Gleeson has seen its pre-tax profit fall by half in its half-year results but still expects to meet its full-year targets.
For the six months to 31 December, Gleeson recorded a pre-tax profit of £3.6million compared to £7.2million year-on-year. Despite this, it expects its margins to improve in the second six months of the year.
Gleeson’s turnover increased by 4.2% during the period to £157.9million and its number of homes sold also grow to 801 from 769 the previous year.
The housebuilder’s sales margin reduced year-on-year by 3.9% to 20.6%, which Gleeson said was a reflection of build cost inflation not being offset by increasing sales prices. It also said that cost increases on older sites nearing completion had an impact.
The firm’s land division did not record any sales during the period, contributing just £1.3million in revenue from a collaborative land swap with a joint venture partner. Gleeson said that it has five sites that are currently in a sales process or being marketed.
Despite the dip in profit, the housebuilder remained confident it would meet its expectations of a pre-tax profit of £28million and completions in the region of 1,868 for the full year.
The developer also expects its recently launched partnerships business to gain momentum, pending an affordable housing grant funding settlement from the government. The partnerships arm has currently agreed deals with Citra Living and Home Group.
Graham Prothero, chief executive officer of Gleeson, commented: “I am pleased to report a robust performance during the six months to 31 December 2024, despite the market remaining subdued, with Gleeson Homes completing the sale of 801 homes, more than the first half last financial year. Gleeson Homes is making good progress against its growth strategy, opening 8 new build sites and 11 new sales outlets, and we remain confident of growing by circa 10 sales outlets per annum from next year onwards.”
“Gleeson Land is progressing a number of significant opportunities which we expect to complete during the second half. The business is starting to reap the rewards from its restructured operations and market-leading research and data analytics capabilities, and will continue to grow its portfolio of sites in the second half and beyond. We are already seeing the benefit of the changes to the NPPF, with three planning consents achieved post-period end.”
“At Gleeson Homes, there are early indications of an improving selling season with much stronger net reservation rates in the first four weeks. More importantly, we are pleased with the progress of our site opening programme which will drive sustained growth over the medium term.”
