Interim profits slide at Gleeson, warns of uncertain outlook
MJ Gleeson Plc sounded a cautious note on Wednesday, prompting the share price to tumble, after interim profits slumped amid subdued market conditions.
The housebuilder, a specialist in affordable homes in the Midlands and north of England, saw revenues jump 9.6% to £173.1m in the six months to 31 December, while total homes sold rose to 848 from 801.
However, operating profits slid 17.6% to £4.2m, and pre-tax profits tumbled 52.8% at £1.7m, on lower first-half phasing of sales, higher overheads and increased borrowing costs.
The housing sector has been buffeted recently by weak consumer sentiment, historically high interest rates and a spike in uncertainty in the run up to last autumn's Budget.
Looking to the full year, chief executive Graham Prothero said Gleeson had been "cautiously encouraged" by open market buyer activity over the last five weeks, "which has seen a recovery from the first half".
However, he warned: "While market expectations remain achievable, a strong Spring selling season remains fundamental to our assumptions in delivering those expectations, and we need to see the recovery gain further momentum.
"The bulk market has softened further, as investors remain cautious and focused on pricing. Margins continue to be pressured as net selling price increases are outpaced by build costs, and we experience increasing regulatory and tax headwinds."
As at 0830 GMT, the FTSE All-Share stock was down 10% at 356.36p.
Prothero said the firm would update guidance in April, when it expects to have greater visibility on trading to the year end.
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