A positive trading update from low-cost housebuilder MJ Gleeson (GLE) is sufficient to drive the shares higher despite the negative market backdrop, up 2.7% to 679.7p.
Gleeson is an outlier in the housebuilding sector as it focuses on the lower end of the market in the North of England and the Midlands. The company also has a South of England focused strategic land operation which progresses land through the planning system.
Prior to today’s rise the company had been caught up in the wider sector sell-off and it remains down 13.4% year-to-date, though this is better than a 17.6% decline for the wider sector.
The recent extension of the Help to Buy scheme is helpful for the group with around 71% of its customers taking advantage of the government-backed offer.
Guidance is for results in the year to 30 June 2019 to be in line with expectations with both the housebuilding and strategic land divisions enjoying ‘strong demand’.
The company is pushing up volumes with 62 active sites compared with 58 this time a year ago and completions are expected to rise 10% in the current half year period to 31 December from the previous six months.
Canaccord Genuity analyst Aynsley Lammin says: ‘Consensus looks well underpinned and the group looks to be on track with its growth strategy as it benefits from its exposure to a relatively attractive part of the UK housing market.
‘We see more attractive value after the recent share price fall, of course assuming we avoid a macro collapse relating to Brexit.'
