MJ Gleeson Reports Mixed FY2025 Results with Land Division Outperformance

FY2025 at MJ Gleeson: sales up, margins down, Land division shines

MJ Gleeson has posted audited results for the year to 30 June 2025 that are a mixed bag. Group revenue rose 5.9% to £365.8 million, but profits slipped as Gleeson Homes battled stubborn build costs and incentives. The bright spot was Gleeson Land, which more than trebled operating profit.

Management says FY2025 landed in line with revised expectations and guides to FY2026 “in line with expectations”. The strategy remains unchanged: grow Homes to 3,000 units a year and scale Land’s promotion engine. If they hit 3,000 homes, the Board believes Group profitability could broadly triple – not a formal forecast, but a clear ambition.

Key numbers investors should know

Metric	FY2025	FY2024	Change
Revenue	£365.8m	£345.3m	+5.9%
– Gleeson Homes	£348.2m	£329.0m	+5.8%
– Gleeson Land	£17.6m	£16.3m	+8.0%
Operating profit – Homes (pre-exceptional)	£22.3m	£30.3m	-26.4%
Operating profit – Land	£7.0m	£2.2m	+218.2%
Profit before tax (pre-exceptional)	£21.9m	£24.8m	-11.7%
Profit before tax (reported)	£20.5m	£24.8m	-17.3%
EPS (pre-exceptional)	28.9p	33.1p	-12.7%
Basic EPS (reported)	27.1p	33.1p	-18.1%
Dividend per share	11.0p	11.0p	Flat
ROCE	8.6%	10.1%	-150 bps
Net cash/(borrowings)	£(0.8)m	£12.9m	£(13.7)m

Gleeson Homes: stronger order book, squeezed margins

Homes sold rose 1.2% to 1,793, with the average selling price up 4.3% to £193,600. Underlying prices edged just 0.6% higher, so most of the ASP lift came from mix (fewer lower-priced multi-unit deals and more larger homes).

The rub is margins. Gross margin on homes sold fell to 20.7% (2024: 24.1%) as incentives stayed elevated and build costs overshot provisions, particularly on older sites with extended durations. Operating profit fell to £22.3 million and the operating margin to 6.4% (2024: 9.2%). Exceptional restructuring costs of £1.3 million reflect the “Project Transform” overhaul of leadership and processes.

Sales momentum is improving

• FY2025 reservation rate averaged 0.71 per site per week, up 37%. Excluding multi-unit sales, it was 0.53, up 20%.
• In the 11 weeks to 12 September 2025, open-market net reservations were 0.54 per site per week versus 0.50 last year (+8%).
• Forward order book at year end: 845 plots (2024: 559) – a material step-up.

Operationally, 13 new build sites opened in the year, finishing with 68 build sites and 57 active sales sites. Planning delays and utility connection lead times constrained the site opening cadence, but the land pipeline increased to 19,638 plots across 164 sites. Management expects to open 20-30 build and sales sites in FY2026, with more sales sites by 30 June 2026.

Product and partnerships broaden the customer base

• New one-bedroom apartments aimed at suburban density and affordability; five-bedroom houses to attract movers and downsizers.
• Four partnership agreements signed in FY2025; two more signed since year end. Target remains around 20% of sales from partnership sites over the medium term.
• Affordability remains a core pitch: 78% of homes sold were affordable to a couple on the National Living Wage.

My take: the order book and reservations tell you demand is there at the right price point. The near-term earnings swing factor is margin – which hinges on build cost control, reduced incentives and a steadier planning backdrop. The reorganisation should help, but we will need to see it in the delivered margin.

Gleeson Land: momentum building for medium-term outperformance

Gleeson Land delivered a standout year: operating profit jumped to £7.0 million from £2.2 million, on revenue of £17.6 million. Seven transactions completed, including five promotion sites sold with permission for 996 plots, a 206-plot land swap, and a sale of an option agreement.

• Portfolio expanded to 77 sites with potential for 18,401 plots (2024: 71 sites, 16,911 plots).
• Eight sites with planning or resolution to grant for 1,343 plots; ten sites awaiting planning decisions.
• Six sites with consent for 1,252 plots are already in sale processes.

Management expects another “robust” FY2026, with significant growth from FY2027 as the enlarged pipeline converts. The division has invested in a beefed-up team and data analytics, and has doubled site win rates since reorganising. In plain English: more deals coming through, with better odds of planning success.

Cash, balance sheet and dividend

The Group swung to modest net borrowings of £0.8 million, from £12.9 million net cash last year, as it invested in inventories and land receivables. Inventories rose to £380.8 million. Liquidity looks ample: a £135 million revolving credit facility with Lloyds and Santander has been extended to October 2027, with a further uncommitted one-year option.

The total dividend is held at 11.0p per share (covered 2.6x by normalised earnings). The Board’s policy is 3-5x cover, but they are comfortable recommending a lower cover this time, signalling confidence in the medium-term outlook.

Building safety remains provisioned at £11.9 million (2024: £12.4 million), with two buildings substantially complete and remediation progressing.

Outlook: FY2026 steady, bigger ambitions beyond

For FY2026, the Board expects an overall result “in line with expectations”. The Homes division enters with a fatter order book and stable sales rate, while Land has more sites in sale processes and is positioned for growth from FY2027.

The bigger strategic prize is 3,000 homes per year for Gleeson Homes. Management says that could broadly triple Group profitability. The enablers are clear: more sites opened, tighter cost discipline, and partnerships providing volume resilience.

Josh’s take: what’s good, what’s not, and why it matters

Positives

• Land outperformance: £7.0 million operating profit, stronger portfolio and planning traction.
• Homes demand indicators improved: reservations up, cancellations stable, order book +51% year on year.
• Strategic housekeeping: leadership rework, tighter controls and clearer accountability should support margins.
• Dividend maintained and facilities extended, giving breathing room to invest through the cycle.

Watch-outs

• Homes gross margin at 20.7% is the pressure point. Incentives and cost inflation remain the headwind.
• Planning and utilities continue to slow site openings, limiting near-term volume growth.
• ROCE down to 8.6% reflects lower profitability on higher capital employed – needs to turn as new sites ramp.

Why it matters: Gleeson serves the most affordable end of the new-build market in the Midlands and North – a large, underserved segment. If management can restore Homes margins while scaling volumes and keep Land’s momentum, the earnings power materially increases. Today’s numbers show the path, but not yet the punch.

Jargon buster

• Reservation rate: average weekly net sales per site. Higher is better for future completions.
• Forward order book: contracted future sales (plots) not yet completed – supports revenue visibility.
• ROCE: return on capital employed – profit before interest and tax divided by average net assets. A key efficiency metric.
• Multi‑unit sale: a bulk sale of five or more homes to a single buyer, often at a discount.
• Partnership sale: homes sold to partners such as registered providers or single‑family rental operators.

What to watch next

• Homes gross margin recovery as Project Transform beds in and incentives normalise.
• Site openings: management targets 20-30 new build and sales sites in FY2026.
• Partnership pipeline conversion and the Government’s affordable housing funding impact from Spring 2026.
• Land disposals in FY2026 and the step-up flagged for FY2027.

For the detail-minded, analyst consensus links are provided by the Company: https://www.mjgleesonplc.com/investors/analyst-coverage/ and the FY25 results webcast is at https://brrmedia.news/GLE\_FY25.