MJ Gleeson has seen its share price fall by more than 21%, after warning of a 15% to 20% drop in its full-year operating profit expectations.

The housebuilder said it previously expected to deliver an overall operating profit in line with market expectations, which included the profit contribution from the disposal of one of its land holdings in East Yorkshire.

However, this disposal is now not expected to proceed, leading to the latest operating profit update.

Furthermore, MJ Gleeson added that the pace of housing market "has not been sufficient" to offset the impact on its gross margin, citing headwinds such as increased build costs, flat selling prices, the "continued use of incentives" and several bulk sale transactions.

As a result, its gross margin for the year to 30 June is set to be 1% lower than previously expected.

Looking to the 2026 financial year, the housebuilder expects a number of factors to impact its financial results, including planning delays, which will see it sell "fewer sites than previously expected".

Investment director at AJ Bell, Russ Mould, stated: "MJ Gleeson was meant to be the resilient player in the housebuilding sector, given it focused on the affordable end of the market. Sadly, that’s not proved to be the case.

"A profit warning has knocked its share price for six as Gleeson has spelt out headwinds which are crimping margins.

"It is suffering from higher build costs, no growth in selling prices, and ongoing reliance on incentives to shift properties, among other factors. Layer on top disappointment over failing to sell a big patch of land and profits are going to be nowhere near market expectations."

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