MJ Gleeson (LON:GLE) reported what management described as a “robust performance in a subdued market” for the six months to December 2025, as higher completions and improved reservation trends were partially offset by softer margins, higher overheads, and continued reliance on incentives. Executives also emphasized a major operating restructure under “Project Transform,” alongside increasing momentum at Gleeson Land.
Trading backdrop and early second-half trends
Chief Executive Graham Prothero said the autumn selling season “turned into a bit of a damp bonfire night,” citing negative budget headlines and a cautious consumer environment. Even so, the group delivered 848 homes in the first half, up about 6% year-over-year, and a net reservation rate that was up 9% to 0.48 per site per week, though still below 0.5.
Prothero said the broader backdrop appeared constructive, citing strong mortgage availability and falling interest rates, but stressed that confidence remained the missing ingredient and that each sale required “hard work” on pricing, presentation, and customer experience.
Financial performance: revenue up, profit down
Finance Director Stefan Allaway said group revenue rose 9.6% in the period, with growth in both divisions. Group operating profit, however, fell 17.6%. Net interest costs rose by GBP 0.7 million to GBP 2.2 million due to higher average borrowings. Excluding an additional GBP 0.3 million of exceptional costs, Allaway said the group delivered GBP 2.0 million of profit before tax.
At Gleeson Homes, revenue increased 5.9%, driven by both higher volumes and higher selling prices. The division completed 37 plots for partners, marking its first completions in the partnerships segment, and it also sold more homes via bulk transactions. Private bulk completions rose to 190 from 95 in the prior-year first half.
Allaway said reported average selling prices increased 2.5%, while underlying like-for-like selling prices rose 1.7%. Gross profit increased 4% to GBP 33.4 million, but gross margin fell to 19.8% as bulk sales made up a higher share of volume, slower sales extended site preliminaries, incentives remained in place, and build cost inflation marginally exceeded underlying price growth.
Overheads in Gleeson Homes were GBP 3.4 million higher year-over-year, which management attributed to pay inflation of around 3.2%, the impact of higher national insurance costs from April 2025, increased investment in IT systems and cybersecurity, and changes in bonus and share-based payment accruals. As a result, operating profit in the Homes division fell to GBP 7.0 million.
In Gleeson Land, the company completed three site sales in the first half, compared with none in the prior-year period. The sales generated GBP 2.0 million of gross profit, but the division increased provisions on work-in-progress by GBP 0.7 million, resulting in reported gross profit of GBP 1.3 million. The first-half loss narrowed to GBP 0.6 million. Allaway noted that Gleeson Land is “lumpy” and typically weighted toward a stronger second half.
Order book, cash flow, and dividend
Allaway said the forward order book increased 64% to 978 plots, from a low base. Partnerships orders rose from 105 to 382, bulk orders increased by 36, and open market forward orders rose 20% to 416 compared with December of the prior year.
On the balance sheet, inventories increased by GBP 46 million to GBP 416.7 million. Gleeson Homes’ inventory rose by GBP 31 million, with land work-in-progress reflecting purchases of over 2,300 plots on 17 sites in the last 12 months at an average cost of GBP 17,800. Gleeson Land’s inventory increased by GBP 15 million, which Allaway linked to the cost of activity around submitting 15 planning applications in the period. He also highlighted that Gleeson Land’s work-in-progress includes a significant amount relating to an owned site that has been conditionally sold, with completion expected by the end of the financial year.
Operating cash outflow was GBP 11.7 million, lower than the prior year’s first half, as Gleeson Land shifted to an operating cash inflow. Total cash outflow for the six months was GBP 6.6 million, taking net debt to GBP 22.5 million at December, up by GBP 4.4 million. Management said it expects net debt to reduce by year-end and emphasized that it can adjust land spending and site investment to generate cash if needed.
The board declared an interim dividend of 4p per share, unchanged year-over-year, payable on 7 April to shareholders on the register at close of business on 6 March.
Project Transform: operating restructure and margin focus
Prothero said “Project Transform” was central to restoring margins and improving execution, and that the company moved into the second phase of its restructure in January to complete a “fundamental operating restructure” in Gleeson Homes. Key changes included:
- Moving to a single division with six regions, including scaling Greater Manchester/Merseyside down to a “skeleton team” while the pipeline is rebuilt.
- Shifting land accountability from a centralized model to regional ownership, with land directors reporting to regional managing directors.
- Adopting a customer care model intended to hand over units defect-free after eight weeks.
- Aligning marketing and finance business partners more directly with regions to improve responsiveness and accountability.
Prothero said the company is tightening overheads as part of the changes, with headcount reductions of “no more than about 25.” He said the related cash people costs will not exceed GBP 1.5 million, and the company also expects to write off up to GBP 3 million of older land assets—mostly pre-development costs—in Greater Manchester. Annualized cost savings are expected to be about GBP 1 million.
On margins, management cited continued build cost inflation (about 2.7% in the first half), extended preliminaries on slower-selling sites, regulatory and tax headwinds, and the dilutive impact of bulk sales. Prothero also discussed a shift toward supply-and-fix groundworkers rather than labor-only, which he said would add roughly 2.5% to groundwork costs in appraisals but should improve pace, quality, and reliability over time.
Planning constraints, partnerships growth, and outlook
Prothero repeatedly highlighted planning as the “biggest single impediment” to growth. The company purchased nine sites in the first half and opened nine build sites, aiming to open a further eight in the second half. Since early January, Gleeson Homes has received five consents, including what management described as its largest-ever consent: 600 units in Spilsby, Lincolnshire. The company cited 43 sites awaiting planning decisions.
In partnerships, Prothero said the business is beginning to contribute revenue and profit. The company signed three new agreements in the first half, has eight sites under development, and is progressing discussions on a further 11. Management reiterated a target for partnerships to represent 20% of the business. Prothero said housing associations are “back in negotiation” but funding timing remains a constraint, while PRS investors remain active.
Looking ahead, management said market expectations remain achievable but warned risks could lead to a lower outcome if open market sales weaken or if bulk demand softens. Prothero said it would be “rash” to stand by guidance without seeing how the next few weeks develop, and the company plans to update investors in April.
About MJ Gleeson (LON:GLE)
MJ Gleeson plc comprises two divisions: Gleeson Homes and Gleeson Land.
Gleeson Homes, under the banner of “Building Homes. Changing Lives” builds high-quality affordable homes across the Midlands and North of England. To meet customer demand, and without compromising affordability, the range of homes available extends from one-bed apartments to five-bedroom houses. With a two-bedroom home available from £100,000, a key objective is to ensure that on all of our developments, a meaningful proportion of homes are affordable to a couple earning the National Living Wage.
