MJ Gleeson H1 2025 Earnings Report

MJ Gleeson EPS Results

• Actual EPS: GBX 4.80
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

MJ Gleeson Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

MJ Gleeson Announcement Details

• Quarter: H1 2025
• Date: 2/11/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, February 11, 2025
• Conference Call Time: 4:30AM ET

MJ Gleeson (LON:GLE) comprises two divisions: Gleeson Homes and Gleeson Land. Gleeson Homes is the leading low-cost, affordable housebuilder with the vision of "Building Homes. Changing Lives." Focusing on areas where affordable housing is most needed in the Midlands and North of England, Gleeson Homes' average selling price was £193,900, 34% lower than other housebuilders average selling price of £291,700 in the same geographic regions. This means that a couple earning the National Living Wage can afford to buy a home on any Gleeson Homes development. Gleeson Land, which operates across the South of England and the Midlands, is the Group's land promotion division. To deliver on its vision of "Promoting Land. Unlocking Value", the division carefully identifies sustainable development opportunities which it then promotes through the residential planning system and sells on behalf of the landowner. Gleeson Land is a pioneer of data analytics in the land promotion space, which it leverages to secure new promotion agreements and deliver successful planning outcomes. In July 2023, the Company held a Capital Markets Day titled 'Putting in place the foundations for growth', where it set a medium-term target within a stable market environment to reach 3,000 annual completions. More details on the Company can be found at: https://www.mjgleesonplc.com/

MJ Gleeson H1 2025 Earnings Call Transcript

Presentation

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Good morning, everybody. Thank you for making it on time. Thank you for coming. Welcome to M. J.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Gleeson's interim results for the six months to thirty one December twenty twenty four. You know the format. I'll give you a quick summary. Stefan will then run you through the numbers in a bit of detail, and I'll come back and talk a bit about operations and strategy and leave plenty of time for your questions. So without further ado, I would characterize the six months as a solid performance in an unexciting market.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

No surprises there. But perhaps more importantly, I am really pleased with the progress we're making on the efforts that we're putting in still to refine and improve the operations in both parts of the business. And we'll talk a little bit about that that over the next half hour or so. But as I say, pleased, our home sales, a number of homes were up at eight zero one. Revenues were up a bit.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And our net reservation rate was up at up some 13% on the comparable period in the prior year, although 0.44% still in that market, nothing to write home about, I have to say. The margin continues to be under pressure. The gross margin was 20.6%. That's disappointing, but not disastrous. We can talk about the reasons for that.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

You're well aware what they are. Very importantly, pleased that we retained our customer recommend score in every region at five star. And that's an important focus for us right now as we transition to the HBS new scoring system. Really importantly, made good progress on our site openings plan. We'll talk about that.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

That's obviously critical for the achievement of our exciting growth ambitions and still continuing to see good strong interest in our nascent partnerships business. Over in Gleeson Land, as you're aware, we didn't complete any sales in the first half, but we did make good progress on some very promising opportunities, which should come to fruition in the second half and that gives us confidence for our forecast there. And a great January, '3 planning consents achieved in January, which is excellent. And we it's really good that we're starting to see the benefits in the numbers of the restructure Guy put in place and particularly seeing some good success in the land market. So overall, I'm happy that the business is very well positioned for a market recovery.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Turning then just to the period since the holidays. It's

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

fair

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

to say, I mean, the macro backdrop has not been encouraging. I don't think any of us expected it to be much different. But we've come into the year, we had the early turmoil in the bond markets and then that was interpreted by various sections of the press as carnage in the mortgage markets. And we are seeing business and consumer confidence surveys turning down, still looking very, very cautious. We kind of anticipated that that would be the case.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

I don't think anybody thought we were going to come back and see January kick off and off to the races. And so we've been working very hard and very proactively to look at we know the customers are out there, but they need incentivization. So we and there's no substitute for a real kind of granular focus. So it's hard work. It's week site by site.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

It's week by week and it's a real senior focus. And we're pushing prices where we can, but adjusting incentives where we need to, to make sure we're really on the front foot and putting our best foot forward. And so far, it would appear that we're making our own luck. We've got a strong sales rate of 0.77 through January, which we're very pleased with. Just to reassure you, that doesn't mean we're giving the homes away.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Our average incentives in January have been at 4.3%, which compares with 3.5% year to date. So as I say, I think it's really that hard work and that targeting of the incentives more than just dumping incentives as it were. So we'll see if that holds. But at that point, I will hand you over to Stefan to run you through the numbers.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

Thank you, Graham, and good morning, everyone. So we were very pleased with the first half performance in a market that remained pretty subdued up to the New Year. Despite those market conditions, first half results were in line with our expectations and we grew revenue by 4.2% to just under million. I will take you through the divisional operating performance on the next few slides to highlight a few points. Gleeson Homes' operating profit was 10.8% lower at GBP 9,100,000.0 for the half year.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

And as expected, Gleeson Land did not complete any sales in the first half and reports a loss as a result, small loss. Group overheads were slightly lower and interest costs were also slightly lower, reflecting lower average borrowings during the first half compared to the first half last year. As a result of that first half loss in Gleeson Land and lower operating margin in Gleeson Homes, the group's profit before tax was 50% lower at million. Now turning to divisional results. In Gleeson Homes, volumes grew by 4.2% to eight zero one homes completed with a lower proportion coming from multiunit sales, 95 units from multiunit sales.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

