Building
Homes.
Changing
Lives.
Annual Report and Accounts 2023
MJ Gleeson plc
specialises in low-cost
house building and
land promotion.
Contents
Strategic Report
Highlights
At a Glance
Our Values and Culture
Investment Case
Our Stakeholders
Chairman’s Statement
Market Review
Our Business Model
Our Business Strategy
Key Performance Indicators
Q&A With Our New CEO
Chief Executive’s Statement
Business Review
Financial Review
Risk Management
Our Sustainable Approach
Communities
People
Environment
Sustainability Targets
Task Force on Climate-Related
Financial Disclosures
Sustainability Accounting
Standards Board
Section 172 Statement
Non-financial and Sustainability
Information Statement
01
02
03
04
06
08
10
14
16
18
20
22
28
32
36
42
44
52
58
70
76
86
92
96
Corporate
Governance
Chairman’s Introduction
Board of Directors
Corporate Governance Report
Nomination Committee Report
Audit Committee Report
Sustainability Committee Report
Remuneration Committee Report
Annual Report on Remuneration
Directors’ Report
Statement of Directors’
Responsibilities
Financial Statements
Independent Auditors’ Report
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Other Information
Five Year Review
Further Information
100
104
106
112
116
124
128
134
148
152
156
164
164
165
166
168
169
200
201
Cover image: Joe and Elsie, Renmore,
Firbeck Fields, Nottinghamshire
Alfie, Baxter and Jordan, Firbeck
Fields, Langold, Nottinghamshire
Highlights
Financial highlights
Operational highlights
Revenue
Profit before tax and
exceptional items
£328.3m
£31.5m
2022: £373.4m
2022: £55.5m
Homes sold
1,723
2022: 2,000
Operating profit (pre
exceptional items)
Basic earnings per share
(pre-exceptional items)
Average selling price
£33.6m
2022: £56.8m
42.9p
2022: 78.1p
£186,200
2022: £167,300
Cash and cash
equivalents
£5.2m
2022: £33.8m
Return on capital employed
(pre-exceptional items)
CO2e emissions
(scope 1 and 2)
13.0%
2022: 25.4%
2.09 tonnes per
home sold
2022: 1.86 tonnes
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MJ Gleeson plc Annual Report & Accounts 2023
01
Gleeson Homes
Gleeson Land
At a Glance
Our locations
Divisional breakdown
£328.3m
Revenue
(2022: £373.4m)
Gleeson Homes: £320.8m
(2022: £334.6m)
Gleeson Land: £7.5m
(2022: £38.8m)
£33.6m
Operating profit1,2
(2022: £56.8m)
Gleeson Homes: £35.0m
(2022: £51.2m)
Gleeson Land: £1.0m
(2022: £11.1m)
1 Pre-exceptional items.
2 After Group overheads of £2.4m
(2022: £5.5m).
Our mission
Gleeson Homes
We build affordable, quality homes. Where they are
needed, for the people who need them most.
Our mission is to change people’s lives through home
ownership; we build high-quality affordable homes
across the North of England and the Midlands. We
help our customers to achieve their dream of home
ownership, wealth creation, and the benefits of better
health and wellbeing that come from living in a modern,
energy-efficient home.
Gleeson Land
We promote land through the complex planning
system. Unlocking value to deliver sustainable and
attractive sites for other developers to build new
homes, where they are needed.
We carefully select and promote land through the
planning process. We build strong relationships with our
landowners and take a proactive and bespoke approach
to promoting their land. We fulfil a vital part of the
housing supply chain in delivering consented land, often
in areas of acute housing need.
02
MJ Gleeson plc Annual Report & Accounts 2023 Our Values and Culture
We are Passionate
We are Collaborative
We are Respectful
Our values
• We are passionate about
• We work together
• We respect the right to a safe
building high-quality homes
that are affordable.
• We are passionate about
our customers and ensuring
they enjoy buying their home
from us. Where we get things
wrong, we aim to put it right
quickly and fairly.
collaboratively, with shared
goals, where information,
knowledge and ideas can be
discussed openly, honestly and
free from judgement.
• We listen to our customers and
work with them throughout
their buying journey.
• We are proud of the strong
• We collaborate with our
relationships we build with our
suppliers and subcontractors
who work alongside us.
external partners and value
their part in helping us achieve
our goals.
working environment on all our
sites and in all of our offices
and are fully committed to
ensuring our colleagues and
those who work on or visit our
sites and offices return Home
Safe – everyone, everyday.
• We are respectful of our
customers, colleagues and
partners by listening to them and
treating them equally and fairly.
• We undertake our business in
an ethical way, and we respect
the environment.
Driven by our commitment to sustainability
Communities
People
Environment
We want to create attractive,
affordable places for people to
live where they can be part of
a welcoming and sustainable
community. Affordability is a key
part of this commitment and
we ensure that a couple on the
National Living Wage can afford
to buy a home on any Gleeson
Homes development.
We put our customers and their
communities at the heart of
everything we do. We want our
customers to enjoy buying their
home from us and we support
our customers throughout the
buying process.
Our people are key to our success
and share our vision, mission
and values. We are committed
to ensuring all of our colleagues,
subcontractors and people
connected to our business are
kept safe, treated fairly and paid
a fair wage.
Achieving our objectives relies
on having the right people in the
right roles, supported through
training and development.
Our people want to have
clear opportunities for their
own development and be
part of a vibrant, diverse and
forward-thinking culture.
As a housebuilder we recognise
that our activities have an impact
on the environment. We prioritise
taking all reasonable measures
to conduct our business in a way
that minimises our impact and
enhances the land we develop.
We are committed to reducing
our CO2 emissions, both in the
materials that we use to build our
homes, and from our homes when
occupied. We are committed to
protecting biodiversity in the
areas we develop and reducing
waste and the consumption of
natural resources such as water.
Sustainable
cities and
communities
Gender
equality
Life
on land
Climate
action
Decent work
and economic
growth
Responsible
consumption
and production
03
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Investment Case
Gleeson Homes builds high-quality, affordable homes. Our homes are modern, brick built two,
three and four bedroom houses, each with a front and rear garden and off-street parking.
Too few homes are being built in areas of need; these are often areas of deprivation in need
of regeneration where other housebuilders do not want to build, making this part of a vastly
underserved market.
Gleeson Homes
Long-term plans
Competitive advantages
• Compelling reasons for customers to choose
• Strong growth potential in both
Gleeson Homes and Gleeson Land.
Gleeson, including affordability, energy
efficiency and quality.
• Vastly underserved customer base,
with appeal for first-time buyers, home
movers, retirees, downsizers and other
“value driven” buyers.
• Gleeson Homes has a visible route to
3,000 homes per annum in the medium term
and increasing in the longer term.
• Gleeson Land is well-placed to continue
growing in existing regions and expand into
new areas.
• Range of new house designs that meet our
• Opportunities to improve both margin
customers’ needs and expectations.
• Large and high-quality land pipeline,
representing over ten years of supply.
and returns.
Shareholder returns
Gleeson Homes’ customers highest priority is
affordability. The average cost of a Gleeson home
in our geographic areas is one-third less than
other new build homes, and it remains cheaper to
buy than to rent.
Buyers are also increasingly focused on energy
efficiency, and the average Gleeson Home uses
49% less energy than existing housing.
• Strong balance sheet and high levels of
liquidity to support growth.
• Uniquely placed to deliver medium
and long-term potential with sizeable
market opportunity.
• Medium and long-term sustainable
investor returns.
• Optimised operating structure to deliver
future growth potential.
Accreditations
Gleeson Land
Competitive advantages
• Strong pipeline of sites held under option and
promotion agreements, which mitigates land
value risk.
• High planning success rate including
through appeal.
• Low capital requirements to support growth
and highly cash-generative.
• Leveraging data and technology to accelerate
new site sourcing and differentiate offering.
Gleeson Land already has a successful model
in the South East and South West with the
opportunity to increase market share in these
areas and expand into other underserved
high-value areas.
04
MJ Gleeson plc Annual Report & Accounts 2023 S
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Firbeck Fields, Langold,
Nottinghamshire
MJ Gleeson plc Annual Report & Accounts 2023
05
Our Stakeholders
What’s important to our stakeholders
Considering the needs of our stakeholders is key to our business model, strategy and approach,
and we balance these needs in everything we do.
Customers
Our people
Communities
Our customers want
attractive, high-quality
affordable homes they
can be proud to live in.
Our customers want
a home that has all of
the modern touches
and gives them the
opportunity to tailor it
with their own choices.
Energy efficiency is
increasingly important,
and our customers
want a highly energy-
efficient home that
helps them to reduce
their energy bills.
Our colleagues expect
to be kept safe, treated
fairly and rewarded
appropriately for
the work they do.
They want to have
career progression
with opportunities
for training and
development.
Our colleagues value
open and transparent
communication about
the business, its
performance, and its
future. They want to be
part of its growth and
feel valued for their
contribution.
Residents in the areas
we develop want
attractive and
well-designed spaces
that create vibrant and
safe communities in
which to live. Residents
want their views to
be valued and to be
consulted.
Local communities
want a wider positive
benefit to come from
new developments,
with better quality
housing, access
to resources, and
community services.
Local
authorities
Local authorities
want us to deliver
high-quality
affordable housing
in the right places,
creating sustainable
communities that
contribute positively to
the local area.
Local authorities
want us to ensure our
activities minimise or
mitigate the impact on
biodiversity and the
environment and leave
a positive legacy.
Future
generations
Shareholders
and banks
Government
and regulators
Suppliers and
subcontractors
Future generations
want us to reduce
our impact on the
Investors and banks
Regulators and
Our suppliers and
expect to see
government want us to
subcontractors expect
consistent or improving
ensure that we operate
to be kept safe when
environment, reducing
returns, underpinned by
our business safely and
they are working with
carbon emissions and
a sustainable approach
are compliant with all
us and to be paid fairly
waste, protecting
and compliance
laws and regulations,
and on time.
nature and reducing
with regulations and
including health
our use of resources,
covenants.
including water.
Investors and
They want us to adopt
banks want open
and safety, building
regulations, planning
regulations, tax and
financial reporting.
efficient methods of
building homes but
also maintain our
and transparent
communication from
Regulators and
the Group to provide
government want
issues arise.
Our suppliers and
subcontractors want us
to deal with any queries
quickly and efficiently,
with clear lines of
communication when
affordability to ensure
them with a balanced
businesses to conduct
that home ownership
understanding of
their operations in a
remains a realistic
business performance,
responsible manner,
opportunity for future
opportunities, and risks.
including paying all
generations.
relevant taxes fairly
and transparently.
Top three priorities
Top three priorities
Top three priorities
Top three priorities
Top three priorities
Top three priorities
Top three priorities
Top three priorities
• Affordability
• Build quality
•
Energy efficiency
• Health and safety
• Land use
• Recognition
and reward
• Build quality
and design
• Career development
• Affordability
• Land use
• Affordability
• Environment
• Carbon emissions
• Profitability
• Health and safety
• Health and safety
• Biodiversity
• Affordability
• Strong
balance sheet
• Sustainability
• Planning regulations
• Timely payment
• Tax and compliance
• Clear
communication
Read more on how our strategy aims to address our stakeholder priorities on pages 16 to 17
Read more on how our Section 172 statement sets out how we have responded to our stakeholder needs on pages 92 to 95
06
MJ Gleeson plc Annual Report & Accounts 2023 Customers
Our people
Communities
Local
authorities
Future
generations
Shareholders
and banks
Government
and regulators
Suppliers and
subcontractors
Our customers want
Our colleagues expect
Residents in the areas
Local authorities
attractive, high-quality
to be kept safe, treated
we develop want
want us to deliver
affordable homes they
fairly and rewarded
attractive and
high-quality
can be proud to live in.
appropriately for
well-designed spaces
affordable housing
Our customers want
a home that has all of
the modern touches
and gives them the
opportunity to tailor it
with their own choices.
Energy efficiency is
increasingly important,
and our customers
want a highly energy-
efficient home that
helps them to reduce
their energy bills.
the work they do.
They want to have
career progression
with opportunities
for training and
development.
that create vibrant and
in the right places,
safe communities in
creating sustainable
which to live. Residents
communities that
want their views to
be valued and to be
consulted.
contribute positively to
the local area.
Local authorities
Our colleagues value
Local communities
want us to ensure our
open and transparent
want a wider positive
activities minimise or
communication about
benefit to come from
mitigate the impact on
the business, its
new developments,
biodiversity and the
performance, and its
with better quality
environment and leave
future. They want to be
housing, access
a positive legacy.
part of its growth and
to resources, and
feel valued for their
community services.
contribution.
Future generations
want us to reduce
our impact on the
environment, reducing
carbon emissions and
waste, protecting
nature and reducing
our use of resources,
including water.
They want us to adopt
efficient methods of
building homes but
also maintain our
affordability to ensure
that home ownership
remains a realistic
opportunity for future
generations.
Investors and banks
expect to see
consistent or improving
returns, underpinned by
a sustainable approach
and compliance
with regulations and
covenants.
Investors and
banks want open
and transparent
communication from
the Group to provide
them with a balanced
understanding of
business performance,
opportunities, and risks.
Regulators and
government want us to
ensure that we operate
our business safely and
are compliant with all
laws and regulations,
including health
and safety, building
regulations, planning
regulations, tax and
financial reporting.
Regulators and
government want
businesses to conduct
their operations in a
responsible manner,
including paying all
relevant taxes fairly
and transparently.
Our suppliers and
subcontractors expect
to be kept safe when
they are working with
us and to be paid fairly
and on time.
Our suppliers and
subcontractors want us
to deal with any queries
quickly and efficiently,
with clear lines of
communication when
issues arise.
Top three priorities
Top three priorities
Top three priorities
Top three priorities
Top three priorities
Top three priorities
Top three priorities
Top three priorities
• Affordability
• Build quality
•
Energy efficiency
• Health and safety
• Land use
• Recognition
and reward
• Build quality
and design
• Career development
• Affordability
• Land use
• Affordability
• Environment
• Carbon emissions
• Profitability
• Health and safety
• Health and safety
• Biodiversity
• Affordability
• Strong
balance sheet
• Sustainability
• Planning regulations
• Timely payment
• Tax and compliance
• Clear
communication
Read more on how our strategy aims to address our stakeholder priorities on pages 16 to 17
Read more on how our Section 172 statement sets out how we have responded to our stakeholder needs on pages 92 to 95
07
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Chairman’s Statement
I would like to thank all
Gleeson colleagues for
their commitment, hard
work and resilience through
these challenging times,
ensuring that we were able
to deliver results in line with
expectations.”
James Thomson
Chairman
I was delighted to be appointed Chairman, succeeding
Dermot Gleeson who retired on 31 December 2022 after
47 years on the Board and 28 years as Chairman. It was
Dermot’s vision that saw the business transform into the
UK’s leading listed low-cost housebuilder and one that
can genuinely say that it changes people’s lives. I look
forward to maintaining and building on that legacy.
Strategy
Graham Prothero, who joined the Group as Chief
Executive Officer on 1 January 2023, set out in July
a roadmap to significantly scale the Company’s
operations over the long term. Under the banner
“Putting in place the foundations for future growth”, this
included broadening out Gleeson Homes’ proven model,
including widening the audience of target buyers,
exploring opportunities in partnerships, and expanding
Gleeson Land’s footprint.
We are not complacent about the risks in the short term
presented by the wider macroeconomic environment
and broader market issues including planning
constraints. However, we believe that the scale of unmet
demand for affordable and high-quality homes will
underpin a swift return to growth as soon as market
conditions stabilise and confidence returns. In the
interim, our focus on cost controls allied to new sales
initiatives, including attracting purchasers who would
previously have considered buying a more expensive
property, should ensure a resilient performance in the
coming year.
08
MJ Gleeson plc Annual Report & Accounts 2023 Homes sold
1,723
Dividend
Subject to shareholder approval at the 2023 Annual
General Meeting, in line with the Board’s stated
dividend policy, the Company intends to pay a final
dividend of 9 pence per share on 24 November 2023, to
shareholders on the register at the close of business on
27 October 2023. The total dividend for the year to 30
June 2023 will be 14 pence.
The Board intends to maintain an earnings to ordinary
dividend cover ratio of between three and five times.
Outlook
We have an excellent team, robust balance sheet
and strong underlying demand both for affordable,
high-quality homes and well-located land.
The Board is confident of the Group’s prospects. It
believes that the business is well-placed to take full
advantage of a market recovery when it materialises
and to deliver sustained, profitable growth over the
medium term.
James Thomson
Chairman
13 September 2023
Restructuring
Gleeson Homes responded proactively to the difficult
market conditions by pausing land buying, delaying
the opening of new sites, and controlling build activity
on certain sites. A restructuring of Gleeson Homes
operations was completed successfully by June 2023.
The business is now in a stronger position to return to
growth when conditions allow and has recommenced
land buying and site opening.
Board and succession planning
I stepped down as Chief Executive Officer on
31 December 2022, remaining on the Board as
Non-Executive Chairman following the retirement of
Dermot Gleeson. I was succeeded by Graham Prothero
who joined the Group from Vistry Group plc, where he
was latterly Chief Operating Officer.
Nicola Bruce joined the Board as a Non-Executive
Director with effect from 24 March 2023. Nicola is an
experienced Remuneration Committee Chair, with a
background in strategy and business development.
People
I would like to thank all my Gleeson colleagues for their
commitment, hard work and resilience through these
challenging times, ensuring that we were able to deliver
results in line with expectations. I am hugely proud
of their levels of engagement with the Company and
with its vision of “Building Homes. Changing Lives”. In
this year’s independently assessed people survey, our
colleague engagement remained in the top quartile of
all companies surveyed, despite the challenges faced.
Sustainability and our commitment
to a Science Based Target
Gleeson Homes’ core mission remains fully aligned
with UN Sustainable Development Goal 11, the first
target of which is “access for all to adequate, safe and
affordable housing” and I am proud that a couple on
the UK National Living Wage can still afford to buy a
home on any Gleeson Homes development site. We
have had a busy year focusing on our key pillars of
People, Communities and the Environment, and have
employed a Senior Ecologist to further develop our
biodiversity and ecology strategies. Most significantly,
I am pleased to announce our commitment to setting a
Science Based Target in line with the Paris Agreement’s
goal of limiting global warming to 1.5oC. Gleeson has
been working hard on understanding and eliminating
both emitted and embedded greenhouse gases in its
construction activities and I look forward to confirming
the targets we agree with the Science Based Targets
initiative (“SBTi”) well within the two year timetable.
09
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Market Review
The housing market faced a number of fundamental challenges this year with the cost of living
crisis, high inflation and rising interest rates all having an impact on the demand for new homes.
While there remains uncertainty around inflation, the risk of further interest rate rises and
potential changes to planning regulations, the desire for home ownership remains strong.
01
Average 2-year fixed mortgage rates (90% LTV)
Inflation, interest rates and
mortgage availability
Inflation rose sharply in 2022 and remained above 7% last year.
This led to the Bank of England raising interest rates multiple
times, with the base rate rising to 5.25% in August 2023. In July
2023, the average two year fixed rate mortgage rate rose to
6.6%, the highest since 2008, but has fallen slightly since then.
Coupled with this, the government’s mini-budget in September
2022 severely damaged market confidence and led to a
withdrawal of mortgage products and a decrease in demand in
the immediate aftermath. The latest increases in interest rates,
coupled with pessimistic media coverage has further damaged
buyer confidence.
Impact
These factors have had a severe impact on the market, with
a downturn in reservations immediately after the September
2022 mini-budget impacting our sales volumes in the last three
quarters of the year. Whilst reservation rates have improved in
the second half of the year, they remain below historic levels.
The changes in market dynamics have particularly impacted
first-time buyers with a reduction in the availability and
affordability of mortgage products, particularly when coupled
with the end of Help to Buy, which closed to new applicants in
October 2022.
Opportunities
Gleeson are well positioned to respond to these challenges
for several reasons. Primarily our focus is on the North of
England and the Midlands, where house price growth has been
significantly lower than London and the South of England and
gives us the opportunity for sustainable growth in prices whilst
maintaining affordability. Secondly, in addition to first-time
buyers who make up around half of our customers, our product
appeals to downsizers, retirees, second home buyers and other
“value driven” buyers who are increasingly attracted to the
quality and price point of our homes. Additional initiatives to
encourage both first-time buyers and home movers will ensure
that we continue to attract new customers. These include First
Homes, Shared Ownership, Deposit Unlock and Own New.
Link to strategy:
1
3
Link to risk:
1
2
4
10
7
6
5
4
3
2
1
0
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2
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3
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4
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5
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Source: Bank of England
Residential mortgage approvals
120,000
100,000
80,000
60,000
40,000
20,000
0
6
1
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7
1
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3
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Source: Bank of England (seasonally adjusted)
House prices versus inflation
200
150
100
50
8
0
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9
0
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1
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4
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5
1
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6
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7
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0
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1
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2
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3
2
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London
RPI
South & East of England
& West Midlands
North of England
& East Midlands
Source: Land Registry, UK House Price Index (indexed December 2007)
MJ Gleeson plc Annual Report & Accounts 2023 02
Net additional dwellings
Structural under-supply of new homes
where they are needed
New housing supply remains critically below the levels needed
and has not been helped by the government watering down
its own target of building 300,000 new homes a year by the
mid-2020s. This failure to deliver adequate, quality housing not
only impacts on availability and affordability, particularly for first-
time buyers, but will have an impact on generations to come.
Net housing additions in England last year was in the region
of 233,000 homes, with affordable housing supply accounting
for only 59,000 homes. Research from the National Housing
Federation and Crisis estimates that 145,000 affordable
houses need to be built each year. Moreover, only 23% of
new build homes sold in England were in the most deprived
areas, which remain grossly underserved in terms of quality,
affordable housing.
Impact
In the North of England and Midlands, 4.1 million households are
renting, and there are 0.6 million households on local authority
waiting lists. A further 2.1 million adults live with parents. In the
North of England and East Midlands, there remains a shortage
of affordable homes, with new build sales representing only
2% of all homes sold below £200k. The opportunity for home
ownership remains squeezed by this lack of supply. Whilst older
terraced housing stock makes up the vast majority of sales under
£200k, the quality of these houses tends to be poorer than new
build and these are not as energy-efficient, with only 12% of
English housing stock EPC rated A or B.
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
Government target
7
0
0
2
8
0
0
2
9
0
0
2
1
0
0
2
1
1
0
2
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
New build completions
Other net additions
Source: Department for Levelling Up, Housing and Communities
New homes built in deprived areas
84%
100
80
60
40
20
23%
0
Gleeson
Homes
Source Land registry data and gov.uk indices of multiple deprivation.
Other
housebuilders
Opportunities
The structural under-supply of new homes represents a vast
underserved market of customers in our target areas. 84% of
Gleeson homes were sold in the most deprived areas of the
country in line with our mission of building homes “where they
are needed, for the people who need them most”. In addition, our
homes are highly energy-efficient with 95% of Gleeson homes
being EPC rated A or B.
Link to strategy:
1
2
3
Link to risk:
1
3
4
6
Key:
Strategic priorities
1
2
Sustainable growth
Build quality
3 Affordability
Risks
1
Economic environment
2 Mortgage availability
3
Land availability
4 Government policy and regulations
4
5
6
5
6
7
8
Climate change
7
Land – Gleeson Land
People, wellbeing, health and safety
Land – Gleeson Homes
Build costs and availability
9
Health and safety
Build quality and customer service
10 Financial environment and control
People
Cyber and IT systems
11 Climate risk
12
Sustainability
11
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Market Review
CONTINUED
03
Affordability being stretched
The cost of living crisis had a major impact on household
finances in the year, with energy prices and household bills
rising further. This combined with interest rate rises designed
to curb inflation have only served to make living costs higher
for individuals, who are impacted either by mortgage rate
rises or higher rental costs, which increased by 7.2% over the
last 12 months. Although wage rises have remained strong
and the National Living Wage increased by 9.7% in April 2023,
affordability is being stretched in some parts of the country.
Impact
Despite the cost of living crisis, some buyers continue to be
able to save for deposits, partly fuelled by pandemic related
savings and a strong labour market, often with the ability to
earn overtime.
For others, however, the pressure on household finances have
made it increasingly difficult to save for a deposit and the dream
of home ownership has had to be put on pause.
Whilst buyer interest remains high, many are still hesitant and
want to be assured of “value for money” before they buy. The
availability of rental property has also worsened in recent years
as private landlords exit the rental market. This continues to
make purchasing a home increasingly attractive.
Gleeson Homes average selling price versus
other housebuilders (£000)
276
268
254
293
181
181
190
164
North
East
North
West
Yorkshire and
the Humber
East
Midlands
Gleeson Homes
Other housebuilders
Mortgage costs as a percentage of
take home pay for first-time buyers
80%
70%
60%
50%
40%
30%
20%
10%
0%
1983
1993
2003
2013
2023
London
Rest of England
North of England
& East Midlands
Source: Nationwide
Opportunities
Whilst house prices have risen across the country, our homes remain affordable and a
couple on the National Living Wage can afford to buy a home on any Gleeson Homes
development. Mortgage payments in the North of England and East Midlands remain
low at 29% of take home pay relative to the rest of England (46%) and London (65%).
Increasingly buyers are motivated by the quality and price point of our homes relative to
other housebuilders and the “value for money” that this offers. Gleeson’s average selling
price of £186,200 was significantly below the UK average of £286,000, and below the
average for the North of England and East Midlands of £273,000.
Link to strategy:
1
3
Link to risk:
1
2
4
Key:
Strategic priorities
1
2
Sustainable growth
Build quality
3 Affordability
12
4
5
6
Climate change
7
Land – Gleeson Land
People, wellbeing, health and safety
Land – Gleeson Homes
MJ Gleeson plc Annual Report & Accounts 2023 04
Planning delays and environmental
issues risk impacting new homes
We continue to see long delays in the planning process, which
started with local planning department staff shortages during
the pandemic, followed by new environmental legislation
introduced by the Environment Act 2021, and most recently by
proposed government changes to the National Planning Policy
Framework in December 2022. These changes have led to
uncertainty around planning policy and some local authorities
have taken the opportunity to withdraw their local plans.
All of this has fuelled an ongoing crisis in the planning system,
which threatens the supply of consented land for new homes.
In addition, Biodiversity Net Gain (“BNG”) legislation is due to
be introduced from November 2023, which challenges balancing
the aims of the legislation with creating habitable spaces and
communities for people to live.
Impact
Planning applications are taking longer, and local planning
decisions are now more uncertain, even where these have
recommendation for approval. The impact has been felt across
the industry by both housebuilders and land promoters alike.
Gleeson Land and Gleeson Homes have seen the time taken
to secure planning permissions increase during the year, with
more applications being taken to appeal, often due to local
authority uncertainty over planning policy. This is more keenly
felt by Gleeson Land who are reliant on planning permissions
for sites to market and sell. Gleeson Homes would be impacted
over a longer term as delays in planning could delay build start
dates and mean a greater reliance on sales from existing sites to
achieve growth.
Major planning applications granted
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
4
1
-
3
1
0
2
5
1
-
4
1
0
2
6
1
-
5
1
0
2
7
1
-
6
1
0
2
8
1
-
7
1
0
2
9
1
-
8
1
0
2
0
2
-
9
1
0
2
1
2
-
0
2
0
2
2
2
-
1
2
0
2
3
2
-
2
2
0
2
Source: Department for Levelling Up, Housing and Communities
Percentage of planning decisions made
within 8 or 13 weeks
100
90
80
70
60
50
40
30
20
10
0
s
n
o
i
t
a
c
i
l
p
p
a
f
o
e
g
a
t
n
e
c
r
e
P
3
1
-
2
1
0
2
4
1
-
3
1
0
2
5
1
-
4
1
0
2
6
1
-
5
1
0
2
7
1
-
6
1
0
2
8
1
-
7
1
0
2
9
1
-
8
1
0
2
0
2
-
9
1
0
2
1
2
-
0
2
0
2
2
2
-
1
2
0
2
3
2
-
2
2
0
2
Source: Department for Levelling Up, Housing and Communities
Opportunities
Gleeson Land and Gleeson Homes have strong pipelines of land across a number of
local authorities and have an excellent track record of successful planning applications,
including via appeal. We have created a biodiversity strategy to address the challenges
posed by Biodiversity Net Gain. As the planning system gets increasingly complex, this
serves as a competitive advantage for our expert teams to work on promoting land for
landowners in Gleeson Land, and securing land for development in Gleeson Homes.
Link to strategy:
1
4
6
7
Link to risk:
4
5
11
12
Risks
1
Economic environment
2 Mortgage availability
3
Land availability
4 Government policy and regulations
5
6
7
8
Build costs and availability
9
Health and safety
Build quality and customer service
10 Financial environment and control
People
Cyber and IT systems
11 Climate risk
12
Sustainability
13
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information
Our Business Model
Key inputs
Group business model
Gleeson Homes contributed 98% of Group revenue this year
and is the key driver of growth in the business. The Homes
division requires significant capital investment in land and
work in progress as we acquire new sites to build more
high-quality, affordable homes. By contrast, Gleeson Land
requires significantly lower levels of working capital and is
highly cash-generative.
Gleeson Homes
Land
acquisition
We acquire land,
often in brownfield
areas or areas in need
of regeneration. We
transform these into
meaningful spaces for
people to live.
We have clearly defined
gateway processes to
ensure we buy land in
the right areas and at
the right price. This is
essential to keeping our
homes affordable.
Planning
We plan our
developments to
transform sites
into attractive
and sustainable
communities.
We work with local
authorities, local
residents, community
groups and other
stakeholders to achieve
an implementable
planning permission
that is sympathetic to
local needs.
Designing homes
Our homes are designed
to the latest planning and
building regulations. For
example, all new homes
built from June 2023
will use highly efficient
air source heat pumps
(“ASHPs”) as their source
of heating.
We regularly review the
specification of our homes
to ensure they remain
highly energy-efficient to
help our customers lower
their bills.
Gleeson Land
Build
Our health and safety
procedures are designed
to ensure everyone
connected to our sites
remains safe and free
from harm.
We are reducing carbon
emissions in our build
activities and supply
chain and working to
reduce our impact on the
environment including
through waste reduction
and recycling.
Sales and
customer
experience
Our focus on quality
is absolute and we will
not hand over a home
that we are not 100%
proud of.
We strive to provide
a five-star customer
experience and ensure
this commitment
to quality extends
throughout the
customer journey.
Outcome
We enable people to
escape from housing
poverty caused by the
“rent trap” and into
home ownership and
wealth creation.
We sell high-quality,
affordable homes to
first-time buyers or
young families as well
as home movers and
“downsizers” who can
benefit from our lower
price points.
New sites
We use land agents
and in-house search
capabilities to identify
and carefully select
new land opportunities.
We enter into
agreements with
landowners to promote
their land through the
planning process.
Promotion
We engage with
local authorities,
residents, communities,
stakeholder groups
and statutory
consultees to promote
land for sustainable
housing development
whilst balancing
stakeholder needs.
Planning
We have in-house
planning capabilities
and work closely with
masterplanning and other
specialist consultants
to secure attractive and
sustainable planning
consents in areas of
housing need.
Technical
We have in-house
technical experts to
Sales process
Outcome
As one of the
We supply high-quality
UK’s largest land
land that has the benefit
ensure that our sites are
promoters, we have
of planning permission
delivered with a readily
strong relationships
to other housebuilders,
implementable planning
with a wide range of
fulfilling a key need in
permission. In doing so,
housebuilders. We
the supply chain for
we provide developers
bring high-quality
the delivery of much
with an “oven ready”
consented land to
needed new homes.
site ready for them to
market and look to
start on.
achieve best value for
our landowners.
Financial capital
We have a robust capital model
with high levels of liquidity to
invest and grow the business.
Land
We buy land where homes can
be sold at affordable prices
and often in areas in need
of regeneration where other
housebuilders do not want
to build.
Building materials
We look to sustainably source
materials from reputable
suppliers. We select materials
with lower levels of embodied
carbon where possible.
Our people
Our people are key to achieving
the mission and vision of
our business and share our
core values.
Local authority
relationships
We build relationships with
local authorities and share our
sustainable vision of building
affordable homes for the people
who need them most.
Supply chain partnership
We partner with our supply
chain and use suppliers and
subcontractors that are local to
our sites where possible.
14
MJ Gleeson plc Annual Report & Accounts 2023
By promoting land in attractive areas where there is a
strong housing need, it forms part of the supply chain for
other housebuilders. Together, the two divisions support
the sustainable growth of the Group and contribute to the
delivery of much needed new homes across England.
Land
acquisition
We acquire land,
often in brownfield
areas or areas in need
of regeneration. We
transform these into
Planning
We plan our
developments to
transform sites
into attractive
and sustainable
communities.
meaningful spaces for
We work with local
Designing homes
Our homes are designed
to the latest planning and
building regulations. For
example, all new homes
built from June 2023
will use highly efficient
air source heat pumps
(“ASHPs”) as their source
of heating.
people to live.
We have clearly defined
gateway processes to
ensure we buy land in
the right areas and at
the right price. This is
essential to keeping our
homes affordable.
authorities, local
residents, community
groups and other
We regularly review the
stakeholders to achieve
specification of our homes
an implementable
to ensure they remain
planning permission
highly energy-efficient to
that is sympathetic to
help our customers lower
local needs.
their bills.
Build
Our health and safety
procedures are designed
to ensure everyone
connected to our sites
remains safe and free
from harm.
We are reducing carbon
emissions in our build
activities and supply
chain and working to
reduce our impact on the
environment including
through waste reduction
and recycling.
Sales and
customer
experience
Our focus on quality
is absolute and we will
not hand over a home
that we are not 100%
proud of.
We strive to provide
a five-star customer
experience and ensure
this commitment
to quality extends
throughout the
customer journey.
Outcome
We enable people to
escape from housing
poverty caused by the
“rent trap” and into
home ownership and
wealth creation.
We sell high-quality,
affordable homes to
first-time buyers or
young families as well
as home movers and
“downsizers” who can
benefit from our lower
price points.
Value for stakeholders
Customers
We help our customers to achieve
long-term value creation, security and
wellbeing through home ownership.
Shareholders
We generate sustainable value and
returns for our shareholders.
Our people
We invest in our people, develop their
skills and reward them appropriately.
Suppliers and subcontractors
We create long-term relationships
with our suppliers and subcontractors.
We pay them fairly and on time.
Communities
We regenerate land often in deprived
areas, leaving a positive lasting legacy
for the communities who need it
the most.
Government and
local authorities
We consult with government, local
authorities and industry bodies to
ensure we remain fully compliant and
to ensure they understand the impact
of policies on house building.
Banks
We work with our banks to ensure
that we comply with all covenants
and other requirements of the
facilities they provide.
New sites
We use land agents
and in-house search
Promotion
We engage with
local authorities,
Planning
We have in-house
planning capabilities
capabilities to identify
residents, communities,
and work closely with
and carefully select
stakeholder groups
masterplanning and other
new land opportunities.
and statutory
specialist consultants
We enter into
agreements with
consultees to promote
to secure attractive and
land for sustainable
sustainable planning
landowners to promote
housing development
consents in areas of
their land through the
whilst balancing
housing need.
planning process.
stakeholder needs.
Technical
We have in-house
technical experts to
ensure that our sites are
delivered with a readily
implementable planning
permission. In doing so,
we provide developers
with an “oven ready”
site ready for them to
start on.
Sales process
As one of the
UK’s largest land
promoters, we have
strong relationships
with a wide range of
housebuilders. We
bring high-quality
consented land to
market and look to
achieve best value for
our landowners.
Outcome
We supply high-quality
land that has the benefit
of planning permission
to other housebuilders,
fulfilling a key need in
the supply chain for
the delivery of much
needed new homes.
Toni, Petersmiths Park,
Ollerton, Nottinghamshire
MJ Gleeson plc Annual Report & Accounts 2023
15
S
t
r
a
t
e
g
i
c
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e
p
o
r
t
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o
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a
n
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a
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a
i
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a
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m
e
n
t
s
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t
h
e
r
I
n
f
o
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a
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i
o
n
Our Business Strategy
Our strategy incorporates the Group’s objective for sustainable
growth, together with the environmental, social and governance
priorities that are most important to the Group.
Strategic priorities
Objectives
Target
Progress in 2023
Future actions to meet target
Sustainability Link to SDGs
1
Increase the number of new homes built
and extend our geographical reach.
To reach 3,000 homes per year over the
medium term.
Sustainable growth
Link to KPI: 7 8 9 10 11 13
2
Build quality
3
Affordability
4
Climate change
Build high-quality, energy-efficient homes
to the specification that our customers
require.
To be a five-star housebuilder on all our
development sites.
Link to KPI: 3
Keep our homes affordable through
managing build costs, sourcing responsibly
and building efficiently, utilising local
suppliers and subcontractors where
possible.
To ensure a couple on National Living
Wage can afford a home on any one of our
developments.
Link to KPI: 5 12
Protect the environment and reduce
carbon emissions for the homes that we
build and sell.
To reduce scope 1 and 2 emissions by
30% from 2020 to less than 1.75 tonnes
per home.
We will achieve Science Based Targets
validation by 2025 for near-term and net
zero targets with a clear path to achieve
these targets.
Link to KPI: 4 6
5
People, wellbeing,
health and safety
Everyone who is involved with, or affected
by, our business remains free from harm
and returns home safe every day.
To reduce our health and safety accident
rate (“AIIR”) to lower than the industry
average.
To attract, retain and develop employees
who share the values, culture and
objectives of the Group.
To maintain our employee engagement
score in the upper quartile of all surveyed
companies.
Link to KPI: 1 2
To sustainably grow our land pipeline,
sourcing land in areas that are in need of
regeneration where homes can be built for
sale at low cost.
To acquire land at an average cost per plot
below 15% of expected selling price in order
to keep homes affordable.
To source high-quality new sites that are
well located and can deliver attractive
residential planning consents for
sustainable development.
Link to KPI: 14
To obtain more planning permissions in
each financial year than sites sold.
Link to KPI: 15
6
Land –
Gleeson Homes
7
Land –
Gleeson Land
16
The market conditions experienced
We continue to invest in land and spread our
during the year to 30 June 2023
geographical footprint. We will drive sales
resulted in a reduction in homes sold
and build activity to ensure we remain well
compared to 2022, but we have a robust
positioned to benefit from market recovery.
strategy to return to growth.
Our customer recommendation score
We will recover our five-star status during 2024
was 89.0% (2022: 90.7%), which puts
through enhanced training, quality inspections,
us below the Home Builders Federation
response times and timely resolution of any
five-star rating.
“snagging” issues post completion. See further
actions on page 75.
A couple working full time on the
We remain committed to building high-quality
government’s National Living Wage
homes that are affordable. We continue to
continue to be able to afford to buy a
assess each new land opportunity on the basis
home on 100% of our active sales sites.
of the affordability of homes being delivered.
Our scope 1 and 2 emissions per home
We will continue to reduce our scope 1 and 2
sold increased this year due to the lower
direct emissions through the actions set out on
number of homes sold, whilst build
page 75.
activity was intentionally maintained.
We have committed to setting targets validated
Our commitment to Science Based
by the Science Based Targets initiative which
Targets will set out our long-term
will set new carbon reduction targets for the
carbon reduction plans.
Group across scope 1, 2 and 3, both near and
long-term.
Our AIIR for the year was 303 (2022:
We continue to ensure that safety remains
55) and was above the industry average
our number one priority and have rolled out
of 239.
In our latest employee survey we had a
87% engagement score, which maintains
additional tracking of health and safety and near
misses, site inspections and communications.
See further actions on page 75.
our position in the top quartile of all
We continue to ensure our employee offering
companies surveyed.
provides training and career development, a
positive working environment, a competitive
package and high-levels of employee
engagement. More actions can be found on
pages 52 to 57.
The average cost per plot of land
Our land buying policy continues to require land
acquired in the year was below 15%
to be purchased according to this criteria in
of expected selling price and four out
order to ensure our homes remain affordable.
of five sites in the land pipeline were
brownfield or in areas of deprivation.
We acquired three sites in the year and
Whilst the planning system remains extremely
obtained planning permission on six
challenging, we continue to successfully
sites. We sold three sites during the year.
progress sites in our portfolio, aided by the
strength of the Gleeson Land team.
MJ Gleeson plc Annual Report & Accounts 2023
Key:
KPIs
1
2
3
4
5
Health and safety (“AIIR”)
Employee engagement
Customer recommendation
score
CO2e (scope 1 and 2)
First-time buyers
6
7
8
9
Waste
11 Gleeson Homes – Homes sold
People
Sustainability
Cash and cash equivalents
net of borrowings
Group profit before tax
(pre-exceptional items)
Total dividend
10 Return on capital employed
15
14 Gleeson Homes – Land
pipeline
Gleeson Land – Portfolio
12
13
Gleeson Homes – Average
selling price
Gleeson Homes – Build sites
Communities
Environment
Strategic priorities
Objectives
Target
Progress in 2023
Future actions to meet target
Sustainability Link to SDGs
1
2
3
4
5
6
7
Increase the number of new homes built
To reach 3,000 homes per year over the
and extend our geographical reach.
medium term.
Sustainable growth
Link to KPI: 7 8 9 10 11 13
Build quality
require.
Link to KPI: 3
Build high-quality, energy-efficient homes
To be a five-star housebuilder on all our
to the specification that our customers
development sites.
Keep our homes affordable through
To ensure a couple on National Living
managing build costs, sourcing responsibly
Wage can afford a home on any one of our
and building efficiently, utilising local
developments.
Affordability
suppliers and subcontractors where
possible.
Link to KPI: 5 12
Climate change
Protect the environment and reduce
To reduce scope 1 and 2 emissions by
carbon emissions for the homes that we
30% from 2020 to less than 1.75 tonnes
build and sell.
per home.
We will achieve Science Based Targets
validation by 2025 for near-term and net
zero targets with a clear path to achieve
these targets.
Link to KPI: 4 6
The market conditions experienced
during the year to 30 June 2023
resulted in a reduction in homes sold
compared to 2022, but we have a robust
strategy to return to growth.
We continue to invest in land and spread our
geographical footprint. We will drive sales
and build activity to ensure we remain well
positioned to benefit from market recovery.
Our customer recommendation score
was 89.0% (2022: 90.7%), which puts
us below the Home Builders Federation
five-star rating.
We will recover our five-star status during 2024
through enhanced training, quality inspections,
response times and timely resolution of any
“snagging” issues post completion. See further
actions on page 75.
A couple working full time on the
government’s National Living Wage
continue to be able to afford to buy a
home on 100% of our active sales sites.
We remain committed to building high-quality
homes that are affordable. We continue to
assess each new land opportunity on the basis
of the affordability of homes being delivered.
Our scope 1 and 2 emissions per home
sold increased this year due to the lower
number of homes sold, whilst build
activity was intentionally maintained.
Our commitment to Science Based
Targets will set out our long-term
carbon reduction plans.
We will continue to reduce our scope 1 and 2
direct emissions through the actions set out on
page 75.
We have committed to setting targets validated
by the Science Based Targets initiative which
will set new carbon reduction targets for the
Group across scope 1, 2 and 3, both near and
long-term.
People, wellbeing,
health and safety
Everyone who is involved with, or affected
To reduce our health and safety accident
by, our business remains free from harm
rate (“AIIR”) to lower than the industry
and returns home safe every day.
average.
To attract, retain and develop employees
To maintain our employee engagement
who share the values, culture and
score in the upper quartile of all surveyed
objectives of the Group.
companies.
Link to KPI: 1 2
Our AIIR for the year was 303 (2022:
55) and was above the industry average
of 239.
In our latest employee survey we had a
87% engagement score, which maintains
our position in the top quartile of all
companies surveyed.
To sustainably grow our land pipeline,
To acquire land at an average cost per plot
sourcing land in areas that are in need of
below 15% of expected selling price in order
regeneration where homes can be built for
to keep homes affordable.
Land –
Gleeson Homes
sale at low cost.
Link to KPI: 14
The average cost per plot of land
acquired in the year was below 15%
of expected selling price and four out
of five sites in the land pipeline were
brownfield or in areas of deprivation.
We continue to ensure that safety remains
our number one priority and have rolled out
additional tracking of health and safety and near
misses, site inspections and communications.
See further actions on page 75.
We continue to ensure our employee offering
provides training and career development, a
positive working environment, a competitive
package and high-levels of employee
engagement. More actions can be found on
pages 52 to 57.
Our land buying policy continues to require land
to be purchased according to this criteria in
order to ensure our homes remain affordable.
Land –
Gleeson Land
To source high-quality new sites that are
To obtain more planning permissions in
well located and can deliver attractive
each financial year than sites sold.
residential planning consents for
sustainable development.
Link to KPI: 15
We acquired three sites in the year and
obtained planning permission on six
sites. We sold three sites during the year.
Whilst the planning system remains extremely
challenging, we continue to successfully
progress sites in our portfolio, aided by the
strength of the Gleeson Land team.
