Mj Gleeson Plc · LSE:GLE
Mj Gleeson — H1 2025 Earnings Presentation
58 slides from Mj Gleeson's earnings presentation, Feb 11, 2025
Slide 1: Results for the half year ended 31 December 2024
Results for the half year ended 31 December 2024 “Strongly positioned for a market recovery” 11 February 2025
Slide 2: Contents
Contents Overview 3 Financial Performance 6 Operations & Strategy 14 Summary & Outlook 26 Appendices 29 Graham Prothero Stefan Allanson CEO CFO MJ Gleeson PLC 2
Slide 3: Overview
Overview MJ Gleeson PLC 3
Slide 4: A robust performance
A robust performance Gleeson Homes: • 801 homes sold (H1 23/24: 769) • Net reservation rate on open-market sales up 13% at 0.44 per site/week • Margin impacted by pricing, incentives and extended prelims • 5-star customer recommendation in every region maintained • Site opening growth plan progressi
Slide 5: Encouraging early start
Encouraging early start Net reservations • Recent open market sales rate up 45% over prior period: up 45% v prior year • 4 weeks to 31 January 2025: 0.77 Cancellations • 4 weeks to 2 February 2024: 0.53 • Affordability strong but still some way to go before buyer confidence fully restored • Buyers n
Slide 6: Financial Performance
Financial Performance MJ Gleeson PLC 6
Slide 7: Group income statement
Group income statement £ million H1 24/25 H1 23/24 Change Notes Gleeson Homes 156.6 142.3 10.0% Homes sold up 4.2%, ASP up 4.8% Gleeson Land 1.3 9.2 (85.9%) Land swap on two JV promotion agreements Revenue 157.9 151.5 4.2% Gleeson Homes 9.1 10.2 (10.8%) Operating margin 140bp lower Gleeson Land (1.9
Slide 8: Gleeson Homes
Gleeson Homes • Homes sold up 4.2% to 801 (H1 23/24: 769) • Including 95 private multi-unit sales (H1 23/24: 169) • ASP up 4.8% to £193,900 (H1 23/24: £185,000) • +0.8% increase in underlying selling prices* • Revenue up 10.0% to £156.6m (H1 23/34: £142.3m) • Includes £1.2m land sale • Gross profit
Slide 9: Forward order book
Forward order book • Forward orders up 1.9% compared with December 2023 • Continued multi-unit orders • Second partnership agreement • Recovery in market confidence needed to re-build open-market forward orders *Includes s106 multi-unit Affordable Homes for-rent sold to Registered Providers MJ Glees
Slide 10: Gleeson Land
Gleeson Land • No land sales completed (H1 23/24: 1 promotion land sale) • Gross loss £0.3m (H1 23/24: gross profit of £2.9m) • £0.3m additional provisions • Overheads £1.6m (H1 23/24: £1.9m) • Operating loss £1.9m (H1 23/24: operating profit of £1.0m) MJ Gleeson PLC 10
Slide 11: Group balance sheet
Group balance sheet 31 December 31 December £ million 2024 2023 Notes Gleeson Homes Land 116.2 98.2 £14,600 per plot (December 2023: £12,100, June 2024: £12,800) WIP 218.2 227.4 £2.8m per site (December 2023: £2.7m, June 2024: £2.7m) Gleeson Land Land 16.8 14.0 73 sites (December 2023: 70 sites, Jun
Slide 12: Group cash flow
Group cash flow £ million H1 24/25 H1 23/24 Notes Profit before tax 3.6 7.2 Depreciation and other 3.9 4.3 Depreciation, provisions, finance costs and SBP charges Working capital movements (29.7) (24.6) Gleeson Land debtors reduced significantly in prior half-year Cash used in operating activities (
Slide 13: Dividends
Dividends • Interim dividend of 4.0 pence per share (H1 23/24: 4.0 pence) • To be paid on 4th April 2025 to shareholders on the register at close of business on 7th March 2025 • Dividend cover policy: full year earnings to cover dividends between 3 and 5 times Interest cover 3.9x 4.3x 3.1x 3.0x MJ G
Slide 14: Operations & Strategy
Operations & Strategy MJ Gleeson PLC 14
Slide 15: Gleeson Homes
Gleeson Homes MJ Gleeson PLC 15
Slide 16: Market environment
Market environment • Demand environment awaiting stable macro and improved confidence • Interest rate cut on 6 February: further cuts expected this year • Mortgage rates stable and availability is good • Selling prices steady – continuing use of incentives • Build cost inflation – expect 2% to 3% ov