Pleasingly, average selling prices were up 4.8%. That was driven by continued increases in underlying selling prices of 0.84% coming from mix, and that was a lower proportion from multiunit completions and a slightly richer house type mix. On open market sales, we continue to increase gross prices by 2.3%, but incentives were also higher, extras were a little lower. And those higher incentives, which are currently at about 4.3%, meant that underlying house prices were up only 0.8%. Gross profit in Gleeson Homes was million lower at million.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

That includes a small profit on the sale of some surplus land in East Yorkshire. You'll remember a few years ago, we would occasionally have a land sale. And like most house builders, if we have a surplus site, a bit too much in one region, we might sell a piece of land. So those gross margins that Graeme mentioned, 20.6% in the first half. That was three ninety basis points lower than the prior year, and that reflects this increase in incentives.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

We did see some build cost inflation over the period of 0.9%, almost 1%. We're still selling on some sites that we'd hoped to close a little earlier, so we have extended prelim costs. And of course, we are still taking orders on multi unit sales, which attract a higher discount than open market sales. And so as a result, margin was lower. We do expect, as we'd flagged before, we said that margins in the first half would be at the low point.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

We do expect margins in the second half to recover, to continue to increase and then beyond that in future years to continue increasing. Overhead costs were 6.9% lower at million. That reflects reduced headcount. Our headcount was 5.5% lower at the December than December the year before. And we had some other lower costs, particularly marketing costs.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

So for the first half, Gleeson Homes delivered operating profit of £9,100,000 at an operating margin of 5.8%. Now some of the detail I've just given you there isn't on this slide. If you look at the appendices, the final pages of the appendices, you'll see some of that detail and a bit more there. Now looking at Cleosan Home's forward order book. We grew that by 6.8%, grew from the start of the year to five ninety seven forward orders.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

That was supported by another partnership agreement we entered into in the first half and some further multiunit orders. We do aim to rebuild the forward order book by the end of this financial year, and we're particularly encouraged by the strong start we've seen in the first four weeks of this year. Now turning to Gleeson Land. We didn't expect Gleason Land to complete a sale in the first half. We flagged that back in September.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

But we are currently marketing eight sites and we have terms agreed on a number of those sites already. We do expect those to land somewhere between four and eight completions to land in the second half. They are all likely to be in the back end of the year, all in Q4, many of them likely to be in June. So the division incurred without any sales in the first half incurred just overhead costs. We had a small increase in provisions.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

And as a result, I report a loss of million. Now turning to the balance sheet. Inventories increased million to million, with roughly 70% of that increase being in Gleeson Homes. Gleeson Homes purchased 10 sites in the first half, had a good first half with just under 1,000 plots on those 10 sites. The cost of those purchases was higher than normal.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

It was million for those 10 sites. Now two of these sites were a little larger than usual and more expensive than usual. But they reflect the quite oven ready nature of those two sites, much more so than our typical sites. And that's quite unusual. We don't expect that to repeat.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

We expect the average to fall back down to more normal levels. As a result, the average land width in the balance sheet per plot acquired was higher at £14,600 still significantly less than 10% of expected selling prices on those sites. So build whip reduced by £9,200,000 That reflects us building on fewer sites than we were building on in December. Again, we flagged that that was likely to happen in the first half. We're building on 75 sites compared to 79 at the December 2023.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

Gleason Land increased its width by million overall. That came because the portfolio is now starting to grow again. We had a portfolio of 73 sites compared to 71 a year ago. We also didn't have any sales in the first half, so there was no accumulated build WIP or WIP released to the P and L, so that remained on the balance sheet. But and we continued to invest in progressing the portfolio through the site to continue to incur some costs and capitalize those costs.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

As usual, I would highlight Lease and Home's land creditors, which are to million, about 11% of land assets, roughly the same proportion as a year ago. As a reminder, forgive me, we typically pay for our land, Gleeson Homes typically pays for its land when it buys it. It doesn't tranches payments and have lots of deferred payments on high creditors. We ended the year with net debt of the half year with net debt of million, slightly lower than a year ago. And we continue to have a strong and healthy balance sheet.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

So looking at operating cash flow. Operating cash outflow for the year was million, higher than first half last year. There's some interesting things going on there. So Gleeson Land had an operating cash outflow of million compared to the operating inflow it had the previous half year of million. That was an unusually high inflow in the first half of last year.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

So that's a swing of million, which is larger than the difference in group operating cash outflow. Gleeson Homes' operating cash outflow was million. It's quite typical as a seasonal outflow in the first half of the year. It was lower than the million in the first half of the previous year. Interest, tax and capital expenditure were broadly in line with our expectations.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

And as a result, we were very pleased to see slightly lower net debt at the end of the period of million. Despite our lower earnings, we do remain quite confident of our full year outlook. In line with the group's capital allocation policy, we will be declaring an interim dividend of 4p per share, unchanged on our prior interim, prior year, half year interim dividend of 4p. That dividend will be paid on the April 4 to shareholders on the register, the March 7. And we are reiterating once again our dividend cover policy of earnings covering dividends, full year earnings covering dividends between three times and five times.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

Final dividend for the full year will be determined by earnings this year and will remain within that three times to five times cover policy and very likely towards the lower end of that range. Thank you. And I will hand you back to

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Grant. Very good. Thanks, Stefan. So turning to kind of operations and strategy, looking at first at Gleeson Homes. Quick look at the market environment.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

