Housing developer MJ Gleeson says cost inflation and static demand have hampered its progress, despite an increase in the number of properties it has sold.
Boss Graham Prothero said the headwinds were exacerbated by issues around process and compliance which added costs and led to a restructuring of the Gleeson Homes business that saw divisional chief executive Mark Knight step down in July. The measures also included stricter cost controls.
The comments came as the Sheffield-based builder announced full year 2025 results in which it reported the sale of 1,793 homes in the year to the end of June, up from 1,772 in 2024. Gleeson saw overall revenues rise 5.9% with operating profits up 218.2% across it land division to £7m, up down 26.4% to £22.3m across its homes business.
Reservation rates for the year averaged 0.71 per site per week, up 37% on 2024 numbers. The firm's forward order book also grew from 559 plots to 845.
Mr Prothero said: "Market demand has been steady, and we have maintained a robust sales rate, reflected in our net open market reservations rate, up 28% in the second half against the same period last year. Selling prices, however, remained constrained, with incentives continuing at an elevated level, restricting material margin improvement.
"The organisational and management changes implemented in Gleeson Homes to improve performance are already delivering benefits. The new leadership team is operating effectively with shorter reporting lines, strengthened divisional and regional management teams, and more rigorous process compliance, underpinned by increased local empowerment and responsibility."
He added: "We are also very pleased with the progress at Gleeson Land, which achieved improved levels of planning success and new promotion agreements during the year and starts the new financial year with more sites in sale processes. Having delivered a significantly improved result, and strengthened by the recent geographical reorganisation and data research capability, the business is making significant progress towards its objective of becoming the pre-eminent land promoter in the South of England.
"Consequently, the board currently expects the group to deliver an overall result for FY2026 in line with its expectations [expected pre-tax profit of £24.3m]. Looking further ahead, we believe the combination of a stronger performance from Gleeson Homes and continued progress at Gleeson Land position the group well for a period of sustained growth."
