MJ Gleeson shares dropped on Tuesday after announcing it has slipped to a statutory loss and cut its dividend by more than half, as a squeeze on margins and one-off charges overshadowed a rise in home completions.
The affordable housebuilder sold 1,968 homes in the year to 30 June, up almost 10%, lifting revenue 12% to £410m.
But profitability fell sharply as adjusted pre-tax profit halved to £10.8m, and after £13.6m of exceptional charges covering impairments and provisions for legacy sites, the group reported a statutory loss before tax of £2.7m, against a £20.5m profit a year earlier.
If historical charges weren’t enough, build cost inflation will be a real concern at 4.5%, outpacing selling price growth. A greater proportion of lower-priced bulk sales is weighing on the homes business, where the gross margin fell to 18.7% from 20.7%.
Its land promotion arm also swung to a small loss after a large transaction slipped into the new year. The board cut the total dividend to 5.0p, from 11.0p, citing prudence in a challenging market.
During the year, Gleeson pushed through a major overhaul of its homebuilding business, known as Project Transform, which involved a regional restructuring, 56 redundancies and new leadership, and it grew its “capital-light” partnerships business, building affordable homes with housing providers.
The company said it expected full-year 2027 results to be in line with market forecasts, which should help cap any downside in shares.
MJ Gleeson shares were 4% lower at the time of writing.