Slide 17: Highly affordable
Highly affordable • Cheaper to buy than rent • Typical Gleeson 2-bed home costs £700 per month to buy • Equivalent home costs £900 per month to rent • Affordable for low-income buyers • Lowest income earners experiencing “real” earnings growth • National Living Wage up 9% more than inflation since 2
Slide 18: Operational capability
Operational capability Northern division • 6 regions, 2 divisions Central division • Capacity of c.500 homes p.a. in each region • Further strengthening operations • Build cost savings initiatives • Commercial controls further improved • Sales focus continuing • Focus on high-quality build and custo
Slide 19: Private rented sector and partnership sites
• Private rented sector continues to be highly active Open market site Partnership site • Housing Associations keen to participate but constrained, pending new funding settlement Site size 50-200 plots 100-900 plots Sales rate 30-50 homes p.a. 50-80 homes p.a. • High level of activity to date: • 2 a
Slide 20: Build and sales sites
Build and sales sites • Build sites • 8 sites opened (H1 23/24: 3 sites opened) Build sites • 79 sites (31 December 2023: 76) Build sites not • 79 average sites (H1 23/24: 78) yet actively selling • Expect sites to grow by 10 net new sites each year thereafter • Sales outlets • 11 outlets opened for
Slide 21: A pipeline for growth
A pipeline for growth • Pipeline up 3.1% to 18,731 plots on 174 sites • 79 active build sites • 10 owned, not yet active • 85 conditionally purchased sites • High quality pipeline to support growth • Average cost c.£15,900 per plot (31 Dec 2023: £14,800) • Land continues to be available at sensible
Slide 22: The route to 3,000 homes p.a.
The route to 3,000 homes p.a. • Under-supplied market segment, with strong underlying demand for high quality affordable homes Medium-term, FY24 stable market scenario • Business well positioned to achieve growth: • Pipeline of 95 future sites • Controlled expansion, increasing sales outlets by 10 S
Slide 23: Gleeson Land
Gleeson Land MJ Gleeson PLC 23
Slide 24: Planning activity
Planning activity • Expect 4-8 sites sales in H2 • Little planning risk, more timing and execution risk • NPPF changes already benefiting both current and future years • 2 planning applications submitted (FY24: 4, H1 FY24: 1) • 2 sites granted permission (FY24: 5) • 11 sites were awaiting a planning
Slide 25: Executing the strategy
Executing the strategy • Strategy is significantly strengthening the medium-term outlook • 3-region structure fully operational • 100% customer satisfaction score • Market-leading research and data analytics capabilities delivering increased bids and increased win rate • H1 early indications are ver
Slide 26: Summary & Outlook
Summary & Outlook MJ Gleeson PLC 26
Slide 27: Strongly positioned for a market recovery
Strongly positioned for a market recovery • Early signs of a bright start to H2 underpinning confidence in FY outlook • Gleeson Homes well positioned for growth • Site openings accelerating, as planned • Gross margins expected to improve from H2 • Lower margin sites completing in H2 and H1 next year
Slide 28: Q&A
Q8&A MJ Gleeson PLC 28
Slide 29: Appendices
Appendices MJ Gleeson PLC 29
Slide 30: About MJ Gleeson plc
About MJ Gleeson plc Gleeson Homes We build and sell high-quality, low-cost homes where they are needed, for people who need them most. Gleeson Land We promote land, enhancing its value by securing mainly residential planning. MJ Gleeson PLC 30
Slide 31: Building safety
Building safety • Wholly committed to remediating life-critical fire-safety issues Stage of work No. of buildings • Identified 17 buildings over 11 metres • 16 buildings below 18 metres, 1 building at 18.3 metres Work underway 5 • 4 with some cladding (none fully clad) • Remediation works focused on
