A jump in home completions wasn't enough to save Gleeson from a statutory loss, exceptional charges and a dividend cut of more than half.
MJ Gleeson (AIM: GLE) shares fell 4% on Tuesday after the affordable housebuilder swung to a statutory pre-tax loss of £2.7m for the year to 30 June, reversing a £20.5m profit a year earlier, and slashed its total dividend to 5.0p from 11.0p.
The slide came despite Gleeson selling 1,968 homes, up almost 10% on the year, and lifting revenue 12% to £410m, as investors instead focused on collapsing margins and a raft of one-off charges that overwhelmed the top-line growth.
Adjusted pre-tax profit halved to £10.8m, and after £13.6m of exceptional charges for impairments and provisions on legacy sites, the group tipped into a statutory loss. Build cost inflation of 4.5% outpaced selling price growth, while a heavier mix of lower-priced bulk sales dragged the homes division's gross margin down to 18.7% from 20.7%. The land promotion arm also swung to a small loss after a large transaction slipped into the new financial year.
Management pointed to prudence in a tougher trading environment as the reason for the steep dividend cut, while also pushing through 'Project Transform', a regional restructuring that included 56 redundancies and a new leadership team, alongside efforts to grow its capital-light partnerships arm building homes with housing providers.
Gleeson said it expects full-year 2027 results to be in line with current market forecasts, a reassurance that may limit further downside, though investors will be watching closely for signs that cost inflation and margin pressure are stabilising before the shares can recover meaningfully.
This report is based on MJ Gleeson’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full markets calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Fab Lentz on Unsplash.
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