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As predicted sp jumped to £7+ so cashed my chips at £7.60 for a nice butty.
Expect housebuilders sp in general will suffer with supply chain affected by lockdown restrictions and sub contract labour price hikes in new year hence the sell opinion.
MJGLEESON been busy buying new sites second half of 2020 so forward land looking healthy
Hoping to buyback gleeson around the £6 mark early 2021
Well, could go either way this one. Nice move by Mr Mills, who is a non exec and represents the largest shareholder, to support the April placing and then sell the same position for a £450k profit seven months later. I was tempted to sell at the same time but believe the pinnacle to be £8. There seem to be a lot of headwinds ahead in the form of quality control, sub contractor availability and increased selling prices.
The remuneration policy seems to be looking a bit excessive again hence the objections and review. Promise of strategic land sales, from a division that couldn't be sold last year, is the same promise as before--- lets see.
Additional site openings is vanity, its margin and cash that is reality. The 2000 sales per annum by 2022 is looking unrealistic to me and probably eye watering to those counting on it for their bonus.
Selling price increases are bringing Gleepmoat to the level were it is in danger of loosing its reputation as the low cost housebuilder. ( if anyone is wondering why Gleepmoat its because many of the management brought in over the last 18 months previously worked for Keepmoat and left for various reasons)
Pretty spot on assessment, good growth in the recession years however dated housetypes which don’t meet spatial standards may find it difficult to achieve the targets given to the city.
Land prices being pushed up by the volume big boys won’t help although expect distressed sales in 2021 with the impact of Covid to help Gleeson
Imported management trying to put their own stamp on Gleeson or is it Gleepmoat not helping company reputation with suppliers & subbies
Still share price good value with target purchasers keyworkers / first time buyers.
Very well placed to benefit from Government HTB scheme
Def a buy at sub £6 expect £7+ very soon
Invested in this company since the last recession when they wisely brought in Mr Harrison, an Industry legend, to lead. Four Developments became seventy four over the next 12 years and he built a strong loyal team of Managers and Sub contractors. Taking the share price from £1 to £8 and making capital gains and dividends of half a billion pounds. Last year he was begrudged a substantial bonus and criticized for inadequate succession planning by his Institutional shareholders ... so he left. He and his Board were gradually replaced by accountants who increased selling prices by substantially more than inflation, reduced sub contractor budgets when they were already low and increased in house management numbers along with substantial bonuses. They failed to sell the Land Development Division last year and still haven't offloaded it at presumably an even lower price.
My concerns for the future are that the new financially orientated management style may cause reputational damage, quality will suffer and the completion target of 2000 homes per annum by 2022 may be unachievable as Covid will hopefully no longer be an excuse then. I have bought in again recently sub £6 and expect in the short term a small rally but long term a takeover would help the price but I cant see much else positive happening to return to the £10 heights. All IMHO of course.
god why is this thread so thin: there's an update due monday any idea what to expect?
i amin the red- i am mystified by this company yet buit by a family, nice div and disttiguishible from the other housbuilders - so any one can enlighten me?
The recovery here should be as good as the other builders imv - but that has not yet happened. Looking for above £7.
Confident outlook and lets hope the sp also returns to pre covid levels!
So the luck directors and others will get more shares at 33% discount - outrageous - almost robbery imv.
why the big fall here?
IC
Ramping up housing completions to 2,000 a year by 2022 remains a top priority for MJ Gleeson (GLE), said chief executive James Thomson, but the housebuilder delayed opening new sites during the first half to tighten-up the pre-start process. “Sometimes the focus on the building can begin to slip,” said Mr Thomson. However, management still expects to open a further seven sites by June.
Lower active sites did not hinder completions during the first half, which rose 17 per cent to 811 units, although selling a greater proportion of two-bed homes meant Gleeson Homes’ operating margin declined 90 basis points to 15.1 per cent.
Three strategic site sales that were expected to complete in December were delayed due to the timing of the general election, although all are expected to complete by the end of February. That lack of sales was responsible for pulling down the group’s pre-tax profits during the period and meant the return on capital employed declined to 19.1 per cent, from 29.5 per cent in the prior year.
House broker Liberum forecasts adjusted pre-tax profits of £44.5m and EPS of 65.7p for December 2020, rising to £48.5m and 71.1p in 2021.
IC View
Management expects gross margins to remain around 30 per cent and said the group is on track to hit its home completions target. The shares have rebounded since December and trade at 15 times forward earnings or 2.2 times forecast net asset value at the June 2020 year-end. That is a premium worth paying for a housebuilder whose low cost focus has managed to broadly maintain margins and completions. Buy.
Last IC view: Buy, 727p, 8 Jan 2020
https://www.investorschronicle.co.uk/tips-ideas/2020/02/13/gleeson-holds-back-site-openings/
RNS
Outlook in line.
SP opened -4% . Now +0.8%
Div up.