Sheffield-based affordable house builder MJ Gleeson said the housing market “lacks confidence and remains subdued” and the firm “does not see a short-term catalyst for any substantial improvement.”
Gleeson’s gloomy outlook came in a trading update for the year ended June 30, 2025, which also included a series of organisational and management changes “to enhance operational performance and commercial delivery at its Gleeson Homes division.”
Gleeson also announced board changes.
The group expects to deliver a profit before tax and exceptional items for FY2025 within current market expectations which range from £21 million to £22.5 million.
On the Gleeson Homes reorganisation, the group said: “Gleeson Homes’ gross margin had come under pressure through the year due to the cumulative impact of a number of headwinds. These reflected external pressures such as increased build costs and flat selling prices, along with the cost of mitigating actions including the continued use of incentives and several bulk sale transactions.
“Planning delays, which pushed back the opening of new higher-margin sites, the absence of an anticipated wider market recovery and further costs arising from legacy site issues meant that the margin improvement expected in the second half did not materialise.
“Additionally, issues around process and compliance with procedures within the business, which were resulting in cost overruns, had been identified in the summer of 2024. Immediate actions did not fully address these and a comprehensive review of the business, under the banner of Project Transform, was initiated in the autumn.
“The review identified the need to implement some organisational and management changes.
“These are designed to shorten reporting lines, empower the divisional leadership teams and strengthen regional management as well as reinforcing controls and driving local ownership and accountability. They will also substantially improve oversight of processes and compliance from the centre, supported by enhanced data provision.”
Mark Knight has stepped down from his role of chief executive of Gleeson Homes and left the business.
The Northern division of Gleeson Homes will continue to be run by Andy Davies. The Central division will be run by Scott Stothard who is joining the business from Vistry where he was Divisional Chair. Both Andy and Scott will report to Graham Prothero.
Simon Topliss, previously Gleeson Homes Finance Director, has been appointed to the newly created role of Chief Operating Officer, with responsibility for central functions, driving performance and governance. Simon will also report to Graham Prothero.
Gleeson Homes will retain its current six regions within two divisions. Central division will include Greater Manchester & Merseyside, Cumbria, Midlands and South/West Yorkshire regions. Northern division will include East Yorkshire and Tees Valley/Tyne & Wear regions.
In the Greater Manchester / Merseyside and Cumbria business, whilst remaining separate regions, they will now be led by a single leadership team which will afford significant operational synergies.
As a result of the reorganisation, a cash cost of £1.2 million is expected to be recognised as an exceptional item in the FY2025 accounts.
In its outlook, MJ Gleeson said: “The housing market lacks confidence and remains subdued and the Board does not see a short-term catalyst for any substantial improvement.
“However, as reflected in our robust sales rate, there are customers for well-located homes at the right price. Meanwhile, housing associations have been rightly buoyed by the Chancellor’s recent announcements around grant funding and the rent settlement, which improve prospects for our partnership business.
“Continuing capacity issues in the planning system have delayed site openings and Gleeson Homes will operate from fewer sites than anticipated in the current year. However, our strong pipeline and improvements in our own process give us confidence in our ambitious growth plans.
“Gleeson Land’s performance in FY2026 is expected to be similar to FY2025 with delivery weighted to the latter part of the year. Site acquisition and planning application activity is high with the tailwind of the improving medium-term planning environment.
“Taking these factors into account, the Board expects that profit before tax and exceptional items for FY2026 will be at or around £24.5m, the lower end of current market expectations.”
MJ Gleeson CEO Graham Prothero said:“This was a challenging year for Gleeson.
“As well as external factors, it had become clear that our commercial delivery was not where we needed it to be. Over the last nine months we have therefore been implementing at pace management changes which will significantly benefit the business through FY2026 and beyond.
“These changes will also ensure the delivery of our strategic objectives.
“Whilst we do not expect any significant economic recovery in the short-term, we are maintaining a robust sales rate. This, along with our remedial actions, gives me confidence that we have a stronger business which will deliver our projections for the current year and our significant growth plans over the medium-term.”
On its board changes, MJ Gleeson said that “following a comprehensive process” it has appointed Fiona Goldsmith, currently interim chair, as chair with immediate effect.
“Fiona was appointed to the board in October 2019 having previously held senior executive finance roles at First Choice Holidays plc and Land Securities Group plc,” said the group.
“Fiona was also previously a non-executive Director at Walker Greenbank plc. Currently, Fiona is non-executive Director and Chair of the Audit and Risk Committee of KCOM Group Limited.”
Nicola Bruce has been appointed senior independent director with immediate effect. Bruce, who joined the board in March 2023, will remain chair of the Remuneration Committee and continue to sit on the Audit and Nomination Committees.
The board has initiated a search process for a new independent non-executive director who will additionally assume the role of Chair of the Audit Committee.