As I said, it's still out there, still lacking conviction, still cautious, but there are buyers there. And as I say, we're really pleased with our sales rate in January. Zero point '7 '7 is good and we'll strive to keep that going. It's far too early, way too early to say, right, war's over, we're off to the races. We need to see that We need to see that sort of rate of sale over kind of three, four months before we start saying anything like that.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

But it's a good start to the New Year and we're very pleased with it. Obviously, last week's base rate cut will help, although it was again interesting to see significant sections of the media prefer to concentrate on kind of the technical challenges behind the rate cut and the low GDP expectations and inflation curves and what have you. But of course but that isn't what gets talked about in the pub. So what we want is that we want the stronger headlines and that's what will start to build the confidence. And so despite what you read in the papers, actually the mortgage markets are pretty good.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

There's good availability. The banks are pretty competitive with each other and mortgage rates are stable. It's not a bad time to be looking for a mortgage. We're finding that overall so selling prices are steady. We're still pushing prices at every release.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Some of those are sticking, some are not. And again, as I said earlier, it's really important that we're keeping right in tune with that and getting the pricing right, getting the incentives level exactly right. Build cost inflation was very modest in the first half, about 1%. The big question everybody's pondering is what happens over the next six months with the NI increases kicking in. We're estimating 2% to 3% over that period.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Really, I'm guessing that as always with this industry or in any industry, the real impact of those NI increases on our supply chain will depend on the strength of the wider market as it always does and what's the general demand. Planning is improving slowly. I would say we are starting to see the benefits of the new N But it's interesting, different effects in the two businesses. So where we're seeing that benefit is more in the supply constrained very tightly constrained authorities in the South and we'll talk a bit about that in Guy's business. In Mark's business, in homes and this is not so much about well, maybe an North South thing with but certainly for the homes business, where we're more concerned about actually getting an implementable consent and less about the actual principle of establishing the principle of development, there it's still a really turgid process just to actually get the piece of paper, to get to site, to get the Section 106 signed.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And so we're still seeing that shortage in resources in planning departments, which is going to take longer to solve. But I think overall, we would say a decent school report for the government for the first six months. They're doing the right things. Just a reminder, our unique proposition in the market, Gleeson Homes remained highly affordable. And Gleeson Homes' typical customers have continued to see sort of strong increase in their disposal real increases in their disposable income.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

In April, we get another increase in the national living wage up by 6.7% and that's on the back of successive 10% increases. So that from April, our benchmark couple on the National Living Wage can afford to buy a home at against our average selling price of They can buy any of our three beds. The average Gleason customer spends just 22% of their take home pay on their mortgage compared to 36% nationally. And of course, the gap with the rental market continues to open out. As the rental market soars away with seems to be private landlords deserting that market and institutional PRS obviously can't build fast enough to close that gap.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Just looking at our operational capability and I talked about the work that we're doing to continue for continuous improvement in the business. So the restructure and standardization that we put in place some eighteen months ago now, well, that's settled very well. But I talked earlier about the kind of work that we're doing, the granular work that we're doing on our demand side. We're also focusing very hard on our own operations. It's really important that we continue to find those improvements in build, in the pace, the quality and the cost control.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And we're also looking hard at our commercial controls. And this is really about pushing home those benefits of standardization, real compliance with process and finding those small incremental improvements, which will in turn make us more confident in our control, make sure the whole operation is more reliable such that as we stride towards that growth, we can do so in a really controlled and confident manner. Great to see the progress that we're making in that regard. And as I mentioned earlier, it's an important year for us 2025 on the quality of our customer experience because we are kind of joining the rest of the industry in publishing our results under the HBF survey. We previously used in house, which is no less rigorous.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

It's absolutely it's independent. So our five star is absolutely real, but we have to move to the new survey under the New Homes Quality Board. And that means we're transitioning. We need our team to ensure they're chasing up the HVF surveys etcetera, etcetera. So it's a big year for us.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And of course that new survey is more comprehensive, more granular and I think the whole industry is kind of focusing hard on that to make sure that we're in a good place. We announce our first results under that for calendar 2025 in March 2026, I think, Mark. Gleason Partnerships, making really good progress. You know that we signed two deals, I think one at the end of last year, one at the beginning of this financial year. I was on both of those sites recently in Yorkshire.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Really exciting to see the progress and the pace that we're making on those sites and very excited for our first completions, which will be in the summer. We're targeting, as you know, one partnership deal in every one of our regions by the end of the year. And we've got some great deals under negotiation. You're also aware that we're in a bit of a hiatus with the housing associations at the moment who are all sitting on their hands. They're keen to trade, but they're unable to commit because of the delay to the new funding settlement.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

The chance of we'd all hoped for something back in the autumn. Then it was pushed to the March spending review. That spending review has now been pushed to the summer. So right now, the housing associations are not out to play, which is they're keen to negotiate but can't commit. That has the knock on effect that there's no urgency, there's no tension in the market.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

So the private rented players have got the playground to themselves and they can kind of saunter around and deal when they choose. So it's a bit soggy in the partnerships markets at the moment. That may frustrate us by a few months. It's not going to impact our forecast certainly for the current year nor really for next year given the time these deals take to come to fruition. So it may delay us by a few months, but we're still going for it that one in every region.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And just to remind you, the steady a good steady state placed for our partnerships operation will be about 20% of our homes business. We're absolutely committed to the model, but what it represents is a market risk diversification for us and a leveraging of our operating capital to enhance the growth in our core open market business. We're making good progress on opening our build and sales sites. And this is really the key to our growth, the growth in our outlets. So we were pleased to open eight build sites in the first half and 11 new sales outlets in that six months.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