17
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information
Key Performance Indicators
Key:
Key sustainability targets
Sustainability
People
Communities
Environment
Strategic priorities
1
2
Sustainable growth
Build quality
3 Affordability
4
5
6
7
Climate change
People, wellbeing,
health and safety
Land – Gleeson Homes
Land – Gleeson Land
Read more on our Business
Strategy on pages 16 to 17
Risks
1
Economic environment
2 Mortgage availability
3
4
5
6
7
8
9
Land availability
Government policy and
regulations
Build costs and availability
Build quality and
customer service
People
Cyber and IT systems
Health and safety
10 Financial environment and
control
11 Climate risk
12
Sustainability
Read more on our
Risk Management on
pages 36 to 41
18
Sustainability KPIs
Health and safety (“AIIR”)
Employee health and safety is our
number one priority, and we are
committed to keeping our AIIR below the
industry average.
Employee engagement (%)
We want to attract, retain and develop
employees who share the values and
culture of the Group.
6
5
5
9
5
3
8
2
2
Link to
sustainability:
People
3
0
3
5
5
Link to strategy:
5
Link to risk:
l
e
b
a
l
i
a
v
a
a
t
a
d
o
N
8
8
9
8
0
9
7
8
Link to
sustainability:
People
Link to strategy:
5
Link to risk:
’19
’20
’21
’22
’23
9 12
’19
’20
’21
’22
’23
7 12
Customer recommendation
score (%)
CO2e (scope 1 and 2) tonnes
per home sold
We aim to be a five-star builder on all
of our developments, which means
obtaining a customer recommendation
score above 90%.
We are committed to reducing our
carbon emissions.
8
8
1
9
1
99
8
Link to
sustainability:
Communities
Link to strategy:
2
Link to risk:
l
e
b
a
l
i
a
v
a
a
t
a
d
o
N
2
8
2
.
6
4
2
.
5
0
2
.
6
8
.
1
9
0
2
.
Link to
sustainability:
Environment
Link to strategy:
4
Link to risk:
’19
’20
’21
’22
’23
6 12
’19
’20
’21
’22
’23
11
12
First-time buyers (%)
We aim to get more first-time buyers
into home ownership and out of the
“rent trap”.
Waste (% of waste diverted
from landfill)
We aim to reduce our impact on the
environment.
4
8
0
8
0
48
7
9
5
’19
’20
’21
’22
’23
Link to
sustainability:
Communities
Link to strategy:
3
Link to risk:
1
62
12
8
9
9
9
9
9
6
9
Link to
sustainability:
Environment
Link to strategy:
4
Link to risk:
l
e
b
a
l
i
a
v
a
a
t
a
d
o
N
’19
’20
’21
’22
’23
11
12
1 Accident Injury Incidence Rate measured as the number of reportable incidents per
100,000 employees and on-site subcontractors.
MJ Gleeson plc Annual Report & Accounts 2023
Financial KPIs
Cash and cash equivalents net
of borrowings (£m)
We aim to maintain positive cash
balances or reduce net debt.
Group profit before tax
(pre-exceptional items) (£m)
The Group aims to generate profits
to invest in the future growth of the
business for all stakeholders.
Operational KPIs
Gleeson Homes – Build sites
(year end)
Build sites represent the sites we are
actively building on.
.
3
4
3
.
8
3
3
.
3
0
3
.
8
6
1
’19
’20
’21
’22
.
2
5
’23
.
5
5
5
2
.
1
4
7
.
1
4
Link to strategy:
1
3
5
.
1
3
6
5
.
Link to risk:
1
2
3 4
Link to strategy:
1
Link to risk:
1
8
7
28
8
9
6
1
7
Link to strategy:
1
Link to risk:
1
10
’19
’20
’21
’22
’23
5 10
’19
’20
’21
’22
’23
1
3 4
Total dividend
(pence)
We look to provide steady dividend
growth whilst maintaining dividend cover
at sustainable levels.
Return on capital
employed2 (%)
Return on capital employed represents
the profits made from the assets
we hold.
Gleeson Homes –
Average selling price (£)
Average selling price represents our
overall sales income per home sold.
.
5
4
3
.
0
5
1
.
0
0
.
0
8
01
4
1
.
Link to strategy:
1
Link to risk:
1
2
3 4
.
9
5
2
.
4
5
2
4
.
1
2
1
.
3
.
0
3
1
Link to strategy:
1
Link to risk:
0
0
2
6
8
1
,
0
0
3
7
6
1
,
0
0
8
5
4
1
,
0
0
9
8
2
1
,
0
0
9
0
3
1
,
Link to strategy:
1 3
Link to risk:
1
2
3
5
’19
’20
’21
’22
’23
5 10
’19
’20
’21
’22
’23
1
10
’19
’20
’21
’22
’23
12
Gleeson Homes – Homes sold
We aim to increase the number of
new homes built and extend our
geographical reach.
Gleeson Homes – Land pipeline
(plots)
Land pipeline ensures our ability to grow
over the coming years.
Gleeson Land – Portfolio (sites)
Gleeson Land’s portfolio represents the
number of sites available to promote for
future sale
0
0
0
2
,
2
1
8
,
1
3
2
7
,
1
9
2
5
,
1
2
7
0
,
1
’19
’20
’21
’22
’23
Link to strategy:
1
Link to risk:
2
3 4
1
5
5
7
5
3
1
,
1
0
8
3
1
,
5
7
3
7
1
,
4
1
8
6
1
,
3
6
8
5
1
,
1
7
1
07
7
8
6
0
6
Link to strategy:
6
Link to risk:
Link to strategy:
7
Link to risk:
’19
’20
’21
’22
’23
1
3 4
’19
’20
’21
’22
’23
1
3 4
2 Return on capital employed is calculated based on earnings before interest, tax and exceptional items (“EBIT”) from continuing and
discontinued operations, expressed as a percentage of the average of opening and closing net assets after deducting deferred tax and
cash net of borrowings.
19
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Q&A With Our New CEO
Graham Prothero
Chief Executive Officer
I am excited for what is
next for the business, and
look forward to updating all
stakeholders of our progress.
We have tremendous teams
across Gleeson Homes and
Gleeson Land, all pulling in
the same direction to make
these ambitions a reality.”
Q What initially attracted you to
MJ Gleeson?
During my time working within the sector, I have always
admired Gleeson from afar. Its proposition of marrying
affordability and quality is more clearly defined than
many of the volume housebuilders, which positions the
business incredibly well for scalability and growth.
Gleeson Homes has strong roots within the North
of England and the Midlands, and truly impressive
community engagement. Gleeson Land is a business
with significant growth potential and one that I am
excited to see expand its presence. Importantly, the
Company is incredibly well run and always has been,
with a strong hold over its finances.
20
MJ Gleeson plc Annual Report & Accounts 2023 Q Did your first impressions meet
your expectations?
I have to say, since joining the business I have been
overwhelmed with the Company’s resilience in what
has been a challenging year. There is clear growth
potential for Gleeson Homes and Gleeson Land, both
have outstanding and industry-leading teams who are
invested in the business’ growth, and have exceptional
land pipelines.
At Gleeson Homes, a thorough two-year review of
the specification has led to an incredibly high-quality
product that is on par with any other I have seen
across the industry, particularly when considering their
affordability. Gleeson Homes also has a clearly defined
message and proposition, which allows it to capture key
demographics of customers, while pivoting to entice
wider audiences as we have seen during the last year.
At Gleeson Land, Guy Gusterson, our new Managing
Director, has breathed new life into the business and is
implanting an ambitious but entirely achievable growth
strategy that will see the business utilise data to an
industry-leading extent, enabling it to identify key sites
and geographies that are ripe for promotion.
I am excited for what is next for the business, and look
forward to updating all stakeholders of our progress.
We have tremendous teams across Gleeson Homes and
Gleeson Land, all pulling in the same direction to make
these ambitions a reality.
Q What are the highlights from your
time so far as CEO?
It is well-documented that this has been a difficult
time for the sector, with interest rates and planning
being two considerable challenges. I feel we have
used this time wisely, restructuring Gleeson Homes to
allow for sustainable growth when the market returns,
while developing our product to appeal to a wider
demographic of potential customers. We want to drive
quality and speed within our recovery, and will do so
when the time is right.
I am also greatly excited by Gleeson Land’s prospects,
which now has the opportunity to fulfil its potential
within the Group. Gleeson Land has clear potential and
I have the utmost confidence in Guy and his team to
achieve this.
Q What can we expect in 2024?
On 7 July 2023, we held a Capital Markets Day at our
Petersmiths Park development in Nottinghamshire. There
we set out our strategic vision for the business under the
strapline “Putting in place the foundations for growth”.
While the market has suffered, we used the time to
position the business for growth when the opportunity
returns. This included restructuring Gleeson Homes,
making it more efficient, and investing in data analytics
within Gleeson Land.
Gleeson Homes will drive volume growth, each year
opening more development sites than it completes,
putting it in a strong position to be able to deliver
increases in both top line revenue and bottom line profit.
Whilst the market may not make a full recovery over
the next year, we will continue to adapt and explore
new opportunities in the sector. At the same time, we
will maintain our focus on developing our people to
become the next generation of sector leaders through
our Gleeson Academy programme. We will continue to
benefit from our refreshed product, which will appeal
to a wider demographic of potential customers as we
broaden out our proven model.
In Gleeson Land, Guy and the team will leverage their
data-driven approach to buying land, and this will enable
us to strengthen the portfolio for future profit delivery.
Overall, the message from me is to watch this space!
Whilst house sales and land sales fell last year following
the rise in interest rates and economic headwinds, we
expect to return to strong growth in both Gleeson
Homes and Gleeson Land supported by the structural
under-supply of new homes.
Q And, looking further ahead,
how will the business you eventually
leave differ from the one you took
charge of?
We set out an ambitious plan at our Capital Markets
Day; one that is very much centred on our core purpose
of Building homes: Changing Lives. Gleeson Homes has
a clear pathway for growth and Gleeson Land has the
potential to become the leader in its field.
So, exciting opportunities ahead, but fundamentally
what we do at the core that will never change, just a lot
more of it. And we must deliver on our ambition to do so
in a sustainable way, recognising the imperative of the
world in which we live and operate today.
21
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information
Chief Executive’s Statement
I am pleased to report
a robust performance
despite the impact on
first-time buyer confidence
as a result of current
economic volatility. We
maintained an acceptable
sales rates, supported by
our first multiple unit and
investor sales.”
Graham Prothero
Chief Executive Officer
Overview
I am pleased to report a robust performance in a year
characterised by economic volatility, a deterioration
in buyer confidence and shifting buyer demographics.
We continued to experience delays in planning,
further exacerbated by the local elections in May and
uncertainties around government policy.
We took advantage of the quieter market to implement
an important reorganisation of the business, reducing
our regional overheads and standardising the structure
to facilitate efficient and controlled future growth.
We have maintained our geographic coverage whilst
reducing the number of divisions from three to two and
regional management teams from nine to six, securing
£3.2m of annualised administrative cost savings.
Importantly, the restructuring has put the business in a
stronger position to grow as the market recovers. We
enter the new financial year with a stronger operating
structure and have re-commenced land buying and
site opening.
Since joining the Group on 1 January 2023, I have been
hugely impressed with the resilience of our teams across
the Group. I would like to thank everyone for remaining
focused and committed through a challenging period.
These tough market conditions may continue for
a while yet, but I know that we have a skilled and
dedicated team to navigate the business through these
choppy waters.
22
MJ Gleeson plc Annual Report & Accounts 2023 In anticipation of the economy stabilising and
confidence returning to the market, we are
implementing a range of measures to further improve
our competitiveness and position the business to take
advantage of the recovery.
At our Capital Markets Day in July we set out our
strategy to deliver on what we believe is an exciting
opportunity ahead. Under the banner “Putting in place
the foundations for future growth”, we described how
we intend to broaden out Gleeson Homes’ proven model
and expand Gleeson Land’s footprint and capabilities.
We have over the medium term a visible route to
delivering 3,000 homes per annum and scaling our land
promotion business, and we look forward to reporting
our progress on this over the coming months and years.
Results
Group
Group revenue was £328.3m (2022: £373.4m) and
profit before tax and exceptional items was £31.5m
(2022: £55.5m). Profit before tax was £30.5m
(2022: £42.6m) after exceptional restructuring costs of
£1.0m (2022: £12.9m building safety provisions).
The Group ended the year with cash and cash
equivalents of £5.2m (2022: £33.8m) and continues to
have a strong balance sheet and significant liquidity to
invest in new sites and future growth.
Gleeson Homes
Gleeson Homes sold 1,723 homes (2022: 2,000).
Average selling prices increased by 11.3% to £186,200
(2022: £167,300) due to underlying selling prices
increasing by 7.6% and changes in the mix of homes
sold. The division entered into agreements with four
carefully selected partners during the year for the sale
of a total of 377 homes. The sale of 115 of those homes
was completed during the year, with revenue recognised
on the plots legally completed. The remaining
262 homes are expected to be completed in the new
financial year.
We experienced increases in material and labour costs
during the financial year with average inflationary cost
increases of 3.4%. Whilst these increases had started
to ease during the second half of the year, increases in
preliminary costs, as site durations were extended, and
increased sales incentives led to a modest reduction in
gross margin of 2.0% to 27.0% (2022: 29.0%).
The division delivered an operating profit before
exceptional items of £35.0m (2022: £51.2m) reflecting
the market slowdown throughout most of the
financial year.
Medium-term target
3,000
homes per annum
We enter the new financial year with a stronger forward
order book of 665 plots (31 December 2022: 319 plots,
30 June 2022: 618 plots).
We opened three new build sites in the year and are
now building on 82 sites across the North of England
and the Midlands (2022: 87 build sites). Whilst this
was lower than we had originally anticipated due to
our response to the economic slowdown, we have
retained a healthy pipeline of 173 sites at 30 June 2023,
which increased by 561 plots to 17,375 plots (2022:
16,814 plots).
Gleeson Land
The division completed the sale of three sites, under
promotion agreements, with the potential to deliver
413 plots for housing development, and delivered an
operating profit of £1.0m (2022: £11.1m). The more
cautious approach adopted by housebuilders to buying
land resulted in some land sales progressing slower than
anticipated particularly in the final quarter.
Gleeson Land ended the year with a stronger portfolio,
having six sites consented or with resolution to grant,
which have the potential to deliver 1,400 plots for
housing development (2022: three sites, 1,206 plots),
and a further 18 sites awaiting a planning decision or
in appeal, with the potential to deliver 4,285 plots for
housing development (2022: 16 sites, 3,559 plots).
Under the leadership of its new Managing Director,
Guy Gusterson, the business is well positioned for
growth and to expand its geographical reach. Our
investment in technology and analytics will enable
the division to accelerate growth, and is already
differentiating our offering compared to other land
promoters.
The overall portfolio comprises 70 sites, with the
potential to deliver 17,831 plots, and 25 acres of
commercial land (2022: 71 sites, 20,241 plots, 25 acres of
commercial land). The majority of these sites are held
under promotion or option agreements.
We have a strong pipeline of sites and continue to see
demand from mid-size and regional housebuilders for
well-located, consented land.
23
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Chief Executive’s Statement
CONTINUED
Strategic review
We held a Capital Markets Day in July at our Petersmiths
Park development in Nottinghamshire which, when
completed, will comprise 305 homes. At the event,
which was well-attended by sell-side analysts and
investors, we set out, under the banner of “Putting in
place the foundations for growth”, why we are excited
about the strong growth potential across both Gleeson
Homes and Gleeson Land.
At Gleeson Homes, we have clear visibility for the
delivery of 3,000 homes per annum over the medium
term and have set out an ambition to realise the Group’s
full potential over the longer term, which could see it
delivering circa 10,000 homes per annum.
Gleeson Land is well-placed to expand its regional
presence and its rate of acquisitions, using its advanced
analytics and research capability, and is expanding
its capabilities to become the country’s pre-eminent
land promoter.
We look forward to keeping the market updated on our
progress.
Building safety
The Group remains firmly committed to remediating
life-critical fire safety issues on buildings over 11 metres
in which it was involved in developing over the last 30
years. In February 2023, the Group entered into the long
form agreement with the Department for Levelling Up,
Housing and Communities (“DLUHC”) self-remediation
terms following its initial pledge in April 2022.
We moved swiftly to carry out investigation work,
intrusive surveys and fire risk assessments where
building owners and management companies permitted.
Despite our best efforts progress has been slower than
we would like but we are committed to undertaking any
remedial work as soon as agreement can be reached.
Three additional buildings were identified by Gleeson
and notified to DLUHC this year. These buildings are of
masonry construction, two of which were conversions
from their previous use as mills and one of which was
previously notified to DLUHC as a single development
but comprises two separate buildings. The overall
provision has been reassessed in light of these and a
further assessment of the remediation works required
on the 14 buildings previously notified and, based on
current estimates the remaining provision of £12.8m at
30 June 2023 remains appropriate for the 17 buildings.
The market
The current economic backdrop has impacted buyer
confidence across the market. With first-time buyers
particularly affected by the end of Help to Buy, we were
pleased to see an increase in demand from existing
home-owners, which drove a significant shift in our
buyer demographics. Reservations from first-time
buyers in the second half accounted for circa 50% of
open-market reservations compared to a more typical
80%, whilst over 20% of reservations are from buyers
aged over 55 years old (2022: 10%).
The average selling price of new build homes in our
geographic regions was £272,600, 46% higher than the
average selling price of a Gleeson home at £186,200.
Gleeson Homes is therefore uniquely positioned to serve
customers who might previously have been considering
a more expensive property but who, faced with higher
mortgage rates, are now looking at more affordable
price points. We are broadening our marketing and
sales initiatives to target this much wider audience
of value-driven potential purchasers. We expect our
homes to become increasingly attractive, reinforced
by cost of living pressures which will further enhance
the attractiveness of a Gleeson home. We also expect
that we will see first-time buyer interest returning
to more normal levels as confidence returns, further
strengthening demand.
The UK’s housing market is driven by the structural
under-supply of homes in the UK and household
formation will continue to ensure strong demand.
Our starting point is the estimated nine million rented
households in England, of which just under half are
in the areas in which we operate. Meanwhile, the cost
of renting in the UK continues to outpace the cost of
buying a new Gleeson home. Over the last 12 months, in
our regions, rental costs for an average three bedroom
house increased by 7.7%, and the cost of buying a
Gleeson home remains comparable, if not cheaper, than
renting. Moreover, Gleeson homeowners see significant
savings on their energy bills which are, based on current
energy prices, £748 lower per year on a typical two-bed
home compared to older housing.
The market served by Gleeson Land for consented
land continues to enjoy good demand, but is seeing
increased levels of caution from major housebuilders.
In their place, mid-size and regional housebuilders have
seized the opportunity to step in and bid on sites and,
as a result, the demand for attractive, well-located sites
with planning permission remains robust.
Gleeson Land is one of two large land promoters whose
interests are aligned to their land owners by maximising
value on open market sales and who do not sell land to
their housebuilding arm.
24
MJ Gleeson plc Annual Report & Accounts 2023 Business restructuring
In response to the economic conditions, the Group took
a number of defensive measures early in the financial
year. This included pausing land buying, delaying the
opening of new sites, and controlling build rates on
certain sites in line with demand.
In February 2023, we announced the restructuring of
Gleeson Homes. This was completed successfully by
June 2023, reducing from nine regional management
teams to six and moving to a standardised operating
structure. This process had a significant impact on
people in the business, and I am grateful for the
resilience and support of our colleagues during this
period. This action was necessary to reshape the
organisational structure and create a strong platform
for growth as the market returns. This process resulted
in a number of redundancies, generating annualised
administrative cost savings of £3.2m and a one-off
exceptional cost totalling £1.0m.
We continue to hold a strong pipeline of land and have
actively resumed land buying in the new financial year.
We have also resumed opening sites, investing in work
in progress to provide a platform to accelerate sales as
market conditions return.
Calluna Grange,
Broughton Moor, Cumbria
Immediate priorities
Following on from the restructuring of Gleeson Homes,
we now have a standardised operating structure,
ensuring that we are more efficient in what we do on a
day-to-day basis.
We are rolling out a new and wider product range,
including one-bedroom homes, and refreshed elevations
to ensure that we attract buyers who might not
previously have considered a Gleeson home.
We are widening our marketing and sales activities to
all value-driven buyers and placing a particular focus
on systems development and training to ensure that
we have the best sales processes to improve our buyer
conversion rates.
We are considering further multi-unit sales to carefully
selected partners, taking advantage of demand in the
rental market to reduce risk and maintain our sales rate.
In addition, we are exploring opportunities to develop
longer-term partnerships with selected partners
who share our values, which would offer incremental
growth, whilst moderating our open-market risk and
enhancing returns.
25
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Chief Executive’s Statement
CONTINUED
Current trading and outlook
Economic uncertainty has continued to subdue the
wider market over the summer months. Gleeson
Homes’ net reservation rate for the 9 weeks to
1 September 2023 was 0.43 per site per week compared
with 0.54 per site per week over the comparable period
last year. Cancellation rates of 0.10 per site per week
were unchanged from the comparable period last year.
However, with a steadying mortgage market and the
implementation of a range of sales and marketing
initiatives, including the introduction this month of a
shared ownership package, we anticipate an increase
in our reservation rates during the Autumn selling
season. We also continue to receive interest in multi-unit
transactions, which would further strengthen sales.
Gleeson Land started the financial year in a stronger
position with six consented sites and has already
completed the sale of one significant site. Demand for
consented sites remains strong and further site sales are
anticipated throughout the year.
We therefore view the current year with confidence,
whilst remaining cautious around continuing risks in the
wider economy and any further impact on customer
demand. As market conditions improve, we look forward
to returning to significant growth.
Saxon Grange,
Boston, Lincolnshire
Net reservations per site per week
(excluding multi-unit sales)
9 weeks to
1 September
2023
9 weeks to
2 September
2022
0.53
0.10
0.43
0.64
0.10
0.54
Gross reservations
Cancellations
Net reservations
Sustainability review
Home ownership
Our vision of “Building Homes. Changing Lives.” and our
mission of “Changing lives by building affordable, quality
homes, where they are needed, for the people who need
them most.” supports UN Sustainable Development
Goal 11 (“Sustainable cities and communities”) to provide
access for all to safe and affordable housing. I am proud
that a working couple on the National Living Wage can
afford to buy a high-quality home on any one of our
developments. This year 84% of the homes that we sold
were either in the most deprived areas of the country or
on brownfield land in need of regeneration.
We recognise that home ownership may not be an
option for some, and we have entered into agreements
with a small number of carefully selected partners to
sell homes for rent on selected developments. We will
continue to explore these opportunities where these are
aligned to our mission, vision and values.
26
MJ Gleeson plc Annual Report & Accounts 2023 People and health and safety
Our independently-assessed people engagement score,
at 87%, remained in the top quartile of all surveyed
companies this year, with a higher response rate across
the Group. It is pleasing that we have maintained our
position as we strive to make Gleeson an even better
place to work. We will be responding to the latest
constructive feedback over the coming months. We
place great emphasis on the importance of personal
development and training, and keep our employee value
proposition under continual review.
On health and safety performance, the number of
reportable incidents rose from one last year to six
this year. This was disappointing as health and safety
has been an area of significant management priority
and investment and we continue to re-enforce our
“HomeSafe” message across our sites. Whilst we
previously outsourced health and safety inspections
to a third-party, this was not yielding the quality and
consistency that we expect and we have, therefore,
taken the decision to bring this activity back in house.
This is an important area for us and we seek to measure
ourself against best-practice in the industry.
Climate, the environment and our
commitment to a Science Based Target
Whilst we have reduced our absolute emissions from
direct operations to 3,601 tonnes (2022: 3,714 tonnes),
we missed the ambitious target we set in 2021 to reduce
our scope 1 & 2 carbon emissions from 2.5 tonnes to
1.75 tonnes per home sold. Emissions per home sold
in 2022 had reduced to 1.86 tonnes but increased to
2.09 tonnes in this financial year as a result of the lower
number of homes sold.
The increasing push towards nationally described space
standards (“NDSS”) has the unintended consequences
of making homes larger and more expensive despite it
being clear that this is not what many customers want,
and will increase the embodied carbon emissions of an
average Gleeson home over the next few years despite
the actions we are taking.
However, we are working hard to reduce all emissions
and in August 2023, we committed to the Science
Based Targets initiative (“SBTi”) to set both a near-term
and a long-term carbon reduction target. This affirms
our ambition to deliver direct climate action through
the decarbonisation of our operations, supply chain and
in use emissions. We now have a two year period to
submit our targets and have these validated by the SBTi,
which includes setting a baseline year and developing a
plan for carbon reduction. We will announce the specific
targets once we have had these validated, and report
against them in future reporting periods.
We are already taking steps to switch to lower carbon
materials, where viable, such as using concrete bricks
or reconstituted stone rather than kiln-fired clay bricks,
installing air source heat pumps, and reducing fuel
use on sites through improved forklift and generator
technology and HVO fuel.
In response to the Future Homes Standard and changes
in building regulations, we are now installing air source
heat pumps in all the homes we commenced building
after 15 June 2023 which means that our homes will
be net-zero ready in preparation for the UK Grid being
decarbonised by 2035.
We are supportive of the measures to improve energy
efficiency and our homes already have better energy
performance ratings than most other homes, with
95% of our homes having an EPC “B” rating or above.
Customers also benefit from living in an energy-efficient
and well-insulated home. The average Gleeson home
requires 49% less energy to heat and power than
existing housing, and the average Gleeson buyer of a
2-bed home currently saves over £748 per year on their
energy bills based on actual usage data.
Build quality and customer service
Build quality remains a priority and for most of our
customers buying a Gleeson home represents the single
largest financial commitment of their lives. We are
committed to meeting our customers’ expectations for
quality and customer service.
We saw a marginal decrease in our overall customer
“recommend” scores during the year to 89.0% (2022:
90.7%). The movement in the score was primarily down
to a drop in customer satisfaction levels in a couple
of regions, principally at the point of handover, and
our effectiveness in dealing with defects promptly
thereafter.
Following the corrective actions put in place, we have
seen a significant improvement in survey scores received
in recent months with current “recommend” scores of
93.9% in the two months to 31 August 2023.
Gleeson was one of the first housebuilders to register
under the New Homes Quality Code (“NHQC”). We
fully support its principles and our processes have been
updated to meet these new requirements.
Graham Prothero
Chief Executive Officer
13 September 2023
27
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Business Review
Gleeson Homes
Results
Gleeson Homes completed the sale of 1,723 homes
during the year (2022: 2,000), a reduction of 13.9% on
the previous year. Of the homes sold, 115 were to the
four carefully selected partners with whom we have
entered agreements to sell a total of 377 homes.
Revenue decreased by 4.1% to £320.8m (2022:
£334.6m) as resilient selling prices partly mitigated the
impact of the reduction in the number of homes sold.
The average selling price of homes sold during the year
increased by 11.3% to £186,200 (2022: £167,300), driven
by higher underlying selling prices which were up 7.6%,
changes in the mix of site locations and house types and
increased customer extras.
Gross margin on homes sold decreased to 27.0% (2022:
29.0%) reflecting build cost inflation of 3.4%, increased
fixed site costs as site durations extended due to the
wider market downturn, the impact of multi-unit and
affordable sales and the higher use of incentives to
secure sales. Despite the increase in average selling
prices, the decrease in the volume of homes sold and
gross profit margin resulted in gross profit decreasing
by 10.7% to £86.5m (2022: £96.9m).
Administrative expenses, which include sales and
marketing costs, increased by £5.7m to £51.8m
(2022: £46.1m) driven by higher headcount, increased
advertising and selling costs and the impact of
inflation. Other operating income amounted to £0.4m
Business restructure and standardisation
The restructuring of Gleeson Homes was announced
in February and completed by the end of June
2023. Whilst around a third of colleagues were
notified that their roles were at risk, the final number
of redundancies was kept to a minimum. The
restructuring achieved the following:
• Annualised cost savings of £3.2m from 2024
• Reduced from three divisions to two divisions
• Reorganised from nine regions to six regional
management teams across the same geographic
coverage
• Standardised operating structure, roles,
responsibilities, systems and processes
• Establishes a visible route to 3,000 units per
annum and beyond
•
Opportunities for incremental regional expansion
• Completed at a one-off exceptional cost of £1.0m
28
(2022: £0.4m). Consequently, operating profit before
exceptional costs decreased by 31.6% to £35.0m
(2022: £51.2m) and operating margin decreased from
15.3% to 10.9%.
Market demand
The combined impact of rising interest rates, the
government’s disastrous mini-budget in September
2022 and withdrawal of Help to Buy in October 2022,
all led to a rapid slowdown in the housing market in the
second quarter and a significant fall in demand. Whilst
we started to see early signs of a recovery in January
and February 2023, demand did not recover to prior
year levels. As a result, net reservation rates remained
relatively weak over the second half of the year.
Although it remains too early to call, it appears that
interest rates, which are currently at 5.25%, are nearing
their peak as inflation begins to fall. Equally, mortgage
rates are starting to stabilise and reduce, which we
anticipate will start to support a return in market
confidence and activity.
Responding to market conditions and
restructuring for growth
We took action quickly in response to the weaker
market conditions. In the second quarter we
implemented a number of defensive measures focused
on managing working capital and costs. These included
slowing build rates on certain sites in line with demand,
Tyne
and Wear
Development
Regional offices
Cumbria
Tees Valley
Yorkshire
East
Greater
Manchester
West
Yorkshire
Merseyside
South
Yorkshire
Midlands
MJ Gleeson plc Annual Report & Accounts 2023 delaying the opening of new sites, and pausing land
buying.
In February 2023, we announced the reorganisation of
Gleeson Homes from three divisions to two and from
nine regional management teams to six, adjusting our
overhead to suit current volumes whilst maintaining
capacity for growth. The process necessarily put at
risk a significant proportion of our colleagues, but the
final number of redundancies was kept to a minimum
through some roles being transferred and through
natural attrition over the period.
Annualised administrative cost savings of £3.2m will
be fully realised from 2024 onwards. Exceptional costs
arising from the restructuring amounted to £1.0m.
An important part of the reorganisation was to
restructure the way that the business operates,
implementing a standard structure with consistent roles,
responsibilities, processes and reporting. This will bring
enhanced control and improved quality of both build and
customer service, also ensuring that we can confidently
maintain these aspects as we grow the business.
Sites
Gleeson Homes opened three new build sites during
the year and started the new financial year with
82 active build sites (2022: 87), of which 71 were actively
selling (2022: 61). New site openings were paused
in response to the economic conditions resulting in
a reduction in active build sites. Our average active
build sites and sales sites were 85 and 68 respectively
(2022: 83 and 63).
Gleeson Homes’ developments are located across
the North of England and the Midlands, with plans
to continue expanding in existing areas and into
neighbouring regions. The business expects to open
more than 20 build sites during the new financial year
and to be building on between 80 and 85 sites and
selling on between 60 and 65 sites by 30 June 2024.
Pipeline
Total plots
17,375
(2022: 16,814)
Plots owned
7,674 plots
(2022: 8,478)
Plots conditionally
purchased
9,701 plots
(2022: 8,336)
Total plots
17,375
(2022: 16,814)
Plots on greenfield
land or more
affluent areas
4,061 plots
(2022: 3,625)
Plots on brownfield
land or areas of
deprivation
13,314 plots
(2022: 13,189)
Pipeline
Land continues to be available at sensible prices.
The pipeline of owned and conditionally purchased
sites increased by 3.3% to 17,375 plots on 173 sites
at 30 June 2023, representing over ten years of
sales (2022: 16,814 plots on 160 sites). Of the total
plots, 7,674 plots are owned (2022: 8,478 plots) and
9,701 plots have been conditionally purchased subject to
receiving planning permission (2022: 8,336 plots).
During the year, 37 new sites were added to the pipeline,
whilst 24 sites were completed or did not proceed
to purchase.
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1,723 homes
2022: 2,000 homes
Average selling price
£186,200
2022: £167,300
Operating profit
(pre-exceptional items)
£35.0m
2022: £51.2m
Operating margin
(pre-exceptional items)
10.9%
2022: 15.3%
29
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate Governance
Business Review
CONTINUED
Gleeson Land
Results
During the year, the business completed the sale of
three sites with residential planning permission for
413 plots (2022: six sites, 1,443 plots) at an average of
£8,800 gross profit per plot (2022: £9,550 per plot).
All sites were sold under promotion agreements.
As a result, revenue from land sales decreased to
£7.5m (2022: £38.8m), including £1.3m relating to the
completion of a further phase of a legacy site sold in
2019 (2022: £2.5m). The sites sold in the year totalled
55 gross acres. Total gross profit for the year was £3.6m
(2022: £13.8m).
Overheads for the business continue to be well
controlled at £2.6m (2022: £2.7m). As a result of the
reduction in gross profit, operating profit reduced to
£1.0m (2022: £11.1m).
The results reflected a more cautious approach from
housebuilders and congestion in the planning system,
exacerbated by the local elections in May, which delayed
a number of sites, particularly in the final quarter of
the financial year. However, the business ended the
year with a strong portfolio, having six sites either with
planning permission or resolution to grant with the
potential to deliver 1,400 plots for housing development
(2022: three sites, 1,206 plots). Of these, one site has
been sold since the year end.
Portfolio
During the year three sites (706 plots) were added to
the portfolio, secured under promotion agreements.
One legacy site, which was no longer viable to promote,
was aborted.
At 30 June 2023, the business had a portfolio totalling
70 sites (2022: 71 sites) with the potential to deliver
17,831 plots (2022: 20,241 plots) plus 25 acres of
commercial land (2022: 25 acres). The majority of
the portfolio is held under option and promotion
agreements with landowners.
The portfolio, which is located in the South of England
where land values are highest, is expected to realise
value over the short, medium and long term, driven by
the planning context of each site.
The land promotion market remains highly competitive
but, as one of the largest land promoters, we continue
to see opportunities to add well-located, attractive
sites to the portfolio. We carefully select sites where we
see the potential for residential development and that
meet our strict internal hurdle rates. We are making
increasing use of technology and data analysis to focus
KEY
N
Monks Farm, Grove,
Oxfordshire
Planning Application Boundary
Local Plan 2011 Policy H5 Allocation
Grove Northern Link Road
Tree lined boulevard (Primary
Movement Route)
Secondary movement route
Tertiary movement route
Public Right of Way (PRoW)
Main access
Pedestrian/ cycle access
Residential frontage
Primary school
Locally Equipped Area for Play
(LEAP)
Multi Use Games Area (MUGA)
SuDS features shown indicatively
Public open space
Letcombe Brook corridor retained as
semi-natural open space
Retained hedgerow and trees
Proposed planting of hedgerow and
trees (structure planting)
30
Grove Strategic Site
on behalf of Gallagher Estates and Gleeson Strategic Limited
Note:- Reproduced from the Ordnance Survey Map with the permission of the Controller of Her Majesty’s Stationary Offi ce (HMSO). Crown copyright.
Published for the purposes of identifi cation only and although believed to be correct accuracy is not guaranteed.
\\Oxford03\urban design\URBAN DESIGN\UD Projects\Gleeson Gallagher\Grove Strategic Site\Graphics\G 150827 NT A1 Urban Design Drawings.indd. 02/03/16.
drawing no.
SK44
drawing
Phase 2 Masterplan
rev
A
drawn by
AR
checked by
DH
scale at A1
1:2,500
job no.
OXPL 226417
date
2 March 2016
c Copyright Savills (UK) Ltd.
MJ Gleeson plc Annual Report & Accounts 2023 our land searches and support our bids, which improves
our efficiency and enhances our competitiveness in the
bidding process.
Planning
This year, Gleeson Land submitted planning applications
on 11 sites with the potential to deliver 2,014 plots (2022:
10 sites, 1,428 plots), and achieved planning consent or
resolution to grant on six sites.
The planning system remains chronically slow and this
has been further exacerbated during the course of the
year by the proposed reforms from government. This
has increased uncertainty around planning policy and,
in some cases, prompted the withdrawal of housing
delivery plans by local authorities. In addition, the delays
caused by Natural England’s guidance on nutrient
neutrality, including phosphates and nitrates, show some
signs of being resolved but we await the outcome of the
government’s planned legislative changes.
Despite these challenges, Gleeson Land has an excellent
track record in navigating the complexities of the
planning system. We ended the year with 18 sites
awaiting a decision on planning applications or in appeal
(2022: 16 sites).
Sites with planning consent
or resolution to grant
Sites awaiting a
planning decision
Plots sold
413 on
3 sites
2022: 1,443 on 6 sites
18
Portfolio
16
15
11
9
12
10
8
6
4
2
0
6
6
3
20
15
10
5
0
7
6
2019 2020 2021
2022 2023
2019 2020 2021
2022 2023
Portfolio (plots)
Portfolio (sites)
Total
17,831
(2022: 20,241)
Freehold
489 plots
(2022: 489)
Promotion agreement
11,830 plots
(2022: 13,564)
Held under option
5,512 plots
(2022: 6,188)
Total
70
(2022: 71)
Consented
6 sites
(2022: 3)
Unallocated
40 sites
(2022: 44)
Awaiting planning decision
18 sites
(2022: 16)
Allocated
6 sites
(2022: 8)
70 sites
2022: 71 sites
Operating profit
£1.0m
2022: £11.1m
Monks
Farm, Grove,
Oxfordshire
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31
MJ Gleeson plc Annual Report & Accounts 2023
Financial Review
Stefan Allanson
Chief Financial Officer
Introduction
Our response to the economic challenges this year,
including our defensive capital allocation plan, has allowed
us to maintain a strong balance sheet and resilient profits,
leaving us well positioned for future growth.
We continued to invest heavily in commencing the build
of a substantial number of homes during the year to
ensure an orderly transition to new building regulations,
which resulted in higher than typical site work in progress,
which will unwind over the next two years, and was the
principal driver for the reduced year end cash balances.
Revenue
Group revenue decreased 12.1% to £328.3m (2022:
£373.4m) due to the reduction in sales in both Gleeson
Homes and Gleeson Land.
Gleeson Homes’ revenue decreased by 4.1% to £320.8m
(2022: £334.6m) driven by a 13.9% decrease in the
number of homes sold to 1,723 (2022: 2,000) offset
by an 11.3% increase in average selling price (“ASP”)
to £186,200 (2022: £167,300). ASP increases were
driven by underlying selling price increases of 7.6% and
changes in the mix of sites and house types.
Gleeson Land sold three sites in the year (2022:
six sites). Revenue decreased by 80.7% to £7.5m
(2022: £38.8m), largely caused by housebuilders
taking a more cautious view in response to the
economic environment. This resulted in some land sales
progressing more slowly than anticipated, particularly in
the final quarter of the year. In addition, the delays in the
The economic and market
conditions during the
year presented significant
challenges to demand,
reducing revenue and profit
for the year.”
32
MJ Gleeson plc Annual Report & Accounts 2023 planning system meant that we started the year having
only three sites with consent or resolution to grant,
and fewer planning applications approved during the
year. We commence the new financial year in a stronger
position with six sites with consent or resolution to
grant (2022: three sites) and 18 sites awaiting a planning
decision (2022: 16 sites).
Gross profit
Pre-exceptional gross profit for the Group decreased
by 18.6% to £90.1m (2022: £110.7m), with gross profit in
Gleeson Homes decreasing by 10.7% to £86.5m (2022:
£96.9m). The gross profit margin for Gleeson Homes
decreased to 27.0% (2022: 29.0%) as selling price
increases began to slow, build cost inflation continued
and fixed costs increased as site durations extended.
The reduction in site sales in Gleeson Land resulted
in gross profit for Gleeson Land reducing to £3.6m
(2022: £13.8m).
Administrative expenses
Administrative expenses excluding exceptional costs
increased by £2.5m (4.6%) in the year to £57.0m (2022:
£54.5m) reflecting increased payroll costs, advertising
spend and office costs.
Profits for the year
Group operating profit before exceptional items was
£33.6m (2022: £56.8m), a 40.8% decrease on the prior
year. This was due to the 31.6% decrease in operating
profit in Gleeson Homes to £35.0m (2022: £51.2m) and
the reduction in Gleeson Land operating profit to £1.0m
(2022: £11.1m). Group overheads were £2.4m (2022:
£5.5m), benefiting from a reduction in bonus and
share based payment costs including the unwind of
share based payment costs charged in prior years.
Net finance expenses increased in the year to £2.1m
(2022: £1.3m) due to the combined impact of increasing
interest rates and drawdowns of our facility to fund
working capital during the year. As a result, the Group
delivered profit before tax and exceptional items of
£31.5m (2022: £55.5m) and profit before tax of £30.5m
(2022: £42.6m).
Group Revenue
£328.3m
Exceptional items
In February 2023, we commenced consultation on
the restructure of the Gleeson Homes business,
consolidating the three divisions and nine regional
management teams to two divisions and six regional
management teams. Annualised overhead cost savings
of £3.2m were partly realised in the year. The operational
restructuring leaves Gleeson Homes better positioned
for growth as the market recovers. The £1.0m cost of this
restructure included redundancy costs and termination
payments, plus professional and legal fees directly
associated with the restructuring, and is treated as an
exceptional item.
The £12.9m exceptional item in the prior year related to
the building safety provisions for life-critical fire-safety
remediation costs on buildings over 11 metres that the
Group had involvement in developing over the last
30 years. The provision has been re-assessed throughout
the year as investigations and intrusive surveys have
been carried out. As a result of these investigations,
three additional buildings were identified and notified
to the Department for Levelling Up, Housing and
Communities (“DLUHC”). Following the re-assessment
of all other provisions at the year end, there has been no
further impact on profit and the remaining provision of
£12.8m is considered appropriate. Further information
can be found in note 3 to the financial statements.
Tax
The pre-exceptional tax charge was £6.5m which
represents an effective tax rate of 20.7% against the
headline rate of 20.5%. This followed the change in the
corporation tax rate from 19% to 25% from 1 April 2023.
A tax credit of £0.2m was recognised in respect of the
exceptional cost (2022: £2.5m), resulting in a total tax
charge for the year of £6.3m (2022: £7.5m).
Included in the tax charge is £0.3m relating to residential
property developers tax (“RPDT”), which was effective
from 1 April 2022 and applies to profit from residential
property development activity on profits over £25.0m.
Whilst the RPDT charge has been low this year due
to subdued trading, the levy continues to create an
additional tax burden on the industry.
33
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Cash and bank facilities
The Group ended the year with cash of £5.2m
(2022: £33.8m). In July 2023, the Group successfully
refinanced its club borrowing facility with Lloyds Bank
plc and Santander UK plc. The facility was increased
from £105m to £135m and extended to October 2026
plus two uncommitted one-year extension options.
The increased facility provides the Group with
additional liquidity to invest in new sites and support
future growth.
Dividends
In line with the Board’s stated dividend policy, the
Company intends to pay a final dividend of 9 pence
per share at a total cost to the Company of £5.2m.
The dividend will be paid on 24 November 2023 to
shareholders on the register at the close of business on
27 October 2023. Combined with the interim dividend of
5 pence per share paid in April 2023, the total dividend
for the year will be 14 pence, representing a decrease of
22.2% on the prior year (2022: total dividend per share
18.0p) and is covered 3.06 times.
The Board intends to maintain an earnings to ordinary
dividend cover ratio of between three and five times.
Stefan Allanson
Chief Financial Officer
13 September 2023
Financial Review
CONTINUED
Profit after tax
Pre-exceptional profit after tax for the year decreased
by 45.1% to £25.0m (2022: £45.5m) and reported profit,
net of the exceptional charge, decreased 31.1% to £24.2m
(2022: £35.1m).
Earnings per share
Pre-exceptional basic earnings per share decreased
by 45.1% to 42.9 pence (2022: 78.1 pence). Reported
basic earnings per share decreased to 41.5 pence (2022:
60.2 pence).
Return on capital employed
Return on capital employed decreased 1,240 basis
points to 13.0% (2022: 25.4%) caused by the reduction in
profit and increases in working capital at 30 June 2023.
Balance sheet
During the year to 30 June 2023, shareholders’ funds
increased by 5.1% to £286.0m (2022: £272.2m). Net
assets per share increased to 490 pence, an increase of
4.9% year on year (2022: 467 pence).
Non-current assets decreased during the year by 14.2%
to £12.1m (2022: £14.1m). This was due to a reduction in
non-current trade and other receivables of £5.0m as a
result of the deferred land payments in Gleeson Land
all now being due within one year, offset by an increase
in property, plant and equipment of £3.0m as a result
of additions to plant and machinery, show homes and
leased property and equipment.
Current assets increased by 3.1% to £364.3m (2022:
£353.5m). Inventories increased by £57.7m to £344.6m
of which approximately £30m was invested on site
infrastructure and build starts in preparation for the
transition to new building regulations on 15 June 2023
and will unwind over the next two years. Trade and
other receivables decreased by £15.3m to £13.9m as
a result of net receipts of deferred monies in Gleeson
Land of £5.0m, reduction in VAT receivables and Help
to Buy monies that were outstanding at the end of last
year in Gleeson Homes. The remainder was a result of
the reduction in cash, which reduced to £5.2m (2022:
£33.8m) due to the investment in inventories and
property plant and equipment in the year.
34
MJ Gleeson plc Annual Report & Accounts 2023 Hillcrest Gardens,
Gainsborough, Lincolnshire
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MJ Gleeson plc Annual Report & Accounts 2023
35
Risk Management
Effective risk management is essential to the achievement of our
strategic priorities and risk management controls are integrated
across all levels of our business and operations.
