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MJ Gleeson, the housebuilder, has issued a profit warning for this year, anticipating a 15-20% hit due to sluggish recovery in the housing market and the collapse of a land sale in

Yorkshire. The firm informed markets that the UK's housing market recovery pace has "not been sufficient" to counterbalance the effects of increased build costs, stagnant

selling prices, and several bulk sale transactions, as reported by City AM. Investors' reaction was swift, with the company's share price plummeting over 22% in early trading as

they shed their holdings in the housebuilder. Gleeson indicated that its gross margin for the year would be around one per cent lower than anticipated, resulting in an operating profit

15-20% below current expectations. While the inflation of material costs has been easing since its peak in 2022, labour cost inflation continues to escalate, fuelled by hikes in

employers' National Insurance contributions and the National Living Wage. The company also noted that the failure of a land disposal in East Yorkshire had further dented profits.

"The board's expectation that Gleeson Homes would deliver an overall operating profit in line with market expectations included the profit contribution [of the sale]... It is now

not expected that this disposal will proceed," the company stated. In the previous year, Gleeson reported a revenue increase of 5.2%, from £328.3m to £345.3m, although pre-tax profit

dropped by 21.3% to £24.9m. Gleeson has warned that planning delays will continue to impact the business in 2026, with its gross margin for next year predicted to be around one per cent

lower than market expectations. Despite the UK government's ongoing efforts to reform the planning system, approximately half of projects are currently experiencing delays. LIKE THIS

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