The biggest challenge to that, if you like, we're a bit behind where we want to. So we've made good progress. We're a bit behind where we wanted to be and that comes down to the P word, planning. As I say, grinding out those implementable consents is hard work. But we are pleased with the progress we're making.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

We're making good progress and we're not letting up the pressure at all. Just to you can see the trajectory on the bar chart, the severe kind of drop post Trussonomics and that market weakness and then the budgeted and planned increase coming out this year and in the following years. And just to be clear, the bar chart does slightly mask what's going on because the in FY 'twenty five, you can see the 65 outlets there. That number should be lower in a that contains a number of kind of tail end sites with just a handful of units and pretty low choice left for our customers. So those sites in a normal market would have sold out sooner.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

The point I'm making is the trough would be more marked, would be deeper. The 65 is slightly overstated. Whereas the 67 sites, the vast majority for 67 sites for FY 'twenty six, the vast majority of those are newer sites with a full range with a new product and crucially a full range of choice for our customers. And very importantly, that's the trajectory for the site openings and we have the land to support that. Our land we're continuing to buy.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Landmark, it's been tougher, I would say, over the past calendar year. It's definitely as people have returned to the market, but we're doing well. And we have a great pipeline of some kind of 19,000 plots on 174 sites. So the land we need is in our control. And as Stefan said, the average cost per plot in there is well below 10% of our average selling price.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

So we're in a really good place with our land bank. You've seen this before, but as I say, crucial to achieving those growth ambitions is getting the sites open. The arithmetic shows you that if we can get up to that important 100 sites 100 outlets, then even a relatively modest sales rate of 0.6 per site per week gets us to our medium term target. So turning then to Gleeson Land. The disappointing, I would say, not to have made any sales in the first half, but absolutely not disastrous.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And we did make good progress on a number of deals we're bringing through and very exciting to have achieved three consents in January, '1 more than we were expecting actually. We got an earlier one than we thought. So that gives us good confidence that we will complete between four and eight sales in the second half and that underpins our confidence for our forecasts for the full year. We are starting to see the as I said, the benefits of the new N So those three consents, two were at committee, one came through by appeal. But the two that came through from committee were both in authorities that basically looked at the NPPF as it was coming through and said, hang on a minute, we are going to need some numbers in order to stay in control of our own local plan process, and they encouraged us to bring forward those applications.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

So just underlines, I think that Gleesonland is really well placed to benefit from those positive changes.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Where was I going to was there

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

one other thing I wanted to say? No, I think we're good. So turning then to the strategy and the benefits, as I said, really pleased that we're starting to see the benefits of the excellent strategy changes that Guy has made. And this was all, if you recall, all about the regionalization of our land team. So we now have our land in three regions, boots on the ground.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And that's really important because it means that they're there understanding the local authorities well and crucially making the network and the contacts within their regions. And then they're strongly supported by our excellent our unique data research and analysis capability, which really empowers them in terms of identifying the sites and making the proposals. And then the whole underpinned by our fantastic planning and technical teams, which continue to be based centrally in fleet. And the effect of that is that we're seeing a wider range of opportunities, so more opportunities coming across our desk. We're still maintaining our discipline, so we still only bid on maybe one in 10 of the opportunities that we actually see, but we're also winning a higher proportion of the bids that we're making up to about a third of the bids we've been successful on in this period.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And I put that down to really the quality of our proposals and our growing reputation and high levels of customer satisfaction. So that's really positive. Just to reassure you, we're absolutely not winning those bids by dropping our hurdles. We're maintaining our disciplines, maintaining our hurdle rates. It's absolutely not about reducing our profitability or increasing our risk profile.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And so you can see as a result of that, we expect to increase by net five sites in our portfolio in the current year and then further 10 net sites next year. So in summary, we are seeing the early signs of a bright start to the second half, which is underpinning our confidence for the full year, but still lots to do, of course. Gleason Homes well positioned for growth. We have the land, we have the products, we have the process and we have the people. Our site openings are accelerating as planned.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

We expect our gross margins to start to improve, to start to climb back from the second half as lower margin sites complete and we anticipate the build cost inflation will stay reasonably restrained. And in Gleesonland, just really pleased that we're seeing that strategy start to deliver. We expect between four and eight sales in the second half. We anticipate quite aggressive growth in the portfolio and we are well placed to benefit from the new N So overall, I would characterize us as very strongly positioned for that market recovery. And at that point, we'll be pleased to take your questions.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Good. Ainsley straight off the blocks.

[Aynsley Lammin, Analyst at Investec]

Thanks very much. Ainsley Alamo from Investec. Just two for me please. Just interested to hear a bit more maybe on the recent trade in, kind of how much of that do you think the efforts you've been making around the business and sales? Or is it just the market's actually a bit better than what people have bid?