The Board has overall responsibility for the Group’s management and assessment of risk, supported by the Audit
Committee. Our risk management framework includes a Group Risk Register, which includes the key risks to the
business. The register identifies both principal and emerging risks and informs a formal risk assessment process that
considers the likelihood and impact of the identified risks, together with any mitigating controls that are already
in place or planned. This position is formally reviewed by the Audit Committee at the majority of its scheduled
meetings, including consideration of emerging risk areas and changes in risk ratings.
During the year, the Group commenced a wide reaching project facilitated by external advisers to assess our risk
maturity. As a result, we have refreshed our risk management framework, revisited our risk assessment methodology
and formalised risk appetite. This project will continue over the course of the next financial year with the objective
of embedding enhanced risk management across the Group, underpinned by formalised risk and controls for all
business processes. We have also appointed a Group Internal Auditor to help develop our assurance framework and
internal audit programme. As well as enhancing the Group’s existing corporate governance structure, these changes
will ensure its readiness for the proposed revisions to the UK Corporate Governance Code that were announced for
consultation by the Financial Reporting Council (“FRC”) in May 2023.
Our risk management framework consists of the following components:
Main Board
• Sets the Group risk
policy, strategy and
overall risk appetite
• Overall responsibility
for monitoring and
managing principal and
emerging risks
• Responsible for the
effective operation of
the risk management
framework
• Sets the “tone at the
top” for the proactive
management of risk
across the Group
Audit Committee
• Monitors the Group’s
systems, controls and
integrity of reporting
• Approves and advises
on the internal audit
plan and monitors
effectiveness of
internal audit
• Monitors the
performance,
effectiveness and
independence of
external audit
• Monitors the
management of
principal and emerging
risks and responses
• Provides assurance on how risks
are managed operationally
• Provides assurance on the design
effectiveness of internal controls
and makes recommendations
• Provides assurance on the
operational effectiveness of
internal controls in practice
Internal Audit
Senior Management
•
Identifies, reports on, and
monitors risk within the relevant
function
• Assesses the effective operation
• Designs and implements additional
of day-to-day controls
controls to mitigate any risks
identified
• Operates processes and controls to manage risks in
•
day-to-day activities
Identifies emerging risks and gaps in controls for
reporting to senior management
Operational Management
36
MJ Gleeson plc Annual Report & Accounts 2023 We categorise our risks into
two sources:
External – macro risks, outside of our direct control
Operational – risks related to the day-to-day
operation of the divisions, within our control
The Group’s risk framework shows how the principal
risks are rated by the Board in terms of their potential
impact on the business and the likelihood of the risk
transpiring. The table on pages 37 to 41 summarises the
Group’s principal risks and the mitigating actions the
Group has in place to manage these risks. The Audit
Committee has assessed the risks during the year and
determined that these remain appropriate and no new
or emerging risks have been identified.
The risk matrix is presented after taking account of
mitigating controls and actions.
Mitigated risk scores
10
2 3
9
11
5
4
1
7
12
6
8
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g
H
i
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c
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m
I
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L
Low
Likelihood
High
Risk appetite
The Board sets the risk appetite for the Group based on the level of risk the Board is prepared to accept in its
operational and strategic objectives. Risk appetite is set for each principal risk and a target score is set based on this
appetite. We define our risk appetite in four categories: averse, low, medium or high.
The Board must balance risk appetite against the level of inherent risk that exists in the business, as construction will
naturally have higher levels of inherent risk than many other industries. The level of risk that the Board is willing to
accept is balanced in this context and against the cost of mitigating risk entirely.
Risk description
Assessment
Mitigation
The current cost of living crisis,
rising inflation and interest rates
all contribute to uncertainty in
the housing and land markets and
have contributed to a reduction in
reservations and sales.
An economic downturn or
uncertainty in the housing
market could affect
buyer confidence and the
demand for new homes
and consented land. This
would have an adverse
impact on Group revenue,
profit, cash generation and
carrying value of assets.
• Lead indicators of the
economy and housing market
are closely monitored.
• A cautious approach to
funding is maintained.
• Visitor and reservation rates
are constantly monitored
and prices and incentives
are regularly reviewed and
updated.
•
Investment in new sites and
spend are carefully controlled.
Risk
1
Economic
environment
Residual risk:
High
Change in year:
Unchanged
Appetite:
Medium
Strategic priorities:
1 3
Key:
Strategic priorities
1
2
Sustainable growth
3 Affordability
Build quality
4
Climate change
5
6
People, wellbeing, health and safety
Land
37
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Risk Management
CONTINUED
Risk description
Assessment
Mitigation
The availability of
mortgage finance,
particularly the deposit
requirements for
first-time buyers, is
crucial to our customers’
ability to purchase.
Restrictions on mortgage
funding could reduce
demand for both new
homes and for consented
development sites and
negatively impact Group
revenue and profit.
Mortgage availability has
fluctuated in the year as a result
of the mini-budget in September
2022 and rising interest rates, but
has shown some improvement as
the year progressed and lender
confidence returned. However,
this still remains a risk due to
the possibility of further interest
rate changes in the face of
stubborn inflation.
• Lead indicators of mortgage
availability are closely
monitored.
• Gleeson Homes provides a
range of customer assistance
packages.
• We innovate to find new ways
to support our customers.
• We work with key lenders
to ensure products are
appropriate and available.
An increase in land prices
or decrease in land
availability would reduce
the viability of sites in
Gleeson Homes given
the high hurdle rates
internally set, and would
increase competition for
promotional opportunities
in Gleeson Land, driving
down profitability and
cash flow.
Although land prices remain
strong, as does the competition
for new sites, we continue to
find land available to purchase
at prices that meet our hurdle
rates to support the growth of
Gleeson Homes.
Gleeson Land continues to source
opportunities to sign up and
promote high-quality land for
development across the South
of England.
Planning regulation
changes due to changes
in government policy or
complexities within the
system may affect the
Group’s ability to secure
planning consent on a
timely basis. Other policy
changes, including changes
to building regulations, the
Future Homes Standard
and Help to Buy, may
adversely impact revenue,
profit and cash flow.
Changes to building
regulations including Part
L (Conservation of fuel and
power), Part F (Ventilation),
Part O (Overheating), Part S
(Infrastructure of charging
electric vehicles) and Part M
(Access to and use of buildings)
all change the way our homes are
built and impact on build costs.
Additional environmental
requirements including
Biodiversity Net Gain, nutrient
neutrality and phosphate and
nitrate mitigation are also
creating challenges to pursuing
residential planning permissions.
• We have a clearly defined
land strategy and geographic
focus, which are regularly
reviewed by the Executive
Directors.
• We work closely with local
authorities to identify and
purchase land at sensible
prices.
• There is a formal gateway
process and rigorous
adherence to margin
requirements and rates of
return.
• We have proactive land
searching capabilities and
strong relationships with land
agents.
• Our planning and technical
experts closely monitor
changes to legislation and
building regulations.
• Changes to building
regulations are built into site
cost plans and forecasts.
• We consult with government,
local authorities and industry
bodies to understand
proposed changes and
highlight issues as early as
possible.
• The end of Help to Buy is not
expected to reduce demand.
First Homes and other
initiatives will continue to
support first-time buyers.
Risk
2
Mortgage
availability
Residual risk:
Medium
Change in year:
Unchanged
Appetite:
Medium
Strategic priorities:
1 3
3
Land
availability
Residual risk:
Medium
Change in year:
Unchanged
Appetite:
Medium
Strategic priorities:
1 3 6
4
Government
policy and
regulations
Residual risk:
High
Change in year:
Unchanged
Appetite:
Medium
Strategic priorities:
2
38
MJ Gleeson plc Annual Report & Accounts 2023 Risk description
Assessment
Mitigation
Shortages or increased
cost of materials or
skilled labour, the failure
of key suppliers or the
inability to secure supplies
on appropriate terms
could increase costs and
delay build programmes,
reducing revenue
and profit.
Whilst some of these pressures
have eased during the year
and we are seeing reductions
in certain material prices and
improvement in the availability
of labour, inflation continues
to remain high and there is an
ongoing risk.
• The Group procures supplies
ahead of issues or stoppages
on sites.
• Price increases are mitigated
in part by rising average
selling prices.
• Group purchasing
arrangements are in place to
ensure continuity of supply
and pricing.
• We have strong, established
relationships with key
suppliers and subcontractors.
A failure to build new
homes to the standard and
quality that our customers
expect, to not treat our
customers fairly, or not
respond adequately to
complaints or rectify
defects in a timely and
professional manner.
Adverse publicity from
perceived poor build
quality would damage our
reputation, lead to lower
sales and impact future
revenue and cash flows.
The customer and customer
experience are at the heart of
what we do. We will not hand
over a new home where it does
not meet our quality requirements
and we have a strict inspection
process in place. We committed
to the New Homes Quality Code
last year and have continued
to invest in our Customer Care
team and after sales support to
ensure any defects or issues are
rectified quickly.
• We are registered with the
New Homes Quality Code.
• A strict final inspection
process identifies issues and
allows us to remedy these
before handover.
• Gleeson Quality Charter sets
out what our customers can
expect in terms of quality.
•
Independent build inspections
and buyer surveys ensure a
high level of quality control.
• We continue to invest in our
customer care team.
Failure to attract, develop
and retain good-quality
people with the right skills
may result in overstretched
and demotivated staff,
decreased productivity or
quality and stifled growth
opportunities. Inadequate
succession planning could
result in inefficiency and a
loss of key knowledge from
the business.
The focus on recruitment,
development, and recognition is
reflected in high scores on our
annual employee survey. The
leadership development and
succession programme put in
place has continued to strengthen
the management team. Our focus
on making Gleeson one of the
best companies to work for will
help to attract, develop and retain
good-quality people.
• We have a clear mission,
vision and values that our
people share.
• We have regular performance
and development reviews.
• Action is taken from the
feedback gained from our
employee surveys.
• Our people have access to
training throughout their
career at Gleeson.
• Our remuneration policy is
reviewed and benchmarked to
ensure it remains attractive.
Risk
5
Build costs and
availability
Residual risk:
High
Change in year:
Unchanged
Appetite:
Medium
Strategic priorities:
1 2 3
6
Build quality
and customer
service
Residual risk:
Medium
Change in year:
Unchanged
Appetite:
Low
Strategic priorities:
2
7
People
Residual risk:
Medium
Change in year:
Unchanged
Appetite:
Medium
Strategic priorities:
5
Key:
Strategic priorities
1
2
Sustainable growth
3 Affordability
Build quality
4
Climate change
5
6
People, wellbeing, health and safety
Land
39
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Risk Management
CONTINUED
Risk description
Assessment
Mitigation
We continue to invest significantly
in our IT systems and networks so
these remain secure and up-to-
date, whilst continuing to support
remote working as needed.
Failure of the Group’s IT
systems or unauthorised
access to systems due to
inadequate protection,
controls, processes or
cyber attack could result
in data loss, business
disruption, reputational
damage or financial loss.
Health and safety failures
can result in injuries to
employees, subcontractors
or site visitors, resulting
in harm to people, delays
in construction, additional
cost, reputational damage,
criminal prosecution or
civil litigation.
The health and safety of our
people and anyone associated
with our developments is
paramount to our business, and
we continue to improve our
training and awareness across
the business.
The availability and cost
of finance may limit the
Group’s ability to take
advantage of business
opportunities and be a
possible impediment to
future growth.
An inability to meet
obligations as they fall due
or comply with banking
covenants could result in
insolvency.
The Group could suffer
losses from financial fraud
or error, poor controls
including over taxes, credit
risk or through having
inadequate insurance.
The Group maintains a strong
relationship with its lenders,
insurance providers and other
stakeholders, and maintains a
disciplined approach to managing
working capital and compliance
with bank facilities.
The risk of financial fraud or
error is closely monitored
by management, the Audit
Committee, and the Board.
Although the financial, regulatory
and tax environment continue to
change for corporate entities, the
Group has adequate knowledge
and experience to maintain
compliance, supported by third-
party advisers.
•
Industry-standard systems are
managed by a central IT team
with additional outsourced
support.
• Contingency plans are in
place and regularly tested.
• The majority of data is held
on secure external servers
and backed up regularly.
• Regular testing is conducted
on the security of our
systems.
• Enhanced email, network and
cyber controls have been
implemented during the year.
• Experienced health and safety
team in place to provide
regional support, inspections
and training.
• Our “HomeSafe – everyone,
every day” campaign
promotes the focus on health
and safety awareness across
the Group.
• Regular independent
inspections of all
development sites.
• We have specific actions to
improve health and safety
reporting and performance.
• Documented policies and
procedures are updated to
ensure continued focus and
improvement.
• The Group has committed
bank facilities of £135m
until October 2026, shared
between two established
lenders.
• The Group maintains security
over the majority of land sold
on deferred terms.
• External firms are used to
provide “health checks” over
systems and processes.
• External advisers are
employed to support the
production of tax and other
returns.
• The Group has robust
financial and tax controls
designed to segregate duties
and minimise opportunities
for fraud or error.
Risk
8
Cyber and IT
systems
Residual risk:
Medium
Change in year:
Unchanged
Appetite:
Low
Strategic priorities:
1
9
Health and
safety
Residual risk:
Medium
Change in year:
Unchanged
Appetite:
Averse
Strategic priorities:
5
10
Financial
environment
and control
Residual risk:
Medium
Change in year:
Unchanged
Appetite:
Low
Strategic priorities:
1 3
40
MJ Gleeson plc Annual Report & Accounts 2023 Risk
11
Climate risk
Residual risk:
Medium
Change in year:
Unchanged
Appetite:
Low
Strategic priorities:
4
12
Sustainability
Residual risk:
Medium
Change in year:
Unchanged
Appetite:
Low
Strategic priorities:
1 2 3 4 5 6
Risk description
Assessment
Mitigation
The physical effects of
climate change could
result in reduced land
availability, disrupted
build programmes or
shortages of materials due
to more frequent extreme
weather events.
The speed of climate-related
legislation changes and
expectations on businesses
to respond to climate change
continues to accelerate. The
Group is taking action to monitor
and reduce the impact of our
activities on the environment
both now and in the future.
Stakeholder expectations relating
to corporate sustainability are
rapidly evolving. We continue
to actively engage with our
stakeholders and advisers
to understand expectations,
and monitor sustainability
best practice.
The Group could fail to
meet the expectations
of stakeholders relating
to our sustainability
responsibilities including
climate change, health
and safety, governance,
build quality and
customer service.
Failure to ensure we remain
a sustainable business
could affect the Group’s
ability to secure sites,
planning permissions,
attract house buyers,
recruit new employees,
appeal to investors or raise
finance when needed.
By not having clear
targets and effective
communication of our
sustainability strategy, this
could result in damage to
the Group’s reputation.
• We undertake detailed
flood, environmental, and
biodiversity assessments as
part of preparing planning
applications.
• We set clear targets to reduce
our carbon emissions and
waste from sites.
• We track carbon emissions,
waste and other initiatives to
evaluate the success of our
actions.
• We have committed to setting
medium and long-term
targets validated by the SBTi.
• The Sustainability Committee
oversees the development,
implementation, and reporting
of sustainability initiatives.
• The Group Sustainability
Manager is responsible for
embedding the sustainability
strategy into operations.
• We publish and monitor clear
targets to ensure our business
operates in a sustainable and
socially responsible way.
• We report in line with the
recommendations of the
Financial Stability Board’s
(“FSB”) Task Force on
Climate-related Financial
Disclosures (“TCFD”) and with
SASB Standards.
Key:
Strategic priorities
1
2
Sustainable growth
3 Affordability
Build quality
4
Climate change
5
6
People, wellbeing, health and safety
Land
41
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Our Sustainable Approach
Sustainability means “meeting the needs of the present without
compromising the ability of future generations to meet their own needs”.
Sustainability underpins everything we do at Gleeson.
Our mission and vision define our approach to the
social aspects of sustainability, whilst our business
model and strategy ensure that we do this in a way
that ensures sustainable economic growth whilst
protecting and conserving natural resources. The
three pillars of sustainability as defined by the United
Nations as Social, Environmental and Economic are
fundamental to our business approach, taking what
is important to our stakeholders and applying this to
all areas of the business. At Gleeson, our sustainability
approach is based around Communities, People and
the Environment. Economic impacts are considered
alongside each of these in all of our decision making.
Social
Creating a better quality of life for all
People
UN Sustainable Development Goals (“SDGs”)
Communities
Our customers
Read about what is important to our customers,
and how this is fundamental to our sustainable
strategy on pages 44 to 49.
Wider communities
Read about how we consider the wider
community, and how we provide social value, on
pages 50 to 51.
Employees and subcontractors
Read about how we attract, retain and develop our people on
pages 52 to 57.
Human rights
Read about our Human Rights Policy on page 123.
Living wage
Read about our commitment to pay the Real Living Wage on
page 56.
Training and apprenticeships
Read about our apprenticeships and training schemes on
page 52.
Reward and recognition
Details of how we reward our people are set out on page 56,
with further details in our Remuneration Report on pages 134
to 147.
Gender and diversity
Details of our gender diversity and pay gap can be found on
page 56.
Environmental
Protect and conserve
natural resources
whilst using them in a
responsible manner
UN SDGs
42
Environment
TCFD
Our TCFD disclosures set out how climate
change impacts our strategy, activities
and financial performance both short and
long term.
Carbon emissions
• Details of our commitment to Science
Based Targets are set out on pages 58
and 60.
• A summary of the carbon emissions of a
home are set out on pages 58 to 59 and
pages 64 to 65.
• Read about the initiatives we have taken
and plan to take on pages 60 to 61.
Land, water and waste management
Details of our impact on land, water,
waste management and supply chain
are set out on pages 61 to 63.
Biodiversity
Details of our new biodiversity
strategy are set out on pages
66 to 67.
SASB disclosures
Further disclosures required by the
Sustainability Accounting Standards
Board can be found on pages
86 to 91.
MJ Gleeson plc Annual Report & Accounts 2023 Bat boxes at Willows Park,
Accrington, Lancashire
Economic
Ensuring that sustainable
economic growth is
possible and economically
viable
UN SDGs
Sustainable growth:
• Our approach to sustainability
is set out in our business
strategy and business model.
• TCFD sets out the economic
impact of climate change
on our business in the near,
medium and long term, the
governance we have in place
to monitor and mitigate
these risks, and the potential
economic impact of the risks
and opportunities identified.
• Monitoring of key performance
indicators allows us to
report on and respond to
the economic impacts of our
activities.
• Risk management incorporates
sustainability when assessing
each functional risk area, and
considers the financial impact
should these risks materialise.
UN Global Compact
During the year, Gleeson became participants of the United
Nations Global Compact (“UNGC”) and Members of the
Network UK. We are committed to making its principles
the foundation of our strategy, culture and operations. By
being participants of the UNGC we are now part of a global
movement with more than 15,000 companies and 3,800 non-
business participants.
As the world’s leading corporate sustainability initiative, the
UNGC is a call to action for companies to align strategy and operations with ten
universally accepted principles in the areas of human rights, labour, environment
and anti-corruption.
This year we have reviewed and aligned relevant polices to incorporate the ten
principles of the UNGC and taken a significant step in taking climate action by
committing to set Science Based Targets (see page 58). We have established
targeted actions to improve equity, diversity and inclusion across the business
and we are going to undertake a full review of our supplier code of conduct.
We continue to support material Sustainable Development Goals (“SDGs”) and
were the only UK housebuilder to support the UN SDG Flag Campaign where we
proudly flew the UN SDG flag on every development to raise awareness of SDGs.
This year we will submit our first Communication on Progress (“CoP”)
and reaffirm our commitment to the ten principles of the United Nations
Global Compact.
The key goals for Gleeson are:
Make cities and
human settlements
inclusive, safe, resilient
and sustainable.
Ensure responsible
consumption and production
patterns.
Achieve gender
equality and empower
all women and girls.
Take urgent climate action to
combat climate change and
its impact.
Promote sustained,
inclusive and
sustainable
economic growth,
full productive
employment and
decent work for all.
Protect, restore and promote
sustainable use of terrestrial
ecosystems, sustainably
manage forests, combat
desertification, and halt and
reverse land degradation and
halt biodiversity loss.
43
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information
Communities
Our vision:
Building Homes.
Changing Lives.
Our mission:
Changing lives by
building affordable,
quality homes. Where
they are needed, for
the people who need
them most.
Isla, Petersmiths Park,
Ollerton, Nottinghamshire
44
MJ Gleeson plc Annual Report & Accounts 2023
U
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Our customers
We put our customers and their communities at the
heart of everything we do. We create communities
for our customers and work hard to leave a legacy for
generations to come, regenerating land and contributing
to the local area.
Our customers want to live in high-quality, sustainable
homes that are affordable and energy-efficient. They
want attractive and well-designed spaces that create
vibrant and safe communities in which to live.
Our customers want modern designs of houses to
choose from and, for this reason, we update our house
types and elevations regularly to ensure that our homes
remain attractive and in keeping with the local area. We
also offer a number of additional extras and options to
suit our customers’ tastes and budgets.
Our customers have historically been young first-time
buyers and families on low to average incomes. Whilst we
continue to focus on this sector, we have also seen a shift
in our customer demographics this year towards home
movers, downsizers and “value-driven” buyers who are
attracted by our low price points. We are continuing to
broaden our appeal and offerings to these buyers.
In order to assist our buyers, we already offer or
facilitate a number of initiatives and incentives:
• Deposit Unlock
•
100% mortgages
• Cash incentive up to 5% on selected plots
• First Time buyer assist
• First Homes
• Shared Ownership
•
Own New
Whilst we continue to attract first-time buyers, we
recognise that home movers are attracted to our
properties and, as such, have introduced some limited
part-exchange for the first time this year. This is offered
through Property PX Group who buy and sell on our
customers behalf. Our desire to help people into home
ownership remains our key goal. However, as a result
of the challenging macroeconomic environment and
the impact on demand, we have also partnered with a
selected number of investors this year, who are aligned
to our values. This enabled a number of plots on certain
developments to be sold and offered for rental, providing
those who are not able to buy with the benefit of living in
a high-quality, energy-efficient home. We have partnered
only with those investors who have the highest standards
of property management, ensuring our developments
retain the community ethos we set out to create.
We will continue to explore partnership and other
opportunities where these are in keeping with the ethos
and mission of Gleeson, to change lives by building
affordable, quality homes where they are needed and for
the people who need them most.
Cost of living
Despite the rises in interest rates and house prices, it
remains cheaper to buy than rent. Not only is it £27
cheaper in terms of weekly payments for a typical
2 bed Gleeson home versus renting an equivalent
house, buying a house is an investment for the future
generating additional wealth even before factoring in
any house price inflation.
In addition, energy savings are increasingly
important and buyers could typically save a further
£14 per week living in a Gleeson home compared
to existing housing, which is often older and less
energy-efficient.
Affordability
Affordability is one of our key strategic objectives
and supports UN SDG 11 “ensure access for all to
adequate, safe and affordable housing”.
Whilst our average selling price increased from
£167,300 to £186,200 this year, this remains 32%
lower than the average price of a new build house in
the North of England and East Midlands. We remain
committed to ensuring that a couple working full
time earning the National Living Wage can afford to
buy a Gleeson home on any of our developments.
This is highlighted by the fact that since 2014 the
National Living Wage has risen by 65%, whilst the
average selling price of a Gleeson home has only
risen by 53%.
Quality
Cost of a 2 bedroom home
(£ per week)
196
169
200
150
100
50
0
Gleeson Homes
Rented house
Gleeson 2-bed FOB OMS ASP £151,820. Mortgage payments on 90% LTV, 5 yr fixed,
35 yr term at 5.49%.
Rental cost based on the median of new rent listings of a 2-bed house in the North
of England and East Midlands in July 2023. Data provided by OnTheMarket.
Affordability for a Couple on the
National Living Wage (“NLW”)
200,000
150,000
138,667
144,768
151,794
192,654
175,644
150,465
137,035
161,223
118,886
)
£
(
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50,000
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103,854
105,944
109,341
FY18
FY19
FY20
FY21
FY22
FY23
Affordability for a
couple on NLW
Gleeson 2-bed
average selling price
We do not compromise on quality to deliver
affordability. We source quality materials and work
with our supply chain to get the best prices, whilst
also considering more sustainable and energy-
efficient alternatives.
We proudly provide the Gleeson Quality Charter
to all customers as a commitment to both quality
homes and great customer service throughout the
buying journey and beyond. All of our homes come
with a two-year Gleeson warranty and a ten-year
NHBC Buildmark Warranty or similar, and we operate
under the government’s New Homes Quality Charter.
Disappointingly, our customer recommendation
score fell this year below the equivalent of the Home
Builders Federation five-star rating. We achieved
a score of 89.0%, which was 1.7% lower than our
score for the previous year, which put us just below
the 90% needed to achieve the equivalent five-star
rating. We have taken the time to understand the
reasons for the fall in our customer recommendation
score this year and put in place corrective actions.
Improvements have been seen in recent survey
scores and give us confidence that we will be able
to exceed a 90% customer recommendation score
again in 2024, regaining our five-star status.
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Changing the lives of
Kaity and Keelan
From a spare room living with their parents
to a 2-bedroom Gleeson home of their own!
After living with Kaity’s parents and outgrowing their spare
room with a newborn baby, the couple knew it was time to
start looking for their first home together and take the first
step onto the property ladder. Kaity and Keelan have now
enjoyed their first Christmas and celebrated their little boy’s
first birthday in their new Gleeson home.
We spoke to the couple about their journey with Gleeson:
“As soon as we set foot in the Gleeson sales office
something just felt right. The staff were warm and friendly,
they answered all of our questions and just really went out
of their way to help us. We had lots of bumps in the road,
but we always felt as though the Gleeson team were rooting
for us and doing their best to help.
At the time, Keelan was newly self-employed so
unfortunately the mortgage companies would not take his
wage into account when we were applying. Because we
hadn’t anticipated this being a problem it totally changed
the budget we had to spend. This led us to look at buying a
house using an affordability scheme so naturally a new build
home seemed like the right choice for us. With Gleeson,
there really is an option for everyone and I would encourage
anyone who’s sat thinking they couldn’t afford to own their
own home to call in and speak to someone in the sales
office and see what is out there.
We had a six-month-old baby at the time so the thought
of buying an older property and potentially having to
redecorate a whole house was a definite no for us. We were
sure we wanted to move into something that was ready
to go and as energy-efficient as possible, which we found
absolutely was the case in our new home.
We moved in December 2022 just as the energy bill crisis
was at its peak, but we have been so surprised by how
low our bills are, we really do wish we had moved sooner!
Everyone that has been to visit our house always comments
on how warm it is inside and we have been really pleased
with how well it keeps its heat and in the winter we hardly
seem to have the heating on.
The houses are great value for money compared to other
new builds that we looked at. Gleeson homes are well
spaced out and the gardens are huge, which is a bonus too.
They also had a good range of incentives and schemes for
first-time buyers such as the shared ownership scheme we
went for.”
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Buyer:
Occupation:
Kaity, 26 and Keelan, 27
Kaity is a ward-based
pharmacy technician for
the NHS and Keelan is
self-employed as a
fencing contractor
Date of purchase:
December 2022
Development:
Grangemoor Park,
Widdrington,
Northumberland
House type:
2-bed semi, Cork
Purchase price:
Mortgage cost:
£125,000 – 50% shared
ownership
£238 plus shared ownership
cost of £169 per month
MJ Gleeson plc Annual Report & Accounts 2023
Changing the lives of
Debbi and David
Purchasing their second Gleeson home!
Buyer:
Occupation:
Debbi, 47 and David, 51
Account Manager and
Retired RAF Airman
Date of purchase:
June 2023
Development:
House type:
Petersmiths Park,
Nottinghamshire
3-bedroom detached,
Renmore
Purchase price:
£230,995
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Debbi and David decided it was time to move from our
Woodhorn Park development in Northumberland and chose
to move to another Gleeson development, Petersmiths Park
in Nottinghamshire.
On their journey, Debbi said: “David and I were looking to
move further south, so we were closer to our family. My
family live in South Wales and David’s live in Yorkshire, so
the Midlands was a perfect location between them. When
we discovered that Gleeson had a development in the area
we were house hunting in, we knew we wanted to buy our
second Gleeson home! David’s nephew also owns a Gleeson
home on another development so the decision for us to buy
our next home was easy; we knew what we were dealing
with and were excited to start the journey!
We previously owned a 3-bedroom semi-detached Galway
style house, which we purchased for £132,995. However, for
our second home we fell in love with the Renmore house
type. Moving to a detached home is something we always
wanted. As well as the overall look of the home, it has a
traditional yet modern feel to it and we love the exterior,
with the door central, as well as the central staircase
separating the living room from the kitchen and the
bedrooms upstairs.
The process of buying our second home was a breeze.
The sales team at Petersmiths Park, especially Josh and
Louise, were amazing. We bought our property in a slightly
unconventional way, as living three hours away, we couldn’t
visit the property before buying it, so Josh and Louise were
our eyes and ears, communicating every step of the way and
updating us on progress. Without them, we wouldn’t have
been able to buy our home so they were fundamental in
the process.
Our development is located in a superb area, close to
woodland and rivers, and as David is a keen fisherman,
and we are both outdoorsy people, this was a huge selling
point for us! We love getting out on walks and exploring
the local area!”
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Changing the lives of
Harry and Henry
Cheaper to own their own Gleeson home than to rent!
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After initially moving into rented accommodation, Harry,
24 and Henry, 21 decided they wanted to stop wasting their
money on rent and to start putting it towards a deposit,
so moved back in with Henry’s parents to maximise their
savings. On discovering their Gleeson development, the
couple were thrilled to find out that homeownership was
much more achievable than they had originally thought,
especially after realising renting a one bedroom flat
worked out to be more than a monthly mortgage cost
for a 2-bedroom Gleeson home.
Harry and Henry said: “After meeting during the first
lockdown we decided to move into a rented flat together,
however, we didn’t have the best experience. Our rented
flat, which cost £450 per month was cold, damp and had
mould climbing all the walls, which were severely affecting
our mental and physical health. As a result, Henry’s parents
kindly let us move in with them, which allowed us to save the
deposit for a new home much faster.
We chose the 2-bedroom semi-detached Kerry style house
type which is the perfect size for us, plus we really love
how large our garden is. We came across Gleeson early last
year when the first phase of homes was released, however,
our plot wasn’t ready to be reserved! We were constantly
checking on the website every day until we saw the yellow
dot and we managed to reserve our dream home within the
first week of it becoming available.
The cost of owning our own home is cheaper than what we
were paying in rent, and we’re only paying £436 per month,
which is an amazing feeling as we are now investing in
ourselves and not paying off someone else’s mortgage. Also
with a new build we haven’t had to deal with any of the issues
we had in our rented accommodation, so that has improved
our overall health both mentally and physically too. We have
also found that we rarely need to put the heating on as the
house is always warm, which is fantastic as this will be saving
us money on our energy bills, compared to what we were
spending, or if we had gone for an older renovation project.
We also have a bat box on the side of our house, which
Gleeson installed as part of their sustainability initiative
and we absolutely love it, we are now just waiting on some
new friends to move in. Gleeson provides great quality and
affordable homes, which are very difficult to find. We are so
happy to finally be on the property ladder and never want to
look back at the days when we were stuck renting.”
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Buyer:
Occupation:
Harry, 24 and Henry, 21
Both work for a Tele
Communications
company
Date of purchase:
December 2022
Development:
Willows Park, Accrington
House type:
2-bedroom semi-
detached, Kerry
Purchase price:
£144,995
Mortgage cost:
£436 per month
Previous rental cost: £450 per month
MJ Gleeson plc Annual Report & Accounts 2023
Changing the life of
Annie
Attracted to move house by the quality and value
of a Gleeson home!
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After visiting our popular Petersmiths Park development in
Nottinghamshire with her daughter, Paige, who was looking
to buy a Gleeson home, Annie decided she wanted to move
instead! Annie instantly fell in love with the development
– so they made a deal; her daughter would buy her previous
home and Annie would move into her dream home at
Petersmiths Park!
We spoke to Annie about her homebuying journey:
“I previously lived in a 3-bedroom semi-detached home
and was mortgage free, finally! My daughter was looking
for her own house to buy, but most second-hand homes
we looked at were just out of her price range. A friend of
hers introduced her to Gleeson and we ventured over to
view the properties. My daughter loved the homes and the
prices, totally affordable, but decided she wanted to stay
close to Nottingham. On the other hand, I instantly fell in
love with Petersmiths Park. I loved the location, the views
and the prices! So we made a deal, my daughter bought
my house, and I took out a small mortgage and have never
looked back.
Initially I was interested in the Kildare and hoped to reserve
a plot, however, because the development was so popular,
I just missed out. Louise, the Sales Executive convinced
me to take a look at a slightly larger home, the 4-bedroom
Longford and wow, I’m glad I did! The layout is spacious,
the blank canvas gave me so much freedom to make it my
own and my front and back garden are both large too. The
natural lighting and privacy in my home is something I’ve
never seen on other new build developments before and
to top it all off, it’s affordable too! I will always be grateful
to Louise. This is my dream home and now I have plenty of
space to share this with family and friends when visiting.
I would advise anybody who is considering buying a Gleeson
home to reserve right away, these homes are so popular and
you can see why once you’ve viewed them! I’ve only been
here for just over two months, and I am very much looking
forward to creating my own little haven. I’ve met some
wonderful neighbours since moving in and this particular
location is close to lots of woods and forest walks, which I
have yet to explore. My stress levels are minimal, and the air,
ambience and vibe of this community are second to none!”
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Buyer:
Annie, 50
Occupation:
International Contracts
Manager
Date of purchase: April 2023
Development:
House type:
Petersmiths Park,
Nottinghamshire
4-bedroom detached
Longford
Purchase price:
£257,995
Mortgage cost:
£312 per month
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CONTINUED
Other community matters
Our commitments extend beyond our customers to the wider community
and the way we carry out business on a day-to-day basis. We have a long
history of partnering with local schools, giving health and safety talks,
inviting school trips to our sites for children to learn about housebuilding,
and running competitions to name sites or streets. We want our
developments to be part of the community.
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Cumbria
Heathlands Project
The Cumbria team donated £1,000 to a local charity,
Heathlands, to help improve their sensory garden
with a new water feature, picnic bench and plants.
Allison Scott, Sales Manager, visited the charity to
present the cheque and said: “Heathlands is a charity
that helps people with learning or physical disability,
mental health issues and brain injuries and it gives
me great pleasure to present this amount from
Gleeson Cumbria”.
Workington Rugby Sponsor
We are proud that our signage is on display at the
rugby club as well as new jackets provided to the
groundsmen and our logo on the back of the lawn
mower! Frazer Thompson, Regional Director and David
Wright, Senior Land Director, visited the ground to
meet the team.
Tees Valley
Remembering DC Porter, Greenfield Park
The Tees Valley team unveiled a commemorative
plaque at Greenfield Park in memory of DC Porter who
sadly lost his life in 1982 when responding to a break
in at the former wallpaper factory in Bishop Auckland,
now known as our Greenfield Park development. Steve
Lloyd, Trustee of the Police Memorial Trust unveiled
the plaque at the entrance to the development.
Merseyside
Teardrops
Our Merseyside regional office collected donations
for the homeless charity Teardrops who support
rough sleepers and those in poverty. They provide
food, clothes and toiletries as well as offering support
and advice. As well as donating food and clothes,
the team also gave unwanted pots and pans from
their kitchens to the charity, which arranges cookery
classes for those who have not had the chance to use
a home kitchen.
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MJ Gleeson plc Annual Report & Accounts 2023
Our colleagues regularly get involved in fundraising efforts for a variety of
causes, a few of which are set out below:
East Yorkshire
Lincolnshire & Notts Air Ambulance
Our East Yorkshire team donated over £3,000 to
Lincs & Notts Air Ambulance. The team raised this
fantastic amount by selling show home furniture.
Maureen Hynes, Sales Manager said: “We wanted to
choose Lincs & Notts Air Ambulance as our Charity of
the Year as I live in Lincoln and see the helicopter fly
overhead on a regular basis. Every time it goes by, I
know someone is in trouble. It takes a special person
to be an LNAA doctor or paramedic and do what they
do day after day.”
LNAA Community Fundraiser, Steph Bradshaw said:
“It is lovely that Gleeson Homes has nominated us
as their chosen Charity for 2023. This support allows
our crew to deliver the best possible care to patients
across Lincolnshire and Nottinghamshire 24 hours a
day, seven days a week, whether that is by road or by
air. Thank you!”
Andy’s Man Club
Andrew Davies, Divisional Managing Director, Wayne
Sutton, Regional Managing Director and Bev Reynolds,
Head of Sales, presented the charity with a cheque
for £2,945, which was raised by selling show home
furniture at Dane Park, Hull.
Gleeson Land
Countess of Brecknock Hospice
Gleeson Land supported the Countess of Brecknock
Hospice in Andover this year and raised over £2,000
with a variety of fundraising events. The hospice
provides palliative and end of life care to adults
suffering from life-limiting illness in Andover and the
surrounding area.
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We are Passionate
We are Collaborative
We are Respectful
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Our values and culture
Achieving our objectives relies on having the right people in the right roles,
supported through training and development. We want all of our colleagues
to share our vision, mission and values.
Our aim is to attract, retain and develop people who share the values and
culture of the Group and to promote a vibrant, diverse and forward-thinking
environment for people to flourish.
Our HomeSafe brand is fundamental to taking care of our people, ensuring
that everyone who is involved with, or affected by, our business remains free
from harm and returns home safe every day.
Attracting the right employees
Attracting the best candidates and developing talent in our business is
crucial to ensure that we have the right skills for operational delivery and
future growth. We have a number of pathways which support attracting new
and young talent into the business.
Graduate programme
In August 2021, we launched our first two-year graduate programme with 11
new Land Graduates in the Gleeson Homes land team. We are delighted that
ten of these Land Graduates have successfully completed their programme
and all have been promoted into permanent roles within the Gleeson
Homes land team. The graduates followed a structured programme, which
consisted of on and off the job learning, mentoring, and learning workshops
where they covered topics including technical issues, planning, valuation,
commercial management and interpersonal skills.
The graduate programme has been a great success, with each of the
individuals going through the programme taking on valuable projects,
including conducting land bids and purchasing land.
Apprenticeship programme
We continue to have a long-standing and
active apprenticeship programme across
the Group and we currently have 66
apprentices, approximately 65%, in trade
site-based roles and 35% in office trainee
positions such as commercial, technical
and finance roles. Our Learning and
Development team proactively support all
apprentices conducting regular visits and
reviews to monitor their progress and to
assist them in remaining on track with their
programme, helping them to complete their
qualification.
In addition to this, we have 14 colleagues
who are undertaking training through an
apprenticeship route as part of further
skills development.
MJ Gleeson plc Annual Report & Accounts 2023 Case Study
Emily Brown
Land Graduate – Tyne & Wear
Why did you choose a Graduate scheme at Gleeson?
Whilst studying my Masters in Planning and Surveying I
had a keen interest in development and housing delivery.
From researching a range of different roles that would fall
under that umbrella, I came across the Gleeson advert for
the graduate programme. The job description ticked a lot
of boxes that I was looking for and covered a wide range of
disciplines that I thought I would really enjoy.
What have been the highlights of your experience as a
graduate at Gleeson?
I have learnt so much over the past two years and gained
a whole range of skills that I didn’t expect to, which has
been a major highlight. As I was part of the first cohort of
graduates, it has felt like we have been able to pave the
way and help shape the scheme for future graduates. Our
learning objectives have been listened to throughout and I
have felt very involved in the programme.
From the start, I was given the opportunity to get involved
and put my own stamp on things. I recently received
planning permission for one of the very first sites I presented
to the Executive Directors. Being able to take a site full
circle from putting an offer together, through legals, into
planning and receiving permission throughout the course
of the graduate programme has been a major highlight.
It is rewarding to feel that over the past two years my
contribution has made a difference.
What have been your biggest challenges/learnings?
I know it is common guidance, but the biggest thing I have
learnt is the importance of asking as many questions as
possible and learning from others – they are invaluable
experiences. My biggest takeaway is to not be afraid to
challenge things – always do what you can to get your point
across in a respectful and collaborative way!
What are your future development aspirations?
I still have a long way to go and look forward to progressing
my career, learning more along the way and seeing where
it can take me. This experience has been an invaluable
starting point.
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What advice would you give someone considering the
graduate scheme?
Given the experience I have had, I would always recommend
a graduate scheme to anyone who wants to be exposed to
a wide range of experiences. At Gleeson, we were given the
opportunity to dive straight into things from day one, which
has been a great way to learn.
What advice would you give someone considering
entering the house building industry?
It is a great industry to learn a wide range of skills – so they
should go for it! Every day is different, which keeps things
interesting and there is never a dull moment.
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Developing our people
Continuous development is important both for
individuals as they progress through their careers
and for the success of our business as we grow. We
support our colleagues’ development in a number of
ways, including:
Gleeson Skills Development Programme
The Gleeson Skills Development Programme is a new
programme, which has been designed and implemented,
tailored to skills development for our Build Management
teams. There are two levels to this programme, each of
which consist of:
Learning and development
Our in-house learning and development team are
dedicated to the ongoing learning and further
development of our colleagues at Gleeson. In the last
year we have improved our internal training matrix
and management processes to better support and
deliver essential training on topics such as health and
safety and to achieve 100% compliance across the
business. In addition to this in-house training, we have
continued to deliver training in collaboration with
various external providers. Bespoke programmes have
been designed and implemented including the Gleeson
Skills Development Programme and Gleeson Leadership
Development Programme.
Gleeson Competency Framework
During the year, the Gleeson Competency Framework
was launched. This is a shared framework, which helps
us to understand and develop performance excellence
and standards across Gleeson. Our framework has
seven competencies, each of which represents the
skills, knowledge and behaviours needed to perform
effectively in a given role or situation. This framework
is used in a number of ways, including for recruitment,
learning and development, career and succession
planning and performance management.
Talent mapping and succession planning
We have continued to conduct regular talent mapping
and succession sessions across the business; by
doing this we can assess key strengths and target
development needs for individuals, departments and
regions to ensure succession plans are designed and
tailored to the needs of each area of the business.
1. Completing a construction related NVQ –
to continually develop discipline specific skills
2. Completing Management and Leadership
development days
3. 360 degree feedback and 1:1 coaching
We have successfully achieved 100% completion rate of
the first level 1 and level 2 cohort who commenced on
the programme in September 2022.
Gleeson Leadership Development
Programme
An additional training programme was designed for
future leaders in the business; those that are aligned
to the “tactical level” of our competency framework.
This programme has been tailored to develop these
competency areas to a “strategic level”. The programme
consists of self-assessments and personal development
planning, with leadership and management training
days throughout, combined with building commercial
awareness, a group project, one-to-one coaching and
ending the 12 months with a 360 degree feedback
programme. We saw the launch of this programme
in February 2023 and are looking forward to the next
cohort of starters in February 2024.
Investors in People
In 2019 Gleeson were awarded the standard Investors
in People accreditation. In 2023 we embarked on the
journey toward the platinum accreditation. This consists
of us working in collaboration with Investors in People
(“IIP”) and with our colleagues to understand where
we are currently, and what we can do in line with the
IIP framework to make Gleeson an even better place
to work.
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MJ Gleeson plc Annual Report & Accounts 2023 Alice, Head of Organisational
Development, Head Office,
Sheffield
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Retaining our people
We believe that retaining good people depends on
a variety of factors that extend beyond just financial
reward and are constantly reviewing ways to enhance
our offering to help retain, motivate and engage
colleagues.
Communication and engagement
We recognise the importance of keeping employees
informed of operational, financial, and strategic business
matters and do this in a number of ways, including a
weekly newsletter, employee roadshows, our intranet
(“the Hub”) and various videos.
Our annual Your Voice survey provides an opportunity
for all employees to provide anonymous feedback on
a wide range of topics. This is our fourth year running
the survey, and participation has increased every year.
77% of our colleagues completed the survey this year,
up from 76% last year. Our overall engagement score
decreased to 87%, remaining in the top quartile of all
companies surveyed. We anticipated a small decrease,
given the uncertainty caused by the restructuring
process, the cost of living crisis and the general
market, and will be working to improve this score in
the year to come. We are incredibly proud that we
have been awarded an “Outstanding Workplace” award
for a second year, which reflects the strength of the
engagement at Gleeson and supports our intention to
continue listening and working with colleagues to create
the best working environment for everyone to thrive in.
Wellbeing
Every month we communicate a different topic or an
awareness day or week that is happening, intended to
get our people thinking and talking about a subject.
These have included – International Women’s Day, Stress
Awareness Month and Mental Health Awareness Week
to name just a few.
We also rolled out Mental Health First Aid training to
more employees across the business. We are proud
to say that Gleeson was one of the first companies to
deliver the updated Mental Health First Aid training
courses. The cohort included employees across
different regions and departments, and we now have 34
trained Mental Health First Aiders across the business,
an additional nine of which were trained in the last
12 months. Further to this, we hosted Mental Health
awareness training for an additional ten colleagues who
can assist in signposting to Mental Health First Aiders
and other support platforms.
We continue to communicate across the business
our Wellbeing Toolkit and our Employee Assistance
Programme for all employees, and our private healthcare
policy, which includes up to eight free counselling
sessions. We also added the Lighthouse Club to our
Wellbeing Toolkit. The Lighthouse Club is a charitable
welfare and support service for the construction
community. It provides free 24/7 mental health support
to individuals and their families.
