UK's MJ Gleeson sees fiscal 2026 profit at lower end of market expectations

(Reuters) -British homebuilder MJ Gleeson warned on Friday that profit for fiscal year 2026 will be at the lower end of market expectations due to subdued demand.

It added that Mark Knight, the CEO of its unit Gleeson Homes, has resigned as part of a management overhaul.

It appointed Fiona Goldsmith as the chair of its board and Simon Topliss as its chief operating officer.

WHY IT'S IMPORTANT

MJ Gleeson, which builds affordable homes in the North of England and the Midlands, has had a challenging year due to a subdued housing market, rising costs, flat selling prices and planning delays. 

Gleeson Homes has come under margin pressure due to the absence of an anticipated wider market recovery and cost increases. MJ Gleeson warned of lower-than-expected profit at the division last month.

KEY QUOTES 

"As well as external factors, it had become clear that our commercial delivery was not where we needed it to be," MJ Gleeson CEO Graham Prothero said in a statement, adding that management changes will benefit the company.

Prothero said he does not expect any significant economic recovery in the short term.

BY THE NUMBERS

The group expects pretax profit within current market expectations of 21 million pounds to 22.5 million pounds ($28.68 million - $30.73 million) for the year ended June 30. It will announce its results on September 16.

It reported a profit of 24.8 million pounds for the previous fiscal year.

Analysts expect fiscal year 2026 pretax profit of 24.5 million pounds to 27 million pounds.

MARKET REACTION

Shares dropped to their lowest since September 2023 and were last down 4.6% in early trade.

"The trading backdrop remains subdued, with high levels of competition from the second-hand market and a lack of any demand support for first-time buyers," Peel Hunt analysts said in a note.

($1 = 0.7318 pounds)

(Reporting by Unnamalai L in Bengaluru; Editing by Harikrishnan Nair)