Housebuilder says operating profit will be 15% to 20% lower than expected
Gleeson Homes has warned its operating profit could be hit by up to 20% this year due to market ‘headwinds’ and a land sale unexpectedly falling through.
The housebuilder, in a short trading update this morning, said the pace of the housing market recovery has not been able to offset the impact of “headwinds” throughout the past year.
It said: “These include increased build costs, flat selling prices, the continued use of incentives and several bulk sale transactions. Consequently, Gleeson Homes gross margin for the year will be circa 1% lower than previously expected.”
It also said it had been expecting to dispose of land in east Yorkshire, but this has now fallen through, which will affect its figures for the year to 30 June.
It said: “It is now not expected that this disposal will proceed and consequently Gleeson Homes anticipates reporting an operating profit circa 15% - 20% below current expectations.”
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The housebuilder said a number of factors including planning delays will continue to impact its business into next year, including “planning delays which will see the business selling from fewer sites than previously forecast.” It said its land business has completed three transactions to date and is continuing work on a further seven disposals anticipated to complete before the year end.
Gleeson had previously reported a halving of its profit to £3.6m for the six months to 31 December but had expected its margins in the second half of the year.
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