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(Sharecast News) - Housebuilding company MJ Gleeson warned on Tuesday that the pace of the housing market recovery has not been sufficient to offset the cumulative impact of "a number of headwinds" to gross margins, weighing on FY operating profits.
MJ Gleeson pointed to headwinds such as increased build costs, flat selling prices, the continued use of incentives and several bulk sale transactions.
As a result, MJ Gleeson said gross margins in its Gleeson Homes unit were now forecast to be approximately 1% lower than previously expected.
The London-listed group anticipates operating profits coming in roughly 15% to 20% lower than current expectations, even after including profit contributions from the disposal of one of Gleeson Homes' land holdings in East Yorkshire.
"Looking ahead, a number of factors will continue to impact Gleeson Homes into FY26, including planning delays which will see the business selling from fewer sites than previously forecast. Gleeson Homes' gross margin in FY26 is also expected to be circa 1% lower than market expectations," added MJ Gleeson.
As of 0840 BST, MJ Gleeson shares had sunk 22.63% to 399.24p.
Reporting by Iain Gilbert at Sharecast.com
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