[Aynsley Lammin, Analyst at Investec]

And secondly, on the Gleeson Land business, obviously, the win rate and the kind of bid rate has increased quite a lot. Just interested to hear the likelihood that that also translates to more planning permission over the is that an indication of the pipeline, I guess, that's coming through in that business? And just generally in the land business interest here, any color on kind of housebuilders interest? So the increase in hurdle rates, just given maybe view on the recoveries a bit tempered interest in that?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Okay. I might ask Guy to give you a bit more color on land in one second. But so to sales in January, it's interesting. We obviously get to see the HBF levels, so we get a bit of insight into the market. I think as I said, I do think we're making our own luck.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

A jump of 45% over our performance in the same period last year is significant. And I think that that is to do with some of the kind of longer term efforts we've been putting in and making sure our sales teams are right on it. We've been doing a lot of training and that takes time over many months. And so a lot of work with our sales teams. But then also no substitute, as I say, for sleeves rolled up.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

A lot of early morning calls, Mark's on them, Stefan's on them, I's on them, the sales director's on them and he is also doing the same with the sales directors. This is a market when you work hard and that's not a complaint. But we are making sure that every site, every plot is appropriately positioned and targeted for with as balance between price and incentives and absolutely presentation, etcetera. So hard work really. Whether it's a wider market upturn, we'll hear from others today and over the next few days and we'll obviously see more into the spring.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

I would love it to be a wider market upturn, but we will see. At Police and Land, as I say, I'll get I'll ask Guy to comment on that. But I would stress that this is really about the I think the win rate. This is a positive circle, if you like. So we are building our reputation.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Undoubtedly, the combination of the people that Guy has hired, the fact that we have a regionalized land business, the fact that we have this superb data research capability, which is pretty damn impressive and our clients see that as well. And then the service that they receive, we've had some excellent customer feedback. The market, it's quite a tight market. That gets talked about and our reputation is growing. Guy, I don't know if you want to add to that.

[Guy Gusterson, Managing Director of Gleeson Land at MJ Gleeson]

Yes. No, I think all those things are absolutely pertinent. So I think it's a reflection of the fact that as part of the strategy, we, as Graeme says, regionalized invested in our land team, invested in our research and analytics team. And if I take the land team as an example, though that additional resource landed January and March, So just sort of twelve to nine to twelve months ago, clearly the first three or four months is getting used to the new operating structure, getting out to the market. But I've seen and what we've definitely seen in the last six months then is the fruits of that labor coming through with regard to the number of bids that we're submitting because we've got those boots on the ground and better engagement with the market and the success rate increasing as

[Guy Gusterson, Managing Director of Gleeson Land at MJ Gleeson]

a result of all the

[Guy Gusterson, Managing Director of Gleeson Land at MJ Gleeson]

points that Graeme's made. So I see that as really encouraging.

[Guy Gusterson, Managing Director of Gleeson Land at MJ Gleeson]

I think

[Guy Gusterson, Managing Director of Gleeson Land at MJ Gleeson]

I'll let Stefan talk about how that translates to our projections as a business. But I think the other point you asked about was about the land market and demand. So I'll touch on that briefly. I've been encouraged. We've got a number of sites, as Graham has alluded to, that are either in legals or out to market at the moment or where we've actually just received offers.

[Guy Gusterson, Managing Director of Gleeson Land at MJ Gleeson]

And I'm encouraged at the demand that we're seeing. If I take an example of that, we had offers in on a site last week, which I would say was in a secondary location rather than a prime location. I think the demand for prime location landers has been strong consistently, even though it's been a more challenging environment over the last eighteen months. But we've definitely seen in that secondary market a tailing off and housebuilders being a lot more selective about where they choose to invest in land. But on the site that we took to market and had offers in, I was encouraged by the number of bids that we had in and secondly, the value described in as well.

[Guy Gusterson, Managing Director of Gleeson Land at MJ Gleeson]

Clearly, that's early days. We need to now go through a process, get into legals and transact. But certainly as a sign of the market, that seems to be stronger than it was six months ago.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Greg, sorry.

[Gregory Poulton, Senior Equity Research Analyst at Singer Capital Markets]

Yes. Could you just talk

[Gregory Poulton, Senior Equity Research Analyst at Singer Capital Markets]

a bit about customer demographics through the first half and whether you've seen them change in the New Year? Is that just first time buyers coming back to market post Christmas? And then secondly, on the on Greece and land, can you talk about the consistency of that base and win rates and where you think it could get to?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

So we are seeing I don't know whether we've got the actual January analysis or not. We are seeing a gradual increase in first time buyers. They're back up over 50% of our buyers. Do we have the January analysis? We may not yet.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

I've seen the numbers, but that's such a small sample. You can't really take much from it, but it's kind of consistent with 55%. You remember that we were 80% a few years ago. We had an obsession with first time buyers many years ago. And we decided to widen our offering so that customers who weren't young, low income first time buyers were also able to buy our homes.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

And so we saw the proportion of buyers fall to still a high ish proportion, but 45%. It's 55% over the last six months, so it's recovered a little bit. And what's really interesting is the demographics now is quite spread. So 20% of our customers are, I'm going to say, old. That's over 55 years old.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

So 20% are now at that demographic. But we still have we had a we've got a customer, he's a forklift truck driver, he's 18 years old. He bought a home in East Yorkshire in the first half. We have a customer who's 87 years old.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

I'm trying to persuade Stefan to buy one that will push the average age up. Just coming to your second question around I mean, I do anticipate that the levels of bids and I suppose the level of opportunities depends on the wider market. We are seeing a good level at the moment. This is in Gleesonland. I do expect that our bid rates will push up because, as I say, because of the restructure, because of the way that we're now working.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And I think our win rate will hold. And that is because it's underpinned by it really is the quality of what we're doing. I can't stress enough, we're not reducing our hurdles. It isn't worth us putting in the time, effort and premium to make a small amount of profit. So we're turning away.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

We see some eye watering bids out there at the moment. And really interestingly, we had one come back to us. Shant mentioned locations or names, but one of our peers had just put in an eye watering bid and they clearly got cold feet. And so that one's come back to us. And again, that's reputation.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

They came back and they said, well, Gleesonland do what they say, do what they say. So we stick to our levels. We won't get pulled up into the higher bid levels. But if we make our bid, we deliver. And that's what the market is starting to see.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Charlie

[Charlie Campbell, Managing Director, Equity Research at Stifel Financial Corp]

Campbell, Stifel. Just a couple actually. Just on the land, you've given us I think two years of forecasts. I have sort of heard I think an old number of sort of a medium term target of getting up to 100 sites. Is that still the sort of ambition?