Our focus for the next 12 months will be to continue to
encourage our employees to know the importance of
looking after their wellbeing and to continue to foster
an open and supportive space where everyone can talk
about their own mental health.
MJ Gleeson plc Annual Report & Accounts 2023
55
People
CONTINUED
Diversity and inclusion
Real Living Wage
We are proud to be accredited as a Real Living Wage
employer, which means that we pay all of our colleagues
and subcontractors at least the Real Living Wage, an
independently calculated rate of pay that is based on
the actual cost of living. The Real Living Wage exceeds
the National Living Wage (set by the government)
and covers all employees aged 18 and older, with the
exception of apprentices. Receiving this accreditation
demonstrates our clear commitment to our colleagues
as well as making it clear that we expect the same from
our suppliers and subcontractors.
Diversity and inclusion
We aim to create a working environment that provides
equal opportunities for all. Promoting and embedding
our values of being passionate, collaborative and
respectful forms the foundation for a diverse and
inclusive work environment.
Selection for employment and promotion is based on
merit, following an objective assessment of ability and
experience, after giving full and fair consideration to
all applications. We are committed to ensuring that
our workplaces are free from discrimination and that
everyone is treated with dignity and respect. All new
employees receive mandatory diversity and inclusion
training as part of their induction.
Every effort is made to retain and support employees
who become disabled while working within the Group
and we continue to remove physical barriers for disabled
colleagues or applicants.
Promoting women in construction
We, and the construction industry overall, need to do
more to promote women working in the industry. We
are continuously seeking ways to reduce the barriers
to women entering and advancing their careers in
construction. A focus over the last few years has been
around attracting more diversity into the industry. We
have done this through a number of ways including
looking at our entry level talent to the industry. Our
graduate scheme consists of 60% females and 40%
males and we are very proud that we are able to attract
more females into the Land discipline and construction
industry. In addition, we have designed an Early Talent
Ambassador workshop and trained regional teams on
hosting this workshop in their local schools and colleges
to further attract diverse early talent to the industry.
56
Gender pay gap
In 2023, our median gender pay gap was 3% in favour
of women (2022: 3% in favour of men). 51% of women
now occupy the upper two pay quartiles compared to
48% in 2022. Further information about our gender pay
gap, and what we are doing to address it, is included
in our Gender Pay Gap Review, which is available at
mjgleesonplc.com.
Gender breakdown:
Male
Chairman
Female
Non-Executive Directors
Executive Directors
Senior management
Other employees
515
228
One employee
10 employees
MJ Gleeson plc Annual Report & Accounts 2023 S
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Alex and Jordan,
Firbeck Fields, Nottinghamshire
MJ Gleeson plc Annual Report & Accounts 2023
57
Environment
We recognise the impact that housebuilders can have on the
environment. There is a ‘carbon cost’ of building a home, as well
as an impact on the land on which a home is built, in terms of
water usage and run-off, waste and biodiversity.
However, our long-standing core alignment with the UN ‘SDGs’,
alongside our established strategic approach to build
predominantly on brownfield land or in areas of deprivation, means
we have already made great inroads in making improvements
to our sustainability over many years. We have also increasingly
utilised more innovative and sustainable solutions as they become
available, both within and adjacent to our operations, to ensure we
build and operate as responsibly as possible.
Science Based Targets commitment
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sustainability journey, demonstrating our ongoing
commitment to direct climate action through
decarbonisation across our operations, supply chain
and in-use emissions.
The SBTi is a partnership between the Carbon
Disclosure Project, United Nations Global Compact,
World Wildlife Fund and World Resources Initiative
and is currently the most widely recognised
pathway to decarbonisation. It is aligned to the Paris
Agreement’s objective to work together worldwide
to limit the global temperature increase to 1.5°C from
pre-industrial levels.
We now have a strong understanding of the carbon
emissions generated in both building and customers
subsequently living in our homes, as well as how
future regulations and initiatives may have an impact
in the near term. We look forward to setting out in
more detail our pathway to making further headway
in this area in the future.
Following an extensive internal review of our scope
1, 2 and 3 emissions, we are proud to commit to
setting science based targets with the Science Based
Targets initiative (“SBTi”), which we expect to be
validated and announced well within the two year
standard period. This will specifically help us reduce
our carbon emissions in a meaningful way and report
our progress in the process. This commitment is
an important milestone for the Group on our wider
Internal &
external walls
36%
Cement 14%
Bricks 8%
Insulation 4%
Timber 2%
Steel 1%
Plaster finish 1%
Blocks 6%
58
MJ Gleeson plc Annual Report & Accounts 2023
Energy used on sites
and in offices
9%
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Top 10 CO2e contributors
in the build process
Cement mortar
Clay bricks
Fuel used on site
Concrete blocks
Ready mix concrete
Road surfacing
Windows and doors
Cavity wall insulation
Radiators
Fibreglass roof materials
Top 10 contributors
Other contributors
Total
Tonnes of
CO2e
6.3
3.6
3.0
2.8
2.6
2.2
2.1
1.7
1.6
0.9
26.8
20.0
46.8
% of total
14%
8%
6%
6%
6%
5%
4%
4%
3%
2%
57%
43%
100%
Roof & insulation
4%
Kitchen & bathroom
7%
CO2e to build
47 tonnes
An average Gleeson home takes 47 tonnes of
CO2e to build – this will rise to 54 tonnes under
the Future Homes Standard due to the increase in
size of properties, thermal insulation and increased
embodied carbon of alternative heating systems.
CO2e to use
107 tonnes
The average Gleeson home adds 107 tonnes of
CO2e of in-use emissions over 60 years. However
the installation of air source heat pumps and the
decarbonisation of the grid will reduce in-use
emissions to 40 tonnes of CO2e over 60 years.
Windows & doors
4%
Heating & plumbing
6%
Other (including waste)
13%
Foundations and
substructure
13%
Roads & infrastructure
8%
MJ Gleeson plc Annual Report & Accounts 2023
59
Environment
CONTINUED
Scope 1 and 2 emissions
Our scope 1 and 2 emissions increased this year to
2.09 tonnes CO2e per home sold, missing our target of
1.75 tonnes CO2e in 2023, which was set in 2021. This
was due to a number of factors:
• we measure intensity based on homes sold rather
than homes built and, whilst the number of homes
sold reduced this year, we continued to maintain
build progress throughout the year to ensure future
sales security. Hence, the emissions generated in
build activities were not matched by the number of
homes sold, increasing the intensity measure; and
• a number of factors led to an increase in generators
being used on site for longer, rather than sites being
connected to the National Grid. This increased our
diesel usage on site during the year.
It remains a key priority to reduce scope 1 and 2
emissions and our commitment to Science Based
Targets will set out an absolute reduction target for
scope 1 and 2 emissions.
Science Based Targets
By committing to set Science Based Targets, we have
two years to submit targets and have these validated
by the SBTi, which includes setting a baseline year and
developing a plan for carbon reduction. We will commit
to both a near-term target (2032) and a net-zero target
(2050). Targets will be a combination of absolute
reduction targets for scope 1 and 2, meaning we reduce
our overall CO2 equivalent emissions in total from the
base year (regardless of build volumes), and intensity
reduction for scope 3, meaning we reduce the emissions
per unit produced. We will announce the specific targets
once we have had these validated, and report against
them in future reporting periods.
We will join over 5,000 companies committing to take
climate action whilst continuing with our mission of
“changing lives” by building affordable, high-quality
homes, for those who need them the most.
Carbon reduction initiatives
We take our responsibility for minimising our impact
on the environment very seriously, and are continually
looking at ways to improve the efficiency of our homes
in use, and to reduce the embodied carbon of the
materials we use to build them. During the year, we
launched new policies on efficient generator use and
the procurement and use of biodiesel. Turning these
policies into actions will help further reduce our carbon
emissions. In addition we are continuing to make
progress on the initiatives commenced in prior years.
60
Air source heat pumps
The most significant carbon impact comes from scope 3
emissions in building our homes and from the emissions
of our homes in use over their life. For in-use emissions
the single biggest contributor is the heating system of
the home, which has typically been from gas boilers.
The Future Homes Standard, which is due to be in force
in 2025, means that new build homes must generate
75–80% less in-use carbon emissions when compared to
pre-transitional regulations. This will effectively prohibit
the use of fossil fuel heating in homes, for example from
gas boilers.
We are committed to playing our part in providing a
healthy planet for future generations and are embracing
the Future Homes Standard. For all homes built after
15 June 2023, we are installing Air Source Heat Pumps
(“ASHPs”), which means that our homes will be net
zero ready in preparation for the UK grid being fully
decarbonised by 2035, or where our customers move to
a verifiable “green tariff” with their energy supplier.
Concrete bricks
The transition to lower carbon materials will be pivotal
in our plans to decarbonise. We are conscious of
the efforts being undertaken across the clay brick
industry to decarbonise and clay bricks remain a key
construction material. However, we are also embracing
lower carbon materials including concrete bricks and
reconstituted stone. Over the past few years we have
increased the use of concrete bricks, which provide
a significant reduction in embodied carbon over a
traditional clay brick. This year we have sold 241 homes
built using concrete bricks or reconstituted stone. This
will continue to increase and, as with any other material
changes, we will ensure that these do not impact on the
quality, longevity and aesthetics of the homes we build.
MJ Gleeson plc Annual Report & Accounts 2023 Supply chain and sustainable materials
In 2022 we proudly became a partner of The Supply
Chain Sustainability School. This enables us to upskill
colleagues and work collaboratively with other
housebuilders, subcontractors and suppliers within
the construction industry to achieve common goals in
delivering a sustainable future. Throughout the year we
have provided learning pathways for colleagues and
subcontractors and have achieved the Gold level of
engagement. Further information can be found below.
HVO fuel
As part of our scope 1 emissions reduction initiatives,
we are using hydrotreated vegetable oil (“HVO”), which
provides a significant carbon saving over regular “white”
diesel. However, the demand for HVO and the impact
of the energy and fuel crisis this year has resulted in
the cost of HVO soaring to the point where it became
commercially unviable on certain sites. As a result, HVO
accounted for 7% of total liquid fuels that we used on
site. We are continuing to monitor fuel costs and our
fuel policy has been updated to favour HVO over white
diesel where it is commercially viable.
Hybrid generators and grid connection
One of the largest opportunities within our scope 1 and
2 reduction initiatives is gaining early grid connections
for our developments and limiting the use of generators
on site. Our electricity is purchased on REGO-backed
green tariffs. Combined with the UK Government’s
commitment to decarbonise the grid by 2035, energy
transition from burnt fuels using generators to “mains”
electricity provides significant carbon emissions savings.
As part of our processes, we target getting sites
connected to the grid at the earliest opportunity.
Where generators are required, we have undertaken
trials this year using hybrid generator technology.
Trials of the 30 kVA generators showed average fuel
and emissions savings of 39% over a standard diesel
generator. As such, all new sites will utilise hybrid
generators until a connection to the grid is achieved,
where it is commercially viable to do so.
Supply Chain Sustainability School
Last year we committed to develop
targeted learning pathways based on job
roles to help upskill and further develop
colleagues throughout the business
including subcontractors.
We are proud that we achieved this objective and
during the year to 30 June 2023 we have:
• Established learning pathways covering
12 sustainability themes across 33 job roles
• Commenced rollout of pathways and
delivered 116 hours of learning for colleagues
• Achieved Gold level of engagement
• Achieved a partner value of £193,000
Next year, we will maintain our Gold level of
engagement and increase the extent of learning
opportunities across the business and supply
chain. We will also establish targets to increase
engagement from our supply chain partners.
Further details on our targets and actions can be
found on page 75.
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MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Environment
CONTINUED
Other environmental considerations
Land
Our developments are typically located in areas where
there is a need for regeneration including areas of
deprivation or brownfield sites that would otherwise
remain unused. Four out of five of our homes sold
are in the most deprived areas of the country or on
brownfield land.
We invest in our sites, creating attractive and
well-planned developments with open space and
access to local facilities. We continue to purchase
land in areas that are in need of regeneration, but
with good transport links and access to local facilities
and employment. Page 69 sets out an example of the
brownfield land remediation that we undertake.
Waste
In the year, we diverted 99.0% (2022: 99.0%) of waste
generated away from landfill through recycling or
conversion to energy. We continued with our target
of zero waste to landfill and we will achieve this by
enganging with specialist waste management providers
and implementing initiatives such as pallet repatriation,
re-use of waste materials on site and engaging with
our upstream supply chain to minimise incoming waste
such as packaging. This year will see the development
of targeted, role-specific training and awareness with
learning pathways including waste management
practices.
During the year, our total waste amounted to
11,391 tonnes (2022: 12,272), a waste intensity of
6.6 tonnes (2022: 6.1) per home sold.
Absolute waste has decreased by 7.2%, but due to
the decrease in homes sold, our waste intensity has
increased. Measures taken on sustainable procurement,
packaging and waste management helped to reduce
the absolute waste produced in the year. We continue to
work with our supply chain and internal stakeholders to
firstly reduce waste generated, then to maximise waste
recovery options.
Hazardous waste is generally limited to packaging
containing hazardous residues such as paint tins, aerosol
canisters, sealant and adhesive cartridges.
Timber
We source 99.9% of the timber we use in construction
from FSC or PEFC certified sources.
SDG Flags, Linkswood Park,
Dalton, Rotherham
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MJ Gleeson plc Annual Report & Accounts 2023 Water
Water stress
We typically acquire sites and build in areas of relatively
low water stress, being located in the North of England
and the Midlands. For the year to 30 June 2023, 36%
of the homes sold were in areas of high water stress. In
total, 37% of plots in the Gleeson Homes land pipeline
are classified as being in an area of high water stress.
We do not undertake any water abstraction from
ground or surface waters.
Water usage
We recognise that water is a valuable resource. Last year
we committed to developing a water strategy. This is in
progress and we are targeting to complete this within
the next 12 months. This water strategy will address
our water demand and aim to reduce our reliance on
licenced water supply. As part of our strategy we will
be evaluating the feasibility of incorporating grey water
usage into our operating activities and will explore
initiatives such as rainwater harvesting and the use of
surface water during construction for site processes
such as dust suppression. Our strategy will also include
improved methods of tracking water consumption
across the business with actual usage data, rather than
estimates. The strategy will also focus on climate-related
water risk to the business.
Water consumption
2023
2022
Cubic metres of water
consumed
83,651
90,692
90,692
Cubic metres of water
consumed per home sold
49
Cubic metres of water
consumed per build site
984
45
1,093
Met Office data shows that the provisional mean
temperature for 2022 was 10.0°C, which is 0.9°C above
the 1991–2020 average and was the warmest year in the
UK on record. The provisional rainfall total was 1,051mm,
which is 90% of the 1991–2020 average. Warmer and
drier periods have an impact on water use on our
developments due to water being required for several
site and construction processes and activities. As part of
our water strategy, we will examine the impact of these
drier periods and ways in which to conserve and reduce
water usage.
All of our homes are fitted with dual flush toilets, low
flow taps and showers and water meters. They are
designed to achieve an internal water use of less than
110 litres per person per day (actual usage is nearer 104
litres per person per day). This is 12% lower than the
maximum allowance specified by building regulations.
We are going further and our newest home designs
will use around 97 litres per person per day through
higher specification sanitaryware. This provides 22% less
consumption than the current maximum allowance.
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MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Environment
CONTINUED
Our scope 1 and 2 emissions in detail
The table below shows the energy usage and carbon emissions for the Group in line with the Streamlined Energy
and Carbon Reporting (“SECR”) requirements. All energy and carbon emissions originate in the UK. Our carbon
emissions are calculated in accordance with the Greenhouse Gas Protocol – a Corporate Accounting and Reporting
Standard.
2023
2022
2021
Tonnes of
CO2e
2,250
Energy
usage
896,609 litres
Tonnes of
CO2e
2,009
Energy
usage
750,257 litres
Tonnes of
CO2e
2,288 829,440 litres
Energy
usage
558
286,153 litres
783 328,960 litres
12
72,042 litres
9
55,900 litres
490
0.25
203,871 litres
1,500 litres
414
2,000,553 kWh
334
1,828,044 kWh
518 2,676,613 kWh
380 1,788,610 kWh
290 1,576,126 kWh
479 2,615,295 kWh
32
148,332 kWh
105
488,701 kWh
84
392,472 kWh
3,601
2.09
3,714
1.86
3,721
2.05
Scope 1 and 2
Gas oil/diesel
Car fuel
HVO fuel/biofuel
Electricity
Gas
Liquid petroleum gas (“LPG”)
Total scope 1 and 2
Per home sold
Scope analysis
Scope 1 and 2
Scope 1 – burnt fuels
Scope 2 – electricity
– location-based1
– market-based1
Total Tonnes of CO2e
Per home sold (location-based1)
Per home sold (market-based1)
2023
Tonnes of
CO2e
3,187
2022
Tonnes of
CO2e
3,196
2021
Tonnes of
CO2e
3,341
414
176
3,601
2.09
1.95
518
260
3,714
1.86
1.73
380
196
3,721
2.05
1.95
1 The Group reports location-based and market-based scope 2 electricity data. Market-based data is based on the emissions from electricity
purchased by the Group. Location-based uses the average emissions intensity of the UK electricity grid. Purchased renewable sources of
electricity used on our sites is supported by Renewable Energy Guarantees of Origin (“REGO”) certificates.
Divisional analysis
Scope 1 and 2 (tonnes of CO2e)
Scope 1 – burnt fuels
Scope 2 – electricity
Total
2023
2022
Gleeson
Homes
Gleeson
Land
Gleeson
Homes
Gleeson
Land
3,173
410
3,583
14
4
18
3,172
509
3,681
24
9
33
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MJ Gleeson plc Annual Report & Accounts 2023 Scope 1 and 2 methodology
The Group reports the sources of material greenhouse gas emissions from its main activities, categorised as scope
1 and 2. Scope 1 comprises direct emissions from sources purchased and used directly by the Group, such as diesel,
natural gas and liquid petroleum gas on sites and in our offices. Scope 2 comprises emissions associated with the
consumption of energy from purchased electricity.
Our largest carbon emitting fuel is diesel, which is used by forklift trucks, generators, plant and machinery.
Emissions are calculated using the volume of litres purchased during the year and multiplying by the applicable
conversion factor to convert into CO2 equivalent. In April 2022, the government prohibited the use of red diesel
in the construction industry and as an alternative we have switched to a combination of regular white diesel and
HVO biodiesel.
Our second largest carbon emitting fuel is petrol and diesel for company vehicles. This is calculated by taking the
total litres of each fuel purchased, split proportionally based on business mileage submissions. This is multiplied
against a standard conversion factor to convert this into CO2 equivalent.
Our scope 3 emissions in detail
Tonnes of CO2e
Plot build
Infrastructure
Total scope 3 (excluding in use)
Per home sold
In-use emissions (60 years)
Total scope 3 (including in use)
Per home sold
2023
71,454
5,631
77,085
44.74
183,883
260,968
151.46
2022
78,729
7,450
86,179
43.09
218,639
304,818
152.41
Scope 3 methodology
For emissions from build, all of the materials used for each house type plus emissions from construction work on site
(including infrastructure such as roads and sewers), transport and end-of-life replacements are used to estimate the
embodied carbon emissions.
We use the “bill of quantities” to understand every individual component of our homes and the volume of materials
required for the build, including an apportionment of site infrastructure such as roads and utilities. To date, we
have obtained Environmental Product Declarations (“EPD”) reporting the embodied carbon emissions for 62% of
the materials used in our homes and applied these, where appropriate, in calculating the scope 3 build emissions.
The remaining 38% are calculated based on standard industry emissions data by material.
This assessment was carried out for our most common house types, collectively accounting for 85% of total homes
sold in the year to 30 June 2023. The remaining 15% is extrapolated based on floor area and other known material
quantities in the remaining house types to give the total annual emissions from house building.
For in-use emissions, actual energy spend data from customers is converted to energy consumption and carbon
emissions, then projected forward (assuming broadly stable energy usage) to arrive at the 60-year in-use carbon
emissions total for each house type.
65
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information During 2023 we welcomed a Senior Ecologist to our
team, bringing ecology expertise in-house and enabling
us to bring more focus to this area of our business.
We engaged with a “customer panel” to understand
our customers’ views on nature and biodiversity.
Eighty percent of customers felt that it was important
to encourage wildlife into gardens. The majority of
customers would welcome bird and bat boxes, trees
and hedgehog highways. We also gained an insight
into some of the concerns customers had such as:
maintenance, tree roots, concern for pets and the
misconception of certain species. This data has
proved invaluable in shaping our biodiversity strategy
to go beyond the legal requirements and to provide
something meaningful and lasting that can be embraced
by our customers.
Environment
CONTINUED
Biodiversity and ecology
Our focus on building affordable, quality homes where
they are needed, means that we are often building
on brownfield land, which can be biologically diverse.
We are very mindful of the ecological impact that
the clearance of land and use of natural resources in
building new homes may have.
We want to go beyond our legal and planning
requirements to provide habitat, bird and bat boxes
across all developments and encourage our customers
to engage with nature in their garden space. Nearly 5%
of land use in England is for residential gardens. This
provides a real, tangible opportunity to create mosaics
of land to help biodiversity by planting and creating
habitats for nature to thrive.
Biodiversity Net Gain
After November 2023, developments will be
required (via the Environment Act 2021) to create
a measurable 10% gain to biodiversity, either
via habitat retention, enhancement or creation
on site, or by the funding of habitat creation
offsite, and then also safeguard it for at least
30 years. This is referred to as Biodiversity Net
Gain (“BNG”).
When we acquire land for development, these
sites are often brownfield, including land
contamination with non-native, invasive plant
species present. The land has often been left for
many years to naturally colonise and rewild, so
can sometimes have a high biodiversity baseline.
Clearing land for remediation in readiness for
construction can have an initial short-term
detrimental impact on nature at the site but
provide a long-term benefit and legacy. We
consider biodiversity on our developments
from the design stage, considering each site
individually to try to retain valuable habitats as
well as considering our impacts on protected
species and habitats in the surrounding area.
Through planning regulation and our own
enhancements we leave a net gain to biodiversity
and manage any protected species, which have
either been identified during ecological surveys at
pre-planning stage or during construction.
66
MJ Gleeson plc Annual Report & Accounts 2023 Hedgehog, The Green,
Blidworth, Nottinghamshire
Bat box, Willow Park,
Accrington, Lancashire
4.3
Bats
Springfield Meadows,
Bolsover, Derbyshire
Bat species are in decline throughout
the UK. They’re a valuable indicator
of biodiversity as a whole as
they depend on a healthy insect
population to survive.
At Gleeson we not only try to retain features
that are of value to bats such as hedgerows
and large trees, and provide insect beneficial
planting, we also install bat boxes onto 40% of
our homes to provide roosting space for our
urban bat species.
Our biodiversity strategy
Enhancements
4.4
Gleeson Homes
Biodiversity Strategy 4
1.0
Setting the scene
In 2019, The State of the Nature Partnership
released the State of The Nature Report which
provided various worrying statistics on the
state of UK’s biodiversity. In the UK, 15% of
species are threatened with extinction. 41% of
species have seen their populations decrease.
In relation to habitats, In England alone, 99.7% of fens, 97%
of species-rich grasslands, 80% of lowland heathlands, up
to 70% of ancient woodlands and up to 85% of saltmarshes
have been destroyed or degraded (Environment Agency
Working With Nature 2022).
Our remaining wildlife and habitats are under pressure
from a combination of things including;
• Urbanisation and increased built development
• Pollution
•
Increased intensive agriculture
• Climate change
•
Intensive/unsustainable fishing
• Non-native invasive plant and animal species
4.5
Reptiles and
amphibians
Our reptiles and amphibians are also under
pressure – almost a third of them are at risk
of extinction.
At Gleeson we not only try to retain features that are of
value to amphibians and reptiles – such as hedgerows
and ponds, we also provide new habitat in the form of
new grassland and additional SuDs or ponds. Where
populations have legal significance or are of high
ecological value we undertake ecological mitigation –
often in the form of translocation or habitat creation.
Birds
Planting and landscape regime focused
on invertebrates and pollinators. We
plant trees, hedgerows and shrubs
prioritising the use of native species.
We only plant non-native species when
they have a benefit to wildlife such as
providing berries for birds or nectar for
insects, or providing habitat for shelter,
breeding or hibernation.
Many of our bird species in the UK
are in decline – including our well
known and well loved urban birds such
a house sparrows, starlings, house
martins and swifts.
All developments to incorporate
hedgehog highways. To ensure
hedgehogs do not lose valuable foraging
resource, we will be incorporating
hedgehog highways into all new
developments. Hedgehog highways
are holes or gaps in fences to allow
hedgehogs to pass through otherwise
enclosed gardens.
5
Gleeson Homes
Biodiversity Strategy
Minimum 30% of homes to include a
bird box or bat box. We try to retain
features that are of value to bats such as
hedgerows and large trees, and provide
insect beneficial planting.
Engagement
As part of our commitment to biodiversity
Gleeson provides bird boxes on 40% of homes
across all developments. The types of boxes vary
depending on the location and species likely to
be present.
We will partner with Buglife to ensure
the work we are doing is meaningful,
consistent and beneficial to nature and
biodiversity.
All homeowners to receive a bug
hotel and wildflower seeds with their
welcome pack.
An electronic “Attracting Wildlife to
Your Garden” booklet will be provided
to all customers providing hints, tips and
advice for attracting wildlife.
Gleeson Homes
Biodiversity Strategy
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MJ Gleeson plc Annual Report & Accounts 2023
67
15
Gleeson Homes
Biodiversity Strategy
Strategic ReportCorporate GovernanceFinancial StatementsOther Information Environment
CONTINUED
Tree Protection Zone, Springfield
Meadows, Bolsover, Derbyshire
68
MJ Gleeson plc Annual Report & Accounts 2023
Regenerating Land case study
Canal Walk – Hapton
A long history of chemical production
Canal Walk, Hapton is located near Burnley on the former William Blyth
Chemical Works, founded in 1842 and operated by different owners
until 2006. The site produced various inorganic chemicals such as
ammonium triseptate, sodium sulphate and hydrochloric acid and
originally produced sulphuric acid for the nearby Nelson and Brierfield
gas works. The site adjoins the Leeds and Liverpool canal, which
played a critical role in the movement to and from the site of raw
materials and finished goods.
Land degradation and contamination
Being a former chemical manufacturing site that operated for over
one and a half centuries, it is no surprise that the extent of the works
resulted in significant land degradation and contamination. In addition
to this, adjoining the chemicals works was a landfill site which was
classified as “hazardous” due to the nature of the waste disposed
which included various chemicals, polymer additives, arsenic, metals
and asbestos.
Bringing the land back to life
In 2011, the land for the chemical site and the hazardous landfill
area was remediated. This involved using vast amounts of inert fill
materials for restoration and soil formation, along with additional
planting of vegetation to create a country park comprising
significant areas of public open space and habitat for biodiversity.
As part of the development, Gleeson provided inclusive access
through the country park in the form of timber edged aggregate
pathways both for residents of our development and the wider
community to access and enjoy the public open space. As a
result, it was shortlisted for the Brownfield awards in 2021 for
“Best Biodiversity Enhancement” category.
Leaving behind a legacy
The development has 202 plots for high-quality, affordable 2, 3 and 4
bedroom homes on land that had been degraded and left derelict for
over a decade. The development is surrounded by countryside and
also boasts direct access to the Leeds and Liverpool canal, providing
further leisure, physical and wellbeing opportunities. The development
is within easy access of nearby towns and the railway station. Canal
Walk was voted second in Home View’s “10 Best Developments”
in Lancashire.
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MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Sustainability Targets
Progress against our 2023 improvement targets
In our annual report last year, we set out a number of ambitious sustainability targets. Our progress against these
targets and actions is set out below.
Health and safety incident rate (“AIIR”) will be reduced to the
industry standard or lower in the year
NOT MET
Our AIIR for the year to 30 June 2023 was 303 (2022: 55). Unfortunately this is above the last reported industry
average of 239 over the same period and is the result of six reportable incidents. The incident rate is not reflective
of the significant improvements which have been made to safety procedures, systems and training over the past
12 months. Health and safety remains our highest priority and we continue to promote our HomeSafe philosophy to
ensure that a strong health and safety culture is embedded across the Group.
2023 actions
Update
Result
Deliver enhanced
temporary-works training
and implement focused
action plans.
Training has been established and delivered across all regions
and to 46 managers within the year and will continue as part of
mandatory training requirements for 2024.
Enhance our campaign on
slips, trips and falls across
all sites and offices.
During the year, we have delivered 137 “toolbox talks” across
sites and offices as focused campaigns, which has been aligned
with HBF working group and industry-wide campaigns.
Provide training to all site
management colleagues
on underground services
and utilities.
Underground services procedures and utility awareness has
been delivered as part of our HomeSafe “essentials” training. It
has been delivered to 127 managers across the business and will
continue into 2024 as part of induction/refresher training.
Introduce additional spot
checks on monthly health
and safety focus areas.
773 safety audits by an independent, external organisation have
been undertaken during 2023 to ensure that Gleeson practices
and processes are being adhered to and to reduce risk and
identify safer working opportunities.
Further develop our
digital near miss reporting
systems to deliver
improved data and
root-cause analysis.
We have introduced a digital near miss reporting system, which
uses QR codes to log near misses. We have also improved our
analysis processes for health and safety data.
70
MJ Gleeson plc Annual Report & Accounts 2023 Our employee engagement will be maintained in the upper quartile
of all companies during 2022/23
MET
Our staff turnover for the year was 41% for the year, and our voluntary staff turnover was 31%. Our independently
assessed employee engagement score decreased to 87% this year (2022: 90%) and 84% of colleagues (2022:
89%) are proud to say that they work for Gleeson. This places Gleeson in the upper quartile of all UK companies
surveyed and demonstrates that further progress has been made on engaging with our people and we believe this
will continue.
2023 actions
Update
Result
Enhance our new starter
onboarding programme
to improve
pre-commencement
support and
communication.
During the year, we have increased pre first day communications
to provide early sight of the Gleeson culture and our core
values. We have also launched welcome boxes for all new
employees and have introduced regional “meet and greet”
sessions where new employees can meet and engage with other
new employees.
Create regional focus
groups to target and
action key findings from
the annual Your Voice
employee engagement
survey.
Provide resources for
site-based staff to enable
them to participate more
easily in the Your Voice
survey.
Deliver targeted learning
and development
pathways for our
colleagues.
Undertake quarterly talent
mapping meetings to gain
insights into development,
performance and
succession plans.
We have created regional focus groups, which are facilitated
by our regional HR business partners to evaluate the findings
of the annual Your Voice employee survey and deliver an
implementation plan.
We introduced QR codes to improve accessibility for site-based
staff. For the 2024 survey, we will increase site presence to
assist and support with accessing the system.
We launched the Gleeson Skills Development Programme
and have commenced NVQ Leadership and Management
training focused on the build management teams. We have
also launched the Gleeson Competency Framework, which has
been designed to assist colleagues in driving their ongoing
development.
We have conducted monthly regional talent mapping sessions
and have applied talent mapping tools to key regional roles to
identify succession/development opportunities. These sessions
feed into a quarterly divisional talent discussion session,
whereby each regional lead discusses top talent areas, key
challenges/risks and mobility of top talent in support of the
overall division.
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MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Sustainability Targets
CONTINUED
We will maintain our five-star status with a 90% or above customer
recommendation score
NOT MET
Despite the extremely challenging market conditions, we achieved an independently assessed customer
recommendation score of 89.0% (2022: 90.7%) this year, only marginally missing our target of 90%. This equates
to the Home Builders Federation (“HBF”) four-star rating. Whilst the current year score has been impacted by low
scores at the beginning of the year, the improvements we have seen in the latter months and subsequent to the
period end give us confidence that we will be able to exceed this target in 2024, regaining our five-star status, and
exceeding performance delivered during 2023.
2023 actions
Update
Result
Develop and implement
a digitised quality
inspection and monitoring
system for key build
stages.
We have been working with our preferred partner to develop
a quality inspection system, which will be amalgamated with
building regulations Part L requirements. This will ensure
better visibility and rigour around the quality we are achieving
throughout the build cycle, but has had to be delayed as efforts
to develop Part L compliance have taken priority.
Implement an enhanced
customer contact
workflow to improve
pre-completion
communication.
As an early adopter of the
New Homes Quality Code,
ensure adherence to its
standards.
Enhance “My Gleeson”
data recording to enable
better root-cause
understanding and allow
preventative actions to be
taken.
Increase our percentage of
issues resolved within 30
days by 10%.
The workflow was implemented and is now delivering
>95% weekly communication for our customers during
pre-completion stages.
We have successfully launched our new complaints system
using a Power BI dashboard to monitor compliance to
complaints timeline and to enable delivery of an audit strategy.
We now have the ability to analyse defects at a trade level,
helping us better understand improvement opportunities and to
provide data to support subcontractor management.
This has not been achieved. Performance in relation to this
metric has been skewed by a focus on older defects being
closed out, affecting the average age profile of closed defects.
Plots falling under New Homes Quality Code (reservations from
1 November 2022) are trending at around 93% closed within
30 days, which we expect to have a significant impact on
performance in 2024.
Improve our customer
satisfaction score for
“Communication”
(pre-completion) by 5%.
This has not been achieved primarily due to issues relating
to build delays and the nature of messages then being
negative from the perception of the customer, rather than
communication not being forthcoming. Build programme
adherence throughout 2024 will be of critical focus.
72
MJ Gleeson plc Annual Report & Accounts 2023 Climate: We will reduce our carbon emissions by 30% over three
years to 1.75 tonnes CO2e by 2023
As set out on page 64 our scope 1 and 2 emissions for the year were 2.09 tonnes of CO2e per home sold
(2022: 1.86 tonnes per home sold).
NOT MET
The increase to 2.09 tonnes of CO2e per home sold this year is a 12% increase on 2022, which means that we have
not met our CO2e reduction target of 1.75 tonnes per home sold by 2023. This is disappointing but the reasons for
this are well understood as set out on page 60. There have been a number of initiatives delivered and our focus is
to deliver a decarbonisation roadmap for near-term and net-zero targets validated by the Science Based Targets
Initiatives (“SBTi”).
2023 actions
Update
Result
Install eco-cabins, which
reduce carbon emissions,
on all new sites.
Eco welfare cabins are installed on every new site. During the
year, we installed 8 and currently have 7 in use. These contribute
to reducing carbon emissions and generator noise on site.
Trial the use of more
efficient generators for
use on sites to reduce fuel
consumption.
Throughout the year, we have undertaken trials of hybrid
generators with battery storage. The trial of these generators
has shown a fuel and emissions reduction of more than 35% for
the trial period.
Improve energy efficiency
across our offices.
During the year we delivered an energy saving awareness
campaign across the business. The campaign focused on
switching off lights and electronic equipment when not in use
and monitoring heating and cooling systems.
Promote the use of
biodiesel across all of our
sites.
Our policy was revised to favour the use of HVO where viable.
Our usage throughout the year equates to 7% of total fuel
use for site operations. We will continue to use HVO where
technically and commercially viable.
Continue to enhance our
company car scheme
to encourage more
colleagues to switch to
electric or hybrid vehicles.
47% of our company car fleet are electric/hybrid vehicles with
the remainder being petrol and diesel with emissions capped
at 150 gCO2e per km. We have undertaken an infrastructure
evaluation to determine the installation of EV charging
points for our offices. A full review of our company car policy
is currently underway to provide further electric/hybrid
opportunities across the fleet.
Continue to progress
actions in respect
of reducing scope 3
emissions as set out on
pages 60 and 61.
During the year, our focus has been on assessing and modelling
our full carbon emission inventory to enable us to commit to
setting near-term and long-term Science Based Targets (“SBTs”)
as detailed on page 58.
From 2025 all of our homes will be net-zero ready and we
continue to evaluate lower carbon alternative materials
and products.
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MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Sustainability Targets
CONTINUED
Other environmental actions
2023 actions
Update
Result
Develop a Group-wide
water strategy to address
water consumption, waste
and re-use of water.
This action has not been met this year due to the significant
work on Science Based Targets and our biodiversity strategy.
This action will form part of our 2024 targets and actions.
Develop a biodiversity
strategy that will align
with and complement our
existing activities and
planning strategies.
We have launched our biodiversity strategy, which will deliver
planning compliance and biodiversity net gain (“BNG”) and
goes further in enhancing our commitments beyond the
legal requirements. Further information can be found on
pages 66 to 67.
Achieve zero waste
to landfill by further
improving waste
management practices
and data recording.
Deliver sustainability
training through targeted
learning and development
pathways in collaboration
with the Supply Chain
Sustainability School.
During the year, we achieved diversion from landfill of 99.0%
therefore maintaining “zero” waste to landfill, which is generally
accepted as 99% or above.
During the year, we have established learning pathways for
colleagues and subcontractors. We have delivered 116 hours of
learning for colleagues on sustainability, and we achieved the
gold level of engagement through the school.
What we want to improve:
Health
and safety
Staff
engagement
Customer
satisfaction
Carbon
emissions
Our incident rate (“AIIR”),
at 303 per 100,000
employees, has increased
and is higher than
the industry average
reported by the Home
Builders Federation.
We do not believe this
is representative of our
processes and systems,
and our focus for 2024
will be on training,
awareness, and proactive
engagement across the
business. We will increase
training for management
and deliver a targeted
health and safety
campaign every quarter.
We want our
colleagues to be
happy, motivated and
engaged with the
values and culture
of the business. Our
approach centres on
improving employee
engagement through
open communication,
training, people
development and
welfare. We are also
focused on ensuring
we have a culture of
equality, diversity and
inclusion across the
organisation.
We want to continue
enhancing the
customer journey
and maintaining our
focus on build quality.
Our approach will be
on developing the
systems, training and
ongoing engagement
with our suppliers
and subcontractors to
support this.
Our scope 1 and 2
intensity emissions
have increased due
to a number of
factors. Whilst this
is disappointing, we
recognise the need
to develop our full
decarbonisation
roadmap across scopes
1, 2 & 3 emissions and
have committed to
setting near-term and
long-term targets
validated by the
Science Based Targets
initiative.
74
MJ Gleeson plc Annual Report & Accounts 2023 Sustainability Targets CONTINUED
2024 sustainability targets
Health
and safety
incident rate
(“AIIR”) will
be lower than
the industry
average in the
year
• All site management will receive HomeSafe Essentials training if not already completed
within the last six months.
• New Safety Health and Environment (“SHE”) software platform to be introduced with
phased implementation plan. Platform allowing for the completion of site inspections
and capture of SHE data.
• We will deliver a targeted, themed campaign every quarter to further embed the
health, safety and environmental culture across the business.
• We will deliver enhanced site environmental training across the business focused
around our most significant environmental impacts.
• Monthly site safety tours to be undertaken by Senior Management
(Regional Directors).
Our employee
engagement
will be
maintained
in the upper
quartile of all
companies
• We will maintain four stars on Glassdoor employer ratings.
• We will establish a colleague representative forum to deliver an effective two-way
communication channel with the Executive Directors twice per year.
• We will further develop our culture of inclusion, including the establishment of an
Equality Diversity and Inclusion working group to help shape and guide our roadmap
and approaches for embedding equality, diversity and inclusion in everything we do.
• We will strengthen and enhance our health and wellbeing focus and agenda.
• More than 5% of roles in the workforce will be apprenticeships, trainees or graduates.
• We will achieve ILM recognition for each of our “In-House Leadership and
Management” development programmes.
• We will maintain our Investors in People accreditation and work towards Gold Star
Investors In People accreditation.
Customer
satisfaction:
we will recover
our five-star
status (+90%
“Recommend”
score) during
2024
We will achieve
Science
Based Targets
validation by
2025 for
near-term
and net zero
targets
• More than 95% of reserved customers will be contacted on a weekly basis.
• Post completion snags closed out within 30 days to be improved by 5%.
• Retrain all colleagues on phase 2 of our enhanced Customer First programme and
provide additional training to support programme delivery.
• Review and redesign all incentive programmes to increase the focus on customer
service targets.
• Complete and implement a digitised quality inspection and monitoring system for key
build stages within the year.
• Deliver a complete decarbonisation roadmap for near-term and net zero targets.
• Review company car policy, infrastructure and processes to reduce carbon emissions
and air pollutants.
• Generators on all new sites to be hybrid models to achieve circa 35% reduction in
generator emissions.
• Maintain Gold level of engagement through the Supply Chain Sustainability School.
• Work with our supply chain partners to increase engagement across the Supply Chain
Sustainability School (top 200 suppliers – 15% to achieve Gold status; 10% Silver; and
25% Bronze).
•
Increase sustainability training to deliver 250 hours of learning across all colleagues
within the year.
• Develop and implement a holistic water strategy addressing consumption, water
stress, mitigation and resilience.
• Maintain zero waste to landfill.
• Deliver a project to measure the waste generated per home to identify waste
reduction and circular economy opportunities.
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MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Task Force on Climate-Related
Financial Disclosures
The Financial Stability Board created the Task Force on
Climate-related Financial Disclosures (“TCFD”) to improve and
increase reporting of climate-related financial information.
Responding to the TCFD requirements, we aim to continually enhance our disclosures in line with its
recommendations and market practice. We also disclose climate-related governance, strategy, risk management and
metrics as part of the Carbon Disclosure Project (“CDP”).
The Company is consistent with paragraph 8(a) of Listing Rule 9.8.6R, which requires that listed companies must
include in their annual financial report a statement setting out whether the listed company has included climate-
related financial disclosures consistent with the TCFD Recommendations and Recommended Disclosures in that
financial report.
Governance
The organisation’s governance around climate-related risks and opportunities.
Board
The Board has ultimate responsibility for climate-related risks and opportunities, with day-to-day control in
responding to climate-related risks and wider sustainability targets being managed by the Executive Directors.
Any amendments to the business strategy or significant changes to day-to-day operations of the business
require approval from the Board. In addition, long-term targets and external commitments require Board
approval before announcement and becoming part of the ordinary course of business.
The Board receives information on a regular basis covering business performance, health and safety, customer
satisfaction and sustainability. Updates also include any technical specification changes, including changes to
house designs to comply with building regulations and improve environmental performance.
The Executive Directors, and the Board above certain set limits, has responsibility for the approval of all land
purchases. As part of the investment appraisal process, climate-related considerations are presented as part
of the approval process and included in the cost plan for the development. These include factors such as land
remediation, flood mitigation, biodiversity requirements, landscaping and environmental impact.
Audit Committee
The Audit Committee is responsible for reviewing and approving the content of the annual report including
the TCFD, SASB and GHG disclosures. In addition, the Audit Committee reviews and approves the Group’s
CDP climate submission, which outlines what we are doing as a Company to address climate-related risks and
opportunities.
The Audit Committee are regularly updated with amendments to disclosure requirements on financial
reporting and disclosure considerations in respect of climate change.
The Group’s sustainability disclosures, including TCFD and SASB, are reviewed as part of the external audit,
the results of which are reported to the Audit Committee.
Sustainability Committee
The Sustainability Committee is responsible for assessing the sustainability aspects of the business
strategy and ensuring that the Group’s sustainability targets align. The Sustainability Committee also
makes recommendations to the main Board on strategic developments that address sustainability risks and
opportunities in particular those relating to climate change.
The Sustainability Committee meets regularly throughout the year to ensure that risks and opportunities are
reviewed regularly, emerging risks and opportunities are identified and mitigation plans are being developed.
The Group Sustainability Manager is responsible for maintaining the environmental risk register and reports
any updates to the Sustainability Committee as part of the Group’s risk management framework.
The Sustainability Committee monitors performance against sustainability targets and actions and approves
the targets and actions used for measuring performance on an annual basis.
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MJ Gleeson plc Annual Report & Accounts 2023
Governance
The organisation’s governance around climate-related risks and opportunities.
Remuneration Committee
The Remuneration Committee is responsible for determining remuneration policy and targets including how
sustainability metrics are taken into consideration when determining incentive pay decisions.
The Committee are involved with setting the targets of the Executive and operational directors throughout the
business and, where appropriate, these are linked to performance against sustainability targets and ambitions.
ESG performance indicators are used to measure performance against these targets and subsequently
remuneration is awarded in relation to performance against these targets. For more information on how
sustainability factors are considered in Executive remuneration, refer to the Annual Report on Remuneration
on pages 134 to 147.
Nomination Committee
The Nomination Committee are responsible for ensuring that the Board structure, size and composition
(including the skills, knowledge and experience of Board members) is adequate to support the Group in its
growth and sustainability ambitions. The Committee consider the risks and opportunities facing the Group,
and what skills and expertise are therefore needed on the Board.
During the year, the Nomination Committee appointed James Thomson (former CEO) as Chairman of the
Board. James has an in-depth understanding of the sustainability ambitions of the Group as well as the risks
and opportunities.
In addition, the Nomination Committee appointed Nicola Bruce as a Non-Executive Director to the Board and
Chair of the Remuneration Committee. Nicola has significant experience in the building materials industry and
ESG experience across a range of sectors. For more information on the Board of Directors, refer to pages 104
to 105.
