Profit drop for Gleeson but signs of demand recovery

Gleeson has seen “positive signs of a recovery in demand”, while reporting a 55% drop in pre-tax profit for its half year, reflecting ongoing difficult conditions.

During the half year ending December 31 2023, the low-cost housebuilder and land promoter’s pre-tax profit fell to £7.2 million from H1 2022/23’s £16.1 million.

The business said that despite beginning its financial year with a strong forward order book, weak housing market conditions last year impacted its home sales, dropping 14% to 769 against the 894 sold during the equivalent period the previous year.

Due to the reduced number of home sales, Gleeson Homes’ revenue fell 14.6% to £142.3 million.

At the same time, the company said it was “encouraged” by early signs of improving buyer confidence. In the five weeks to February 9, its net reservations per site per week improved 9% against the same period last year to 0.50. During its half year, the reservation rate was 0.41.

Operating profit in the Homes division fell 44% in the reporting period to £10.2 million; operating margin on homes sold decreased 370 basis points to 7.2%.

The average selling price of homes lifted 0.8% to £185,000 which Gleeson said reflected …