[Charlie Campbell, Managing Director, Equity Research at Stifel Financial Corp]

Or could it grow further given the kind of momentum? And the second question was to try and help us I suppose think through the evolution of gross margin in homes. Just wondering kind of what sort of proportion of the drop in margin came from the extended prelims and how quickly those reverse out? Just to, I suppose, help us sort of understand how quickly gross margins can improve from here.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Yes, absolutely. So I'll let Stefan talk about margin. In terms of the so the 100 sites is illustrative and no more than that. What it demonstrates is the kind of trajectory that we need to achieve to hit that medium term target of 3,000 units. So we I mean, so in terms of I don't think we've got forecasts out there beyond '28, but we've talked about medium term approximately five years from a standing start to get us to 3,000.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

We have say, we've got the land in the pipeline. Being precise on numbers for anything much beyond the next couple of years gets difficult because of that planning system. However, one would hope that the planning is not going to get more difficult from here with an average time from submission to permission of something in excess of twenty four months in Gleeson Homes. You'd hope that it would start to improve from here. And we have seen one or two that have come through a bit more quickly recently.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

So I but that's why we're not too specific we can't be so specific on the precise trajectory out beyond the next couple of years. But for the next couple of years, we can see those permissions coming. We can see that growth. We're pleased with the progress we've made to date, and we expect to continue on the trajectory to hit that 3,000 in the time horizon we've suggested. Stefan, did you want to pick up on the gross margin?

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

Yes. I mean, we had we've been flagging for a while that our gross margins would kind of follow the sector, which is to be lower. And we do think that this first half is the low point for our gross margins. And I'll come back in a second to why that is. But proportionately, what does that lower gross margin come from?

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

But it really comes from four things. So it is extended prelims. So if you're on a site for another month, that's another, well, 35,000 you're spending on that site as you have fixed costs. It comes from build cost increases where we had 1% over the last six months in a period where whilst underlying completion prices were higher, actually the underlying prices on reservations were flat. So you get build cost inflation, that's going to slightly chip away at your margin.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

We did have some older sites where we had, remember a year ago, some higher costs. Those older sites are still working their way through, as in we haven't yet finished completing those sites. But then of course, there is the impact of multiunit transactions. So whilst we have to do multiunit transactions, we have to offer them at perhaps higher incentives than we offer our open market customers. So all of those are having an impact.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

And the bulk impact is quite significant as well. And in terms of why do I think margins will recover? Well, because I've done the maths and it's pretty clear. We've got higher margin sites coming through from those that we're closing. What do I expect underlying selling prices to do compared to build cost inflation?

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

Well, that's a good question. We are expecting somewhere between 23% over the next six months. I would hope that we can fairly soon start reducing the amount of incentives that we're offering and we can increase our growth prices at a faster pace than we currently are. We are increasing our gross prices still. So I'd hope that we could increase them at a faster pace and that by reducing incentives, we would also stimulate higher extras.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

Of course, if you give customer higher incentives, they have less need to spend more on extras. So I would hope that we'd be able to recover that, but we'll wait and see over the next six months.

[Charlie Campbell, Managing Director, Equity Research at Stifel Financial Corp]

So just to follow-up on the 100 sites, things like on the homes, it was also a question on the land side as well. So no, no, despite what I don't know was very clear. So yes, do you think Gleason Land can get to sort of 100 plots in the portfolio? Is that a ceiling? Or do you think that it can go further as the business grows and

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

It's definitely not a ceiling. So we can get there. And I mean the capacity in that business is, well, I don't think we put a limit on it. In the structure that we have, we're now covering probably half the country. Am I overstating that?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And so we're just testing that potential ourselves. I mean, privately between you and me guys already knocking on my door saying, Graham, I can't I'm going to struggle to process this. We are making good headway and our reputation is really preceding us. And the nature of that market is that as the reputation grows, the agents start to come to you. This is the beauty of the regional structure that guys put in place.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

So we're excited by the pace at which it's growing. And as I say, we just we're pretty high that overhead is pretty highly leveraged. So we can put on a lot more sites for bringing in a handful more people and that's certainly what we got to contemplate over the next six to twelve months. Harry?

[Harry Goad, Equity Analyst at Berenberg]

Harry Goad, Berenberg. I've got two

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

You're too cheap seats this morning.

[Harry Goad, Equity Analyst at Berenberg]

I am. Two questions nevertheless, though. Thank you. So the first one, just on build costs. Can you remind us where we're at on things like future home standards, building regulations, energy efficiency, just whether there's any more cost inflation to come through in the next couple of years on the sort of like for like templates of a standard house type?

