MJ Gleeson shares dip as new home scheme delays demand

MJ Gleeson (LSE:GLEG) stock experienced a 4.3% decline after reporting weaker-than-expected first-half performance due to buyers postponing purchases ahead of the launch of the government's Your First Home (YFH) scheme. The affordable housebuilder disclosed a net reservation rate of 0.53 per site per week for the eight weeks leading up to November 1, slightly higher than the 0.52 rate recorded in the same period last year.

However, when bulk reservations were taken into account, rates dropped to 0.88, down from 0.93 the previous year. The company attributed the decline to the announcement of the YFH scheme, which is expected to be launched five months later, potentially leading to postponed demand and an increase in cancellations. Despite this, the land division of MJ Gleeson is on track to complete a delayed large land sale, with the exercise and completion of the sale option expected in the coming months.

The company remains cautious in the market, facing more sites going to appeal following adverse committee decisions following local elections earlier this year. The company expressed optimism about its medium-term outlook, boosted by the YFH scheme, but acknowledged the challenge of uncertain visibility on the timing of land sales.

The company's management remains cautious on working capital and site acquisitions while aiming to improve buyer confidence and deliver profits in the second half of fiscal 2027. The company will issue a trading update for the six months ending December 31 on January 15, 2027, with results for the period released on February 23, 2027.