Strategy
The actual and potential impacts of climate-related risks and opportunities on the organisation’s
businesses, strategy and financial planning where such information is material.
Climate change has the potential to significantly impact our business strategy through changes in regulation,
government policy, stakeholder expectations and the direct effects of climate change such as more frequent
adverse weather events, loss of developable land and the impact on biodiversity and the wider natural
environment.
Our commitment to align our carbon reduction targets with the SBTi and a 1.5°C climate scenario is reflected
in our review of the resilience of the Company’s strategy towards climate-related risks. Included within our
carbon reduction modelling, we have considered the reliance on the transitional opportunities of emerging
technologies, engagement with supply chain and market expectations whilst balancing the risks of emerging
regulations and failure to adapt to a low carbon economy. The intention being that despite the transitional
challenges that are associated with committing to a carbon reduction target aligned to a 1.5°C scenario, they
are likely to be lesser than the potential impact of physical effects of climate change in a 4°C scenario.
During the year, we have used the process of scenario planning to aid our assessment of climate-related risks
and opportunities and the potential impact on the Group, its strategy and any financial impacts. Details of the
scenarios analysed can be found on pages 80 to 83.
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Strategy
The actual and potential impacts of climate-related risks and opportunities on the organisation’s
businesses, strategy and financial planning where such information is material.
Risk definitions
When assessing climate-related risks and opportunities we use the following criteria to ensure that the
assessment is reflective of the operating activities of the Group.
Risk term
Short term: 0–3 years
Medium term: 4–10 years
Long term: 10+ years
Impact
Low impact: £0.5m
Moderate impact: £1.5m
High impact: £10m
Catastrophic: £30m
The risk term is aligned to the majority of climate-related frameworks, in particular the Science Based Targets
initiative (“SBTi”).
The impact is aligned to the risk assessment methodology used by the Group for all principal and emerging
risks as set out in Risk Management on pages 36 to 41.
The Board adopts a low appetite to climate-related risks. This means that it is a priority for the Group to
maintain a low level of impact on the environment as a result of its operations balanced with the cost of doing
so. The Group invests to ensure there is a robust control framework to maintain a high level of compliance with
environmental regulations.
Impact on financial statements
Costs associated with the transition to the latest building regulations including Part L (Conservation of heat
and power) have been recorded in the valuation of inventory and subsequently reported within cost of sales.
Where a site margin forecast is affected by a change in estimated costs to complete, the impact is recognised
across all plots remaining. See note 1 – accounting policies for inventories on page 171 for further details.
A flood risk assessment is performed on all potential sites that are considered for development. The
associated costs to mitigate flood risk, where relevant, are included within the site valuation and costs to
complete. This is recognised in the forecast site margin and reported within cost of sales as completions are
recorded over the life of the site. As the owned land bank within Gleeson Homes covers a period of four years,
we have assessed that it is unlikely that the flood risk of these sites will change in this timeframe and therefore
no impairment of owned land has been identified.
Within the Gleeson Land division, the land portfolio is more strategic and therefore flood risk can change over
a longer period of time as regional flood models are updated including from the effects of climate change.
Each site is individually reviewed at a period end based on its planning prospects and viability. Where these
have been adversely impacted by a change in flood risk or any other impact, then a provision is recorded to
write down the value of inventory in line with the Group’s accounting policy.
Going Concern and Viability Statements
In preparing the Annual Report, the Group is required to assess whether there are any material uncertainties
over its ability to operate as a going concern (see note 1 – accounting policies for going concern on page 169
for further details). In addition to this, the Group is required to assess the potential impact of the principal risks
on the operations of Group over the longer term for disclosure in its viability statement on page 111. To meet
these requirements, the Group has sensitised its forecasts to incorporate the potential impacts of its principal
risks to a severe but plausible level over the three years to June 2026.
The costs of transition to meet government policy for the Future Homes Standards, biodiversity net gain
and the cost of known lower carbon technologies are already incorporated into the Group’s budget and plan
that is used in the viability assessment. The impact of the climate-related risks identified above, have been
considered but would not have a material impact over the viability period on the Group’s ability to continue
in operation.
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MJ Gleeson plc Annual Report & Accounts 2023 Risk Management
How the organisation identifies, assesses, and manages climate-related risks.
The Board has overall responsibility for the Group’s management and assessment of risks, supported by the
Sustainability and Audit Committees.
The Group risk register is formally reviewed by the Audit Committee at the majority of its meetings, including
consideration of emerging risk areas or changes to existing risks. Climate change and sustainability have been
identified as principal risks for the Group. Find out more on page 41.
The Group’s risk management framework includes a separate environmental risk register, which includes key
climate-related and other environmental risks for the business.
The environmental risk register identifies both principal and emerging risks and informs a formal risk
assessment process that considers the likelihood and impact of the identified risks together with any
mitigating controls that are already in place or planned. This position is reviewed by the Sustainability
Committee as part of its bi-annual review of the environmental risk register.
Any changes to risk scores on the environmental risk register are considered in the context of the Group risk
register in respect of the principal risks of climate change and sustainability. Proposed changes are reported to
the Audit Committee and Board as part of its monitoring of principal and emerging Group level risks.
We determine climate-related risks using our risk management framework outlined on page 36.
Sustainability Committee
The Sustainability Committee met three times in the year and the review of the environmental risk register is a
standing agenda item for each meeting.
The Committee members are responsible for reviewing the risks and opportunities identified, along with their
inherent risk scores, any mitigating actions and the mitigated risk scores. From this the Committee can direct
focus to the mitigating actions against any risks that exceed the risk appetite of the Committee.
The Group Sustainability Manager is responsible for the environmental risk register, which identifies risks
covering key climate-related and other environment risks for the business.
During the year, we have supported the Group Sustainability Manager in their IEMA qualification, which
includes focus on the identification of emerging climate-related risks and opportunities.
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Key climate-related risks
Risk
Scenario analysis
Mitigating actions
Carbon pricing
Government legislation
designed to encourage
industries to take climate
action and reduce their
carbon footprint by imposing
increases on material costs
and significantly increasing
our cost base.
Potential impact: £10–15m
The scenario modelled has
used a carbon price between
£50–100 per tonne and
applied this to projected
scope 1 & 2 emissions and
embodied scope 3 emissions.
Changes to building
regulations
Changes to the specifications
of our homes as a result of
new government policies can
result in high research, design
and build costs.
Potential impact: £15–20m
The scenario modelled has
taken the increase in cost of
recent changes in building
regulations (including Part F,
L, O and S) and extrapolated
over forecast unit sales.
Potential impact: £15–30m
The scenario modelled has
taken the increase in cost
of identified low carbon
alternatives to traditional
building materials and applied
this to forecast unit sales.
Emerging
technologies
Our long-term carbon
reduction strategy will rely
on the development of new
technologies and modern
methods of construction.
In order for these to be
viable for our business
model, they must be readily
available, affordable and have
appropriate skilled resources
available within the industry.
Risk rating:
Medium
Transition risk
Medium–
Long term
1.5–2 degrees
scenario
Risk rating:
High
Transition risk
Short–Long term
1.5–2 degrees
scenario
Risk rating:
Medium
Transition risk
Medium–
Long term
1.5–2 degrees
scenario
We are developing a
carbon reduction strategy
that will significantly reduce
the embodied carbon of
our homes. By committing
to a target validated by
the SBTi and aligned to the
1.5°C scenario we are able
to demonstrate our carbon
reduction commitments
and mitigate the impacts of
carbon pricing.
Our Group Technical
Director sits on the Home
Builders Federation
(“HBF”) Technical
Committee and the Future
Homes Hub, and attends
all NHBC Building for
Tomorrow events to ensure
that we are informed about
potential amendments to
building regulations as well
as providing feedback on
the challenges these may
pose to the industry.
We continuously review
the materials used within
the design of our homes
by engaging with our
supply chain and attending
conferences specific to
the housebuilding industry
to identify low carbon
alternatives.
We review our on-site
operations to identify high
emitting activities and
develop action plans that
target emission reductions
in these areas. We often
trial carbon-saving
initiatives on our sites to
analyse results before
rolling these out as “best
practice” across the Group.
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MJ Gleeson plc Annual Report & Accounts 2023 Risk
Scenario analysis
Mitigating actions
Supply chain
As we develop our carbon
reduction strategy there is a
reliance on our supply chain
to reduce the embodied
carbon of materials and
emissions generated from
build activities. Failure of our
supply chain to decarbonise
could potentially result in us
not achieving our scope 3
carbon reduction targets.
Potential impact: £15–25m
The scenario modelled has
taken our current supplier
spend split between materials
and subcontractors and
uplifted this to incorporate
the increase in costs for
lower carbon materials, fuels
and more efficient plant and
machinery.
Potential impact: £10–15m
The scenario modelling was
performed by reviewing our
current pipeline of sites for
their estimated biodiversity
credit requirements,
combined with an average
cost per biodiversity credit
for forecast site acquisitions.
Stricter planning
requirements
Government and local
authorities are becoming
more stringent in
their planning and site
infrastructure requirements.
This includes requirements
around biodiversity net
gain on sites, which could
result in land opportunities,
in particular brownfield
sites, which have rewilded,
becoming financially unviable.
Risk rating:
Medium
Transition risk
Medium–
Long term
1.5–2 degrees
scenario
Risk rating:
High
Transition risk
Medium–
Long term
1.5–2 degrees
scenario
We communicate our
carbon reduction plans
with our supply chain
to identify lower carbon
alternatives to our
existing build materials,
fuel conservation
methodologies and waste
reduction strategies to
reduce our impact on the
environment.
As part of the supplier
onboarding, we request
sustainability reports
and carbon reduction
strategies to be presented
so that we can collaborate
on identifying more
sustainable solutions.
Our partnership with the
Supply Chain Sustainability
School provides us with
additional tools to engage
with our supply chain
and raise awareness of
sustainable practices within
the construction industry.
The process of acquiring
land for development
includes thorough due
diligence to ensure
that sites comply with
relevant regulations and
government policies as
well as meeting our internal
rates of return.
Financial forecasts include
the costs associated
with complying with
planning requirements
such as biodiversity net
gain, mitigating flood
risk and planning specific
requirements such as
electric vehicle charging
points and lower water
usage technologies in areas
of high water stress.
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Key climate-related risks
Risk
Scenario analysis
Mitigating actions
More frequent adverse
weather events
Disruption to build activities
on our sites as a result of
more frequent adverse
weather events including
heat, cold, rain and storm
damage has the potential
to become unsafe, cause
damage to construction sites
and slow our growth plans.
Potential impact: £15–25m
The scenario modelled
assumes adverse weather
events to become more
frequent, the cost of build
disruption to increase as a
result of more storm damage
and considers the delay
in house sales and other
associated costs.
During periods of severe
weather, communications
are sent to site warning of
potential risks and to follow
company procedures for
adverse weather events.
Risk rating:
Medium
Physical risk
Medium–
Long term
4 degrees
scenario
Equipment and temporary
structures are checked
to ensure they are secure
and stored effectively to
prevent any damage.
Where weather is extreme,
sites may be closed until
the site returns to suitable
working conditions.
In instances of extreme
rainfall, mitigation
procedures are followed
to ensure compliance with
environmental regulation
such as water run-off and
its impact on the local
environment.
Key climate-related opportunities
Opportunity
category
Transition
opportunity
Opportunity
Energy-efficient homes
Due to the high thermal
efficiency of our homes we are
able to ensure that the running
costs of our homes remain
affordable for our customers.
The energy performance of
our homes also enables our
customers to qualify for green
mortgages, which may offer
lower interest rates.
Timeframe
Actions
Short term
We communicate with our customers the
benefits of buying an energy-efficient new
build home.
We are able to compare the typical energy
usage of our homes based on actual energy
consumption data and compare this against
the typical usage for existing housing stock
to show potential energy savings.
We communicate with our customers to
explain how their new home can support
them living a sustainable lifestyle.
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MJ Gleeson plc Annual Report & Accounts 2023 Opportunity
category
Transition
opportunity
Timeframe
Actions
Short-
Medium-
Long term
Transition
opportunity
Short–
Medium–
Long term
Opportunity
New technologies
We regularly review the
specification of our homes
to ensure that our product
offering meets the needs of our
customers.
This enables us to ensure that
the latest technologies are built
into our homes so that our
customers benefit from living in
a stylish, modern home.
Supply chain
By engaging with our supply
chain to align sustainability
strategies there is the
opportunity to unlock benefits
for both us and our supply chain
in reducing operational costs as
well as carbon emissions.
Transition
Opportunity
Short–
Medium term
Sustainability linked
loans
As sustainability linked finance
is becoming more readily
available, there may be an
opportunity for us to benefit
from lower finance costs
based on our sustainability
performance.
We continuously review the materials used
within the design of our homes by engaging
with our supply chain and attending
conferences specific to the housebuilding
industry to identify new technologies
that can support our customers in living a
sustainable lifestyle.
We review the specification of our homes
and optional extras on a regular basis so
that our customers can tailor their home to
their needs.
We communicate our carbon reduction
plans with our supply chain to identify lower
carbon alternatives to our existing build
materials, fuel conservation methodologies
and waste reduction strategies to reduce
our impact on the environment.
As part of supplier onboarding, we request
sustainability reports and carbon reduction
strategies to be presented so we can
collaborate on identifying more sustainable
solutions.
Our partnership with the Supply Chain
Sustainability School provides us with
additional tools to engage with our supply
chain and raise awareness of sustainable
practices within the construction industry.
As we develop our long-term carbon
reduction targets and have these validated
by the Science Based Target initiative it will
provide opportunity to obtain loans linked
to sustainability covenants.
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Key climate-related opportunities
Metrics and targets
The metrics and targets used to assess and manage relevant climate-related risks and
opportunities where such information is material.
Carbon emissions
The Group’s main climate-related performance metric is measured by reference to a short-term carbon
intensity target. In 2020, we set a target of reducing our scope 1 and 2 emissions by 20% per home sold within
three years. This would have resulted in a carbon intensity of less than 2.0 tonnes of CO2e per home sold. Due
to the significant progress made during 2021, we increased our carbon reduction target from 20% (2.0 tonnes
of CO2e) to 30% (1.75 tonnes of CO2e) by the end of 2023.
This year we failed to meet this intensity measure as a result of homes sales volume being significantly below
the level originally anticipated when the target was set. As a business, we have maintained the build rates on
our sites to ensure that the business is best placed to deliver high-quality, affordable homes when the market
returns. As a result, our carbon emissions have been higher relative to the number of homes sold this year.
Had we sold the number of homes originally forecast this year, then we would have met the intensity target of
1.75 tonnes of CO2e per home sold.
Despite not achieving this short-term target, our commitment towards reducing carbon emissions continues
to be a priority for the business. We have submitted our letter of commitment to the Science Based Targets
initiative, pledging our commitment to set carbon reduction targets aligned to the 1.5°C scenario within two
years. The targets will cover both near-term and longer-term targets, setting a clearly defined route to a net
zero carbon ambition.
During this time we will continue to develop our carbon reduction strategy, identifying further opportunities to
reduce carbon emissions within our operations and engaging with our supply chain to reduce the embodied
emissions in our homes and from our homes in use.
For more information on our carbon emissions, targets and strategy refer to pages 60 to 65.
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MJ Gleeson plc Annual Report & Accounts 2023 Metrics and targets
The metrics and targets used to assess and manage relevant climate-related risks and
opportunities where such information is material.
Other climate-related metrics and targets
Of revenues generated by our Homes’ division, 95% are related to climate-related opportunities, through
the completion of high-quality, energy-efficient housing achieving EPC ratings of A or B. As we transition to
the Future Homes Standards, in particular the installation of air source heat pumps, our homes will be fully
electrified and therefore Net Zero ready.
Of our owned sites, 45% are considered to be brownfield (redevelopment sites) which transforms derelict/
abandoned space into much needed affordable housing. By having a preference towards brownfield land, we
are able to repurpose land often contaminated by its previous use, into a space that creates economic and
social value for local communities.
Of our homes, 37% are in areas of severe water stress. Our homes are designed to achieve an internal water
use of less than 110 litres per person per day, 12% lower than the maximum allowance currently specified by
building regulations, reducing the impact our developments have on local natural resources. We are working
to incorporate further efficiencies into our homes to reduce this to less than 100 litres per person per day.
Of our homes, 14% are in flood zone 3 areas and are considered to be “vulnerable” to flooding. As part of our
planning process, we incorporate flood resilience measures and sustainable drainage systems (“SuDS”) into
our site design as needed to mitigate flood risk. The costs of implementing these solutions are included in the
forecast site margin and reported within cost of sales as completions are recorded over the life of the site.
Of construction waste, 99% is diverted away from landfill. During the year, we engaged with our waste
providers with the aim to improve segregation of waste materials on sites and improve our diversion from
landfill and recycle rate whilst limiting the conversion to energy. In addition to this, we rolled out a training
programme through the Supply Chain Sustainability School to educate site managers and subcontractors on
the importance of following waste management procedures.
In our homes and on our developments, 99.9% of timber is sourced from PEFC or FSC accredited sources.
Of our site fuel usage for plant and machinery, 7% used Hydrotreated Vegetable Oil (“HVO”) as a low carbon
alternative to regular diesel, this enabled us to reduce our carbon emissions by 169 tonnes of CO2e. We
continue to procure HVO fuel as an alternative to diesel where it is commercially viable for our sites.
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Standards Board
Land use and ecological impacts
Code/SASB criteria
Our approach
IF-HB-160a.1
Number of (1) lots
and (2) homes
delivered on
redevelopment sites
In the year to 30 June 2023, we added 1,953 (2022: 1,475) brownfield land plots to our
land pipeline. This accounted for 48% (2022: 58%) of plots acquired in the year. The total
number of brownfield plots held at 30 June 2023 was 6,931 (40%) (2022: 6,262, 37%).
In the year to 30 June 2023, we had 858 (2022: 1,211) home sales on brownfield sites. This
accounted for 50% (2022: 61%) of our total annual completions.
Notes: We consider brownfield land to include sites upon previously developed land, below ground
disturbance (including mining or waste disposal) or land that contains contamination from previous use.
In the year to 30 June 2023, we acquired 1,346 plots in regions of serious water stress.
This accounted for 33% of plots acquired in the year (2022: 1,202 plots, 47%). The total
number of plots in areas of serious water stress at 30 June 2023 was 6,455, 37% of the
pipeline (2022: 6,433, 38%).
In the year to 30 June 2023, we had 625 (2022: 457) home sales in areas of serious water
stress. This accounted for 36% (2022: 23%) of our total annual completions.
To report the figures reported above, we use reports produced by the Environment
Agency (the “EA”) who present the classification of areas of water stress on a “Serious” or
“Not Serious” scale.
Notes: Serious water stress is defined as “the current household demand for water is a high proportion of the
current effective rainfall which is available to meet that demand; or, the future household demand for water is
likely to be a high proportion of the effective rainfall which is likely to be available to meet that demand”.
The water stress method takes a long-term view of the availability and demand for public water supply,
rather than a snapshot of shorter or peak periods. It accounts for future population growth, climate
change, environmental needs and increased resilience. It reflects and supports the commitments that water
companies have made to reduce leakage and water consumption.
We incurred no monetary losses in relation to environmental matters in the year.
Site selection
We operate a “gateway” procedure in our site acquisition process to ensure that each
site meets our hurdles at various stages throughout the purchase. At the earliest step,
gateway 1, a site will be reviewed at a high level to ensure that it meets our guiding core
principles and requirements; of particular importance at this stage is our objective to
bring forward development of affordable homes on mostly brownfield sites or sites in
areas of deprivation, in a manner which safely and sustainably returns sites back into
meaningful use, whilst simultaneously alleviating any environmental issues which may
have been left behind by previous landowners. On clearing this hurdle, further due
diligence is carried out by our in-house teams including the production of an appraisal
document, which carries a checklist to prompt consideration of all factors affecting
sustainable development including matters of contamination, noise, odour, impact on
ecology and biodiversity, proximity to transport links and local facilities.
IF-HB-160a.2
Number of (1)
lots and (2)
homes delivered
in regions with
High or Extremely
High Baseline
Water Stress
IF-HB-160a.3
Total amount of
monetary losses
as a result of
legal proceedings
associated with
environmental
regulations
IF-HB-160a.4
Discussion of
process to integrate
environmental
considerations into
site selection, site
design, and site
development and
construction
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Our approach
IF-HB-160a.4
Continued
Site design
We work with a panel of partner architects to ensure that our designs accord with
National and Local Planning Policy and Guidance, whilst providing a development where
our customers want to live and, which is sympathetic to existing constraints including
existing local infrastructure. Through the planning process we will procure the expertise
of third-party consultants in various technical disciplines including all aspects of
environmental assessment to ensure that any constraints are appropriately integrated into
our designs, or appropriate mitigation measures are identified in order to bring forward
appropriate and sustainable development.
When designing the layout for our sites we undertake an initial assessment of
development schemes using the generic Dwelling Emission Rates in order to improve
energy efficiency of each type through orientation and plotting. This assessment
considers landform, layout, building orientation, landscaping and other surrounding
features of each home. All of our homes have driveways for off-street parking and
outdoor garden space for customers to enjoy.
An ecology assessment is performed at the design stage, with our in-house ecologist
feeding into designs and making recommendations for areas to be retained, protected
and enhanced to integrate biodiversity into the development.
Site development and construction
Material selection is carefully considered during the construction of our homes as the
specification and quality of build materials can directly influence the projected CO2e
emissions. All of our properties are currently built with traditional cavity wall construction,
thermally-efficient light aggregate blocks and high-performance insulation within the
cavity.
We are working with our suppliers to identify low carbon alternatives to the traditional
construction materials in our commitment to reducing the embodied carbon emissions
of our homes. As we develop our long-term carbon reduction strategy we are reliant on
modern construction materials that can support our sustainable growth ambitions whilst
reducing our carbon footprint.
Where contractors are required to source materials for key building elements, we stipulate
that they use suppliers capable of demonstrating certification to high tier levels in the
Chain of Custody certification process and have been independently certified by the
BRE Framework Standard for Responsible Sourcing (BES 6001) or ISO 14001.
We engage with our supply chain using the tools from the Supply Chain Sustainability
School to raise awareness of environmental and climate-related issues and how we can
collectively achieve best practice.
We take waste management very seriously and the segregation of all waste materials is
paramount in reducing the amount of waste taken to landfill. This is managed by having
the following procedures in place:
• Target benchmarks for resource efficiency set in accordance with best practice.
• Procedures and commitments to minimise non-hazardous construction waste at
design stage.
• Procedures for minimising hazardous waste.
• Monitoring, measuring and reporting of hazardous and non-hazardous site waste
production according to the defined waste groups.
• Diversion of waste from landfill should adhere strictly to the principles of the waste
hierarchy of reduce; reuse; recycle; recover.
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Standards Board CONTINUED
Land use and ecological impacts
Code/SASB criteria
Our approach
IF-HB-160a.4
Continued
Our site operations report their fuel consumption by type of plant and machinery on a
monthly basis so we can identify and target any inefficiencies within our construction
activities. In response to capturing this data we have replaced our entire fleet of forklift
trucks with newer, more efficient models, which incorporate start-stop technology and
telematics reporting for further data capture.
We have also conducted trials on hybrid generators, which store excess power within
batteries that can be used once sufficient charge has been reached. This aims to eliminate
“waste” power and reduce our site fuel consumption.
We also have a number of initiatives ongoing in order to reduce the environmental impact
of our sites, with further details on pages 60 to 63.
Workforce health and safety
Code/SASB criteria
Our approach
IF-HB-320a.1
(1) Total recordable
incident rate
(“TRIR”); and (2)
fatality rate for (a)
direct employees
and (b) contract
employees
We measure health and safety performance using an Annual Injury Incidence Rate (“AIIR”)
metric. Our AIIR for reportable injuries per 100,000 employees and contractors was 303 in
2023 (2022: 55). The industry average for the house building sector was 239 (2022: 239)
(Source: Home Builders Federation).
In the year we reported six RIDDOR incidents (2022: One RIDDOR incident). There was a
decline in performance despite a number of actions taken in the year. Further details set
out on page 70.
There were no fatalities.
Notes: Reportable injuries are aligned to the UK’s Reporting of Injuries, Diseases and Dangerous Occurrences
Regulations (“RIDDOR”). The figure reported is the consolidated figure for all direct employees and
contractors.
Design for resource efficiency
Code/SASB criteria
Our approach
The Energy Performance Certificate (“EPC”) is the UK equivalent to the HERS Index.
Of our homes, 95.3% achieve an EPC rating of B or higher due to efficient design and
build characteristics in each of our standardised house types (2022: 96.8%).
WaterSense is not applicable in the UK.
All our homes are fitted with dual-flush toilets, low-flow taps and showers and water
meters. They are designed to achieve an internal water use of less than 110 litres per
person per day; the specification for sanitary ware and fittings to be used throughout the
homes has been modified to suit this requirement.
This is 12% lower than the maximum allowance specified by building regulations, saving
both natural resources and our customers money on their water bills. From July 2023,
we will replace our existing shower specification with an enhanced product generating
savings of 10 litres per person per day.
We continue to collaborate with our supply chain to identify innovative products that
reduce the water consumption of our homes.
IF-HB-410a.1
(1) Number of
homes that obtained
a certified HERS®
Index Score and (2)
average score
IF-HB-410a.2
Percentage of
installed water
fixtures certified
to WaterSense®
specifications
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Our approach
IF-HB-410a.3
Number of homes
delivered certified
to a third-party
multi-attribute green
building standard
IF-HB-410a.4
Description of risks
and opportunities
related to
incorporating
resource efficiency
into home design,
and how benefits are
communicated to
customers
All of our homes are subject to UK building regulations, which include standards for
energy and water efficiency as detailed in criteria IF-HB-410a.1 and IF-HB-410a.2.
There are no widely-adopted green building standards that outline specification or
sustainability credentials of homes in the UK.
The historic Code for Sustainable Homes was withdrawn by the government with the view
that these requirements would be embedded into the latest building regulations.
Throughout the design stage of our homes, we apply a “fabric first” approach to energy
efficiency by bringing together a house type range and specification designed to reduce
the consumption of energy by the homeowner. An energy consultant is appointed
on every site to provide site and plot-specific energy ratings. Testing regimes and
certification is issued to assist in the control of the quality of construction, which in turn
reduces the carbon emissions of each home by ensuring we build a thermally-efficient,
well-insulated building with low heat losses.
In order to further improve on building regulation compliance, the following are also
incorporated into the design of our homes:
• energy-efficient boiler or air source heat pump with efficient cylinder (thermal store);
•
time and temperature zone control for boiler systems;
• air permeability rating of five or better; and
• natural/positive input ventilation.
Reviews are carried out on a bi-annual basis to monitor forthcoming changes to building
regulations and consider optional extras that can be offered to customers in line with
trends and expectations. These often lead to updates in specification and design, allowing
improvements to be made where practicable. Any proposed changes are carefully
considered as we balance the impact of changes with the need to keep our homes
affordable, which is fundamental to our sustainable business strategy.
As part of our shift to ASHP, we have also changed other gas appliances such as ovens
and hobs to fully electrify our homes. This transition to a fully electrified home ensures
that our homes are net-zero ready. During the year, we sold our first homes powered
using the ASHP. We have engaged with customers and external consultants to complete
trials on the in-use performance of the heating system to ensure it works efficiently and
effectively in our homes.
Smart meters are provided as standard where available, so that our customers can easily
keep track of their energy usage and efficiencies.
We use sustainable materials where possible, such as introducing concrete bricks to our
build material specification. Concrete bricks have significantly lower embodied carbon
emissions compared to a traditional kiln-fired clay brick allowing us to reduce our scope 3
emissions. More details can be found on page 60.
These benefits are communicated to customers as part of the handover process, in
our new home handbooks and our Gleeson first-time buyer podcast. This explains to
customers what to expect when they become homeowners, how to get the most out
of their new home and minimise their running costs. During the year, we tailored our
customer welcome box to include a bug hotel, wildflower seeds and a booklet guiding our
customers on attracting nature into their garden.
We are installing electric vehicle charging points in our homes on some of our sites to
understand the associated infrastructure requirements in advance of “Part S” building
regulations being implemented.
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Standards Board CONTINUED
Community impacts of new developments
Code/SASB criteria
Our approach
IF-HB-410b.1
Description of how
proximity and access
to infrastructure,
services, and
economic centers
affect site selection
and development
decisions
We always consider matters such as access and proximity to existing infrastructure and
services, as well as economic and employment centres when selecting our sites. We aim
to bring forward developments which are in close proximity to existing services, with
good access to services and facilities. This often comes hand-in-hand with our objective
to develop brownfield sites, in areas of deprivation which often have a high provision of
surrounding rental properties, as these target site typologies are already well served.
Where access to facilities is more limited, we work with consultants and the local authority
to identify mitigation measures that might be taken to improve services and access.
Often this will form part of a Transport Assessment and Travel Plan which might identify
improvements to local public transport infrastructure to improve the sustainability of the
site, or ways in which other sustainable (non-car) transport methods can be promoted.
Notes: The UK Government’s National Planning Policy Framework (“NPPF”) also requires consideration of the
opportunities presented by existing or planned investment in infrastructure.
IF-HB-410b.2
Number of (1) lots
and (2) homes
delivered on
infill sites
IF-HB-410b.3
(1) Number of homes
delivered in compact
developments and
(2) average density
At 30 June 2023, 88% of our developments were infill sites (2022: 91%).
In the year to 30 June 2023, we completed the sale of 1,556 (2022: 1,900) homes on infill
sites representing 90% (2022: 95%) of total homes sold.
Notes: Infill sites are sites served by existing infrastructure such as roads, power lines, sewerage and water,
and other necessary facilities.
We consider all of our sites to be cluster developments, which meet the definition of a
“compact development”. As a result, we delivered 1,723 homes on such developments in
the year to 30 June 2023 (2022: 2,000 homes).
Gleeson Homes typically builds low-density developments delivering on average 100–150
homes per site. The average density of our developments is 14 homes per net acre with
some developments having a density as low as 11 homes per net acre.
Notes: A cluster development is defined as a development that “produces very attractive and marketable
communities and makes it easier for developers to preserve environmentally sensitive lands such as wetlands
and forests by allowing lots to be grouped on certain portions of a site, rather than spread uniformly across a
site, so that other areas of the site may remain undisturbed as open space”.
Climate change adaptation
Code/SASB criteria
Our approach
IF-HB-420a.1
Number of lots
located in 100-year
flood zones
In the year to 30 June 2023, we acquired 640 plots in regions within flood zone 3. This
accounted for 16% of plots acquired in the year (2022: 625 plots acquired, 25% of plots
acquired).
The total number of pipeline plots within areas of flood zone 3 at 30 June 2023 was 2,499
(14%) (2022: 2,158 pipeline plots, 13% of total pipeline).
In the year to 30 June 2023, we had 182 home sales within areas of flood zone 3. This
accounted for 11% of our total annual completions (2022: 222 home sales, 11% of total
completions).
Notes: As per the Environment Agency, flood zone definitions are set out below:
• Flood Zone 1 – land assessed as having a less than 1 in 1,000 annual probability of river or sea flooding
(<0.1%)
• Flood Zone 2 – land assessed as having between a 1 in 100 and 1 in 1,000 annual probability of river
flooding (1–0.1%), or between a 1 in 200 and 1 in 1,000 annual probability of sea flooding (0.5–0.1%) in
any year
• Flood Zone 3 – land assessed as having a 1 in 100 or greater annual probability of river flooding (>1%), or
a 1 in 200 or greater annual probability of flooding from the sea (>0.5%) in any year
These flood zones refer to the probability of river and sea flooding, ignoring the presence of defences.
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MJ Gleeson plc Annual Report & Accounts 2023 Code/SASB criteria
Our approach
IF-HB-420a.2
Description of
climate change risk
exposure analysis,
degree of systematic
portfolio exposure,
and strategies for
mitigating risks
Climate risk has been identified as a principal external risk for the Group as set out
on page 41. The Group risk register is formally reviewed by the Audit Committee at
the majority of its scheduled meetings, including any changes to risk ratings and any
mitigations.
The Group has identified climate risk as having a medium level of residual risk. This is
assessed based on the physical aspects of climate change and the impact on our business
strategy as well as the transition risks associated with climate-related advancements such
as emerging technologies, government policy and regulation.
A sustainability risk register is maintained to identify the key risks associated with our
sustainability themes “Communities, Environment and People” and managed by the
Group Sustainability Manager. The risk register review is a standing item on the agenda of
the Sustainability Committee to ensure focus is applied to developing mitigating actions
of these risks.
Climate-related risks are identified and reported to the Committee and considered for
further analysis, which forms part of our TCFD reporting.
Further analysis of the climate risks we have identified are reported within our disclosures
in accordance to TCFD on pages 80 to 83.
Activity metrics
Code/SASB criteria
Our approach
IF-HB-000.A
Number of
controlled lots
IF-HB-000.B
Number of homes
delivered
At 30 June 2023, our owned land pipeline stood at 7,674 plots (2022: 8,478 plots).
In the year to 30 June 2023, we completed 1,723 homes (2022: 2,000 completions).
Notes: Completions mean all legally completed sales to customers during the year.
IF-HB-000.C
Number of active selling
communities
In the year to 30 June 2023, we were actively selling from an average of 68 sales sites
(2022: 63 active sales sites).
Notes: Active sales sites are sites which are actively selling homes and typically average 25 home sales
per year.
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MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Section 172 Statement
Tom and Gemma,
Tees Valley
The Board is pleased to provide a statement that
supports s172(1) of the Companies Act 2006
(the “Act”). Under the Act a director of a
company must act in the way they consider,
in good faith, would most likely promote the
success of the company for the benefit of its
members as a whole, and in doing so, have
regard, among other matters, to:
a. the likely consequences of any decision in the
long term;
b. the interests of the company’s employees;
c. the need to foster the company’s business
relationships with suppliers, customers
and others;
d. the impact of the company’s operations on
the community and the environment;
e. the desirability of the company maintaining
a reputation for high standards of business
conduct; and
f.
the need to act fairly between the members
of the company.
Board decision making
We firmly believe that to make informed decisions
and support the long-term sustainable success of the
business, the Board must consider all stakeholders
relevant to a matter. We also understand that our
stakeholders’ interests and priorities continue to change
and therefore effective communication is critical to
ensure that the business is “doing the right thing” and is
aligned to stakeholder values.
The Board undertakes significant levels of engagement
with relevant stakeholders so that full consideration
is given to how such decisions will impact on our key
stakeholders.
Our key stakeholders include:
• Shareholders
• Employees
• Customers
• Suppliers and subcontractors
• Banks
• Local authorities
• Government and regulators
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MJ Gleeson plc Annual Report & Accounts 2023 Key examples of stakeholder engagement enhancing strategic decision making and promoting the success of the
Group are set out in the tables below.
Decision
Chair
Succession
Undertaking a
restructure of
the Gleeson
Homes
business
Signing the
Department for
Levelling Up,
Housing and
Communities’
self-remediation
terms
Entering into
an agreement
for the sale
of 288 homes
to a private
investment
company
Investing
in talent
development
Discussion topics with,
and feedback from, stakeholders
Action taken by the Board
as a result of stakeholder feedback
Directors engaged with major shareholders and
advisers when considering the appointment of
James Thomson to Chairman, following Dermot
Gleeson’s decision to step down. Feedback from
shareholders was positive despite the transition
from Chief Executive Officer to Chairman being
contrary to the UK Corporate Governance
Code 2018.
The Board resolved to appoint James Thomson
as Chairman, effective from 1 January 2023,
following Dermot Gleeson’s decision to
step down.
Directors engaged with the Group’s employees
on a regular basis during the restructuring
process, including holding regular update
meetings, appointing employee representatives
and detailed communication throughout
the process.
The Board resolved to initiate a restructure of
the Gleeson Homes operating business, which
involved the redundancy of 26 colleagues. The
Board did not take this decision lightly, but it was
necessary in response to market conditions.
Directors engaged with government
departments, the HBF, shareholders and insurers
when considering the impact of signing the
self-remediation terms, which commits
developers to remediating mid-rise and high-rise
buildings with life-critical fire safety defects.
The Board considered the impact of the self-
remediation terms on stakeholders, and the
Group’s responsibility to leaseholders occupying
those buildings which the Group played a part
in developing, and signed the agreement on
13 March 2023.
Directors considered the implications
of this strategic decision on current and
future customers as well as employees and
shareholders, and considered key input from
legal and financial advisers given both the size
and nature of the transaction.
The Board resolved to enter into the agreement,
which supports the number of homes sold in
2023 and 2024. This was undertaken to boost
trading, which was severely impacted by
challenging economic conditions, interest rate
rises and the fall-out from the mini-budget in
September 2022.
Directors recognise the value of developing
talent within the business to support succession
planning and champion high-performance.
Through engagement with the workforce, they
identified a need to grow talent organically, and
develop future business leaders.
The Board supported the launch of the Gleeson
Leadership Development Programme. The
Board also supported the introduction of a
Commercial Academy.
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MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Section 172 Statement
CONTINUED
Key examples as to how the Board has regard for the s172 factors can be found in the table below:
Factor considered
Long-term
consequences
of any
decisions
How this factor has been
considered in the year
Actions taken by
the Board as a result
• The Group undertakes future planning up
• Extensive analysis and forecasts were
to seven years in critical areas and develops
a strategy, which will enable it to deliver its
long-term objectives.
• The Group invests in information technology
and cyber security, which will ensure it is able
to meet new technological demands and
protect the business against cyber incidents.
• The Group considers succession planning
from Board level down the business.
reviewed to aid the Board in setting the
Group’s strategy.
• The Gleeson Homes business was
restructured to rebuild regional management
teams with the best talent.
•
Invested in new systems, which will improve
the customer journey, increase productivity,
streamline processes and mitigate the risk of
cyber incidents.
• The Gleeson Leadership Development
Programme was introduced to support
succession planning.
Interests of our
employees
• The Group consulted on the redundancy
• The redundancy process was concluded
process.
during the year.
• The Group arranges an independent annual
• Responded to the action points arising from
employee engagement survey called
Your Voice.
• The Group conducts an annual pay and
benefits benchmarking exercise.
• Directors carry out regular site and
office visits and undertake roadshows to
communicate with all employees, including
interactive question and answer sessions.
• An open-door culture is reinforced.
the Your Voice surveys.
• Made investment in recruitment, training
and development including the Gleeson
Leadership Programme.
• Supported lower-paid colleagues through
enhanced pay and benefits in the cost-of-
living crisis.
• Moved our Share Incentive Plan onto an
online platform so that employees can
actively manage their shareholding within the
business.
•
Introduced a new personal development
structure involving enhanced career
discussions.
Interests of
our suppliers,
customers and
others
• Focusing on our customers and prioritising
• Became an early signatory to the New
the customer journey.
Homes Quality Code.
• The Group conducts supplier and
• Accelerated payment runs and made
subcontractor roadshows.
• The Group holds open discussions with our
supply chain about productivity, quality and
health and safety.
• Customer feedback is obtained through
surveys conducted by a third party.
• Target to be a five-star builder across all
divisions.
improvements to our purchase-to-pay
process.
• Signed-up to the government’s First Homes
scheme.
• Set ambitious targets for people,
environment and communities as part
of our sustainability goals. This included
actions for improving customer satisfaction
and restoring our five-star customer
recommendation score.
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MJ Gleeson plc Annual Report & Accounts 2023 Factor considered
Impact on our
community and
environment
How this factor has been
considered in the year
Actions taken by
the Board as a result
• Tracking progress against sustainability
• Developed new sustainability policies.
targets set in the year.
• Preparing the business for Part L regulatory
changes.
• Striving to reduce the Group’s impact on the
environment.
• Organising Gleeson’s inaugural charity gala.
• Set ambitious sustainability targets for
the short and medium term, including the
reduction of carbon emissions.
• Committed to setting Science Based Targets
for both near-term and long-term carbon
emissions.
• Commenced the installation of air-source
heat pumps and EV charging points in new
homes.
• Delegated Sustainability targets to senior
management and linked to Executive
bonuses.
Maintaining a
reputation for
high standards
of business
conduct
• The Group ensures adherence to the highest
standards of conduct.
• Our employees are paid at least the
Real Living Wage and we require our
subcontractors to do the same.
• The Group achieved accreditation from the
Fair Tax Foundation for paying its fair share
of taxes, for the third year running.
• Zero tolerance on violations of human rights,
slavery, bullying and harassment.
• Responsibility for overseeing compliance is
delegated to senior management.
• Compulsory compliance training modules
undertaken across the business, including
Whistleblowing, Bullying and Harassment,
Modern Slavery and Anti-Bribery and
Corruption.
• Established a new Human Rights policy for
the Group.
• Due diligence checks are completed on
our supply chain to ensure they uphold our
standards.
• Regular reporting on governance and
compliance matters to the Audit Committee.
Need to act
fairly between
members of
the Company
• The Company has one class of shares in issue
so all shareholders benefit from the same
rights as set out in the Company’s Articles of
Association.
• Engaged major shareholders in preparing
the current Remuneration Policy that was set
in 2023.
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MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Non-financial and
Sustainability Information Statement
The following table summarises our approach to internal and external stakeholder engagement to comply with the
Companies Act 2006 requirements regarding non-financial reporting:
Statement
Ways we engage
Read more
Employees
We are committed to ensuring
that all our colleagues and
stakeholders are treated fairly
and equitably. We have a
culture that values passion,
collaboration and respect.
• Employee policies on diversity, recruitment, equality
• Page 101
and all significant life events
• Anti-Harassment and Bullying Policy, Health and Safety
• www.mjgleesonplc.com
Policy, Equal Opportunities Policy
• Approach to employee relations and the involvement of
• Page 129
our Workforce Representative
• Health and safety reporting and improving the safety
and welfare of colleagues and visitors to our sites and
offices
• Pages 70 and 75
• Commitment to employing local people, training and
developing all our colleagues, especially apprentices,
raising awareness about mental health and promoting
women in construction
• Pages 52 to 53
• Gender pay gap reporting
• Pages 56 and 130; and
• www.mjgleesonplc.com
Anti-bribery and
corruption
We are committed to the
highest standards of ethics,
honesty and integrity and
expect the same from all
parties we engage with.
• Whistleblowing Policy and monitoring of malpractice
• Page 122; and
reporting
• www.mjgleesonplc.com
• Approach to anti-bribery and corruption
• Page 122
• Anti-Bribery Policy, Anti-Money Laundering Policy,
• www.mjgleesonplc.com
Corporate Criminal Offence Policy
• Reporting of registers of gifts and hospitality given or
received by Directors and employees of the Group
• Page 123
• Human Rights Policy, Anti-Slavery and Human
• Page 123; and
Trafficking Policy
• www.mjgleesonplc.com
• Payment terms and performance in relation to payment
• gov.uk; and
practices
• www.mjgleesonplc.com
• Accredited by the Real Living Wage Foundation,
• Page 56
paying employees the real Living Wage or higher and
expecting our subcontractors to do the same
• Data Protection Policy
• www.mjgleesonplc.com
Human rights and
social matters
We are committed to
upholding human rights across
our business and with all our
stakeholders. Our employee
policies cover all aspects
of human rights and our
grievance and fair treatment
at work policies ensure anyone
connected with our business
can speak up about concerns
without fear of retribution.
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MJ Gleeson plc Annual Report & Accounts 2023 Statement
Ways we engage
Read more
• Monitoring and reporting of carbon emissions (scope 1,
• Pages 64 to 65
2 and 3) related to our homes
• Target set to reduce scope 1, 2 and 3 carbon emissions
• Page 60
• Focus on more efficient and more sustainable materials
• Pages 60 to 61
• Sustainable Procurement Policy, Timber Sourcing
• www.mjgleesonplc.com
Policy Climate and Environmental Policy, Waste Policy,
Packaging Policy
•
Investment in the communities, schools and areas in
which we operate
• Pages 50 to 51
• Biodiversity Policy
• Page 66
• Our Business Model
• Pages 14 to 15
• Principal risks affecting the Group and mitigating
• Pages 37 to 41
actions undertaken
• Sustainability and operational key performance
• Page 70
indicators
• Our Business Strategy
• Risk Management
• Pages 16 to 17
• Pages 36 to 41
• Task Force on Climate-related Financial Disclosures
• Pages 76 to 85
statement
• Sustainability Committee Report
• Pages 124 to 127
Environmental matters
and community
We are committed to creating
more sustainable ways of
undertaking our operations
to conserve energy, reduce
waste and minimise our impact
on the environment. We also
invest in the communities, local
areas and the supply chain
around our development sites.
Other information
Additional non-financial
information required under the
Companies Act.
Climate and
sustainability
We are committed to
monitoring our climate-related
risks and opportunities. Our
Sustainability Committee
identifies, assesses and
manages climate-related risks
and opportunities, and the key
risks are reflected in the Group
risk register. Our approach to
climate and sustainability is set
out in our TCFD statement.
