| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 169.59 | -56 |
| Intrinsic value (DCF) | 131.17 | -66 |
| Graham-Dodd Method | 4.98 | -99 |
| Graham Formula | 3.76 | -99 |
MJ Gleeson plc is a UK-based residential construction company specializing in low-cost house building and land promotion. Operating through two divisions—Gleeson Homes and Gleeson Land—the company focuses on affordable housing in the north of England and Midlands while selling land in the south of England. Established in 2014 and headquartered in Sheffield, Gleeson plays a crucial role in addressing the UK's housing shortage by delivering cost-effective homes primarily for first-time buyers. The company’s business model emphasizes strategic land acquisition, efficient construction, and strong regional market penetration. As a key player in the UK’s consumer cyclical sector, Gleeson benefits from government incentives for affordable housing and urbanization trends. With a market cap of £293 million, the company maintains a disciplined financial approach, balancing growth with profitability in a competitive industry.
MJ Gleeson plc presents a niche investment opportunity in the UK’s affordable housing market, supported by strong demand and government policies favoring first-time buyers. The company’s low-cost housing focus provides resilience against economic downturns, as evidenced by its beta of 0.71. However, risks include exposure to regional economic disparities, construction cost inflation, and interest rate sensitivity. Financially, Gleeson reported £345.3M in revenue and £19.3M net income for the latest period, with a diluted EPS of 33p. Operating cash flow of £17.9M and modest debt (£5.1M) suggest a stable balance sheet. The 11p dividend per share offers a modest yield, appealing to income-focused investors. While the stock is less volatile than the broader market, its growth depends on sustained housing demand and efficient land monetization.
MJ Gleeson plc differentiates itself through a focused strategy on affordable housing, catering to first-time buyers and lower-income segments—a market often underserved by larger developers. Its competitive advantage lies in regional specialization, cost-efficient construction methods, and strategic land banking in high-demand areas. Unlike premium homebuilders, Gleeson’s low-price-point homes are less susceptible to economic cycles, providing stability. However, the company faces competition from both national players and regional builders. Larger competitors like Barratt Developments and Persimmon benefit from economies of scale and diversified portfolios, while regional rivals may have deeper local market knowledge. Gleeson’s land promotion division adds another revenue stream but is subject to planning approval risks. The company’s lean operations and targeted geographic focus help maintain margins, but reliance on government housing policies and subsidies could pose long-term risks if political priorities shift.