MJ Gleeson Sees 6% Home Sales Growth and Strong Order Book in H1 Trading Update

“Project Transform” – the operational restructure – is progressing, with further changes implemented to make overheads “as lean as possible”. The costs will be treated as exceptional this year. Watch for the size and timing of these exceptional charges in February, and for evidence that the savings are sticking in H2 margins.

Planning constraints and site activity

Local authority planning resource remains a drag on opening new sites. Since the start of FY2026, nine new build sites were opened (vs eight a year ago) and seven new sites commenced sales (down from 11). The number of active selling sites is 53, down from 65 at 31 December 2024.

Fewer selling sites are a headwind to volume growth, but stronger reservation rates and a bigger order book suggest the existing network is working harder. If planning throughput improves, openings can accelerate – but that remains a known bottleneck sector-wide.

Gleeson Partnerships: first homes delivered, demand building

Partnerships delivered its first homes in the period and is seeing strong interest from private rental investors and housing associations. Many housing associations are still waiting for funds under the Government’s new settlement, so revenue conversion may be phased as funds are released. The early traction is encouraging for the medium-term mix.

Gleeson Land: three sales booked, more to come but one big timing swing factor

Gleeson Land completed three site sales and has five more in active sale processes. Demand for prime consented sites remains strong. Importantly, the division has planning permission for all sites expected to be sold this year, de-risking execution.

There is one notable caveat: the timing of a single sale – representing approximately 50% of total plots forecast to be sold during the year – depends on final technical agreement of the highways design. That is a timing risk rather than a demand risk, but it could shift revenue between periods.

Balance sheet: modestly higher net debt as activity ramps

Net debt at the period end was £22.5 million, up from £18.1 million a year ago. That’s a manageable level for a housebuilder with improving sales momentum and a larger order book, but it bears watching alongside land spend, build rates and any working capital tied up in the timing of land disposals.

Guidance and outlook: in line with expectations and looking to Spring

The Board expects full-year results to be in line with current market expectations. The company points to an improvement in Spring selling following December’s rate cut and easing Budget uncertainty. Management’s tone is constructive: operational efficiencies in Homes, growing momentum in Land, and confidence in strategic objectives.

For reference, analyst consensus for FY2026 is available here: MJ Gleeson analyst coverage.

My take: positives, watch-outs and what to track on 11 February

What I like

• Clear operational progress: homes sold up 6%, reservation rates higher, and a forward order book of 978 plots with circa 650 expected to complete before year end.
• Margin focus: pushing pricing and volume while cutting overhead via Project Transform should support H2 margin rebuild.
• Land engine turning: three sales completed, five in process, and planning permission secured for all sites expected to be sold this year.

What I’m cautious about

• Planning bottlenecks: 53 active selling sites versus 65 a year ago shows the constraint is real.
• Timing risk in Land: one sale equates to c.50% of forecast plots for the year and hinges on a highways design agreement.
• Exceptional costs: restructuring charges will hit this year – size not disclosed.
• Net debt edging up: £22.5 million vs £18.1 million – not alarming, but worth tracking if land sale timing slips.

What to watch in the interim results

• Gross margin and incentives in Homes – evidence that pricing gains are offsetting cost inflation and regulatory costs.
• Detail on Project Transform – quantum of exceptional costs and expected annualised savings.
• Cash flow and working capital – especially around the timing of the large Land sale.
• Reservation trends post-December rate cut – is the Spring bounce materialising?

Bottom line for investors

This is a reassuring update from MJ Gleeson. Sales and reservations are moving the right way, the order book is much stronger, and management expects to meet full-year expectations. Planning remains a thorn in the sector’s side, and there is a chunky timing dependency in Land, but operational execution is improving.

If the Spring selling season delivers and Project Transform drops through to margins, the set-up for H2 looks favourable. The 11 February results should give a clearer read on profitability, cash and the Land sale timetable.