Strategic Report approval statement
The Strategic Report, contained in pages 01 to 97 has been approved by the Board of Directors and is signed
on its behalf by:
Graham Prothero
Chief Executive Officer
13 September 2023
97
MJ Gleeson plc Annual Report & Accounts 2023Strategic ReportCorporate GovernanceFinancial StatementsOther Information Allison, The Rowans,
Workington, Cumbria
98
MJ Gleeson plc Annual Report & Accounts 2023
Corporate Governance
Chairman’s Introduction
Board of Directors
Corporate Governance Report
Nomination Committee Report
Audit Committee Report
Sustainability Committee Report
Remuneration Committee Report
Implementation of Remuneration Policy
Annual Report on Remuneration
Directors’ Report
Statement of Directors’ Responsibilities
100
104
106
112
116
124
128
131
134
148
152
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MJ Gleeson plc Annual Report & Accounts 2023
99
Chairman’s Introduction
James Thomson
Chairman
The last year has seen
significant challenges, both
economic and political.
Inflation and interest rates
have put pressure on
customers and build costs.
Planning policy, regulation
and planning devolution
is causing planning to
become more complex,
costly and lengthy. Despite
the headwinds and the
reductions in volume,
Gleeson continues to be
resilient, and I am very
grateful to our colleagues
who have delivered results
despite this.”
I am pleased to present the Governance Report
for the year ended 30 June 2023.
This financial year has been set against the backdrop of
wider economic, political, social and industry pressures,
which have brought their own unique set of challenges.
I would like to take this opportunity to thank all of our
colleagues for their hard work in helping the Group
achieve a resilient result in such challenging times.
I would also like to take this opportunity to thank my
predecessor, Dermot Gleeson, for his unparalleled
stewardship of the Board over the last 28 years as
Chairman and an incredible 47 years on the Board
of Gleeson. It is an honour to be appointed as his
successor, and I am proud to have received the support
of the Group’s major shareholders in becoming
Chairman after serving as Chief Executive Officer.
With the changed market conditions, it is as important
as ever that the culture and values that run through the
business should be maintained – not least our focus
on delivering low-cost, quality homes, where they are
needed for those that need them the most. The Board is
committed to supporting the Executive to manage and
operate the business in a way that supports Gleeson’s
long-term sustainable success.
100
MJ Gleeson plc Annual Report & Accounts 2023 The Board is also immensely proud of the Group’s
commitment to resolving environmental, social and
governance matters, and its dedication to sustainability
is prevalent in all of its operations. We are proud to have
given our commitment to set Science Based Targets,
which demonstrates our clear intention to deliver direct
climate action through the decarbonisation of our
operations, supply chain and our homes in use. How we
put sustainability into practice is described on pages 42
to 75.
Building responsibly and safety
The Board is committed to acting responsibly and, in
March 2023, we announced that we had signed the
Government’s self-remediation terms, committing the
Group to remediate qualifying buildings with life-
critical fire-safety defects. The Group was involved in
the development of 17 buildings over 11 metres, and
we are committed to working with the owners of
those buildings to investigate and remediate (where
necessary) in order to protect the lives of residents.
Culture and people
The Board continues to promote and implement Our
Vision, Mission and Values, which are described in
more detail on pages 3 and 44. The results of our latest
employee engagement survey, Your Voice, indicated that
employee engagement has, once again, remained in the
top quartile and overall satisfaction is very high. This
is particularly pleasing following a year in which many
roles in the business faced unprecedented challenges,
including the restructure of the Gleeson Homes business.
This year I am pleased that the Board was able to
partake in a number of site visits, as a collective and
individually. It was humbling to see the great work that is
being undertaken daily by our colleagues to support the
strategic growth of the business.
The Board is also supportive of the work that has been
undertaken to recognise and develop talent. The Gleeson
Leadership Development Programme is a fantastic
opportunity to nurture the talent that is inherent within
the business and build for the future.
Diversity
The Board promotes diversity. The proportion of
women on the Board is 43%, and the position of Senior
Independent Director is held by Fiona Goldsmith. The
current Board female representation satisfied two of the
three new diversity targets set by the Financial Conduct
Authority. The third target, to have at least one Board
member from an ethnic minority background, will form
part of the Board’s recruitment and succession planning
for future years.
The Board is also committed to ensuring that the Group
provides a diverse and inclusive working environment.
As at 30 June 2023, the proportion of women in
employment was 31%. The Board is supportive of a
number of initiatives which aim to improve diversity
across the Group.
Our commitment to engaging
with stakeholders
The Board embraces the ethos behind the requirements
of Section 172 of the Companies Act. Information on
how we engage with our stakeholders is set out in our
Section 172 Statement on pages 92 to 95.
Strategy
The Board held a strategy “away day” in May 2023 to
discuss strategic priorities for the short, medium and
long term against the current challenges faced in the
sector. This was the first time that the newly formed
Board had met to review business strategy together.
The day consisted of dynamic and engaging discussions
on many topic areas, including the homebuilding
landscape, and customer and partnership opportunities,
and I was pleased to see the unity of the Board in its
strategic thinking.
Code compliance
Implementation of the 2018 UK Corporate
Governance Code
During the period under review, the Company, as a
premium listed company, was subject to the 2018 edition
of the UK Corporate Governance Code (“the Code”)
issued by the Financial Reporting Council (“FRC”).
The Board and its Committees are responsible for
ensuring that, wherever possible, compliance with the
Code is achieved. This is demonstrated throughout this
Governance Report and, of particular note, are the Code
principles as set out on page 103. Where the Board has
not complied with provisions of the Code, these are set
out in the compliance statement on page 110 to 111.
James Thomson
Chairman
13 September 2023
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MJ Gleeson plc Annual Report & Accounts 2023Financial StatementsOther InformationStrategic ReportCorporate Governance Corporate Governance Framework
The Board
The Board is responsible to shareholders for the direction, management,
performance, and long-term success of the Group.
It sets the Group’s strategy and objectives and oversees and monitors internal
controls (in conjunction with the Audit Committee), risk management, principal
opportunities and risks, governance and viability of the Group.
All of the Committee
terms of reference
can be found on the
Company’s website at
www.mjgleesonplc.com
Board Committee
Nomination
Committee
Audit
Committee
Sustainability
Committee
James Thomson
Fiona Goldsmith
Elaine Bailey
Committee Chair
Committee Chair
Committee Chair
Remuneration
Committee
Nicola Bruce
Committee Chair
Key responsibilities
Key responsibilities
Key responsibilities
Key responsibilities
• Review the structure,
size and composition
of the Board and its
Committees.
• Monitor the integrity of
the financial statements
and reporting.
• Review significant
• Consider succession
accounting judgements.
plans for the
Board and senior
management.
•
Identify and
nominate candidates
for Board-level
positions.
• Keep under review
the Board diversity.
• Review the
independence of
Non-Executive
Directors.
• Monitor the
effectiveness of the
Group’s internal
controls, risk
management systems
and internal audit
function.
• Review the procedures
for detecting fraud,
preventing bribery and
ensuring appropriate
whistleblowing
procedures are in place.
• Determine appropriate
short, medium and
long-term sustainability
targets and monitor
effective performance
against these.
• Ensure that
remuneration policy
and practices align
to the Group’s long-
term sustainable
success.
• Ensure that the Group’s
sustainability policy
remains fit for purpose
and aligns with the
Group’s approach to
sustainability.
• Set the remuneration
of the Chairman,
Executive Directors,
Company Secretary
and senior
management.
• Advise the Audit
Committee on
sustainability risks.
• Make
recommendations
to the Board on
the design and
application of share
incentive schemes.
Read more on
pages 112 to 115
Read more on
pages 116 to 123
Read more on
pages 124 to 127
Read more on
pages 128 to 130
Executive Leadership Team
The Executive Leadership Team, led by the Chief Executive Officer, is responsible for the day-to-day execution
of business strategy, the management of the Group’s two core business units, management of HR matters
including people, culture, talent and development, and the oversight of legal and regulatory matters. They
discuss all important matters that are brought to the attention of the Board, or respective sub-committee of the
Board.
The Executive Leadership Team consists of the Executive Directors, the Chief Executive of Gleeson Homes, the
Managing Director of Gleeson Land, the Company Secretary and the HR Director.
102
MJ Gleeson plc Annual Report & Accounts 2023
Section of the Code
How we have applied the Code
Board leadership
and Company
purpose
See pages 104 to 105
The Group is led by an effective and entrepreneurial Board, which promotes
the long-term success of the Group and engages with its shareholders and
other stakeholders.
The Board has established the Group’s purpose and strategy and is satisfied that
these are aligned with the Group’s culture and values.
The Board has established and oversees an effective governance and
risk framework.
The Board promotes effective engagement with the workforce, with open
lines of communication where employees can raise matters of both concern
and opportunity.
Division of
responsibilities
The Chairman leads the Board, which includes an appropriate combination of
Executive Directors and Non-Executive Directors. Board relations are constructive
and Board members are able to demonstrate objective judgement.
See page 106
There is a clear division of responsibility between the leadership of the Board (the
Chairman of the Board) and the Executive leadership of the Group’s business
(the Chief Executive Officer and the Chief Financial Officer). The Non-Executive
Directors provide constructive challenge, strategic guidance and advice, and have
sufficient time to meet their Board responsibilities.
There are relevant policies and processes in place for the Board to receive timely
and clear information, and function effectively and efficiently.
Composition,
succession and
evaluation
Board appointments are subject to a formal, rigorous and transparent procedure,
based on objective criteria that promotes diversity. A comprehensive and tailored
induction programme is in place for new Directors joining the Board, led by the
Chairman, Company Secretary and Executive Directors.
See pages 112 to 115
The Nomination Committee oversees an effective succession plan, which takes into
consideration a desired combination of skills, experience, knowledge and diversity
of the Board. The Board is subject to an annual evaluation that considers Group
and individual Director performance.
Audit, risk and
internal control
The Board has established formal and transparent policies and procedures to
ensure the independence and effectiveness of internal and external audit functions,
and satisfies itself on the integrity of financial and narrative statements.
See pages 36 to 41
The Board presents a fair, balanced and understandable assessment of the Group’s
position and prospects.
The Board has established procedures to manage risk, oversee the internal control
framework and determine the nature and extent of the principal risks of the Group
to achieve its strategic objectives.
Remuneration
The Group has designed the remuneration policies and practices to support the
Group’s strategy and promote long-term sustainable success.
See pages 128 to 147
Executive remuneration is aligned to the Group’s purpose and values and is clearly
linked to the successful delivery of our sustainable strategy.
There is a formal and transparent procedure for developing the Executive
remuneration policy and determining Director and senior management
remuneration. The Remuneration Committee is able to exercise independent
judgement and discretion when authorising remuneration outcomes, taking into
account Group and individual performance.
103
MJ Gleeson plc Annual Report & Accounts 2023Financial StatementsOther InformationStrategic ReportCorporate Governance Board of Directors
James Thomson
MA (OXON), ACA
Graham Prothero
MA (Cantab), FCA
Stefan Allanson
ACMA, FCT
Fiona Goldsmith
FCA
Christopher Mills
Elaine Bailey
Nicola Bruce
MA (Oxon), FCMA
Leanne Johnson
LLB
Chairman
Chief Executive
Officer
Chief Financial
Officer
Non-Executive
Director, Senior
Independent
Director and
Workforce
Representative
Non-Executive
Director
(non-independent
as a significant
shareholder
representative)
Independent Non-
Executive Director
Independent Non-
Executive Director
Head of Legal and
Company Secretary
Committee membership
Committee membership
S
S
Appointment to the
Board
Appointment to the
Board
Committee membership
A C N R
Appointment to the
Board
Graham was appointed to
the Board in January 2023.
Stefan was appointed to
the Board in July 2015.
Fiona was appointed to
the Board in October 2019.
Background and
experience
Background and
experience
Background and
experience
Graham has extensive
industry experience and
was previously Chief
Operating Officer at
Vistry Group plc and Chief
Executive of Galliford Try
plc. Graham is a Fellow of
the Institute of Chartered
Accountants and was
previously a partner at
Ernst and Young LLP.
Key strengths
Housebuilding and
construction. Acquisitions
and mergers. Strategy
development. Business
growth. Risk management.
Business continuity.
Operations.
External appointments
Graham is currently the
Senior Independent
Director and Chair of
the Audit Committee of
Marshalls plc, and on the
Board of The Jigsaw Trust.
Stefan was previously
Deputy Chief Financial
Officer of Keepmoat
Homes. He qualified as
an accountant in 1994,
following which he held
senior finance roles at
Honda Motor Co Limited,
BTP plc, The Skills Market
Limited, The Vita Company
Limited and Tianhe
Chemicals.
Key strengths
Housebuilding and
construction. Public
limited companies.
Accounting and finance. IT.
Business continuity. Risk
management. Strategy
development. Commercial.
External appointments
Stefan is currently a Non-
Executive Director and
Chair of the Audit & Risk
Committee of Norcros plc.
Fiona previously held
Executive finance roles
at First Choice Holidays
plc and Land Securities
Group plc. Fiona was also
Non-Executive Director
at Walker Greenbank. She
qualified as an accountant
at KPMG.
Key strengths
Accounting, finance and
audit. Risk management.
Corporate governance.
Acquisitions and
mergers. Compliance
and regulation. Business
turnaround. Strategic
Development.
External appointments
Senior Independent
Director and Chair of
the Audit Committee of
Safestyle UK plc. Chair of
the Audit Committee of
Kcom Group Limited.
Committee membership
N C
Appointment to the
Board
James was appointed to
the Board in June 2019 as
Chief Executive Officer,
and in January 2023 as
Chairman.
Background and
experience
James was previously
Chief Executive of
Keepmoat Homes and
Group Finance Director
and Chief Operating
Officer of DTZ (now part
of Cushman & Wakefield).
He qualified as a Chartered
Accountant with
PricewaterhouseCoopers
and spent ten years in
investment banking.
Key strengths
Housebuilding and
construction. Public
limited companies.
Health and safety.
Strategy development.
Organisational and cultural
change. Acquisitions and
mergers.
External appointments
A local authority councillor
for the City of London,
Chair of the City of London
Police Authority Board and
a Non-Executive Board
member of the Serious
Fraud Office.
104
N/A
Board
Committee membership
Committee membership
Committee membership
S C A N R
R C A N
Appointment to the
Appointment to the
Appointment to the
Board
Board
Christopher was
Elaine was appointed to
appointed to the Board in
the Board in March 2021.
Nicola was appointed to
the Board in March 2023.
January 2009.
Background and
experience
Christopher is the
founder of Harwood
Capital Management
Background and
experience
Background and
experience
Elaine was previously
Nicola has extensive
MJ Gleeson plc.
Chief Executive Officer of
experience in strategy and
the Hyde Group housing
business development
association and held a
and has previously held
Group and, previously,
number of senior roles at
senior appointments in a
Chief Investment Officer
Serco. Elaine has extensive
range of private and listed
of J O Hambro Capital
Management Limited
with an extensive
experience in housing,
companies. Nicola is an
engineering, construction
experienced Remuneration
and government services.
Committee Chair including
background in investment
Elaine is a chartered
in the building materials
member of the Institution
and social housing sectors.
Appointed as Company
Secretary in March 2020,
Leanne is a qualified
solicitor and is Head of
Legal for the Company.
Leanne trained at Irwin
Mitchell and was Legal
Counsel for Keepmoat
Homes before joining
Leanne is also a graduate
Chartered Governance
Professional.
Key strengths
Housebuilding and
construction. Corporate
governance. Legal.
Regulatory and
compliance. IT.
management. Business
Business development.
development.
Commercial.
External appointments
External appointments
External appointments
Senior Independent
Director and Remuneration
of Structural Engineers.
Key strengths
Housebuilding and
construction. Strategy
Key strengths
Strategy development.
Business development.
Corporate governance.
development. Health and
Acquisitions and mergers.
safety. Risk management.
Public limited companies.
Non-Executive roles at
Residential Secure Income
Committee Chair of
Anchor Group. Non-
plc, McCarthy & Stone
(Shared Ownership)
Limited, Andium Homes
Limited, and Trustee for
The Greenslade Family
Foundation.
Executive Director and
Remuneration Committee
Chair of Stelrad Group
plc and Ibstock plc.
Non-Executive Director
at OFWAT.
management.
Key strengths
Public limited companies.
Accounting, finance
and audit. Acquisitions
and mergers. Strategy
development. Risk
Managing Director
of Harwood Capital
Management Group,
Chief Executive Officer
of North Atlantic Smaller
Companies Investment
Trust plc, and a Non-
Executive Director of
several publicly quoted
and private companies.
MJ Gleeson plc Annual Report & Accounts 2023 James Thomson
Graham Prothero
Stefan Allanson
Fiona Goldsmith
Christopher Mills
Elaine Bailey
MA (OXON), ACA
MA (Cantab), FCA
ACMA, FCT
FCA
Nicola Bruce
MA (Oxon), FCMA
Leanne Johnson
LLB
Chairman
Chief Executive
Chief Financial
Officer
Officer
Non-Executive
Director, Senior
Independent
Director and
Workforce
Representative
Non-Executive
Director
(non-independent
as a significant
shareholder
representative)
Independent Non-
Executive Director
Independent Non-
Executive Director
Head of Legal and
Company Secretary
Committee membership
Committee membership
Committee membership
Committee membership
Committee membership
A C N R
N/A
Committee membership
S C A N R
Committee membership
R C A N
Appointment to the
Board
Appointment to the
Board
Appointment to the
Board
Elaine was appointed to
the Board in March 2021.
Nicola was appointed to
the Board in March 2023.
Background and
experience
Background and
experience
Christopher was
appointed to the Board in
January 2009.
Background and
experience
Christopher is the
founder of Harwood
Capital Management
Group and, previously,
Chief Investment Officer
of J O Hambro Capital
Management Limited
with an extensive
background in investment
management.
Key strengths
Public limited companies.
Accounting, finance
and audit. Acquisitions
and mergers. Strategy
development. Risk
management. Business
development.
Elaine was previously
Chief Executive Officer of
the Hyde Group housing
association and held a
number of senior roles at
Serco. Elaine has extensive
experience in housing,
engineering, construction
and government services.
Elaine is a chartered
member of the Institution
of Structural Engineers.
Key strengths
Housebuilding and
construction. Strategy
development. Health and
safety. Risk management.
Business development.
Commercial.
External appointments
External appointments
Managing Director
of Harwood Capital
Management Group,
Chief Executive Officer
of North Atlantic Smaller
Companies Investment
Trust plc, and a Non-
Executive Director of
several publicly quoted
and private companies.
Non-Executive roles at
Residential Secure Income
plc, McCarthy & Stone
(Shared Ownership)
Limited, Andium Homes
Limited, and Trustee for
The Greenslade Family
Foundation.
Nicola has extensive
experience in strategy and
business development
and has previously held
senior appointments in a
range of private and listed
companies. Nicola is an
experienced Remuneration
Committee Chair including
in the building materials
and social housing sectors.
Key strengths
Strategy development.
Business development.
Corporate governance.
Acquisitions and mergers.
Public limited companies.
External appointments
Senior Independent
Director and Remuneration
Committee Chair of
Anchor Group. Non-
Executive Director and
Remuneration Committee
Chair of Stelrad Group
plc and Ibstock plc.
Non-Executive Director
at OFWAT.
N C
Board
S
Board
S
Board
Appointment to the
Appointment to the
Appointment to the
Appointment to the
Board
James was appointed to
Graham was appointed to
Stefan was appointed to
Fiona was appointed to
the Board in June 2019 as
the Board in January 2023.
the Board in July 2015.
the Board in October 2019.
Chief Executive Officer,
and in January 2023 as
Chairman.
Background and
experience
James was previously
Chief Executive of
Keepmoat Homes and
Group Finance Director
and Chief Operating
Background and
experience
Graham has extensive
industry experience and
was previously Chief
Operating Officer at
Background and
experience
Stefan was previously
Deputy Chief Financial
Officer of Keepmoat
Homes. He qualified as
Background and
experience
Fiona previously held
Executive finance roles
at First Choice Holidays
plc and Land Securities
Vistry Group plc and Chief
an accountant in 1994,
Group plc. Fiona was also
Executive of Galliford Try
following which he held
Non-Executive Director
plc. Graham is a Fellow of
senior finance roles at
at Walker Greenbank. She
the Institute of Chartered
Honda Motor Co Limited,
qualified as an accountant
Officer of DTZ (now part
Accountants and was
BTP plc, The Skills Market
at KPMG.
of Cushman & Wakefield).
previously a partner at
Limited, The Vita Company
He qualified as a Chartered
Ernst and Young LLP.
Limited and Tianhe
Key strengths
Accounting, finance and
audit. Risk management.
Corporate governance.
Key strengths
Housebuilding and
Chemicals.
Key strengths
construction. Acquisitions
Housebuilding and
Acquisitions and
and mergers. Strategy
development. Business
construction. Public
limited companies.
mergers. Compliance
and regulation. Business
growth. Risk management.
Accounting and finance. IT.
turnaround. Strategic
Business continuity.
Business continuity. Risk
Development.
Operations.
External appointments
Graham is currently the
Senior Independent
Director and Chair of
management. Strategy
development. Commercial.
External appointments
External appointments
Senior Independent
Director and Chair of
Stefan is currently a Non-
the Audit Committee of
Executive Director and
Safestyle UK plc. Chair of
the Audit Committee of
Chair of the Audit & Risk
the Audit Committee of
Marshalls plc, and on the
Committee of Norcros plc.
Kcom Group Limited.
A local authority councillor
Board of The Jigsaw Trust.
Accountant with
PricewaterhouseCoopers
and spent ten years in
investment banking.
Key strengths
Housebuilding and
construction. Public
limited companies.
Health and safety.
Strategy development.
Organisational and cultural
change. Acquisitions and
mergers.
External appointments
for the City of London,
Chair of the City of London
Police Authority Board and
a Non-Executive Board
member of the Serious
Fraud Office.
Appointed as Company
Secretary in March 2020,
Leanne is a qualified
solicitor and is Head of
Legal for the Company.
Leanne trained at Irwin
Mitchell and was Legal
Counsel for Keepmoat
Homes before joining
MJ Gleeson plc.
Leanne is also a graduate
Chartered Governance
Professional.
Key strengths
Housebuilding and
construction. Corporate
governance. Legal.
Regulatory and
compliance. IT.
Key:
N Nomination Committee
A Audit Committee
S Sustainability Committee
R Remuneration Committee
C Committee Chair
105
MJ Gleeson plc Annual Report & Accounts 2023Financial StatementsOther InformationStrategic ReportCorporate Governance Corporate Governance Report
Division of responsibilities
There is a clear and effective division of responsibilities
between Board members. The Chairman is responsible
for the overall effectiveness of the Board and, in doing
so, promotes the highest standards of integrity and
corporate governance. The Chief Executive Officer
leads the business in delivering the Group’s overall
strategy and works closely with the Chairman and the
Chief Financial Officer. The Non-Executive Directors
provide constructive challenge, strategic guidance and
hold management to account. To ensure the Directors
maintain control over strategic, financial, operational
and compliance matters, the Board meets regularly
during the year and has, formally, adopted a schedule
of matters that are required to be brought to it
for decision.
Board balance and composition
The Board considers that it has a suitable balance of
skills, knowledge and experience in order to discharge
its duties effectively. This includes a combination of
backgrounds and experiences, which enable it to
function effectively and to have a dialogue that is both
constructive and challenging.
Board and Committee attendance
Board and Committee attendance at scheduled
meetings during the year is shown in the table on
page 108. Board packs, which include a formal agenda,
are circulated in advance of such meetings. The main
purpose of these meetings is to permit the Board
and Committees to receive regular reports on the
performance of the Group and address a wide range
of matters, including health and safety, operational
performance, risk management, governance, and
corporate strategy. The minutes of all meetings of the
Board, and of each of its Committees, are recorded
by the Company Secretary. As well as recording the
decisions taken, the minutes reflect any queries raised
by the Directors and record any unresolved concerns.
106
Matters reserved for the Board or
its Committees
Certain matters are reserved for the Board or its
Committees, including:
• To determine the Board’s structure and composition,
including Board appointments, removals and
succession planning.
• Agree the Group’s strategy and financial policy.
• Approve banking and financing arrangements.
• Approve the interim and annual financial statements.
• Agree and oversee risk management and internal
control policy.
• Agree major capital expenditure, material
investments or the acquisition or disposal of land.
• Entering into, and amending, pension arrangements.
• Approve contractual arrangements that fall outside
the authority delegated to Executive Directors.
• Approve dividend policy and annual dividend
payments.
• Pledging security over assets and providing Parent
Company guarantees.
In addition, the Board receives updates on sustainability,
governance, regulatory and legal matters to assist
the Board in maintaining compliance with legislative
requirements and best practice. The Board has
established the following Board Committees to assist
it in fulfilling its oversight responsibilities, providing
dedicated focus on particular areas:
Nomination Committee
Audit Committee
Sustainability Committee
Remuneration Committee
Page 112
Page 116
Page 124
Page 128
These Committees play an important governance
role through the work they carry out to fulfil the
responsibilities delegated by the Board.
Board independence
The Group recognises the importance of having a well-
functioning Board that can exercise objective judgement
and hold management to account. The Board comprises
a Chair, two Executive Directors and four Non-Executive
Directors. Their key roles and responsibilities are set
out on page 104. Of the Non-Executive Directors, three
are considered independent, meaning that the Board
satisfies the independence requirements of the Code.
The independence of the Non-Executive Directors is
kept under review and is assessed annually.
MJ Gleeson plc Annual Report & Accounts 2023 Board activities
Topic
Key activities in financial year ended 30 June 2023
Financial and risk
• Approved the Annual Report and Accounts and interim financial statements.
• Considered the Group’s long-term viability and approved the going concern
assessment.
• Reviewed monthly business updates and trading performance.
• Approved the budget and plan for financial year ending 30 June 2024 and the
medium-term targets for financial years ending 30 June 2025 to 30 June 2030.
• Approved the payment of a final dividend in November 2022 and interim dividend
in April 2023.
• Considered the impact of legislative changes to the Defective Premises Act, and
the financial implications of remedial works to buildings pursuant to the DLUHC’s
self-remediation terms.
• Considered the impact of the September 2022 mini-budget on the housing market
and approved a “defensive capital allocation plan” and company restructuring.
• Approved the Group’s tax strategy for financial year ended 2023.
• Approved Group insurance policies for financial year ended 2024.
Controls and
governance
• Appointed James Thomson as Chairman, Graham Prothero as Chief Executive
Officer and Nicola Bruce as Non-Executive Director, to the Board.
• Procured an external evaluation of the Group’s risk management maturity and
control environment.
• Reviewed and approved an updated Modern Slavery Statement.
• Reviewed cyber risk across the Group.
• Reviewed legal and regulatory updates.
Strategy
•
Monitored progress against the Group’s strategic priorities.
• Reviewed and approved the Group’s sustainability targets.
• Undertook a strategy “away-day” to review the business plans for Gleeson Homes
and Gleeson Land.
• Considered the financial risk to the business following the end of the Help to Buy
scheme in year ended 30 June 2023.
• Considered strengthening Gleeson Homes sales in response to a challenging
market by exploring partnership and private-rented sector opportunities.
People and
employee
engagement
• Approved the restructuring plan that was undertaken and completed during
the year.
• Undertook regular workforce engagement via the Executive Directors and senior
management.
• Attended employee roadshows, hosted by the Executive Directors, giving
employees an insight into the Group’s performance and strategy.
• Workforce Representative engaged with the HR Director
• Board members undertook site and office visits to engage with our colleagues.
• The Workforce Representative received any whistleblowing reports.
107
MJ Gleeson plc Annual Report & Accounts 2023Financial StatementsOther InformationStrategic ReportCorporate Governance Corporate Governance Report
CONTINUED
Topic
Key activities in financial year ended 30 June 2023
Sustainability
• Approved the commitment to setting targets validated by the Science Based
Targets initiative.
• Published new sustainability-led Group policies.
• Reviewed progress against sustainability targets and actions undertaken.
• Reviewed the Group’s sustainable business strategy.
•
Implemented new targets that are linked to Executive remuneration.
Shareholder
engagement
• Engaged with major shareholders before the appointment of James Thomson to
Chairman.
• Presented full and half-year results to investors and analysts.
• Reviewed monthly investor relations reports and annual shareholder body reports.
• Released regular business updates via the RNS.
•
Invited and responded to questions received ahead of the 2022 AGM.
Scheduled:
James Thomson1
Graham Prothero2
Stefan Allanson
Fiona Goldsmith
Christopher Mills
Elaine Bailey
Nicola Bruce3
Former Directors:
Dermot Gleeson4
Board
6
6
3/3
6
6
6
6
1/1
3/3
Audit Remuneration Nomination Sustainability
3
4
3
1
n/a
n/a
n/a
4
n/a
4
1/1
n/a
n/a
n/a
n/a
3
n/a
3
1/1
n/a
1
n/a
n/a
1
n/a
1
1
n/a
1/1
2/2
3
n/a
n/a
3
n/a
n/a
1 James Thomson attended three Board meetings as Chief Executive Officer (1 July 2022–31 December 2023) and three Board meetings
as Chairman (1 January 2023–30 June 2023). During his tenure as Chief Executive Officer, he attended one meeting of the Sustainability
Committee.
2 Graham Prothero was appointed on 1 January 2023.
3 Nicola Bruce was appointed on 24 March 2023.
4 Dermot Gleeson resigned from the Board on 31 December 2022.
108
MJ Gleeson plc Annual Report & Accounts 2023 Key responsibilities
Chairman
• Ensuring the effective running of the Board.
• Promoting the highest standards of integrity and corporate governance throughout
the Group.
• Chairing Board meetings and setting agendas.
• Ensuring that the Board as a whole plays a full and constructive part in the
development and determination of the Group’s strategy and overall commercial
objectives.
• Ensuring that the Board receives accurate, timely and clear information on:
a. the Group’s performance;
b. the issues, challenges and opportunities facing the Group; and
c. matters reserved to it for decision.
• Ensuring compliance with the Board’s approved procedures, including the schedule of
matters reserved to the Board and each Committee’s terms of reference.
• Engaging with the Board outside of formal meetings on a group or individual basis, as
required.
•
Initiating change and succession planning in Board appointments to build and maintain
a highly effective Board.
• Ensuring effective communication between the Group and its shareholders and
ensuring that members of the Board develop an understanding of the views of the
major stakeholders.
• Ensuring that there is a properly constructed induction programme for new Directors.
• Ensuring that the performance of the Board as a whole, its Committees, and individual
Directors is formally, and rigorously, evaluated at least once a year.
Chief
Executive
Officer
• Diligently performing such duties and exercising such powers as may, from time to
time, be assigned by the Board for the successful running of the Group’s business.
• Proposing and developing the Group’s strategy and overall commercial objectives in
close consultation with the Chairman and the Board.
• Maintaining relationships with major stakeholders.
• Ensuring effective dialogue with the Chairman on the important and strategic issues
facing the Group.
• Ensuring that the Executive Directors give appropriate priority to providing reports to
the Board, which contain accurate, timely and clear information.
• Ensuring that the Executive Directors comply with the Board’s approved procedures,
including the schedule of matters reserved to the Board and each Committee’s terms
of reference, and providing input on appropriate changes to the same.
• Keeping the Board alerted to forthcoming complex, contentious or sensitive issues
affecting the Group.
• Providing information and advice on succession planning, to the Chairman, the
Nomination Committee, and to members of the Board, particularly in respect of
Executive Directors and senior management.
• Setting the Group’s culture and values from the top.
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CONTINUED
Key responsibilities
Chief Financial
Officer
• Devising and implementing the Group’s financial strategy and policies.
• Managing the finance, tax, IT, legal, internal audit, and treasury functions.
• Monitoring the Group’s investor relations activities.
• Developing budgets and financial plans.
• Principal owner of the Group’s risk register.
• Managing the Group’s insurance strategy and policies.
• Managing the Group’s relationship with the external auditors.
• Devising and implementing the Group’s sustainability strategy, policies and actions.
Senior
Independent
Director
• Chairing Board and Nomination Committee meetings in the absence of the Chairman.
• Leading the annual evaluation of the Chairman’s performance.
• Leading the succession planning process for the Chairman.
• Acting as a sounding board for the Chairman on Board and Nomination Committee
matters.
• Being available to shareholders, or other stakeholders, if they have concerns about the
Chairman, Chief Executive Officer or Chief Financial Officer, and to intervene in any
circumstances arising from such concerns.
•
Intervening in, and leading on, settlement discussions relating to any disagreements
between the Chief Executive Officer and the Chairman.
• Calling a meeting of the Non-Executive Directors if, in their reasonable opinion, it is
necessary in relation to any of the matters above or otherwise.
Non-Executive
Directors
• Effectively scrutinising and holding to account the performance of the Executive
Directors.
• Evaluating and appraising the performance of the Executive Directors and senior
management against agreed targets, and agreeing remuneration in line with the
remuneration policy.
• Monitoring the financial information, risk management and control processes of the
Group to make sure that they are sufficiently robust.
• Ensuring a rigorous process for the appointment and removal of Executive Directors.
Company
Secretary
• Supporting the Chairman and Chief Executive Officer in fulfilling their duties, especially
in respect of Board agendas, induction, training and the evaluation of Board and
Committee effectiveness.
• Available to all Directors for advice and support.
• Keeping the Board regularly updated on governance matters and best practice.
• Ensuring Group policies and procedures are maintained and updated on a regular basis.
• Attending and maintaining a record of the matters discussed and approved at Board
and Committee meetings.
Code compliance statement
The Company has complied with all principles of the Code for the year ended 30 June 2023 and the vast majority
of its provisions. However, as in previous years, there are some instances where the Company has chosen to take
advantage of the flexibility offered with the “comply or explain” principle, when applying certain provisions.
The Code recognises that good governance can be achieved by other means and the Board believes the approach
taken is the most appropriate for the Group and its shareholders, whilst remaining consistent with the spirit of
the Code.
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MJ Gleeson plc Annual Report & Accounts 2023 Provision 9
The Chairman of the Board, James Thomson, has
previously been Chief Executive Officer, and, therefore,
is not considered to have been independent on
appointment. The Senior Independent Director undertook
a series of consultation meetings with major shareholders
before James’ appointment and gained overwhelming
support. The Board’s reasons for appointing James to the
role of Chairman were published on 12 October 2022 and
made available via the Regulatory News Service and on
the Company’s website. Further information on James’
appointment is set out on page 113.
Risk management and internal control
The Directors acknowledge their responsibility for the
Group’s risk management procedures and systems of
internal controls and for reviewing their effectiveness.
Further details on the Group’s risk management
procedures and systems of internal controls and
how the Board and Audit Committee review their
effectiveness are included in the Audit Committee
Report on pages 116 to 123.
It should be recognised that all such systems and
procedures are designed to manage, rather than
eliminate, the risk of failure to achieve business objectives,
and can only provide reasonable, rather than absolute,
assurance against material misstatement or loss. Risk
management and internal control within the Group’s
operating functions is delegated to senior management,
with the Board retaining ultimate responsibility.
The Group operates internal controls to ensure the
Group’s financial statements are reconciled to the
underlying financial ledgers. A review is completed by
management to ensure that the financial performance
and position of the Group are appropriately reflected.
During the year being reported, and in making this
statement, the Board carried out a robust assessment
of the principal risks and uncertainties facing the
Group, including those that would threaten the
Group’s business model, future performance, solvency
or liquidity. The Board is of the view that there are
adequate processes for identifying, evaluating and
managing the Group’s principal risks. These processes
take the form of a formal risk management policy
supported by financial and management controls,
which are operated Group-wide and are subject to both
internal review by the Chief Financial Officer and Group
Internal Auditor, and external review as part of the
statutory audit carried out by the external auditors.
Viability statement
In accordance with the Code, the Directors have
assessed the viability of the Company and the Group
over a period longer than the 12 months required by
the going concern principle. This takes account of the
current position and circumstances of the Group, and
the potential impact of its principal risks.
The Directors conducted their assessment for a period
of three years to 30 June 2026, which is in line with
the Group’s financial budget approved by the Board in
July 2023. It is also aligned to the operational period
of a number of Gleeson Homes’ developments. This
has enabled a meaningful assessment of viability to
be undertaken, utilising detailed Board-approved
financial budgets that incorporate individual site cash
flow forecasts.
The Directors have considered sensitivities from the
impact of a severe, but plausible, downturn in the
housing and land markets. For Gleeson Homes, this
included the impact of a downturn in both volumes
and selling prices. For Gleeson Land, the Directors have
considered the impact of delays to the completion of
land sales combined with a reduction in land values.
Further details can be found in note 1 of the financial
statements on page 169.
Additionally, the Directors have considered the measures
that would need to be taken to mitigate the impact of
these sensitivities, including the ability of the Group
to curtail expenditure on new land purchases, new site
starts, reduce overheads and cut discretionary spend.
This would include reducing future dividend payments
in response to a severe, but plausible, downturn.
A core principle of the Group is to maintain a cautious
approach to debt funding. Following the refinancing
undertaken this year, the Group has a committed bank
facility of £135m available until October 2026, with two
further one-year extension options provided by two
banks. The facility was undrawn at the year end and
the Group had a cash balance of £5.2m (30 June 2022:
£33.8m net cash).
Based on these facilities, the Group continues to have
a high level of liquidity including under the severe, but
plausible, scenario, to continue in operation, meet its
liabilities as they fall due and remain in compliance with
its financial covenants over the assessed period. The
mitigating actions required do not disrupt the Group’s
ability to grow over the long term.
Based on the results of this assessment, the Directors
have a reasonable expectation that the Company and
the Group will be able to continue in operation and
meet its liabilities as they fall due over the three-year
viability period.
Assessing the Group’s prospects beyond the assessed
period, the Directors consider that the demand for
affordable, quality new homes will remain strong
fundamentally due to market under-supply. The Group
maintains a well-capitalised balance sheet and operates
a sustainable business model that will continue to
deliver long-term growth.
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Key achievements for 2023
• Appointment of James Thomson as Chairman effective from
1 January 2023.
• Appointment of Nicola Bruce as Independent Non-Executive
Director, and Chair of the Remuneration Committee, effective
from 24 March 2023.
Areas of focus for 2024
• Embark upon a Board Evaluation undertaken by a
third-party assessor.
• Consider diversity initiatives for both gender and ethnicity.
Dear shareholder,
I am pleased to present the Nomination Committee
Report for the year ended 30 June 2023.
Operation of the Committee
The Committee comprises the Chairman and three Non-
Executive Directors of the Board. The Chief Executive
Officer, Chief Financial Officer and Company Secretary
attend meetings at the invitation of the Committee.
During the year, the Committee, formally, met once and
had three unscheduled meetings to consider a range
of matters.
Activities during the year
The Committee’s main activity during the year was to
find a suitable successor for the previous Chairman,
Dermot Gleeson, who played a pivotal role on the Board
for 47 years.
Other areas of focus included:
• The appointment of Nicola Bruce as Independent
Non-Executive Director, and Chair of the
Remuneration Committee effective from 24
March 2023.
• A review of the composition of the Board and the
range of skills and experience.
• Board and management succession planning.
• A review of Board diversity and independence.
• An annual review of the Committee’s terms of
reference.
• A review of the internal annual Board evaluation
questionnaire and findings.
• A review of the proposals for the Board’s first
externally-assessed evaluation.
The Committee’s priority
last year was the search
for a new Independent
Non-Executive Director to
restore the Board’s balance
of independence and bring
new skills and experiences
to the Board. The focus
for the year ahead will be
to embark on the Board’s
first externally-assessed
evaluation.”
James Thomson
Chair of the Nomination Committee
Committee members
James Thomson (Chair)
Fiona Goldsmith
Elaine Bailey
Nicola Bruce
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MJ Gleeson plc Annual Report & Accounts 2023 Diversity and inclusion
We believe that the composition and quality of
the Board should be in keeping with the size and
geographical spread of the Group, its sector, culture and
status as a listed company. We understand that a diverse
Board with a range of views enhances decision making,
which is beneficial to the Group’s long-term success and
in the interests of the Company’s stakeholders.
The Board Diversity policy was approved in 2017 and will
be reviewed by the Board in 2024. It sets the framework
for Board appointments to ensure that candidates are
assessed by objective criteria which do not place any
candidate at a disadvantage. We believe that it is in
the interests of our shareholders that appointments to
the Board and our senior management team are made
on the basis of merit. Therefore, the Board does not
currently set specific targets for boardroom diversity,
however, we are cognisant of the new Listing Rules (LR
9.8.6R(9) and LR 14.3.33R(1)) recently introduced.
The Board’s gender and ethnic diversity data is set out
on page 114. Following the appointment of Nicola Bruce,
the number of women on the Board increased from 33%
to 43%. This is in line with the FCA’s guidance. Since the
appointment of Fiona Goldsmith to the role of Senior
Independent Director on 24 March 2022, at least one of
the senior board positions is also occupied by a woman.
The Board is aware that it does not currently meet the
FCA’s guidance to have one member of the Board from
a minority ethnic background. When appointing Nicola
Bruce as a Non-Executive Director, the Board examined
options to appoint a Director from an ethnic minority
background in so far as that individual would bring the
right skills and experience to the Board.
The Board, ultimately, appointed on merit and was
satisfied with the outcome. However, as part of its
review of the Board Diversity Policy, the Board will
keep under review its composition and will ensure that
all future appointments are made on merit against
the specification prepared for each appointment.
In doing so, the Board will seek to meet the FCA’s
diversity targets
Board appointments
Chairman: The Committee, led by Fiona Goldsmith as
Senior Independent Director, undertook an in-depth and
wide-ranging search process to appoint a new Chairman
to replace Dermot Gleeson who, after 47 years on the
Board, including 28 years as Chairman, decided to step
down from 31 December 2022.
On 11 October 2022, the Committee was pleased to
recommend to the Board that James Thomson be
appointed as Chairman, effective from 1 January 2023.
James was previously Chief Executive Officer and
stepped down on 31 December 2022, after 3.5 years
in office.
The Committee surveyed the market with a leading
search agent and agreed that James was the most
suitable candidate to add stability and continuity to the
business at a time when the new Chief Executive Officer,
Graham Prothero, was taking office. The Committee
consulted with the Company’s five major shareholders
(representing a 33.9% stake of share capital at the
time) prior to the appointment of James Thomson
as Chairman.
The Board was satisfied that James was the right
candidate to succeed Dermot Gleeson, and would
act as a supportive non-executive Chairman to
Graham Prothero.
Independent Non-Executive Director: The Committee
reported, in 2022, that it would commence the search
for a further Independent Non-Executive Director to
restore the balance of the Board’s independence. The
Committee commenced the search process in October
2022 and recommended a shortlist of candidates to be
interviewed by the Board in January 2023.
Nicola Bruce was, subsequently, appointed to the Board
on 24 March 2023 due to her extensive experience
in business strategy and as a Non-Executive and
Remuneration Committee Chair.
Committee changes
Nicola Bruce was appointed as Chair of the
Remuneration Committee, succeeding Elaine Bailey as
interim, and as a member of the Audit and Nomination
Committees, effective from 24 March 2023.
Re-election of Directors
The Company’s Articles of Association (the “Articles”)
provide that, at each AGM, at least one-third of the
Directors shall retire from office and shall be eligible
for reappointment. However, the Board has determined
that all Directors will be subject to annual re-election
by shareholders and will do so at the next AGM.
Graham Prothero and Stefan Allanson each hold service
contracts that may be terminated by the Company with
a notice period of one year.
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CONTINUED
Gender diversity
Number
of Board
members
Percentage
of the
Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
Executive
management1
Percentage
of Executive
management1
Men
Women
Not specified/prefer not to say
4
3
–
57%
43%
0%
3
1
–
5
1
–
83%
17%
0%
1 The Company is treating the Executive Leadership Team as ‘executive management’ for the purpose of this data set. The Executive
Leadership Team consists of the Executive Directors, the Chief Executive of Gleeson Homes, Managing Director of Gleeson Land, Company
Secretary and HR Director.
Ethnic background
Number
of Board
members
Percentage
of the
Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
Executive
management1
Percentage
of Executive
management1
White British or other white
Minority ethnic background
Not specified/prefer not to say
7
–
–
100%
0%
0%
4
–
–
6
–
–
100%
0%
0%
1 The Company is treating the Executive Leadership Team as ‘Executive management’ for the purpose of this data set. The Executive
Leadership Team consists of the Executive Directors, the Chief Executive of Gleeson Homes, Managing Director of Gleeson Land, Company
Secretary and HR Director.
The Group also implements an equality and diversity policy in respect of its wider workforce, with further details set
out on page 149.
Nomination Committee priorities in 2023
Priorities
Work carried out
Outcome
Priority 1
Appointment of a new
Chairman effective from
1 January 2023
The Committee undertook a rigorous and
formal recruitment process for the role,
assisted by external advisers. The Senior
Independent Director also consulted with
major shareholders and the incoming
Chief Executive Officer once a preferred
candidate had been selected.
On 12 October 2022, the Committee
recommended to the Board that James
Thomson be appointed as the Chairman,
effective from 1 January 2023.
Priority 2
Appointment of a
new Independent
Non-Executive Director
The Committee undertook a rigorous and
formal recruitment process assisted by
external advisers.
On 24 March 2023, the Committee
recommended that Nicola Bruce be
appointed to the Board as Non-Executive
Director.
Board appointment process
1.
Information obtained through Board evaluation and
succession planning is used to identify gaps in skills,
experience, independence and knowledge.
2. The recruitment process is commenced, assisted by
external consultants who help determine the desired
objective criteria. A longlist of candidates is prepared
for the Nomination Committee to review, and, from
this, a shortlist of candidates is selected for interview.
