MJ Gleeson PLC on Tuesday said poor market conditions caused a sales slump in 2023, but it expects a turnaround in 2024.

The Sheffield, England-based low-cost housebuilder said its Gleeson Homes division completed the sale of 769 homes during the half-year ended December 31, down 14% from 894 a year before.

The downturn reflected ‘the weaker conditions experienced across the housing market during 2023’, the company said.

More positively, Gleeson Homes entered the second half with a forward order book of 586 plots, up from 310 over the same period.

Gleeson expects to report net debt of £18.7 million as of December 31, compared to net cash of £5.2 million on June 30. This reflects its ‘significant investment in bringing forward a higher proportion of home starts before June 2023’, it said.

The impact of this investment on Gleeson’s cash position is ‘expected to unwind over the next two years’, the company said. As interest rates stabilise, Gleeson expects the low-cost housing market in the UK to recover, ahead of the ‘seasonally busier selling period over the coming weeks and months’.

Market conditions and ‘additional costs relating to a number of older sites’ are expected to result in gross margins falling below expectations by around 1.5% to 2.0%.

Gleeson will release its full interim results on February 15.

Shares were down 9.3% at 488.00 pence each in London on Tuesday morning. They are up 37% over the past 12 months, however.

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