Gleeson Homes’ sales slump due to 'weak market conditions'

The low-cost housebuilder issued a trading update revealing that completions fell by 14% over its half year.

Related topics:  Construction,  Property,  Housebuilders,  Gleeson
Property | Reporter
10th January 2024
Construction 711

Over the six months to December 31 2023, Gleeson completed the sale of 769 homes against H1 2022’s 894, reflecting “the weaker conditions experienced across the housing market during 2023” according to the firm.

The business also expects its full-year gross margins to fall “below expectations” by around 1.5% to 2%. This was, it said, thanks to costs from older sites and difficult market conditions including extended site durations, sales incentives and multi-unit sales.

During the half year, net reservation rates were slightly up on 2022, from 0.36 per site per week to 0.41. The Homes division entered its second half with a stronger forward order book than the comparable period, at 586 plots (December 31 2022: 319 plots).

Gleeson said its board anticipated a “seasonally busier selling period” in the coming weeks and months, with stabilising interest rates triggering a renewed interest in low-cost housing.

At the same time, the housebuilder is arranging further multi-unit sales, expecting to enter into agreements “over the coming months for delivery of homes in the current and next financial year”.

Meanwhile, Gleeson Land completed the sale of one site during the half year, compared to the comparable period’s three. It is currently marketing a further four sites.

The group is set to report net debt of £18.7m for its half year after being in a net cash position of £5.2 million as of June 30 2023. Gleeson said this was due to “significant investment” in bringing forward a higher proportion of home starts before June 2023.

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