The housebuilder said demand is now forecast to continue strong through the year, as the demographics of its customer base and prices should protect it from the impacts of rising unemployment, the end of the stamp duty holiday and the forthcoming changes to the ‘Help to Buy’ scheme.
The majority of its customers are young, first-time buyers and around two-thirds are key workers, who benefit from the ‘Gleeson Key Worker Priority Programme’.
It also expects the strategic land market to recover as housebuilders scale up the acquisition of new sites.
The firm, which focuses on low-cost homes in the North of England and the Midlands, reiterated a target of delivering 2,000 homes per annum by 2022.
In the year to June 30, revenue slipped 41% to £147mln with profit before tax down 86% to £5mln. No dividend was proposed amid the coronavirus crisis, while the gross cash balance was £76mln.
“MJ Gleeson‘s unique business model gives it sector-leading exposure to first-time buyers at low price points. We think these buyers will be last to cancel and first to rejoin the market,” analysts at house broker Liberum commented.
“We believe there is significant pent-up demand for homes at its average selling price of £130,000, and limited competition in this segment underpins high margins.”
Shares dipped 2% to 604p on Monday at the opening bell.