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Not surprising really when their Site Managers only last for a couple of months. Gleesons new management have increased prices by 25% since they arrived, reduced quality and work on the basis of the houses are still cheap so the customer cant expect too much from their 'dream homes'. They have obviously cut corners with the Regulations as well. Just look at the social media customer complaints. What was once a Company that provided value for money homes in a professional manner as become one that is simply maximising returns at any cost. The unsavoury side of capitalism.
A very confident self congratulatory Report. The Brokers loved it and revised price targets upwards. It was commendable that they have repaid the furlough grants to HMG.
However, the numerous small buys over the last 2 days are offset by £1.5 million of sales. There are a few other worrying items in the detail. Operating margin only increased by 0.1% but House selling prices up 9.1%, they don't appear to be controlling admin costs. Divi now projected to be under 2% for full year.
Increased Revenue, Profit, EPS and houses sold to 951 fails to mention that most of that was brought forward sales from Covid stalled H2 19/20. How can that be repeated for H2 20/21? Especially when they are selling from only 2 more sites than a year ago. Site openings are vanity and are not active selling sites which is reality.
Land sales at £2.6 profit is good news but substantially less than previous years under the leadership of Mr Harrison. Incidentally he is back in the game with North Country Homes and if his track record is anything to go by he will be a substantial competitor.
I have been an investor in Gleeson for nearly 15 years and today sold half of my remaining holding. I will sell the rest in the new financial year and before the trading update for 20/21. Of coarse do your own research.
Quite right. I would expect NCH to be able to undercut Gleeson by up to 20% ( since that has been the average price increase on Gleeson Homes since the new management took over 18 months ago). Gleeson's cost base may now be at such a high level it cannot be reduced and compete. Added to that Mr Harrison should be able to attract not only key staff but also sub contractors and suppliers who appreciate loyalty, quality and prompt payment.
Look at the negative ratings for Gleeson on the review sites and Facebook and you can see the reputational damage being done. Only one executive director has a substantial amount of money in the business.
The NCH effect will not be immediate so I will be looking to sell my long term shareholding at the next bounce.
A well run efficient business, caring for its employees, contractors and customers providing value for money will usually succeed. I have no doubt that NCH will be a winner, as it always has been, at Gleeson's expense.
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)
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.