Board anticipated that Gleeson Homes would achieve an operating profit in line with market expectations, aided by the profit contribution from a planned disposal of land in East Yorkshire. However, the company has now confirmed that this disposal is unlikely to proceed within the current financial year. Consequently, operating profit for the division is now forecast to fall around 15% to 20% below current market expectations.

Looking ahead to FY2026, several challenges are expected to continue. Planning delays are anticipated to reduce the number of active sales sites, limiting volume and revenue growth. The company also expects gross margins to remain under pressure, with forecasts for FY2026 suggesting a figure approximately 1% below current expectations.

On a more positive note, MJ Gleeson's Land division has completed three land transactions to date. Work is progressing on seven additional land disposals, which the company expects to complete before the end of the financial year. These disposals are expected to contribute positively to group performance.

The company has not issued revised full-year financial guidance but acknowledged that the combination of margin pressures, missed land sale contributions, and planning-related constraints would affect overall profitability.