Sheffield-based housebuilder reports 21.7% increase in profit

Gleeson Homes has reported a 21.7% increase in pre-tax profit for the first half of the year and says it is on course to beat its target of completing 2,000 homes over 12 months.

The urban regeneration specialist, in its results for the six months to 31 December, reported turnover of £173.5m, up 17.5% on the £147.6m posted the previous year. Pre-tax profit increased 21.7% over the same period, from £20.3m to £24.7m.

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Gleeson Homes’ Carrwood Park development near Bradford

The Sheffield-based developer sold 932 homes in the first six months of the year. This was down slightly on the 951 for the same period the previous year, however Gleeson said this was due to delayed completions due to the covid-19 lockdown inflating the previous year’s figure. It said the 932 figure is 14.9% up on the comparable period in 2019.

The firm expects to deliver more than 2,000 homes in the full year, beating the 1,812 homes delivered the previous year and hitting a target it first set itself in 2017.

James Thomson, chief executive of MJ Gleeson, said: “The Group performed strongly during the first half and this result, and indeed our performance throughout the pandemic, is evidence of the underlying strength of the business.

“We expect Gleeson Homes to deliver 2,000 homes this financial year and Gleeson Land to complete further sales in the second half of the financial year. Consequently, in the absence of any further Covid-19 or supply chain related disruption, the Board is confident that results for the full year to 30 June 2022 will be ahead of market expectations.

The average selling prices of Gleeson properties rose 14.7% to £161,000, it opened eight new sites with a further 17 expected in the second half of the year.

Gleeson’s land pipeline now stands at 16,242 plots, up from 15,863 last summer.

Gleeson said that supply chain pressures, including the price and availability of labour and materials are “starting to show signs of easing.”

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It said: “The impact of these has been managed through the strong relationships that we have with our suppliers and subcontractors, and the unprecedented cost increases that have been offset by selling price inflation.”

It added that skills shortages combined with wage inflation “remains a challenge for the wider industry”

Gleeson also said that it is calling for an “industry-wide” solution to the issue of funding for fire safety remediation works on blocks between 11 and 18 metres in height. This follows housing secretary’s Michael Gove announcement of a £4bn cladding fund and his threat to stop housebuilders trading if they don’t contribute.

Gleeson said: “There is universal agreement that a solution to legacy building safety issues is urgently needed and that leaseholders should not have to bear any related costs.

“We have therefore been advocating with the government an industry-wide, fiscal-based solution involving participation from all stakeholders - including architects, specifiers, insurers, materials producers, suppliers and developers - and which would therefore be both proportionate and pragmatic.”