[Harry Goad, Equity Analyst at Berenberg]

And then the second one, separate question, is you alluded to funding issues for housing associations, social housing. Is there a moment sort of is there a date this year we can look forward to where that gets rectified? Or is there a possibility that just gets delayed as we progress through the year into maybe next year?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Okay. Thanks, Harry. Yes, so well, let's take that second one first. I mean, obviously, it's from the quality of Barrow, it's got all sorts of high level contacts. Any word you can have?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Listen, the Chancellor could come out tomorrow is where I'm guessing to and say I am bringing forward an element of that settlement in order to fire up the housing associations, because it's inevitable that at any CSR, any comprehensive spending review, there's going to be a budget for homes. So it's a slight mystery to me as to I realize she doesn't want to give the exact allocation to that part of the market. She wants to sort our entire budget before she sorts any of it. But inevitably, there's going to be a budget for homes, so why not bring forward an element now and just deduct it from the total when you announce when you make the announcement in the summer. But that's an idea.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

The position is that we currently there's not a date for the comprehensive spending review. She hasn't said you've got to wait for the CSR. I'm assuming that's when it will be. And whenever we get the CSR, June, July, who knows? I'm hopeful there will be funding for the housing associations.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And we're very close to a number of quite significant associations, and they're ready to rumble. But they've got they need to know that they've got the funding to commit. So as I say, it can't be any clearer than that. We live in hope. Back to your question on build costs coming through from future homes.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

So we're fully provided and budgeted for everything that is currently in law, if you like. So obviously and the biggest element remains the heat pumps, air source heat pumps and what have you, the whole heating piece, which is in the rearview mirror now. We're building them. They're in the budgets. That's sorted.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

So the next kind of the next big step is the FH25 and the big question in there is what is what will be the final settlement on and photovoltaic PV. And so we're still and there is no decision on that as yet, but that's key. I do we have to it's likely that we will have to install an element of PV. Point is getting into the pros and cons of that. And it's what is that element before it how much PV relative to the floor space in the house and do we have to install?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And that's what will drive the costs. But Mark, I don't think there's anything I think that's the key uncertainty at the moment, isn't it?

[Mark Knight, Chief Executive of Gleeson Homes at MJ Gleeson]

Yes. And just making sure that then the material specs and how to build this is in line in terms of insulation, which is taxable.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Yes. But that's not going to add significantly to the cost. So that's the only uncertainty. And but it's not of the order of the Part L transition that we all went through kind of two, three years ago. Clyde sorry.

[Charlie Campbell, Managing Director, Equity Research at Stifel Financial Corp]

I think I've got two, Graeme, if I may. Help to Buy, there's been a bit of speculation we might get version two. I've been interested on your take on that. And also how do you think your business would be prepared? I mean, if it was brought in this year, are you ready to really benefit from that was the first one.

[Charlie Campbell, Managing Director, Equity Research at Stifel Financial Corp]

The second question really was aimed at sort of asset turn for the business. Clearly partnerships is going to help your asset turn, but what else are you doing within homes and within land to try and improve that side of the equation for generating that better ROE?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Very good. Thank you. So help well, help to buy what's the phrase, your mouth to God's ear or something? I mean, look, it was a highly successful device, which served not only stimulated the market extensively, it helped an awful lot of people get onto the ladder. Do we expect personally, I don't expect it, not because it wasn't a I mean, it benefited government, as we all know.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

They made profits out of it, but they do have to fund it. So I would have thought if we do see any kind of new generation help to buy, they'll probably ask the house builders because, of course, we're cash machines. We've got endless reserves to pay for everything. They'll ask us to contribute. We'll take a look at it.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And so are we but are we prepared? If we got help to buy two tomorrow, are we prepared? Absolutely, we're prepared. We would react very quickly. On Sunday, Angela Reyna reiterated that their offering to support the market is the mortgage guarantee scheme.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Those have never been there's never been great take up for the mortgage guarantees, Matt, from things like guarantee schemes. And normally, the banks step in and so when I hear this morning, they can comment. Normally they step in and say, well, when you're taking a eating our lunch, thanks very much, we'll deal with that. So but where absolutely our plans don't rest on, we're not as you heard me say, we're not sitting here drumming our fingers on the table waiting for assistance from government. If we get it, great.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And boy, oh boy, are we ready to use it? Yes. But we'll see. So turning to asset term, I mean the key, and I'll let Stefan comment specifically, the key to that is the profit is the is that numerator or is it not just the numerator? It's getting that it's getting the profits up.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And that will drive getting the margin back, getting the volumes back up and getting the profits up. That's what will drive our asset turn. But Stefan, I don't know if you want to Yes.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

I think it's fair to say a few years ago, we were very margin focused and our sales rate was we were probably holding ourselves back. What I think will drive a return to a very healthy return on capital and a healthy asset earn is when the market recovers and we see a consistent strong sales rate and we are building to the pace at which we can sell. Now interestingly, in the last four weeks with an encouraging start and perhaps if you touch word, cross our fingers and our toes, that may continue and that will be the start of it. I think also importantly, the partnership strategy really does and you mentioned this, it really does, I think help significantly. And I think thirdly, when we see a return to strong profit levels in police and land, which is a high return on capital business because it doesn't own the land, It's just got capitalized promotion costs on the balance sheet, which are reasonably modest.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

I think that will also help. So I think we're and we're at a low point in terms of profit margins, sales, pace of sales and at the start of our partnership strategy. So I think the combination of delivering on those is going to see the asset turn improve and then where Q follow it.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Really the other really important graph that's on whatever it was, Slide 21, don't forget that 19,000 units in Gleeson Homes land bank is not paid for. We run a good model of holding back the completion of the land until we're ready to go. So that also helps. Alastair, morning.