Slide 32: Customer demographics & case studies
Customer demographics & case studies MJ Gleeson PLC 32
Slide 33: Customer demographics
Customer demographics • Gleeson Homes’ customers: • First time buyers: up slightly at 55% (67% two years ago) • Median age: up one year at 35 years old (29 years old three years ago) • Over 55 year-olds: slightly higher at 22% (11% two years ago) • Youngest buyer 18 years old, oldest buyer 87 years
Slide 34: Jayne, 65 and Karl, 65
Jayne, 65 and Karl, 65 Occupation: Retired School Teacher and Driving Instructor Date of purchase: July 2024 Development: Monarch Green, County Durham House type: 3-bedroom, semi-detached Glin Purchase price: £167,000 Mortgage: £nil, cash purchase After 45 years of marriage and previously living in
Slide 35: Kenzie, 21 and Tyler, 23
Kenzie, 21 and Tyler, 23 Occupation: NHS Process Assistant and HGV Mechanic Date of purchase: June 2024 Development: Rainsborough Park, Knottingley House type: 4-bedroom detached, Longford Purchase price: £264,995 Mortgage: £1,350 per month Kenzie and Tyler couldn’t wait to start their next chapter
Slide 36: Jordan, 27 and Victoria, 25
Jordan, 27 and Victoria, 25 Occupation: Telecommunications Engineer and Primary School Teacher Date of purchase: May 2024 Development: The Green, Blidworth House type: 3-bedroom, detached Kilkenny Purchase price: £244,996 Mortgage: £1,060 per month After previously renting, Jordan and Victoria decid
Slide 37: James, 28 and Gemma, 28
James, 28 and Gemma, 28 Occupation: Kitchen Designer and Early Years Teacher Date of purchase: June 2024 Development: Barley Meadows, Cumbria House type: 3-bedroom semi-detached, Tyrone Purchase price: £159,995 Mortgage: £745 per month After relocating to Cumbria and renting for seven years, James a
Slide 38: Sustainability
Sustainability MJ Gleeson PLC 38
Slide 39: Sustainability
Sustainability • Our commitment to sustainability is central to our mission of transforming lives by building affordable, quality homes for those who need them most • Affordable for every working couple • 5-star housebuilder – in all regions • Crime data shows Gleeson developments benefit high risk
Slide 40: Sustainability
Sustainability • A couple working full time on the National Living Wage can afford a Gleeson Home on any of our developments • 5-star build and service, in every region • Crime data shows Gleeson developments benefit high risk areas • 85% employee engagement score, with 83% saying they are proud to
Slide 41: Market Backdrop
Market Backdrop MJ Gleeson PLC 41
Slide 42: Significantly cheaper to buy than rent
Significantly cheaper to buy than rent 85% LTV 90% LTV Rented house Number of Average mortgage mortgage – new lettings bedrooms Gleeson price (cost per week) (cost per week) (cost per week) 2 bed £164,200 £159 £173 £208 3 bed £195,400 £189 £205 £265 4 bed £252,600 £245 £265 £346 All mortgage payment
Slide 43: Building the affordable homes the country needs
Building the affordable homes the country needs • Selling prices affordance to lower income households • £384,500 average new build house price in England* • £291,700 average new build house prices in North & East Midlands* • 50% higher than Gleeson’s average selling price of £193,900 • Affordable a
Slide 44: Highly affordable
Highly affordable • Affordable for low-income buyers • Mortgage payments 22%* take home pay v UK average 36%** • Lowest income earners experiencing “real” earnings growth • National Living Wage (NLW) increasing by 6.7% from April 2025 • A couple on the NLW can afford a home costing £225,749 • 38% hi
Slide 45: House prices – North of England isn't North London
