MJ Gleeson, the housebuilder, has issued a profit warning for this year, anticipating a 15-20% hit due to sluggish recovery in the housing market and the collapse of a land sale in Yorkshire.
The firm informed markets that the º£½ÇÊÓƵ's housing market recovery pace has "not been sufficient" to counterbalance the effects of increased build costs, stagnant selling prices, and several bulk sale transactions, as reported by .
Investors' reaction was swift, with the company's share price plummeting over 22% in early trading as they shed their holdings in the housebuilder.
Gleeson indicated that its gross margin for the year would be around one per cent lower than anticipated, resulting in an operating profit 15-20% below current expectations.
While the inflation of material costs has been easing since its peak in 2022, labour cost inflation continues to escalate, fuelled by hikes in employers' National Insurance contributions and the National Living Wage.
The company also noted that the failure of a land disposal in East Yorkshire had further dented profits.
"The board's expectation that Gleeson Homes would deliver an overall operating profit in line with market expectations included the profit contribution [of the sale]... It is now not expected that this disposal will proceed," the company stated.
In the previous year, Gleeson reported a revenue increase of 5.2%, from £328.3m to £345.3m, although pre-tax profit dropped by 21.3% to £24.9m.
Gleeson has warned that planning delays will continue to impact the business in 2026, with its gross margin for next year predicted to be around one per cent lower than market expectations.
Despite the º£½ÇÊÓƵ government's ongoing efforts to reform the planning system, approximately half of projects are currently experiencing delays.
