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MJ Gleeson PLC on Friday said higher interest rates and a downturn in the wider UK economy had a negative impact on the number of sales made in the financial year ended June 30. MJ Gleeson is a Sheffield-based low-cost housebuilder and land promoter. Shares in the firm were down 1.6% at 378.88 pence on Friday morning in London. The company completed the sale of 1,723 homes in the year, down from 2,000 homes the year prior. MJ Gleeson said the decrease reflected a downturn in the wider economy and the impact of higher interest rates on buyer confidence. The average selling price of Gleeson homes sold during the year increased 11% to £186,000 from £167,300 the year prior. The company noted that selling prices were resilient as they were underpinned by a shortage of supply. This helped offset material and labour cost increases during the year. MJ Gleeson noted that was a ‘significant’ shift in buyer demographics in the second half of the year, with first-time buyers accounting for half of open-market reservations. Last year, first-time buyers accounted for 71% of open-market reservations. Reservation rates over the past six months improved to 0.64 net reservations per site per week, compared to 0.62 net reservations per week the year prior. The company said it enters the new financial year with a stronger forward order book of 665 plots as at June 30, compared to 618 plots at the same time a year prior. It starts the new financial year with 82 sites as at June 30, down from 87 sites at the same time a year prior. However 71 of these sites are actively selling compared to 61 sites at the year prior. Looking forward, MJ Gleeson said it expects its results for the full-year to be in-line with market expectations which it did not specify. Its annual results will be published on September 14. ‘We are pleased with the year’s performance in a challenging economic environment. We have taken advantage of the quieter market to restructure Gleeson Homes, putting the business in great shape to grow as the market recovers. I am hugely impressed with the resilience of our team, who remained focused and committed through that process to deliver these results,’ said Chief Executive Graham Prothero. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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