MJ Gleeson H1 Earnings Call Highlights

Core Viewpoint - The company reported a robust performance in a subdued market, with higher group revenue but lower operating profit due to weak seasonal demand and cost inflation [4][6]. Group Performance - Group revenue rose 9.6% year-on-year, while group operating profit fell 17.6%, resulting in a profit before tax of £2.0 million, excluding exceptional costs [6]. - The net reservation rate increased by 9% year-on-year to 0.48, and completions rose about 6% to 848 homes [3][6]. Pricing and Sales Dynamics - The open market sales rate for the second half was 0.55, up from the first half but below the 0.79 seen last year [2]. - A 2.5% price increase was implemented on January 1, which has held to an average of about 1.7%, while incentives remain elevated at around 4.5% [2]. Project Transform - Project Transform aims to rebuild margins through a single-division restructure and tighter overheads, incurring exceptional costs in H2 estimated at up to £4.5 million while targeting annualized savings of about £1.0 million [5][12]. - The second phase of the restructure has been completed, focusing on operational redesign and margin control [12]. Land and Planning Strategy - Planning constraints are a significant impediment to growth, with 43 sites awaiting planning approval [15]. - The company purchased over 2,300 plots across 17 sites in the last 12 months at an average cost of £17,800 [16]. Partnerships and Future Outlook - Gleeson Partnerships generated its first revenues and profits, with ongoing interest from housing associations and private rented sector investors [17]. - Management indicated that current market expectations remain achievable, but outcomes depend heavily on upcoming trading conditions [20].