[Alastair Stewart, Construction and Property Analyst at Progressive Equity Research Limited]

Alastair Stuart from Progressive. Just a quick follow-up question on build costs. It's going to be 2% to 3% in the next six months just for the avoidance of doubt. Is that an annualized 2% to 3% during the first six months sorry, the next six months? Or is it during the next six months?

[Alastair Stewart, Construction and Property Analyst at Progressive Equity Research Limited]

And so where's that coming from? Are there any areas that are seeing particular hikes and falls?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Stefan's got the piece of paper.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

If I can read it through these classes. Yes. So it is 2% to 3% absolute. It's not an annualized. It's not 1% to 1.5% for those six months period.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

And listen, that 2% to 3% is a bit of a guess actually. So we don't really know how much of the NI impact is going to be passed through. If you work it out all the way down the chain, that's 1%. So that would be taking if we saw underlying 2%, then it would take it to 3%. So where do we expect it over the

[Alastair Stewart, Construction and Property Analyst at Progressive Equity Research Limited]

Where are you seeing it right just now?

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

Well, we're expecting in labor. So I mean the last in labor, particularly in labor, lesser in materials. So the last six months, there was more increase in labor than material, and especially in ground workers. Now we did see some material cost increases over the last six months, particularly plaster material and bricks. Going forward, I would say the pressure really is on labor.

[Stefan Allanson, CFO & Executive Director at MJ Gleeson]

So as volumes start to increase there with the skilled labor force perhaps not increasing at the same pace, I think we'll see that come through in labor rates, particularly ground workers further.

[Alastair Stewart, Construction and Property Analyst at Progressive Equity Research Limited]

What sorts of inflation are the ground workers at just now?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

They usually start about 20%. It's a negotiation, isn't it? But it's not and it's driven by the strength of the market. You've I know you're only a boy, but you've seen as many cycles as me. The ground it starts with land.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And so the benefit the strength of the market that Guy is seeing is a pain for Mark because it's harder work in Mark's business. Very quickly, the ground workers follow on. The market is coming back to life after that long period of downturn. And the ground workers are getting busy again. And guess what?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Next, it will be the Brickies. Great. Coming around again.

[Gregory Poulton, Senior Equity Research Analyst at Singer Capital Markets]

Yes.

[Gregory Poulton, Senior Equity Research Analyst at Singer Capital Markets]

Sorry.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Please say I might

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

have some more.

[Gregory Poulton, Senior Equity Research Analyst at Singer Capital Markets]

Yes. One follow-up on partnerships. You've obviously stuck to your target to have one per region by the year end. Does that require any clarity on government funding housing associations or

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Does it rely on Yes. Well, good question. Undoubtedly, if we get the if we were to get the government funding in March, I think we'd be home and hosed. I'm just putting pressure on my team there. I don't think we'll get the funding in March.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

And so it will depend on when it comes. I would say to get all six, we probably do need that to happen. But the team are fantastic, great enthusiasm. They talk to the whole market and I wouldn't put it past them to achieve it even if we don't see the CSR, but that's stretching them. Very good.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Do we have any questions online? Harry is waving at me.

[Moderator]

We've got a couple of questions from Andy Murphy from Edison. First question is on lease and land where bid and win rates doubled. What has changed deliberately increasing offer prices or other reasons?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

So what was the very last bit? What has changed?

[Moderator]

What's changed deliberately increasing offer prices or other reasons?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Yes. No, just to stress and probably we've mentioned that since the question was asked, but we're absolutely not changing our hurdles. Guy, Stefan and I go through every bid at a in detail. We because it's a lot having said we leverage our overhead, once we take a site on, there's a hell of a lot of work to bring that through. So we need to know there's a minimum level of profit in each site and we need to manage our risk.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

So we're absolutely not dropping our hurdles. The bid rate and the win rate is all a consequence, as I say, of having people on the ground in the regions, building our reputation and building that reputation for delivering and offering great customer satisfaction.

[Moderator]

Great. Thank you. Next question was about sales outlets, which should grow by 10% PA. What is the key driver of confidence in achieving this level of expansion?

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

So our confidence is because we have the land, we have the plans, we have the people, what's the so we can clearly see the route to getting those outlets open. We also importantly have the capital. The biggest drag remains getting the implementable planning conditions. So right now, I mean, absent an asteroid hitting in another market crash, we are striving towards that increase in outlets and output. But as I say, we can only actually on the ground run as fast as the local authorities let us.

[Moderator]

Thank you. There are no further questions from Webcast. I'll hand back over to you.

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

Thank you very much. Well, thanks again for to you all for coming. Nice to see you and we look forward to catching up with some of you over the

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

next

[Graham Prothero, Chief Executive Officer at MJ Gleeson]

few days. Many thanks.

Participants

Executives

• Graham Prothero, Chief Executive Officer
• Stefan Allanson, CFO & Executive Director
• Guy Gusterson, Managing Director of Gleeson Land
• Mark Knight, Chief Executive of Gleeson Homes

Analysts

• Aynsley Lammin, Analyst at Investec
• Gregory Poulton, Senior Equity Research Analyst at Singer Capital Markets
• Charlie Campbell, Managing Director, Equity Research at Stifel Financial Corp
• Harry Goad, Equity Analyst at Berenberg
• Alastair Stewart, Construction and Property Analyst at Progressive Equity Research Limited
• Moderator