Shares in MJ Gleeson (LSE:GLE) subsided 9.5% to 486.8p after the housebuilder reported a decline in sales, expectations of lower profit margins and a swing to a net debt position for the six months to 31 December 2023, the first half of its financial year.
Gleeson Homes completed 769 sales in the period, a 14% decline year on year, which it said reflected weaker conditions across the housing market.
Full-year gross margins are anticipated to fall 1.5-2.0% below expectations due to additional costs from some older sites, along with extended site durations and sales incentives.
The forward order book stood at 586 plots at the start of January, compared to 319 plots a year ago.
Net debt was £18.7 million at the end of December, from a net cash position of £5.2 million at the end of June as investment was made to bring forward more home starts in the previous financial year.
The cash impact of this investment is expected to unwind over the next two years, it said, while a recovery in demand for its budget housing is expected as mortgage rates soften, while multi-unit sales are expected in the coming months, it said.