MJ Gleeson delivers upbeat outlook despite H1 profit decline

(Sharecast News) - Construction group MJ Gleeson saw profits fall sharply in the first half but delivered a confident outlook on the back of a strong pick-up in housing reservations in January. Total revenues across the six months to 31 December were up 4.2% year-on-year at £157.9m, with Gleeson Homes growing 10% to £156.6m. The company sold 801 homes during the period, up from 769 the year before, while the average selling prices increased by 4.8% to £193,900.

The Gleeson Land division saw revenues slump 86% to £1.3m after no land sales were completed during the period. However, after restructuring operations, the company is confident that it will continue to grow its portfolio of sites in the second half and beyond.

Group operating profits were down 42% at £5.1m mainly due to a lack of completed sales by Gleeson Land.

Looking ahead, MJ Gleeson said it was seeing "encouraging signs of a recovery in demand" with reservation rates rising strongly in January. The positive start to the second half means the board is confident in meeting market expectations for the full year, it said.

"At Gleeson Homes, there are early indications of an improving selling season with much stronger net reservation rates in the first four weeks. More importantly, we are pleased with the progress of our site opening programme which will drive sustained growth over the medium-term," said chief executive Graham Prothero.

Shares were up nearly 2% at 501p by 0950 GMT.