House prices – North of England isn’t North London • Price increases since December 2007 vary by region • London up 72% • North of England & East Midlands up 43% • Below rise in RPI of 85% • Since 2014: • National living wage up 81% • Gleeson prices up 60% • Since August 2022: • London house prices
Slide 46: Planning environment
Planning environment Applications decided Major planning within statutory time applications granted period (England) (Major – 13 weeks, Minor – 8 weeks) (England) Source: Department for Levelling Up, Housing and Communities, England. Lichfields, Insights, Start to Finish MJ Gleeson PLC 46
Slide 47: Planning environment (continued)
Planning environment (continued) Length of planning Residential planning approval period (years) approvals (England and Wales) (England) Source: Department for Levelling Up, Housing and Communities, England and Wales. Lichfields, Insights, Start to Finish New Housing Pipeline, Q3 2024 Report, Glenig
Slide 48: Healthy supply chain
Healthy supply chain • Materials: • Availability high • Call-off periods & delivery times good • Material costs up +1.3% in last 6 months (bricks, blocks, plaster material) • Labour: • Availability good • Labour rates up +0.6% in last 6 months (groundworkers) Source: Brick stocks Department for Busi
Slide 49: Structural under-supply of quality, affordable homes
Structural under-supply of quality, affordable homes Household tenure • Shortage of affordable homes in North of England and (millions of households) Midlands: • 7.8 million households renting • 0.7 million households on Local Authority waiting lists • 1.3 million adults living with parents • Little
Slide 50: Highly affordable
Highly affordable • Selling prices affordable to lower income households • £384,500 average new build house price in England* • £291,700 average new build house price in North & East Midlands* • 50% higher than Gleeson’s average selling price of £193,900 • £193,900 average Gleeson selling price in t
Slide 51: Mortgage availability, rates and costs
Mortgage availability, rates and costs • Buyers starting to adjust to higher cost of borrowing Average mortgage rates: • Alternative products available following end of HtB in March 2023 5-yr fixed 2-yr fixed Variable • First Homes, Shared Ownership, Deposit Unlock, HtB 85% LTV 4.83% 5.08% 6.59% Mor
Slide 52: Gleeson Homes - interim results
Gleeson Homes - interim results MJ Gleeson PLC 52
Slide 53: Gleeson Homes
Gleeson Homes • Homes sold up 4.2% to 801 (H1 23/24: 769) • Including 95 multi-unit sales (H1 23/24: 169) • c43% of full year, as expected • Revenue up 10.0% to £156.6m (H1 23/34: £142.3m) • Includes £1.2m land sale • ASP up 4.8% to £193,900 (H1 23/24: £185,000) • +0.8% increase in underlying sellin
Slide 54: Gleeson Homes
Gleeson Homes • Gross profit of £32.1m (H1 23/24: £34.9m) • Gross profit per home sold £39.8k (H1 23/24: £45.3k) • £0.2m profit on sale of surplus land • Gross margin on unit sales 20.6% (H1 23/24: 24.5%) • Increased incentives & lower extras • Multi-unit sales • Cost increases on older sites nearin
Slide 55: Gleeson Homes
Gleeson Homes • Other operating income £0.1m (H1 23/24: £0.2m) • Operating profit £9.1m (H1 23/24: £10.2m) • Operating margin 5.8% (H1 23/24: £7.2%) • ROCE 10.6% (H1 23/24: 10.9%) FY23 results are stated before £1.0m exceptional restructuring costs and FY22 results are stated before £12.9m exception
Slide 56: Gleeson Land portfolio
Gleeson Land portfolio MJ Gleeson PLC 56
Slide 57: Portfolio
Portfolio • Continued focus on enhancing the depth and quality of the portfolio • 73 sites (Dec 23: 70 sites) • 17,434 (Dec 23: 17,574 plots) • 1,382 plots on 8 sites with consent / resolution to grant (June 2024: 1,473 plots on 7 sites) As at 31 December As at 30 June As at 31 December 2024 2024 20
Slide 58: Thank you
Thank you MJ Gleeson PLC 5 Europa Court, Sheffield Business Park, Sheffield, S9 1XE Tel: +44 (0) 114 261 2900 Registered in England no. 09268016