3. Interviews with the Chairman, Non-Executive
Directors, Executive Directors and Company
Secretary (all held separately).
4. Nomination Committee recommend a candidate to
the Board for approval.
Succession planning
We recognise that succession planning is an important
contributor to the Group’s long-term sustainable
success. For the Board, this is monitored regularly
and is considered in detail during the Board’s annual
performance evaluation.
Board inductions
Following successful appointment to the Board,
new Directors receive a comprehensive and tailored
induction programme. The induction programme
facilitates their understanding of the Group and the key
drivers of business performance and is an opportunity
for the Directors to meet key members of the senior
management team and undertake site visits.
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MJ Gleeson plc Annual Report & Accounts 2023 How this supports a diverse pipeline
The process undertaken during Stage 1 identifies a
recruitment need by looking at the tenure of each
individual Director, the background, knowledge and skills
of each Director, and Board composition as a whole.
This process enables the Nomination Committee to
implement plans for the short, medium and long term,
which support a diverse pipeline.
External advisers
The Nomination Committee uses external advisers,
where required, to assist with the recruitment process.
During the year, the Group used the services of a search
agent with no connections to the Group or any of
the Directors.
Board performance evaluation
Process
Last year, we announced that we would be undertaking
an external evaluation of the Board’s performance for
the financial year ended 2023. Having reflected on the
significant Board changes since 31 December 2022, the
Board agreed that it would be appropriate to pause this
process until the Board had time to become established
in their roles. The Board is pleased to announce that it
has appointed Bvalco to undertake an external Board
evaluation, with the process commencing in September
2023. This process will be completed by the end of the
calendar year, and the outcomes and actions noted in
the Annual Report and Accounts for 2024.
Because the Board understands the importance
of having a rigorous and regular evaluation, during
the year, the Board undertook a review of its own
effectiveness, and that of its Committees. As in previous
years, this was based on the completion of a detailed
questionnaire and individual discussions between the
Chairman and the Directors.
Fiona Goldsmith, in her role as Senior Independent
Director, conducted an evaluation of the Chairman’s
performance in conjunction with the other
Non-Executive Directors and with input from the
Executive Directors.
Outcome
The outcome and conclusions reached from these
evaluations were discussed by the Board and it was
concluded that the Board, its Committees and the
Chairman continued to perform effectively. Findings and
actions arisings are considered in more detail below.
Findings from the 2023 Board evaluation
Actions planned
The Non-Executive Directors feel
empowered to challenge the Executive
Directors and the Board as a whole.
Support the independence and effectiveness of the Non-Executive
Directors to ensure that the open and transparent conversations
with the Chairman and Executive Directors continue.
The Board has a good level of understanding
of Group strategy.
Following the success of the Board’s strategy day in 2023,
schedule more deep dive sessions on key topics and a full strategy
day in the year ending 30 June 2024.
The Executive is visible and has a high level
of engagement with the workforce. However,
there could be wider workforce engagement
by the Non-Executive Directors, including
more regular face-to-face meetings.
The Board should consider ways to enhance workforce
engagement. This includes a plan to move the location of some
Board meetings to regional offices.
The quality of Board and Committee papers
could be more consistent and concise.
The Executive and Company Secretary should consider the
structure and content of Board and Committee papers to enhance
efficiencies.
Committee chairs will work with the Executive on the timing and
content for meetings in the financial year ending 30 June 2024.
Due to the number of key role changes
at Board and senior management level
in the year, some of the standard Board
and Committee procedures have been
protracted.
James Thomson
Chair of the Nomination Committee
13 September 2023
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Key achievements for 2023
• Close monitoring of commercial processes, cost management, profit
and margin recognition.
• Close monitoring of sales performance for Gleeson Homes following
the slowdown in market conditions.
• Close monitoring of the developing regulatory framework in respect
of enhanced financial controls.
• Assessing the effectiveness of the Group’s internal controls.
• Assessing emerging and principal risks, including those related to
climate change and environmental, social and governance matters.
• Obtaining assurance over areas of risk and complexity, including
taxes, carrying value of assets and IT security.
• Close monitoring of the Group’s systems and controls for complying
with regulation and detecting and preventing wrongdoings.
Areas of focus for 2024
• Preparing for the proposed revisions to the 2018 Corporate
Governance Code, dealing with audit and governance reforms.
• Developing an enhanced and resilient risk appetite framework.
• Reviewing and developing the Group internal audit plan.
• Continued focus on commercial processes, cost management, profit
and margin recognition.
• Ongoing assurance over the financial controls, tax compliance and
risk management processes of the Group.
• Resilience and security of key business systems against cyber risks
and other threats.
The Audit Committee
continues to play a vital role
in supporting the Board
in ensuring that effective
systems of risk management
and control are maintained
at all times and are being
developed in line with the
pace of change of the Group
and external regulations.”
Fiona Goldsmith
Chair of the Audit Committee
Committee members
Fiona Goldsmith (Chair)
Elaine Bailey
Nicola Bruce
116
Dear shareholder,
I am pleased to introduce the Audit Committee Report
for the financial year ended 30 June 2023, which has
been another busy year for the Committee.
Operation of the Committee
All members of the Committee are independent
Non-Executive Directors. The Board is satisfied that
the membership of the Audit Committee meets the
requirement for relevant and recent financial experience.
The biographies and professional qualifications of the
members are shown on pages 104 to 105.
The Chief Executive Officer, Chief Financial Officer,
Company Secretary and other senior management
are invited to attend meetings, along with the Group’s
internal and external auditors, when required. The
Committee also met with the Group’s internal and
external auditors without the presence of Executive
Directors or senior management on several occasions
throughout the year.
Committee meetings
The Committee is required, in accordance with its terms
of reference, to meet at least three times a year. During
the year, the Committee formally met four times to
discharge its duties.
MJ Gleeson plc Annual Report & Accounts 2023 Activities during the year
During the year, the Committee dealt with the following
key matters:
• Monitoring Legacy matters including those impacted
by the Building Safety Act 2022.
• Assessing compliance with Group policies and
• Approving the Group’s interim and annual
financial reporting.
• Reviewing principal accounting matters
and judgements.
• Reviewing new reporting disclosures.
• Monitoring profit recognition and cost management.
whistleblowing.
• Assessing external auditor effectiveness,
independence and fees.
• Monitoring risk and assurance matters including:
–
–
reviewing the Group risk register;
internal audit plans and reports;
• Obtaining assurance over work in progress and
– external audit strategy and findings;
carrying value.
• Reviewing going concern and viability.
• Reviewing Group credit risk.
• Reviewing tax matters and approving the Group’s
tax strategy.
Audit Committee activities in 2023
Activity
Work carried out
–
–
–
–
internal control effectiveness;
reviewing external reporting on the Group’s risk
management maturity;
IT and cyber security reports; and
regulatory compliance, including with the UK
Market Abuse Regulation, GDPR, bribery and
corruption and corporate criminal offences.
Financial
reporting – fair,
balanced and
understandable
Risk
management
The Committee reviewed the integrity of this Annual Report
and Accounts and formal announcements made during the
year relating to the Group’s financial performance.
At the request of the Board, the Committee considered
whether the 2023 Annual Report and Accounts taken as
a whole is fair, balanced and understandable and whether
it provides the necessary information for shareholders to
assess the Company’s performance, business model and
strategy. In doing so, the Committee received comments
from management and the external auditors at its meeting
in September 2023. It also reviewed the annual compliance
procedures and management returns that support the
Group’s financial reporting governance framework and risk
management process for the year ended 30 June 2023.
The Committee reviewed the Group’s principal and
emerging risks and mitigation strategies, with particular
discussion of prioritised risks and risk movements. The
Committee also reviewed an external report on the Group’s
risk management maturity and the recommendations made.
A summary of principal Group risks and any changes during
the year is set out in Risk Management on pages 36 to 41.
The Committee fully understands the risks faced by the
Group and how these are being addressed. The process
ensures that the Committee meets its obligation to
oversee the effectiveness of risk management, and allows
it to confirm to the Board that appropriate controls and
mitigations are in place and operating effectively.
Outcome
The Committee was
satisfied that, taken as a
whole, the 2023 Annual
Report and Accounts
is fair, balanced and
understandable and
provides sufficient
information for
shareholders to assess
the Company’s and
Group’s performance,
business model and
strategy. The Committee
recommended as such
to the Board.
The Committee and the
Board fully understand
and manage the
balance of risks in the
business. The Committee
supports the Group in
moving to an enhanced
risk management
framework in readiness
for proposed changes
to the Corporate
Governance Code.
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CONTINUED
Activity
Work carried out
Internal controls
The Committee agreed a plan to review the Group’s internal
control environment, supported by external advisers,
in readiness for proposed changes to the Corporate
Governance Code. This includes the development of risk
and control matrices across all key business processes.
Profit
recognition
Throughout the year, the Committee reviewed the
processes, controls and assumptions for recognising profit
margin on development sites including three particular
areas: cost inflation, selling prices and contingencies. See
further details under “Financial reporting and significant
judgements” on page 174.
Outcome
The Committee
supported the Group in
approving a project plan
to assess controls and
implement improvement
opportunities for key
process areas.
The Committee satisfied
itself that the associated
processes and controls
have continued to
operate effectively
across the Group
and the assumptions
applied by management
in relation to profit
recognition remain
appropriate.
Work in progress
The Committee reviewed reports from the Group’s internal
auditor on the carrying value and recoverability of land
and work in progress on selected Gleeson Homes sites.
The Committee also received reports on the recoverability
and carrying value of work in progress in Gleeson
Land. See further details under “Financial reporting and
significant judgements”.
The Committee satisfied
itself that the carrying
value of land and work
in progress in both
Gleeson Homes and
Gleeson Land remains
appropriate.
Group taxes
Legacy matters
The Committee received regular updates on Group tax
matters. These cover all aspects of compliance, including
VAT, Corporation Tax, Residential Property Developers
Tax, Construction Industry Scheme and employment taxes
including off-payroll working arrangements. The Committee
oversaw the Group’s submission of an unqualified Senior
Accounting Officer certificate.
The Committee reviewed the Group’s Tax Strategy
statement for the year to 30 June 2023 and recommended
its approval to the Board. A copy of the Tax Strategy
statement can be found on the Company’s website
www.mjgleesonplc.com
The Committee received and reviewed reports on
claims associated with the Legacy businesses, being the
contracting and engineering businesses sold more than
ten years ago. This includes those buildings impacted
by the changes brought about by the enactment of
the Building Safety Act 2022 and the government’s
Self-Remediation Terms.
The Committee satisfied
itself that the processes
and controls associated
with Group taxes remain
robust.
The Committee remains
satisfied that the Group
is complying with its
obligations under the
Self-Remediation Terms,
and, in conjunction
with the Chief Financial
Officer, continues to
monitor the status
of claims and any
remaining liabilities.
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MJ Gleeson plc Annual Report & Accounts 2023 Activity
Work carried out
Cyber security
The Committee received two reports in the year on the
Group’s cyber risk management, including key risks and
mitigating actions.
Internal audit
The Committee set the internal audit plan, for the financial
year ended 30 June 2023, at its meeting in September
2022. As covered under “Internal audit”, the Committee
received and reviewed reports from the internal auditor
throughout the year on internal audits conducted across
the business.
Outcome
The Committee remains
satisfied that the
Group is managing
cyber security risk in
a proportionate and
effective manner.
The Committee remains
satisfied with the
effectiveness of the
internal audit function.
External audit
As covered under “External audit”, the Committee received
and reviewed the external auditors’ Group audit plan at its
meeting in February 2023. Following completion of the
audit of the Group, the external auditors presented their
findings to the Committee in September 2023.
The Committee remains
satisfied with the
effectiveness of the
external auditors and the
audit process.
Other activities
During the year, the Committee also reviewed reports on IT and systems, corporate disclosures and MAR, GDPR,
credit risk, Corporate Criminal Offence, anti-bribery, and malpractice monitoring.
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CONTINUED
Financial reporting and significant judgements
The significant financial reporting matters and areas of significant judgement considered by the Committee during
the year are those that present a risk of material misstatement to the Group’s financial statements, being:
Area
Work carried out
The allocation of inventories to cost of sales on the sale of
individual homes is dependent on estimates of total build
costs and future selling prices for each site as a whole. These
estimates, therefore, impact on the timing and amount of
profit margin recognised on sales of individual homes.
The Committee monitors the effectiveness of internal controls
exercised over the key processes employed by the Group in
site development activities and the forecasting of future costs,
revenue and profit.
The Committee receives regular reports regarding sales of
homes and the costs, and possible future costs, relating to
individual sites. The Committee reviewed the assumptions
applied by management, supporting the profit margin
recognised on the sale of individual homes, and concluded
that they remain appropriate.
The most significant asset carried by the Group is inventory,
which includes land and work in progress. The Group carries
inventories at the lower of cost and net realisable value, which
is dependent on estimates of total build or land promotion
costs and future selling prices. There is, therefore, a risk that
land and work in progress is held at a value in excess of the
lower of cost and net realisable value.
The Committee monitors the effectiveness of internal controls
exercised over the key processes employed by the Group in
site development activities and the forecasting of future costs,
revenue and profit.
The Committee also receives regular reports on the carrying
value of land and work in progress in Gleeson Homes and
Gleeson Land. The Committee reviewed these reports and
debated them with the internal auditor and with management.
The Committee reviewed, challenged and agreed the basis on
which the Group’s review and assessment of buildings over
11 metres, in which the Group played a part in developing,
was carried out. The Committee considered the assessment
of costs associated with life-critical fire-safety remediation
in respect of any such buildings and the findings from
independent experts. More details can be found in note 18 to
the financial statements.
Margin
recognition
Carrying
value of land
and work in
progress
Building
safety
120
Outcome
The Committee satisfied
itself that the associated
processes and controls
have continued to
operate, effectively,
across the Group
and the assumptions
applied by management
in relation to profit
margin recognition are
appropriate.
The Committee satisfied
itself that the carrying
value of land and work
in progress remains
appropriate.
The Committee satisfied
itself that the associated
processes and controls
have continued to
operate, effectively,
across the Group and the
assumptions applied by
management in relation
to profit recognition are
appropriate.
The Committee satisfied
itself that the processes
undertaken by the
Group in respect of the
identification, assessment
and estimation of
life-critical fire-safety
remediation costs were
robust and the provisions
recognised were
appropriate.
MJ Gleeson plc Annual Report & Accounts 2023 Area
Work carried out
Climate
change and
environmental
risk
The Committee reviewed the risk of climate change impacting
the Group as part of the risk register review during its regular
meetings.
Climate change has the potential to impact the Group through
restricted land availability, disrupted build programmes,
material and labour shortages and increased costs. This could
impact the carrying value of assets, including land held in
inventory, or require specific provisions to be made.
Carrying value
of investments
(Company
only)
The Committee reviewed the carrying value of the investment
in subsidiaries during the year.
Following a review of the carrying value of investments in the
Parent Company, the Company’s investment in the Legacy
businesses was written down by £3.8m in the Company only.
This has no impact on the consolidated Group.
Going concern
and viability
reporting
The Committee examined the financial forecasts for the Group
including the impact of a severe, but plausible, downturn
in the housing and land markets. These were examined by
the Committee in conjunction with its review of this Annual
Report and Accounts. The Committee satisfied itself and,
subsequently, the Board, that the going concern basis of
preparation continues to be appropriate in the context of the
Group’s banking and liquidity position. Further details can be
found in note 1 of the financial statements on page 169.
In accordance with the provisions of the Code, the Committee
considered the time period over which it could reasonably
assess the Group’s ability to continue to trade, taking into
account the Group’s financial budget period and operational
forecasts. It concluded that this should remain a three-year
period, as explained in the viability statement on page 111. The
Committee received detailed financial analysis based on the
Group’s latest budgets with a severe, but plausible, scenario
applied over the three-year period and determined that there
was a reasonable expectation that the Group will be able to
continue in operation, meet its liabilities as they fall due and
maintain compliance with its banking covenants.
Outcome
The Committee satisfied
itself that no provisions
or impairment of assets
have been recognised
in these financial
statements as a result
of climate change or
environmental risks
and that this remains
appropriate.
The Committee satisfied
itself that the carrying
value of investments held
in the Parent Company
remains appropriate at
the balance sheet date
with no other indicators
of impairment.
The Committee
satisfied itself that,
based on the financial
modelling undertaken,
the Company and
Group have adequate
resources to continue
in operation for the
foreseeable future and
operate in compliance
with their bank facilities.
The Committee
recommended
statements to this effect
to the Board to approve
for inclusion in this
Annual Report.
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Effectiveness of internal controls and
risk management systems
The Committee is responsible for reviewing and
monitoring the effectiveness of internal controls and
risk management systems on behalf of the Board.
The Group’s system of internal control includes the
following processes:
• The Board and management committees meet
regularly to monitor performance against key
performance indicators, which include cash
management and financial and operational measures.
A variety of financial and non-financial reports are
produced to facilitate this review process.
• The Board has established defined lines of authority
to ensure that significant decisions are taken at an
appropriate level.
• The Group employs individuals of appropriate calibre
and provides any training that is necessary to enable
them to perform their role effectively. Key objectives
and opportunities for improvement are identified
through annual performance and development
reviews.
• Each division has defined procedures and controls
to identify and minimise business, operational and
financial risks. These procedures include segregation
of duties, provision of regular performance
information and exception reports, approval
procedures for key transactions and the maintenance
of proper records. Compliance with these procedures
and controls is certified annually by management to
the Committee. The Group’s programme of insurance
covers the major risks to the Group’s assets and
business and is reviewed annually.
• Authorities are in place that require divisional
management to refer all significant decisions that
exceed prescribed limits to either the Executive
Directors or the Board for approval.
Regular reviews are undertaken in order to identify any
changes in procedure or controls that may be required
in the light of changing circumstances.
The effectiveness of the overall internal control
framework and risk management process is monitored
by both the Audit Committee and the Board. As part
of this, the Committee reviews the annual compliance
returns completed by each divisional management
team, which confirm that key financial controls have
been in operation throughout the year and that an
effective control environment has been maintained.
Each divisional management team also completes
an annual risk assessment. The results of this are
reviewed by the Committee and risks identified are
incorporated into the Group risk register. The Risk
Management section on pages 36 to 41 sets out details
of the principal risks that the business faces and how it
manages these risks.
The Committee has satisfied itself that an appropriate
system of internal controls and risk management
processes have been maintained throughout the year to
safeguard shareholder interests as well as the Group’s
assets in accordance with the requirements of the Code.
Whistleblowing arrangements
The Group has in place a formal whistleblowing policy,
an internal whistleblowing mailbox monitored by
the Head of Legal and Company Secretary, and an
independent external whistleblowing helpline. These
enable all employees of the Group to, confidentially,
report any malpractice or matters of concern they
have regarding the actions of employees, management
or Directors, and any unlawful behaviour or breaches
of the Group’s policies or practices, without fear
of recrimination. The policy includes a process for
proportionate and independent investigation of any
reports received. This may involve an informal review,
an internal inquiry, or a more formal investigation.
Whenever possible, feedback is given to the
whistleblower on the outcome of any investigation.
The Head of Legal and Company Secretary maintains a
register of reports received through both internal and
external processes, which is reviewed by the Committee
at least every six months.
Employee awareness of the Group’s whistleblowing
policy is maintained through the induction process,
newsletters, posters and reminders that “if you see
something, say something”. Employees also undertake
a mandatory online course, which is designed to raise
awareness of reportable issues or incidents upon joining,
which is repeated every 12 months.
Anti-bribery and corruption policy
The Group values its long-standing reputation for ethical
behaviour and integrity. Conducting its business with
the highest ethical standards and a zero-tolerance
approach to all forms of corruption is central to these
values, the Group’s image and reputation. The Group
policy sets out the standards expected of all employees
in relation to anti-bribery and corruption and the
Board has overall responsibility for ensuring this policy
complies with the Group’s legal and ethical obligations
and that everyone in the organisation complies with it.
This policy is also relevant for third parties who supply
goods or perform services for, or on behalf of, the
Group. We require those parties to adhere to this policy
or have, in place, equivalent policies and procedures to
combat bribery and corruption.
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MJ Gleeson plc Annual Report & Accounts 2023 Employees also undertake a mandatory online course,
which is designed to raise awareness of bribery and
corruption offences and penalties for both individuals
and the Group.
The Committee reviews a report on the registers of
gifts and hospitality given or received by Directors and
employees of the Group at least every six months. No
incidents of bribery or corruption involving the Group or
its employees were reported to the Committee during
the year.
Human rights and modern slavery
In accordance with section 54(1) of the Modern Slavery
Act 2015, the Board reviews, approves and publishes the
Group’s Modern Slavery Statement on an annual basis.
Modern slavery risk is overseen by the modern slavery
focus group, led by the Chief Financial officer and Head
of Legal and Company Secretary. Risks are regularly
assessed, with the Group’s highest-risk areas, being
its supply chain, regularly audited. To ensure there is a
full understanding of modern slavery risk throughout
the business, all employees receive online training on
spotting the signs of slavery within the workplace and
are actively encouraged to raise concerns through the
whistleblowing lines.
Internal audit
The Committee is responsible for reviewing and
approving the annual internal audit plan. This continues
to cover a broad scope of activities across the Group
focused on areas of risk and management judgement.
During the year, the Committee received eight reports
from the internal auditor on the findings of internal
audits conducted throughout the business, together
with proposed recommendations to rectify any issues
identified. The findings of these reports were actively
debated by the Committee with the internal auditor and
with management. The Committee monitored the follow
up on actions identified.
The Committee reviewed the effectiveness of the internal
audit function and concluded that it has operated
effectively and provided a suitable level of independent
scrutiny across the operations of the Group.
External audit
PricewaterhouseCoopers LLP were first appointed
as auditors to the Group in December 2016 following
a competitive audit tender, and were most recently
reappointed following approval by shareholders at the
AGM on 18 November 2022.
In February 2023, the auditors presented their
Group audit plan to the Committee, identifying
their assessment of key risks in the Group’s financial
reporting. For the 2023 financial year, as in prior years,
the primary risks identified were in relation to the
carrying value of land and work in progress in Gleeson
Homes, work in progress in Gleeson Land and the
building safety provision. Consistent with the prior
year, the carrying value of investments in subsidiaries
was also identified as a primary risk in relation to the
Company only.
The Committee formulates and oversees the Group’s
policy on monitoring external auditors’ objectivity and
independence in relation to non-audit services and is
responsible for the approval of all audit and non-audit
fees for services provided by the Company’s auditors.
As a result of the EU Audit Reforms Regulations (as
amended 11 June 2016), and the FRC’s revised ethical
standard (as revised December 2019), the auditors are
excluded from undertaking a range of work on behalf
of the Group to ensure that the nature of non-audit
services performed, or fee income earned relative to
the audit fees, do not compromise, and are not seen to
compromise, the auditors’ independence, objectivity
or integrity.
For the year to 30 June 2023, there were no non-
audit fees paid to the external auditors. Details of
the audit fees incurred are disclosed in note 4 to the
financial statements.
The Committee assesses the performance and
effectiveness of the external auditors on an annual
basis. When making their assessment, the Committee
considers feedback from the Chief Financial Officer
and other senior finance management, the auditors’
fulfilment of the agreed audit plan, and the auditors’
objectivity and independence during the process. The
Committee also holds private meetings with the auditors
on an annual basis. Matters discussed include the
auditors’ assessment of business risks and management
activity thereon, the transparency and openness of
interactions with management and confirmation that
there has been no restriction in scope placed on them
by management.
The Committee concluded that the audit process had
been conducted robustly and PricewaterhouseCoopers
LLP’s performance, as auditors to the Company, was
considered to be satisfactory. As the auditors have
indicated their willingness to continue in office, a
resolution that they be reappointed will be proposed at
the next AGM of the Company on 16 November 2023.
Under current regulations, the Company is not due to
re-tender its audit until 2026; however, the Committee
will continue to monitor the performance of the external
auditors during this time and make recommendations
accordingly.
Fiona Goldsmith
Chair of the Audit Committee
13 September 2023
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Key achievements for 2023
• Recommending to the Board to commit to setting a medium and
long-term carbon reduction target validated by the Science Based
Targets initiative (“SBTi”).
• Review of progress against 2023 sustainability targets and setting
of 2024 targets.
• Approval of the Group biodiversity strategy.
• Review of Group reporting and disclosures, in particular climate risk
scenario modelling for TCFD.
• Review of Group environmental risks and mitigating actions.
Areas of focus for 2024
• Monitoring progress against 2024 sustainability targets.
• Developing the Group’s long-term carbon emissions reduction pathway.
• Developing the Group’s water strategy.
• Enhancing the Group’s climate-related reporting disclosures and
communications.
We are proud to announce
that we have committed to
setting medium and long-
term carbon reduction
targets that will be
validated by the Science
Based Targets initiative.”
Committee members
Elaine Bailey (Chair)
James Thomson
(resigned on 31/12/2022)
Graham Prothero
(appointed on 01/01/2023)
Stefan Allanson
124
Dear shareholder,
I am pleased to introduce our Sustainability Committee
Report for the financial year ended 30 June 2023,
during which we have continued to make steady
progress on our sustainability objectives.
Operation of the Committee
The Committee is comprised of the Chair, the Chief
Executive Officer and the Chief Financial Officer. Other
members of the Board, senior management or external
advisers are invited to attend for all, or part of, any
meeting, as and when required.
Committee meetings
The Committee is required, in accordance with its terms
of reference, to meet at least three times per year.
During the year, the Committee met formally on three
occasions.
Activities during the year
During the year, the Committee dealt with the following
key matters:
• Reviewing progress against 2023 sustainability
targets and actions.
• Agreeing new sustainability targets and actions
for 2024.
• Reviewing the Group’s environmental risk register.
• Agreeing further steps for the Group in respect of:
–
the Group’s ongoing initiatives to reduce scope 1
and 2 carbon emissions;
– scope 3 emissions data and a projected carbon
reduction pathway;
MJ Gleeson plc Annual Report & Accounts 2023 – committing to set long-term carbon reduction
targets covering scopes 1, 2 and 3 aligned with
the SBTi;
– enhancing employee engagement;
– enhancing the customer experience;
–
reviewing the Group’s new biodiversity strategy;
– agreeing a range of climate-related scenarios and
reviewing their impact on the Group; and
–
reviewing climate-related disclosures in
accordance with the Task Force on Climate-
related Financial Disclosures (“TCFD”) and the
Sustainability Accounting Standards Board
(“SASB”).
Our aims
We are all aware of the potential impacts of climate
change and the risks, not only to our business, but also
to the communities in which we build. We are already
seeing some of the potential effects in the form of more
extreme weather events, flooding and water stress. This
is coupled with other environmental issues including
phosphates and nitrates, and nutrient neutrality, which
are impacting the sector. Our aim is to continue to adapt
and respond to these risks in our approach to land use,
materials, technology, design and processes in order
to manage and mitigate our impact and the effects on
our business.
In addition, climate change poses transitional risks such
as changes in government policy which influence how
we operate. We continually review the specification of
our homes as well as future amendments to building
regulations and identify new sustainable technologies
that can support us in reducing our carbon footprint,
enhancing nature and reducing waste. Further
assessment on climate-related risks can be found within
our TCFD reporting on pages 76 to 85.
The development of our long-term carbon reduction
strategy is progressing well and we are working with
third-party consultants to finalise our plans before
submitting these to the SBTi for validation. These
projections will outline how we utilise low carbon
building materials, new technologies and collaborate
with our supply chain to realise our long-term
decarbonisation plans. Our carbon reduction targets
will focus on scope 1, 2 and 3 emissions and will commit
to significant carbon reduction targets across both the
medium and long term. Further details on our carbon
emissions and carbon reduction plans can be found on
pages 58 to 65.
In the short term, our aim is to set sustainability targets
and actions that can be quantified and that are, ideally,
within the tenure of those who are measured against
them. This enables sustainability targets to be linked to
performance and remuneration effectively and drives
purposeful outcomes, which help to drive the business
towards achieving its sustainable business strategy.
We also seek to provide clarity and leadership in our
reporting on sustainability, sharing the Group’s targets
and performance, including where we have not achieved
targets and any areas for improvement. We believe that
our stakeholders value this honesty in reporting.
Emily, Field Sales Manager,
Maxine, Sales Manager and
Abbie, Marketing Coordinator
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MJ Gleeson plc Annual Report & Accounts 2023Financial StatementsOther InformationStrategic ReportCorporate Governance Sustainability Committee Report
CONTINUED
Sustainability Committee activities in 2023
Activity
Work carried out
Outcome
Carbon
emissions
The continuation of our scope 3 emissions evaluation for
embodied and in-use carbon has significantly improved
the accuracy of our carbon data and understanding.
The Committee has continued to review the progress
made on our carbon emissions reduction plans and the
viability of achieving long-term carbon reduction targets,
which will be validated by the SBTi.
Sustainability
targets
The Committee received updates on progress against
the 2023 sustainability targets that were published in
last year’s annual report. The Committee challenged
where progress was falling short of the targets set and
the corrective actions being taken. Progress against our
published 2023 targets can be found on pages 70 to 74.
The Committee reviewed and approved the targets and
actions for 2024. These can be found on page 75.
Sustainability
risk register
The Committee reviewed the environmental risk register.
This assesses both the inherent and mitigated risks of the
environmental issues relevant to the Group.
Climate-
related
disclosures
Group risks, including those related to climate change
and sustainability, informed by the environmental risk
register, are monitored by the Audit Committee and the
Board as set out in Risk Management on pages 36 to 41.
The Committee reviewed the draft and final disclosures
for inclusion in this Annual Report and Accounts. This
includes the disclosures based on the recommendations
of the TCFD, which can be found on pages 76 to 85,
and the relevant SASB Industry Standards, which can be
found on pages 86 to 91.
Elaine Bailey
Chair of the Sustainability Committee
13 September 2023
The detailed validation of
scope 3 emissions will enable
us to more robustly develop
our medium and long-term
carbon reduction pathway.
Based on the projected plans,
the Committee recommended
to the Board to commit to
setting targets validated by
the SBTi.
The Committee was
disappointed with progress
against the 2023 targets,
but acknowledges that the
targets are challenging and
appropriate actions are being
taken to address key issues.
The Committee approved the
targets and actions proposed
for 2024.
The Committee and the Board
fully understand and manage
the balance of risks in the
business.
The Committee approved the
disclosures for inclusion in this
Annual Report and Accounts.
126
MJ Gleeson plc Annual Report & Accounts 2023 i
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MJ Gleeson plc Annual Report & Accounts 2023
127
Remuneration Committee Report
Key achievements for 2023
• Reviewing and approving the annual bonus and LTIP outcomes
for 2023.
• Approving salary increases for the Executive Directors and senior
management for 2024.
• Approving performance targets for the annual bonus and LTIP
awards for Executive Directors and senior management for 2024.
• Reviewing and approving proposals for workforce remuneration,
particularly in light of the rising costs of living.
Areas of focus for 2024
• Setting targets for Executive remuneration that align to the Group’s
business strategy.
• Reviewing wider workforce remuneration and related policies.
Dear shareholder,
I am pleased to present the Directors’ Remuneration
Report for 2023, describing the key decisions made
on Directors’ remuneration during the year and how
we intend to apply the Directors’ Remuneration Policy
during the year ending 30 June 2024.
The Directors’ Remuneration Policy was approved by
shareholders at the AGM on 18 November 2022 (with
97.53% of votes cast in favour) and became effective
from that date. There are no proposals to amend the
Policy at the 2023 AGM. A summary of the Policy is set
out on pages 131 to 133. The full Policy can be found
in the 2022 Annual Report and Accounts, which is
available to download from the Company’s website at
www.mjgleesonplc.com
I would also like to take this opportunity to thank
Elaine Bailey for her contribution as Interim Chair of the
Committee until the end of March 2023.
Pay and performance outcomes
for 2023
Results for the year
The Group has delivered results for the year in line
with market expectations. Gleeson Homes completed
the sale of 1,723 homes during the year, down 13.9%
compared to the prior year, reflecting the slowdown
in the wider economy and the immediate impact of
increasing interest rates on buyer confidence. The
average selling price increased by 11.3% compared to
the prior year and helped to offset material and labour
cost increases experienced across the sector. Gleeson
Land sold three sites during the year with the potential
to deliver 413 plots for housing development. It ended
the year with a portfolio of 70 sites with the potential to
deliver 17,831 plots for housing development.
The Committee has applied
the Directors’ Remuneration
Policy as intended in
balancing the performance
of the Group in challenging
economic conditions with
the personal performance
of individuals.”
Committee members
Nicola Bruce (Chair)
Elaine Bailey
Fiona Goldsmith
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MJ Gleeson plc Annual Report & Accounts 2023 In addition, the business successfully concluded the
restructuring of Gleeson Homes from nine regional
management teams to six and moved to a more
standardised operating structure. The process resulted
in annualised administrative overhead cost savings of
£3.2m at a one-off cost of £1.0m and ensures that the
Group is well positioned for future growth opportunities
as the market recovers.
Annual bonus
As disclosed in last year’s Directors’ Remuneration
Report, Graham Prothero was awarded a maximum
bonus opportunity of 150% of salary, prorated to reflect
the period of his service as Chief Executive Officer
during the year. His bonus was based on Group profit
before tax (as regards 60% of the potential award)
and strategic performance (as regards 40% of the
potential award). The Committee attributed a higher
weighting to Graham Prothero’s strategic performance,
as compared to the other Executive Directors (see
below), in order to appropriately incentivise and reward
him for delivering key strategic imperatives in his first
six months of appointment, most notably, restructuring
and standardising the operations of Gleeson Homes.
His strategic performance objectives were based on
delivering the Gleeson Homes restructure, customer
satisfaction, sustainability targets and strengthening
the Group’s carry forward position in respect of
Gleeson Land.
Stefan Allanson and James Thomson (during his time as
Chief Executive Officer) were each awarded a maximum
bonus opportunity of 125% of salary, with James
Thomson’s opportunity prorated to reflect the period
of his service as Chief Executive Officer during the year.
Their bonuses were based on Group profit before tax
(as regards 80% of the potential award) and strategic
performance (as regards 20% of the potential award).
Their strategic performance objectives were based
on customer satisfaction (James Thomson only), site
openings, delivering completions in line with budget,
sustainability targets and strengthening the Group’s
carry forward position in respect of Gleeson Land.
The Group achieved profit before tax (pre-exceptional
items) of £31.5m for the year ended 30 June 2023.
Although in line with market expectations, this was
below the threshold target and the profit-related
element of the bonus awards lapsed in full.
Based on performance against the strategic
performance objectives, Graham Prothero, Stefan
Allanson and James Thomson each earned a bonus
equal to 25.08%, 3.67% and 4.54% of the maximum
bonus potential respectively. Full disclosure of
performance against their strategic objectives is set out
on pages 136 to 139.
The Committee considered these bonus outcomes
alongside broader perspectives, including underlying
business performance and the experience of customers,
employees and other stakeholders. The Committee
noted that the Group has delivered on key strategic
priorities during the year, including successfully
restructuring Gleeson Homes. After careful reflection,
the Committee considered the bonus outcomes to be
appropriate and no discretion was applied.
2020 LTIP
Stefan Allanson and James Thomson were each granted
an LTIP award in 2020 equal to 150% of salary. The
awards were subject to performance targets based
on EPS (as regards 50% of the award) and relative
TSR (as regards 50% of the award). These awards will
lapse in full based on performance against the EPS and
relative TSR targets. See page 139.
The Group has responded well to the volatile and
challenging macroeconomic environment and this is
testament to the quality of our Executive Directors and
wider management team. However, the Committee
recognises that shareholders have been impacted by the
Group’s share price performance over the last year and
consequently determined that it was not appropriate to
apply discretion to adjust the formulaic vesting outcome
for the Executive Directors’ 2020 LTIP awards.
Reward for the wider workforce
All of our employees contribute to the Group’s success.
When making decisions in respect of the Executive
Directors, the Committee considers the reward
arrangements for, and views of, the wider workforce.
The Group was the first major housebuilder to be
accredited by the Living Wage foundation. Other
housebuilders have now followed our lead and the
Group believes that all employees in all sectors should
be paid the real Living Wage or higher. The only
exception to this is for apprentices, where the Group
continues to pay above the government’s guidelines.
We have awarded an average salary increase for the
wider workforce of 5% (effective from 1 July 2023).
Salary increases were tapered with higher increases
(in percentage salary terms) awarded to our lower paid
employees.
We support employee share ownership so that our
employees may share in the Group’s success. We
operate a tax-efficient all employee Share Incentive Plan.
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CONTINUED
Furthermore, given our continued focus on health and
safety, the Committee will explicitly consider a reduction
in the bonus outcome if the Group’s Reportable
Incident Rate for 2024 is higher than the House Builders
Federation Health and Safety Standard.
The Committee considers that the approach to 2024
performance metrics is appropriate, noting that:
• A significant proportion (75%) of the award
continues to be based on stretching Group
profit before tax performance targets.
• Our strategic targets, which underpin our growth
and sustainability objectives, will be specific,
measurable and sufficiently stretching such that
Executive Directors are appropriately incentivised
and rewarded for delivering key strategic priorities
during 2024.
• Health and safety performance will explicitly be
considered by the Committee when determining the
final bonus outcome.
The Group profit before tax and strategic performance
targets are considered commercially sensitive and will
be fully disclosed in next year’s Directors’ Remuneration
Report.
Conclusion
I trust the information presented in this report enables
our shareholders to understand both how we have
operated our Directors’ Remuneration Policy over the
year and our rationale for decision making. We believe
that the Policy operated as intended and we consider
that the remuneration received by the Executive
Directors during the year was appropriate taking into
account Group and personal performance, and the
experience of all stakeholders. The Remuneration
Committee did not apply any discretion to the Executive
Directors’ reward outcomes in respect of the year ended
30 June 2023.
I will be available at the AGM to respond to any
questions and discuss any aspects of the Annual Report
on Remuneration or the Committee’s activities.
Nicola Bruce
Chair of the Remuneration Committee
13 September 2023
Our Non-Executive Workforce Representative, Fiona
Goldsmith, engages directly with employees on a
range of topics of interest to them, including Directors’
remuneration. Workforce engagement activities
included site and office visits, reviewing the results
of the Group’s employee engagement survey and
discussions with senior management and staff on
business performance and matters of concern.
Gender pay gap
The Group’s median gender pay gap is 3.1% in favour
of women, versus the 2022 national median of 8.3% in
favour of men.
The Group continues to develop and encourage more
women into roles that have, traditionally, been male
occupied, including better provision on sites for female
employees and subcontractors. Details of our equal pay
policy and further details on our gender pay gap report,
are set out in the Group’s Gender Pay Gap Report,
which can be found at www.mjgleesonplc.com
Remuneration in 2024
An overview of how we intend to apply the Directors’
Remuneration Policy during the year ending 30 June
2024 is set out on pages 131 to 133.
Review of annual bonus performance
metrics
In line with our Remuneration Policy, we will continue to
reflect the importance of financial performance in the
2024 bonus metrics: 75% of the award will be based on
Group profit before tax and the remaining 25% of the
award will be based on strategic objectives.
Improving Gleeson Homes’ customer experience rating
and increasing the Group’s forward order book and
Gleeson Land sites, are key strategic priorities for 2024
underpinning our future growth.
We are also committed to the further development
of our Sustainability Strategy and have consequently
included a target related to the submission of a science
based carbon reduction plan to the SBTi for validation,
which is a critical milestone of the Group’s sustainability
strategy, as a remuneration metric for 2024.
After careful consideration, the Committee has
determined to apply the following weightings for 2024
bonus metrics:
• Group profit before tax (75%);
•
•
Improving customer experience (10%);
Increasing forward order book and Gleeson Land
sites (10%); and
• Submitting a robust and verifiable carbon reduction
plan by 30 June 2024 that meets the SBTi criteria
and recommendations (5%).
130
MJ Gleeson plc Annual Report & Accounts 2023
Implementation of the
Remuneration Policy
FOR THE YEAR ENDING 30 JUNE 2024
Executive Directors
Set out below is a summary of the key elements of the Remuneration Policy for Executive Directors, together with
how the Policy is intended to be implemented for the year ending 30 June 2024.
Key features
Implementation for year ending 30 June 2024
Base salary
Normally reviewed annually taking into
account a number of factors including (but
not limited to):
• Personal performance
• Group performance
•
Inflation and earnings forecasts
• State of the marketplace generally
• Pay and conditions elsewhere in the Group
The Executive Directors were each awarded
a 3% salary increase with effect from 1 July
2023. This compares to an average salary
increase of 5% for the wider workforce.
Salary from 1 July 2023:
• Graham Prothero: £556,200
• Stefan Allanson: £345,865
Benefits
Provision of cash benefits and benefits in kind
including (but not limited to):
In line with benefits provided in the year
ended 30 June 2023.
• Company car or cash equivalent
• Private fuel
• Private medical insurance – family cover
• Life insurance
• Permanent health insurance
• Annual health check
Pension
Contribution to the Group’s defined pension
scheme, personal pension arrangements for
the Executive Director or cash alternative.
Pension contribution or cash pension
allowance equal to 6.5% of salary for both
Graham Prothero and Stefan Allanson.
The maximum contribution or pension
allowance is aligned with the level available to
the majority of the wider workforce (currently
6.5% of salary).
Annual bonus Maximum opportunity of up to 150% of salary
in respect of a financial year.
Performance metrics are determined
annually, reflecting the Group’s strategy and
key performance indicators. A minimum of
50% of the bonus will be based on financial
performance metrics.
The Committee has the discretion to override
the formulaic outturn of the bonus to
determine the appropriate vesting level where
it believes the outcome is not truly reflective
of underlying performance during the
performance period and to ensure fairness to
both shareholders and the Executive Directors.
Executive Directors are required to defer one-
third of any bonus earned into shares for a
two-year period.
Malus and clawback provisions apply.
The maximum opportunity for Graham
Prothero and Stefan Allanson will be 150% of
salary and 125% of salary respectively.
75% of the award will be based on PBT
performance, 10% based on customer
experience, 10% based on increasing forward
order book and Gleeson Land sites and 5%
based on submitting a robust and verifiable
carbon reduction plan by 30 June 2024 that
meets the SBTi criteria and recommendations.
The Committee will explicitly consider a
reduction in the bonus outcome if the Group’s
Reportable Incident Rate for 2024 is higher
than the published House Builders Federation
Health and Safety Standard.
Performance targets are considered
commercially sensitive and will be
fully disclosed in next year’s Directors’
Remuneration Report.
131
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Remuneration Policy CONTINUED
FOR THE YEAR ENDING 30 JUNE 2024
Key features
Implementation for year ending 30 June 2024
LTIP
Normal maximum LTIP opportunity of up to
150% of salary in respect of a financial year.
Performance metrics are determined annually,
reflecting the Group’s strategy and key
performance indicators.
The Committee has the discretion to override
the formulaic outturn of the LTIP to determine
the appropriate vesting level where it
believes the outcome is not truly reflective
of underlying performance during the
performance period and to ensure fairness to
both shareholders and the Executive Directors.
Awards will be subject to a two-year holding
period following the end of the performance
period.
Malus and clawback provisions apply.
The maximum opportunity for both Graham
Prothero and Stefan Allanson will be 150% of
salary.
50% of the award will be based on EPS
performance and 50% will be based on relative
TSR performance measured over a period of
three financial years ending 30 June 2026.
Details of the EPS and relative TSR
performance targets are set out below.
2023 LTIP awards
The targets for the 2023 LTIP awards are set out below. The Committee considers the targets to be appropriately
stretching, taking into account internal and external forecasts, the challenging market conditions and the continued
level of uncertainty.
EPS for the year ending 30 June 2026
Relative TSR1
Threshold (20%) of
award vests
61.5 pence
Maximum (100%) of
award vests2
70.0 pence
Median
Upper quartile
1 To be compared against a group of listed housebuilders comprising Barratt Developments, Bellway, Berkeley, Crest Nicholson, Persimmon,
Redrow, Taylor Wimpey and Vistry Group.
2 Straight-line vesting between threshold and maximum performance.
The Committee has discretion to amend the vesting outcome where it considers that it is not a fair reflection of
business performance. In particular, the Committee will consider whether there have been any “windfall gains” when
determining the vesting outcome, taking into account a number of factors, including:
• share price performance over the performance period on an absolute basis and relative basis against peer
companies;
• underlying financial performance of the Group during the performance period; and
•
the impact of any significant events during the performance period on the Group’s share price or market as
a whole.
132
MJ Gleeson plc Annual Report & Accounts 2023 Non-Executive Directors
Set out below is a summary of the key elements of the Remuneration Policy for Non-Executive Directors, together
with how the Policy is intended to be implemented for the year ending 30 June 2024.
Fees and
benefits
Key features
Implementation for year ending 30 June 2024
Fees may include a basic fee
and additional fees for further
responsibilities (e.g. chairing Board
Committees or acting as Senior
Independent Director).
Non-Executive Directors may be
eligible to receive benefits linked to the
performance of their duties, including,
but not limited to, the use of secretarial
support and travel costs.
The Chairman’s fee will remain at £150,000 for the
year ending 30 June 2024. This is inclusive of a
£10,500 fee for chairing the Nominations Committee.
