Market's view on MJGleeson
Published on April 2024
- Stock watchers discussed the implications of new building regulations effective from June 2023, particularly how they might increase costs for developers. It was noted that costs associated with meeting these stricter regulations are typically passed on to the buyer.
- There was a concern about the full impact of these regulations, particularly in terms of the speed with which new projects had to be started to avoid additional costs. Some companies were reported to have rapidly started projects by June 2023 to sidestep these regulations.
- It was noted that MJ Gleeson’s decision to bring forward home starts to evade new building regulations led to a significant shift from net cash to net debt, raising questions about the financial strategy and its implications over the next two years.
- There was speculation about the company’s profit forecasts following an analyst call that suggested expectations of a 15-20% reduction in full-year profit forecasts.
- A trading update perceived as a warning on margins led to expectations of a short-term drop in share prices.
- Performance analysis by stock watchers included discussion on target prices and earnings per share predictions by financial analysts such as Liberum and Singers, with mixed reactions on the valuation and profitability potential of MJ Gleeson.
- The discussions highlighted both optimism and concerns about the company’s financial health and market position, reflecting a mixed sentiment among investors.