MJ Gleeson PLC (LON: GLE) have seen their shares in red despite a confident update to shareholders posted on Thursday.
MJ Gleeson Group plc founded in 1903 specializes in urban regeneration and land development. It has public facing divisions, Gleeson Homes and Gleeson Strategic Land.
Shares in MJ Gleeson fell 0.77% on Thursday afternoon to 811p. 5/12/19 14:18BST.
In July, the firm saw its shares rally on record performance across all divisions. The firm saw strong sales growth following higher demand for home for sale in Northern England and the Midlands.
The positive update added that Gleeson Homes is currently active on 69 sites and expects to grow to 80 sites in the coming year. It is also on track to achieve its goal of doubling its volumes to 2,000 new homes per year by 2022.
Today, the firm said it expects to deliver annual results in line with forecasts backed up by a strong performance by its Home unit.
The house builder said it has experienced a “strong” demand at its Homes division, with net reservations since the start of its current financial year up more than 10% compared with the same period last year.
Gleeson said Homes has a pipeline of 13,042 plots with a gross development value of £1.7 billion, of which 6,910 plots are owned and 6,132 are conditionally purchased.
“Strong demand, good mortgage availability and our ability to offer attractive levels of affordability to our customers, means the outlook for the division remains very positive,” said Chair Dermot Gleeson.
“Against this background the board remains confident that the group’s results for financial 2020 will be in line with expectations,” added Dermot Gleeson.
The firm said it expects the Homnes unit to record an increase in completions for the first half of 10%, with the previous half year total being 691 units.
For its financial year to the end of June 2020, the company said it plans to deliver an increase in completions of at least 10% versus prior year’s 1,529 units.
In the Strategic Land division, the firm saw strong demand for consented land. Gleeson said it expects results for the first half to be lower than usual, as the majority of land sales are expected in the second half of financial 20.
The struggling nature of the UK homebuilding industry is one that has been seen for many firms, however competitors do seem to be making ground.
FTSE250 listed Homeserve saw their shares rally in November. The firm saw a 2% rise in pretax from £19.3 million to £19.7 million, which caught shareholders attention.
A notable merger in the sector also came from Galliford Try and Bovis Homes Group plc, who had agreed a homebuilding deal which saw Bovis takeover the two Galliford housebuilding business units which was valued at £1.14 billion.
In an industry that is facing struggles, shareholders of Gleeson should be relatively appeased with the performance. The fact that the firm is set to meet expectations is a positive in the market and shareholders will have to be patient to see results amid political uncertainties.
