(Alliance News) - MJ Gleeson PLC on Friday said it remains "cautiously optimistic" despite a downturn in house sales as it cited higher mortgage costs.
The Sheffield, England-based housebuilder and land investor said it completed the sale of 894 homes during the first six months to December 31, down 4.1% from a year ago.
MJ Gleeson said the fall in the sales was the result of a weaker market and higher mortgage costs due to the mini-budget announced by the UK government in September 2022. Selling prices remain stable, the company noted.
The company said cancellation rates had reduced during the six weeks to Christmas, with 6.5 plot cancellations per week, down from 11.5 cancellations per week in the previous six weeks to mid-November, while gross reservations were 22.2 per week in the six week period, down 25% from 29.5 reservations per week in 2021.
MJ Gleeson continues to secure new land, acquiring three sites during the first half as well as opening three new build sites. The company currently has 87 active build sites, up 4.8% from 83 a year ago.
The company is actively selling 68 sites, up 13% from 60 the year prior, with the expectation that it will be selling 66 sites in June.
The company said it has a forward order book of 319 plots, halving from 616 plots at December 31 a year ago. MJ Gleeson said it is "cautiously optimistic of recovery during 2023" due to the continued fall in mortgage rates and the remaining need for low cost housing.
MJ Gleeson shares were up 7.0% trading at 406.55 pence per share on Friday afternoon in London.
By Harvey Dorset, Alliance News reporter
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MJGleeson (GLE)