The basic fee for the Non-Executive Directors
increased by 3% with effect from 1 July 2023. There
was no increase to the additional fees for chairing
Board Committees and the Senior Independent
Director. The Non-Executive Director fees effective
from 1 July 2023 are therefore as follows:
• Basic fee: £52,015
• Additional fee for Chairing a Board Committee:
£10,500
• Additional fee for the Senior Independent Director:
£10,000
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MJ Gleeson plc Annual Report & Accounts 2023Financial StatementsOther InformationStrategic ReportCorporate Governance Annual Report on Remuneration
The Remuneration Committee’s Annual Report on Remuneration for the year ended
30 June 2023 is set out below.
The auditors are required to report on the following information, up to, and including, the table on Directors’ interest
in shares on page 140.
Single total figure of remuneration for each Director for the years ended
30 June 2023 and 30 June 2022
2023
Fixed pay
Variable pay
Value
Salary &
Annual
of LTIP
Salary &
2022
Fixed pay
Variable pay
Value
Annual
of LTIP
fees
Benefits
Pension
Subtotal
bonus
awards
Subtotal
Total
fees
Benefits
Pension
Subtotal
bonus
awards
Subtotal
Total
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
Chairman
James
Thomson1
Dermot
Gleeson2
Executive
Directors
Graham
Prothero3
Stefan
Allanson
James
Thomson1
Non-
Executive
Directors
Elaine
Bailey
Nicola
Bruce4
Andrew
Coppell5
Fiona
Goldsmith
Christopher
Mills
75
64
–
1
–
–
75
65
–
–
270
32
18
320
102
336
257
19
14
22
377
17
288
69
17
–
71
50
–
–
–
–
–
–
–
–
–
–
69
17
–
71
50
15
15
–
–
–
–
–
Total
1,209
66
57
1,332
132
–
–
–
–
–
–
–
–
–
–
–
–
–
75
65
–
128
102 422
–
15 392
323
–
1
–
18
–
–
–
–
129
–
–
–
–
–
–
–
–
–
–
129
–
–
29
370
348
97
445
815
15 303
513
23
33
569
570
153
723 1,292
–
–
–
–
–
69
17
–
71
50
132 1,464
62
–
42
59
49
1,176
–
–
–
–
–
–
–
–
–
–
62
–
42
59
49
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
62
–
42
59
49
42
62
1,280
918
250
1,168 2,448
1 James Thomson stepped down as Chief Executive Officer on 31 December 2022 and was appointed as Non-Executive Chairman on
1 January 2023.
2 Dermot Gleeson stepped down as Non-Executive Chairman on 31 December 2022.
3 Graham Prothero was appointed as Chief Executive Officer on 1 January 2023.
4 Nicola Bruce was appointed to the Board on 24 March 2023.
5 Andrew Coppell resigned from the Board on 16 March 2022.
Notes to the single total figure of remuneration
Salary and fees
Details of annual salaries for Executive Directors for the years ended 30 June 2023 and 30 June 2022 are set
out below.
Graham Prothero1
Stefan Allanson
James Thomson
Salary from
1 January 2023
£
Salary from
1 July 2022
£
Salary from
1 July 2021
£
540,000
335,790
–
–
335,790
512,500
–
322,875
512,500
1 Graham Prothero was appointed as Chief Executive Officer on a salary of £540,000. As disclosed in last year’s Directors’ Remuneration
Report, this is positioned within the market competitive range compared to FTSE SmallCap companies and competitively positioned
against housebuilder peers.
134
MJ Gleeson plc Annual Report & Accounts 2023 Details of fees for Non-Executive Directors for the years ended 30 June 2023 and 30 June 2022 are set out below.
Chairman1
Non-Executive Director fee
Fee for chairing a Committee
Fee for Senior Independent Director
Fees from
1 January 2023
£
150,0002
50,500
10,500
10,000
Fees from
1 July 2022
£
Fees from
1 July 2021
£
128,000
50,500
10,500
10,000
128,000
48,500
10,500
–
1 James Thomson was appointed as Non-Executive Chairman on a fee of £150,000. This is positioned between the lower quartile and
median compared to the FTSE SmallCap.
2
Includes a fee of £10,500 for chairing the Nomination Committee.
Taxable benefits provided to Executive Directors
The main benefits available to the Executive Directors during the year ended 30 June 2023 (and their associated
values) were: car allowance of £6,500 for Graham Prothero, £13,000 for Stefan Allanson and £6,500 for
James Thomson; car fuel of £300 for Graham Prothero, £4,000 for Stefan Allanson and £6,000 for James Thomson;
private medical insurance of £200 for Graham Prothero, £1,000 for Stefan Allanson and £1,000 for James Thomson;
and matching shares granted under the HMRC tax-qualifying all-employee scheme of £50 for Graham Prothero,
£600 for Stefan Allanson and £350 for James Thomson. As disclosed in last year’s Directors’ Remuneration Report,
Graham Prothero was paid a one-off relocation allowance of £25,000 on his appointment as Chief Executive Officer.
Pension
During the year ended 30 June 2023, the Executive Directors received cash in lieu of pension contributions of 6.5%
of salary. This is aligned to the level available to the majority of the wider workforce.
Determination of annual bonus
As disclosed in last year’s Directors’ Remuneration Report, Graham Prothero was awarded a maximum bonus
opportunity of 150% of salary, prorated to reflect the period of his service as Chief Executive Officer during the year.
His bonus was based on Group profit before tax (as regards 60% of the potential award) and strategic performance
(as regards 40% of the potential award). The Committee attributed a higher weighting to Graham Prothero’s
strategic performance, as compared to the other Executive Directors (see below), in order to appropriately
incentivise and reward him for delivering key strategic imperatives in his first six months of appointment, most
notably, restructuring and standardising the operations of Gleeson Homes.
Stefan Allanson and James Thomson (during his time as Chief Executive Officer) were each awarded a maximum
bonus opportunity of 125% of salary, with James Thomson’s opportunity prorated to reflect the period of his service
as Chief Executive Officer during the year. Their bonuses were based on Group profit before tax (as regards 80% of
the potential award) and strategic performance (as regards 20% of the potential award).
Profit performance
The Group achieved profit before tax (pre-exceptional items) of £31.5m for the year ended 30 June 2023. Although
in line with market expectations, this was below the threshold target and the profit-related element of the bonus
award lapsed in full.
Target
Threshold
Target
Maximum
1 Straight-line vesting between points.
Profit
measure
£m
57.26
60.27
63.29
Bonus
achievable as
percentage of
maximum1
20%
50%
100%
135
MJ Gleeson plc Annual Report & Accounts 2023Financial StatementsOther InformationStrategic ReportCorporate Governance Annual Report on Remuneration
CONTINUED
Strategic performance
Performance against strategic objectives for the year ended 30 June 2023 is detailed below.
Graham Prothero
Objective
Performance
Gleeson Homes restructure
Restructuring and standardising the
operations of Gleeson Homes to deliver
material cost savings and ensure that
the Group is well positioned for future
growth opportunities as the market
recovers.
Successfully concluded the restructuring
of Gleeson Homes from nine regional
management teams to six and moved to a
standardised operating structure. The process
resulted in annualised administrative overhead
cost savings of £3.2m at a one-off cost
of £1.0m.
Weighting Outcome
16%
16.00%
Achieved over 80% in two of the five elements
of customer surveys received.
8%
3.20%
Employee engagement was maintained in the
upper quartile of companies surveyed. The
other 2023 sustainability targets were not
achieved.
8%
2.00%
Achieved 48% of target.
8%
3.88%
40%
25.08%
Customer experience
To achieve scores of at least 80% across
each of the five elements of customer
surveys received during 2023.
Sustainability
Achieve the 2023 sustainability targets
published in the 2022 Annual Report:
• Health and safety incident rate to
be lower than that of the industry
average during 2023.
• Employee engagement will be
maintained in the upper quartile of
companies surveyed during 2023.
• Gleeson Homes to maintain a
5-star rating with a 90% or above
customer recommendation score
throughout 2023.
• Carbon emissions will reduce to
1.75 tonnes of CO2e per home sold
during 2023.
Strengthening the Group’s carry
forward position
Target range for forecast profit on
Gleeson Land sites having a resolution
to grant or consent at 30 June 2023.
136
MJ Gleeson plc Annual Report & Accounts 2023 Stefan Allanson
Objective
Site openings
Target range of 20 to 23 build sites
legally purchased by 30 June 2023.
Performance
Five build sites were legally purchased during
the year.
Weighting Outcome
5%
0%
Phasing of completions
Target not met.
5%
0%
To be delivered in line with budget.
Sustainability
Achieve the 2023 sustainability targets
published in the 2022 Annual Report:
• Health and safety incident rate to
be lower than that of the industry
average during 2023.
• Employee engagement will be
maintained in the upper quartile of
companies surveyed during 2023.
• Gleeson Homes to maintain a
5-star rating with a 90% or above
customer recommendation score
throughout 2023.
• Carbon emissions will reduce to
1.75 tonnes of CO2e per home sold
during 2023.
Strengthening the Group’s carry
forward position
Target range for forecast profit on
Gleeson Land sites having a resolution
to grant or consent at 30 June 2023.
Employee engagement was maintained in the
upper quartile of companies surveyed. The
other 2023 sustainability targets were not
achieved.
5%
1.25%
Achieved 48% of target.
5%
2.42%
20%
3.67%
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CONTINUED
James Thomson
Objective
Customer experience
To achieve scores of at least 80% in
each of the five elements of customer
surveys received during 2023.
Site openings
Target range of 20 to 23 build sites
legally purchased by 30 June 2023.
Performance
Achieved over 80% in two of the five elements
of customer surveys received.
Weighting Outcome
4%
1.60%
Five build sites were legally purchased during
the year.
4%
0%
Phasing of completions
Target not met.
4%
0%
To be delivered in line with budget.
Sustainability
Achieve the 2023 sustainability targets
published in the 2022 Annual Report:
• Health and safety incident rate to
be lower than that of the industry
average during 2023.
• Employee engagement will be
maintained in the upper quartile of
companies surveyed during 2023.
• Gleeson Homes to maintain a
5-star rating with a 90% or above
customer recommendation score
throughout 2023.
• Carbon emissions will reduce to
1.75 tonnes of CO2e per home sold
during 2023.
Strengthening the Group’s carry
forward position
Target range for forecast profit on
Gleeson Land sites having a resolution
to grant or consent at 30 June 2023.
Employee engagement was maintained in
the upper quartile of companies surveyed.
The other 2023 sustainability targets were
not achieved.
4%
1.00%
Achieved 48% of target.
4%
1.94%
The Committee considered these bonus outcomes alongside broader perspectives, including underlying business
performance and the experience of customers, employees and other stakeholders. The Committee noted that the
Group has delivered on key strategic priorities during the year, including the successful restructure of Gleeson
Homes. After careful reflection, the Committee considered the bonus outcomes to be appropriate and no discretion
was applied.
20%
4.54%
138
MJ Gleeson plc Annual Report & Accounts 2023 Bonus outcome
The total bonus outcome for each Executive Director is therefore:
Graham Prothero
Stefan Allanson
James Thomson
Bonus payable
% maximum
25.08%
3.67%
4.54%
£000
102
15
15
In accordance with the Remuneration Policy, one-third of the bonus payable is deferred into shares for two years.
2020 LTIP
The 2020 LTIP awards were subject to performance targets based on EPS (as regards 50% of the award) and
relative TSR (as regards 50% of the award).
Details of the performance targets and performance outcome are set out in the table below.
Threshold – 20% vesting
Maximum – 100% vesting
Actual performance
Outcome
Total vesting outcome
Three-year performance period ended 30 June 2023
EPS for the year ended 30 June 2023
Relative TSR1
70.0 pence
Median
82.5 pence
Upper quartile
42.9 pence
Below median
0% vesting
0% vesting
Total
20%
100%
0% vesting
1 Compared against a group of listed housebuilders comprising Barratt Developments, Bellway, Berkeley, Crest Nicholson, Galliford Try,
Persimmon, Redrow, Taylor Wimpey and Vistry Group.
The Group has responded well to the volatile and challenging macroeconomic environment and this is testament
to the quality of our Executive Directors and wider management team. However, the Committee recognises that
shareholders have been impacted by the Group’s share price performance over the last year and determined that it
was not appropriate to apply discretion to adjust the formulaic vesting outcome for the Executive Directors’ 2020
LTIP awards.
LTIP awards granted in the year ended 30 June 2023
An LTIP award equal to 150% of salary was granted to Stefan Allanson on 20 October 2022.
An LTIP award equal to 250% of salary was granted to Graham Prothero on 22 February 2023. As disclosed in last
year’s Directors’ Remuneration Report, this is a one-off exceptional award level, which the Committee considered
to be appropriate in the context of recruiting Graham Prothero and to ensure that he is appropriately incentivised
over the longer term. The award opportunity was determined based on the exceptional LTIP limit included within the
Remuneration Policy (200% of salary), which may be used to recruit an Executive Director, with an additional 50%
of salary to buy out LTIP awards that were forfeited by Graham Prothero on leaving his previous employer. The 50%
of salary serving as a performance-based buy-out award has a significantly lower face value and longer term time
horizons compared to the awards forfeited.
No LTIP award was granted to James Thomson in the year ended 30 June 2023.
The awards are based on the achievement of EPS performance (as regards 50% of the awards) and relative TSR
performance (as regards 50% of the awards) measured over a period of three financial years ending 30 June 2025.
Following the end of the performance period, the Committee will determine whether the performance targets have
been satisfied. Eligible awards will vest following a two-year holding period after the end of the performance period.
The Committee has discretion to amend the vesting outcome where it considers that it is not a fair reflection of
business performance. In particular, the Committee will consider whether there have been any “windfall gains” when
determining the vesting outcome taking into account a number of factors, including:
• share price performance over the performance period on an absolute basis and relative basis against peer
companies;
• underlying financial performance of the Group during the performance period; and
•
the impact of any significant events during the performance period on the Group’s share price or market as
a whole.
139
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CONTINUED
Details of the awards are as follows:
Director
Graham Prothero
Stefan Allanson
Number of shares
granted
Face value at
grant £000
296,053
127,839
1,3501
5042
1 Calculated based on the mid-market closing share price as at the date preceding the date of grant (21 February 2023: £4.56).
2 Calculated based on the mid-market closing share price as at the date preceding the date of grant (19 October 2022: £3.94).
EPS for the year ending 30 June 2025
Relative TSR1
Threshold (20%)
of award vests
Maximum (100%)
of award vests2
90p
103p
Median
Upper quartile
1 To be compared against a group of listed housebuilders comprising Barratt Developments, Bellway, Berkeley, Crest Nicholson, Persimmon,
Redrow, Taylor Wimpey and Vistry Group.
2 Straight-line vesting between threshold and maximum performance.
Payment made to former Directors and payments for loss of office
No payments were made to former Directors and no payments for loss of office were made during the year ended
30 June 2023.
Directors’ shareholdings and share interests
Shareholding guideline
The Group operates within-employment and post-employment shareholding guidelines for the Executive Directors.
The within-employment shareholding guideline requires Executive Directors to build up and retain a holding
in shares equivalent to 200% of salary. As at 30 June 2023, Graham Prothero and Stefan Allanson held shares
equivalent to 24.7% of salary and 187.9% of salary respectively (calculated using the mid-market closing share
price on 30 June 2023, £3.74). The Executive Directors will continue to build up their shareholdings through shares
acquired under vested deferred bonus awards and LTIP awards and through the purchase of shares.
Share interests
The interests of the Directors serving during the year, and of their connected persons in the ordinary share
capital of the Company as at 30 June 2023 (or the date that they stepped down from the Board if earlier), are as
shown below:
Owned
outright
Unvested and
subject to
performance
Unvested and
not subject to
performance
Scheme
Vested and
exercised
Total as at
30 June 2023
Director
Chairman
James Thomson1
Shares
41,534
LTIP 20193
LTIP 20204
LTIP 2021
Deferred bonus share
award 2021
Deferred bonus share
award 2022
–
–
–
–
–
LTIP 2022
–
296,053
Dermot Gleeson5
Executive Directors
Graham Prothero6
Shares
1,088,493
Shares
35,684
Stefan Allanson
Shares
148,196
LTIP 20193
LTIP 20204
LTIP 2021
LTIP 2022
Deferred bonus share
award 2021
–
–
–
–
–
140
–
–
121,753
94,441
–
–
–
–
–
–
76,704
59,498
127,839
–
25,733
–
–
24,094
35,195
–
112
–
3022
16,211
–
–
–
–
14,796
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
41,534
25,733
121,753
94,441
24,094
35,195
1,088,493
35,695
296,053
148,498
16,211
76,704
59,498
127,839
14,796
MJ Gleeson plc Annual Report & Accounts 2023 Owned
outright
Unvested and
subject to
performance
Unvested and
not subject to
performance
Vested and
exercised
Total as at
30 June 2023
Director
Scheme
Deferred bonus share
award 2022
Non-Executive Directors
Elaine Bailey
Nicola Bruce7
Fiona Goldsmith
Christopher Mills8
–
–
–
25,000
Shares
Shares
Shares
Shares 6,555,000
–
–
–
–
–
21,488
–
–
–
–
–
–
–
–
–
21,488
–
–
25,000
6,555,000
1 James Thomson stepped down as Chief Executive Officer on 31 December 2022 and was appointed as Non-Executive Chairman on
1 January 2023. His LTIP awards will continue to vest in accordance with their normal vesting timetable, subject to the achievement of the
relevant performance metrics, and will be prorated for time served as Chief Executive Officer during the relevant vesting periods.
2 Matching shares granted under the HMRC tax-qualifying all-employee scheme that have not yet vested.
3
In July 2022, the Committee approved that 27.4% of the 2019 LTIP awards will vest following Committee assessment of the outcome of the
performance targets. The 2019 LTIP awards will ordinarily vest and become capable of exercise following the end of the two year holding
period in September 2024.
4 The 2020 LTIP awards have lapsed in full following the Committee’s assessment of the outcome of the performance targets.
5 Dermot Gleeson stepped down as Non-Executive Chairman on 31 December 2022.
6 Graham Prothero was appointed as Chief Executive Officer on 1 January 2023.
7 Nicola Bruce was appointed to the Board on 24 March 2023.
8 Shares are held by funds managed by Harwood Capital LLP of which Christopher Mills is a Member/Director.
As at 31 August 2023 the total interests held by James Thomson were 41,534 shares, Graham Prothero were 35,785
shares, Stefan Allanson were 148,546 shares, Christopher Mills were 6,555,000 shares and Fiona Goldsmith were
25,000 shares. The Company has not been advised of any other changes to the interests of Directors and their
connected persons to those set out in the table above.
LTIP awards
Additional details of the outstanding LTIP awards held by Executive Directors serving during the year are set
out below.
Executive
Director
Graham
Prothero
Stefan
Allanson
James
Thomson3
Scheme
30 June
2022
Granted
during year
Vested and
exercised
during year
Lapsed
during
year
Share price
at grant
date
Total
interests
outstanding
at 30 June
2023
End of
performance
period
LTIP 2022
–
296,053
LTIP 20191
59,063
LTIP 20202
76,704
LTIP 2021
59,498
–
–
–
LTIP 2022
–
127,839
LTIP 20191
93,750
LTIP 20202
121,753
LTIP 2021
94,441
–
–
–
–
–
–
–
–
–
–
–
–
£4.56
296,053
30/06/25
42,852
–
–
–
68,017
–
–
£8.00
£6.16
£8.14
£3.94
£8.00
£6.16
£8.14
16,211
76,704
59,498
127,839
25,733
121,753
94,441
30/06/22
30/06/23
30/06/24
30/06/25
30/06/22
30/06/23
30/06/24
1
In July 2022, the Committee approved that 27.4% of the 2019 LTIP awards will vest following Committee assessment of the outcome of the
performance targets. The 2019 LTIP awards will ordinarily vest and become capable of exercise following the end of the two-year holding
period in September 2024.
2 The 2020 LTIP awards have lapsed in full following the Committee’s assessment of the outcome of the performance targets.
3 James Thomson’s LTIP awards will continue to vest in accordance with their normal vesting timetable, subject to the achievement of the
relevant performance metrics, and will be prorated for time served as Chief Executive Officer during the relevant vesting periods.
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TSR performance
We have compared the Company’s TSR performance over the last ten years with the TSR for the FTSE SmallCap
Index, of which the Company is a member, and a comparator index of listed housebuilders. The peer group consists
of a group of listed housebuilders comprising Barratt Developments, Bellway, Berkeley, Crest Nicholson, Persimmon,
Redrow, Taylor Wimpey and Vistry Group.
MJ Gleeson plc TSR comparison to index and peer group 1 July 2013 to 30 June 2023:
450
400
350
300
250
200
150
100
50
0
Jul 13
Jul 14
Jul 15
Jul 16
Jul 17
Jul 18
Jul 19
Jul 20
Jul 21
Jul 22
Jul 23
MJ Gleeson plc
Housebuilders
FTSE SmallCap
Chief Executive Officer’s remuneration 2014 to 2023
Year Chief Executive Officer
2023 Graham Prothero (appointed 1 January 2023)
2023 James Thomson (stepped down 31 December 2022)
2022 James Thomson
2021 James Thomson
2020 James Thomson
2019 James Thomson (appointed 10 June 2019)
2019 Jolyon Harrison (stepped down 10 June 2019)
2018 Jolyon Harrison
2017 Jolyon Harrison
2016 Jolyon Harrison
2015 Jolyon Harrison
2014 Jolyon Harrison
Single figure
of total
remuneration
£000
Annual bonus paid
against maximum
opportunity
LTIP awards
vesting against
maximum
opportunity
422
303
1,292
1,173
769
31
2,482
3,056
2,816
873
2,917
793
25.1%
3.7%
89%
99%
45%
–
–
100%
100%
100%
100%
100%
n/a
–
27%
n/a
n/a
n/a
100%
100%
100%
n/a
100%
n/a
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MJ Gleeson plc Annual Report & Accounts 2023 Annual percentage change in remuneration of Directors and employees
The table below sets out the annual percentage change in each of the Directors’ remuneration compared to the
average employee remuneration.
2022 to 2023
Salary &
2021 to 2022
2020 to 2021
2019 to 2020
Salary &
Salary &
Salary &
fees1
Benefits
Bonus
fees1
Benefits
Bonus
fees1
Benefits
Bonus
fees1
Benefits
Bonus
Chairman
James
Thomson2
Dermot
Gleeson3
Executive
Directors
Graham
Prothero4
Stefan
Allanson5
James
Thomson2
Non-
Executive
Directors
Elaine
Bailey6
Nicola
Bruce7
Fiona
Goldsmith8
Christopher
Mills
Average
employee9
n/a
n/a
–
–
–
–
–
2.4%
n/a
n/a
n/a
–
–
–
–
–
–
–
–
–
7.6%
(9.1%)
–
–
–
–
–
–
(7.1%)
–
–
–
–
4%
5.6% (95.7%)
2.5%
5.9%
(8.4%)
7.6%
(4.9%)
n/a
(7.1%)
1.7%
–
–
–
–
n/a
n/a
n/a
2.5%
9.5%
(7.9%)
9.1%
(11.5%)
142.6%
n/a
n/a
n/a
11.0%
n/a
20.3%
4.1%
–
–
–
–
–
–
–
–
n/a
–
2.2%
2.6%
–
–
–
–
–
–
–
–
n/a
–
n/a
7.6%
–
–
–
–
–
–
–
–
–
–
n/a
(7.1%)
–
–
–
–
–
–
–
–
5.1%
15.5%
(53.7%)
4.1%
12.2%
0.2%
2.2%
9.3%
49.9%
4.4%
8.2%
(8.1%)
1 The Board agreed to a 30% reduction in salary and fees for the period 6 April 2020 to 30 June 2020 in response to the Covid-19 pandemic.
As such, the table above shows a reduction in salaries and fees between years ended 30 June 2019 and 30 June 2020, and an increase in
salaries and fees between years ended 30 June 2020 and 30 June 2021. With the exception of James Thomson, there were no increases to
salaries or fees during the years ended 30 June 2020 and 30 June 2021.
2 James Thomson was appointed as Chief Executive Officer on 10 June 2019. He then stepped down as Chief Executive Officer on
31 December 2022 and was appointed as Non-Executive Chairman on 1 January 2023. Therefore, the percentage change in remuneration
for 2019 to 2020 and 2022 to 2023 is not applicable.
3 Dermot Gleeson stepped down as Non-Executive Chairman on 31 December 2022 and therefore the percentage change in remuneration
for 2022 to 2023 is not applicable.
4 Graham Prothero was appointed as Chief Executive Officer on 1 January 2023 and therefore the percentage change in remuneration for
2022 to 2023 is not applicable.
5 Stefan Allanson did not receive a bonus in respect of the year ended 30 June 2020.
6 Elaine Bailey was appointed to the Board on 1 March 2021 and therefore the percentage change in remuneration for 2020 to 2021 and 2021
to 2022 is not applicable. The increase in 2023 was in respect of additional committee chair responsibilities.
7 Nicola Bruce was appointed to the Board on 24 March 2023 and therefore the percentage change in remuneration for 2022 to 2023 is not
applicable.
8 Fiona Goldsmith was appointed to the Board on 1 October 2019 and therefore the annual percentage change in remuneration for 2019 to
2020 and 2020 to 2021 is not applicable. The increase in 2023 was in respect of additional responsibilities as Senior Independent Director.
9 The annual percentage change of the average remuneration of the Group’s salaried employees, calculated on a full-time equivalent basis.
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Chief Executive Officer pay ratio
The table below sets out the Chief Executive Officer’s total remuneration as a ratio against the full-time equivalent
remuneration of the 25th, 50th (median) and 75th percentile employees.
Year
2023
2022
2021
2020
Method
Option B
Option B
Option B
Option B
25th percentile
pay ratio
Median pay
ratio
75th percentile
pay ratio
28:1
44:1
64:1
28:1
14:1
37:1
40:1
20:1
11:1
20:1
17:1
12:1
Option B methodology was selected on the basis that it is an efficient and robust approach. The remuneration
figures for the employee at each quartile were determined as at the final day of the relevant financial year.
Sensitivity analysis has been performed around the 25th, 50th and 75th percentile employees to ensure that they
are reasonably representative, including reviewing the employees either side of the identified individuals to ensure
their full year’s remuneration is reasonable. No assumptions or estimates were used and no adjustments to pay
were made.
A substantial proportion of the Chief Executive Officer’s total remuneration is performance related and delivered
in shares. The ratios will therefore depend significantly on the Chief Executive Officer’s annual bonus and LTIP
outcomes, and may fluctuate year to year.
The pay ratios have fallen in the year as a result of the reduction in bonus and LTIP awards vesting in respect of 2023
which reduces the overall CEO pay.
The Board believes that the median pay ratio is consistent with the Group’s wider policies on employee pay, reward
and progression. The Committee has reviewed the remuneration policies and practices for the wider workforce in
conjunction with considering how the Remuneration Policy should be implemented. The Committee is satisfied that
there is a good level of alignment in relation to pay policies throughout the Group and that the median pay ratio is
consistent with the Group’s wider policies on employee pay, reward and progression.
Total pay and benefits used to calculate the ratios
The table below shows the employee percentile pay and benefits used to determine the above pay ratios and the
salary component for each figure.
£000
2023
Total pay and benefits2
Salary component
2022
Total pay and benefits2
Salary component
2021
Total pay and benefits2
Salary component
2020
Total pay and benefits2
Salary component
Chief
Executive
Officer1
25th
percentile
Median
75th
percentile
725
527
1,292
513
1,173
500
7693
4583
25
23
29
25
18
18
28
26
50
33
35
33
30
25
39
35
65
50
65
50
68
60
62
53
1 The Chief Executive Officer’s remuneration is the total single figure remuneration for the relevant financial year as disclosed on page 142.
For 2023, this is the aggregate of Graham Prothero’s and James Thomson’s single figure remuneration.
2 The employee percentile pay and benefits have been calculated based on the amount paid or receivable for the financial year.
The calculations are on the same basis as required for the Chief Executive Officer’s remuneration for total single figure purposes.
3 The Board agreed to a 30% reduction in salary and fees for the period 6 April 2020 to 30 June 2020 in response to the Covid-19 pandemic.
144
MJ Gleeson plc Annual Report & Accounts 2023 Relative importance of spend on pay
Set out below is the amount spent on remuneration for all employees of the Group (including the Executive
Directors) and the total amounts paid in distributions to shareholders over the year.
Remuneration for all employees
Total distributions paid
2023
£m
49.5
9.9
2022
£m
47.2
9.3
Difference in
spend
£m
Difference as
percentage
2.3
0.6
4.9%
6.5%
Terms of engagement
The Chief Executive Officer’s service agreement is on a rolling basis and requires 12 months’ notice of termination
on either side. The Chief Financial Officer’s service agreement is on a rolling basis and requires six months’ notice of
termination from the Chief Financial Officer and 12 months’ notice of termination from the Company. The dates of
the Executive Directors’ service agreements are as follows:
Graham Prothero
Stefan Allanson
Date of service
agreement
27 April 2022
29 June 2015
All Non-Executive Directors are engaged for an initial period of three years, which, thereafter, may be extended on
an annual basis, subject to re-election at each AGM. The appointment of the Chairman may be terminated by either
side on three months’ notice and the appointment of the other Non-Executive Directors may be terminated on
either side on one month’s notice. The dates of each Non-Executive Director’s original appointment are as follows:
James Thomson
Nicola Bruce
Elaine Bailey
Fiona Goldsmith
Christopher Mills
1 Subject to re-election at the 2023 AGM.
Date of original
appointment
Expiry of current
term1
1 January 2023
31 December 2025
24 March 2023
23 March 2026
1 March 2021
29 February 2024
1 October 2019 30 September 2023
1 January 2009 30 September 2023
The Remuneration Committee
The Committee was chaired by Elaine Bailey on an interim basis from 1 July 2022 to 23 March 2023. Nicola Bruce
was appointed as Chair of the Committee from 24 March 2023. Elaine Bailey remains a Committee member
alongside Fiona Goldsmith.
Each of the Non-Executive Directors are independent and have no day-to-day involvement in running the business.
Potential conflicts which arise from cross-directorships are managed by the Company Secretary and the Board.
Biographical details of the Committee members are shown on pages 104 to 105, and details of their attendance at
the meetings of the Committee during the year ended 30 June 2023 are shown on page 108.
Role and responsibilities of the Remuneration Committee
The Committee’s primary purpose is to make recommendations to the Board on the Group’s framework for
Executive Directors and senior management remuneration. The Board has also delegated responsibility to the
Committee for determining the remuneration, benefits and contractual arrangements of the Chairman and the
Executive Directors. No individual is involved in deciding their own remuneration.
The Committee has written terms of reference available on the Company’s website, www.mjgleesonplc.com, and its
responsibilities include:
•
recommending to the Board the policy for Executive Directors and senior management remuneration;
• agreeing the remuneration of the Chairman of the Board;
• agreeing the terms and conditions of employment for Executive Directors, including their annual remuneration
and pension arrangements, and reviewing such provisions for senior management;
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CONTINUED
• agreeing the measures and targets for any performance-related bonus and share schemes;
• ensuring that, on termination, contractual terms and payments made are fair both to the Company and the
individual so that failure is not rewarded;
• engaging with shareholders on Executive Directors and senior management remuneration;
•
reviewing wider workforce remuneration and related policies; and
• agreeing the terms of reference of any remuneration consultants that it appoints.
Activities during the year
The Committee met on six occasions during the year, three of which were scheduled meetings. Papers were
circulated in advance of each meeting for all matters considered. The main activities undertaken by the Committee
during the year included:
• approving the fee for James Thomson in connection with his appointment as Non-Executive Chairman;
• approving performance targets for annual bonus and LTIP awards for the Executive Directors and senior
management for the year ended 30 June 2023;
• approving the annual bonus and LTIP outcomes of the Executive Directors and senior management for the year
ended 30 June 2023 and assessing the fairness of these outcomes;
• approving salary increases for the Executive Directors and senior management effective from 1 July 2023;
•
reviewing potential performance metrics and targets for annual bonus and LTIP awards for the Executive
Directors and senior management to be granted in respect of the year ending 30 June 2024; and
•
reviewing proposals for staff pay and bonuses.
How the Committee addressed the factors in Provision 40 of the 2018 UK
Corporate Governance Code when determining the Policy
Our Directors’ Remuneration Policy is designed to support an effective pay-for-performance culture, which enables
the Company to attract, retain and motivate Executive Directors who have the necessary experience and expertise
to deliver the Group’s objectives and strategy. The Policy has been determined based on the following principles,
taking into account Provision 40 of the 2018 UK Corporate Governance Code.
Clarity and
simplicity
Risk
Ensure that the remuneration packages are simple and transparent, and take into account
remuneration and related policies for the wider workforce. Performance targets are set in line
with Group budgets and plans and are reviewed and tested by the Committee.
To promote long-term sustainable performance through sufficiently stretching performance
targets, whilst ensuring that the incentive framework does not encourage Executive Directors
to take inappropriate business risks (including environmental, financial, social, health, safety
and governance risks).
Predictability
Detailed information on the potential values that may be earned through the remuneration
arrangements are set out in the Directors’ Remuneration Policy available on the Company’s
website, www.mjgleesonplc.com
Proportionality
To ensure that that total remuneration delivered is fair and reflects the Group and individual
performance, the Committee has the discretion to override formulaic outturns where it
believes the outcome is not truly reflective of underlying performance during the performance
period and to ensure fairness to both shareholders and participants.
Alignment to
culture
When determining the Policy, the Committee is clear about making decisions to drive the
appropriate behaviours and ensure alignment with the Group’s culture and long-term strategy.
146
MJ Gleeson plc Annual Report & Accounts 2023 Remuneration Committee – support and advice
The Committee is supported by the Group Human Resources Director and the Head of Legal and
Company Secretary.
The Company took advice from Deloitte LLP, who were appointed by the Committee in July 2019 following a
tender process. Deloitte LLP is a founder member of the Remuneration Consultants Group and, as such, voluntarily
operates under its Code of Conduct in relation to Executive remuneration in the UK. The Committee is satisfied that
the appointment of Deloitte LLP is in accordance with the Company’s policy on the provision of non-audit services
to the Group and that the external advice received is objective and independent. The fees paid to Deloitte LLP for
their services to the Committee during the year, based on time and expenses, amounted to £36,400. Deloitte LLP
also provided advice to the Company during the year in relation to share plans.
The Company also took advice from its legal advisers, Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”), under
its annual retainer. Skadden were appointed in November 2020. The Committee is satisfied that the advice received
from Skadden is objective and independent.
Statement of voting at the Annual General Meeting and shareholder
engagement
The following table sets out actual voting in respect of the resolutions to approve the Remuneration Policy and
Annual Report on Remuneration at the Company’s AGM.
Votes in favour
Votes against
2022 AGM: Approval of the
Annual Report on Remuneration
2022 AGM: Approval of the
Directors’ Remuneration Policy
No.
%
No.
Total votes
cast
%
Votes
withheld
43,325,716
99.25
327,699
0.75
43,653,415
2,035
42,575,196
97.53
1,079,604
2.47
43,654,800
650
2022 AGM: Approval of
amendments to the rules of the
Annual and Deferred Bonus Plan 42,590,474
97.57
1,061,946
2.43
43,652,420
3,030
The Committee consults with major shareholders and their representative bodies on remuneration matters,
particularly if any material changes are proposed to the Directors’ Remuneration Policy.
Approved by the Board and signed on its behalf by:
Nicola Bruce
Chair of the Remuneration Committee
13 September 2023
147
MJ Gleeson plc Annual Report & Accounts 2023Financial StatementsOther InformationStrategic ReportCorporate Governance Directors’ Report
Statutory, regulatory and
other information
This section contains the remaining matters on which
the Directors are required to report each year that do
not appear elsewhere in the Annual Report.
Strategic Report
We present a review of the business during the year to
30 June 2023 and of the position of the Group at the
end of the financial year together with a description of
the principal risks and uncertainties faced by the Group
in the Strategic Report on pages 1 to 97.
Business review
The review of the development and performance of the
business during the year, any significant events up to the
date of this Report, and the future outlook of the Group
are set out in the Chairman’s Statement on pages 8 to 9,
the Chief Executive’s Statement on pages 22 to 27 and
the Business Reviews on pages 28 to 31.
The Group’s sustainable business strategy is set out
in the Strategic Report on pages 16 to 17. The key
performance indicators are set out in the Strategic
Report on pages 18 to 19.
The Group’s policy in respect of financial risk
management and financial instruments, details of credit
risk, capital risk management, liquidity risk and interest
rate risk are given in note 15 to the financial statements.
Dividends
The Company may, by ordinary resolution, declare a
dividend to be paid to shareholders, but no dividend
shall exceed the amount recommended by the Board.
The Board may also agree to pay interim dividends
when the financial position of the Company, in the
opinion of the Board, justifies it.
During the year the Company paid a final dividend of
12.0p (approved by shareholders at the Annual General
Meeting on 18 November 2022) for financial year ended
2022 and an interim dividend in respect of financial year
ended 2023 to shareholders of 5.0p per share.
The Board proposes to pay, subject to shareholder
approval at the 2023 AGM, a final dividend of 9.0p per
share on 24 November 2023, to shareholders on the
register at the close of business on 27 October 2023.
The total dividend for the year to 30 June 2023 will
be 14.0p.
Dividend policy
The current year dividend represents a dividend cover of
3.06 times. The Board intends to maintain an earnings to
dividend cover ratio of between three and five times.
Qualifying third-party indemnity
Directors risk personal liability under civil and criminal
law for many aspects of the Company’s main business
decisions. As a consequence, the Directors could face a
range of penalties including fines and/or imprisonment.
In keeping with normal market practice, the Company
believes that it is prudent, and in the best interests of
the Company, to protect the individuals concerned from
the consequences of innocent error or omission.
The Company obtains Directors’ and Officers’ liability
insurance in order to indemnify Directors and other
senior officers of the Company and its subsidiaries.
This insurance policy does not provide cover where the
Director or officer has acted fraudulently or dishonestly.
In addition, subject to the provisions of and to the
extent permitted by relevant statutes, under the Articles,
the Directors and other officers were indemnified out
of the assets of the Company against liabilities incurred
by them in the course of carrying out their duties or
the exercise of their powers. A deed of indemnity
was approved by the Board in November 2020.
These qualifying indemnity provisions were in place
throughout the year and up to the date of approval of
these financial statements,
Substantial shareholdings
At 31 August 2023, the shareholdings noted below,
representing 3% or more of the issued share capital, had
been notified to the Company.
Name of shareholder
Funds managed by
Harwood Capital LLP
Black Rock
Schroder Investment
Management
Sanford DeLand Asset
Management
Aberforth Partners
Amati Global Investors
Highclere International
Investors
Number of
shares
Proportion
of total
6,555,000
4,556,451
3,890,628
2,896,165
2,415,028
2,269,140
1,808,936
11.2%
7.8%
6.7%
5.0%
4.1%
3.9%
3.1%
148
MJ Gleeson plc Annual Report & Accounts 2023 Our policy for selection and promotion is based on an
assessment of an individual’s ability and experiences;
we consider all applicants on their merits and have
processes and procedures in place to ensure that
individuals with disabilities are given fair consideration.
Every effort is made to retain and support employees
who become disabled whilst in the employment of
the Group.
We are committed to developing our employees so
they can maximise their career potential, and our
aim is to provide rewarding career opportunities in
an environment in which equality of opportunity is
paramount. We seek to improve employee retention
by providing benefits that employees value, including
a Group stakeholder pension (including life assurance
arrangements), private medical insurance and income
replacement arrangements.
Employee share scheme
Employee share ownership continues to be encouraged
through participation in the Group Share Purchase Plan
(the “SIP”) under which the Company contributes one
share for every three shares purchased. During the year,
management of the SIP was transferred to Equiniti
and a new online share portal was launched to enable
employees who are shareholders in the SIP to access
their shareholding quickly and efficiently.
Employee involvement
Our people are at the heart of our business and are
involved in decision making across the business in a
variety of ways. More details on employee engagement
can be found on pages 71 and 75.
Stakeholder engagement
Details regarding our stakeholder engagement, including
suppliers, customers, local authorities and shareholders,
and the effect on the principal decisions made in the
year, can be found on pages 93 and 96.
Governance statement
The Disclosure Guidance and Transparency Rules require
certain information to be included in a governance
statement in the Directors’ Report. Information that
fulfils these requirements, including how the Group has
complied with the UK Corporate Governance Code and
our internal control and risk management systems, can
be found in the Corporate Governance section on pages
106 to 111.
Political donations
The Company made no political donations in the year or
in the previous year.
Directors and Directors’ interests
The Directors of the Company, as of the date of this
Report, and during the year, and their biographical
details are shown on pages 104 to 105.
Details of any related party transactions with Directors
of the Company are shown in note 27 to the financial
statements.
The beneficial interests of the Directors and their
connected persons in the shares of the Company
at 30 June 2023 are disclosed in the Annual Report
on Remuneration on pages 140 to 141. Details of the
interests of the Executive Directors in share options and
awards of shares can be found on page 141 within the
same report.
Environmental policies and disclosures
The Group is committed to reporting in line with the
recommendations of the Task Force on Climate-related
Financial Disclosures (“TCFD”) as set out on pages 76 to
85 and the Sustainability Accounting Standards Board
(“SASB”) on pages 86 to 91. As such, the Directors
consider the Group is well positioned to report in line
with IFRS S1 General Requirements for Disclosure of
Sustainability-related Financial Information and IFRS S2
Climate-related Disclosures, which will be effective for
the Group from 1 July 2024.
Employment policies
We are committed to ensuring that all employees,
potential recruits and other stakeholders are treated
fairly and equitably. The principles of equality and
diversity are important to us and advancement is
based upon individual skills and aptitude irrespective of
race, gender identity, sexual orientation, disability, age,
religion or beliefs or any other protected characteristics.
149
MJ Gleeson plc Annual Report & Accounts 2023Financial StatementsOther InformationStrategic ReportCorporate Governance Variation of rights
The Articles specify that the special rights attached
to any class of shares may, either with the consent in
writing of holders of three-fourths of the issued shares
of that class, or with the sanction of a special resolution
passed at a separate meeting of such holders (but not
otherwise), be modified or abrogated.
Transfer of shares
Under and subject to the restrictions in the Articles,
any shareholder may transfer all or any of their shares
in certificated form by transfer, in writing, in any usual
form or in any other form which the Board may approve.
The Board may, save in certain circumstances, refuse to
register any transfer of a certificated share not fully paid
up. The Board may also refuse to register any transfer of
certificated shares unless it is:
•
•
in respect of only one class of shares;
in favour of no more than four transferees;
• duly stamped or exempt from stamp duty;
• delivered to the office or at such other place as the
Board may decide for registration; and
• accompanied by the certificate for the shares to be
transferred and such other evidence (if any) as the
Board may reasonably require to show the right of
the intending transferor to transfer the shares.
Authority to purchase own shares
At the 2022 AGM, shareholders gave the Company
authority to purchase up to the nominal value of
ordinary shares of £116,684 of its own ordinary shares,
representing approximately 10% of its issued ordinary
share capital. No purchases have been made pursuant
to this authority and a resolution will be put to
shareholders at the 2023 AGM to renew the authority
for a further period of one year.
Repurchase of shares
Subject to the provisions of the Companies Act and
to any rights conferred on the holders of any class of
shares, the Company may purchase all or any of its
shares of any class, including any redeemable shares.
Directors’ Report
CONTINUED
Shareholder additional information
The Company is required to disclose certain additional
information where not covered elsewhere in this Annual
Report:
Share capital
The Company has one class of share in issue, being
ordinary shares with a nominal value of 2 pence each,
with no right to fixed income.
At 30 June 2023, the Company had issued share capital
of 58,342,360 ordinary shares, with a nominal value
of £1.2m. Further details are given in note 23 to the
financial statements.
Rights and obligations attaching to shares
Subject to the Companies Act 2006 and other
shareholders’ rights, any share may be issued with
such rights and restrictions as the Company may by
ordinary resolution decide or, if no such resolution has
been passed or so far as the resolution does not make
specific provision, as the Board of the Company may
decide. Subject to the Companies Act 2006, the Articles
and any resolution of the Company, the Board may deal
with any unissued shares as it may decide.
Amendment to the Articles of Association
Any amendments to the Articles may be made in
accordance with the provisions of the Companies Act
2006 by way of special resolution.
Voting
Under and subject to the provisions of the Articles and
subject to any special rights or restrictions as to voting
attached to any shares, on a show of hands, every
shareholder present in person at a general meeting of
shareholders shall have one vote and on a poll every
shareholder who was present in person or by proxy
shall have one vote for every share of which they are the
holder. Under the Companies Act 2006, shareholders
are entitled to appoint a proxy to exercise all or any of
their rights to attend and to speak and vote on their
behalf at a general meeting or class meeting.
Restrictions on voting
A shareholder shall not be entitled to vote at any
general meeting or class meeting in respect of any
shares held by them unless all calls and other sums
presently payable by them in respect of that share have
been paid.
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MJ Gleeson plc Annual Report & Accounts 2023 Appointment and replacement
of Directors
The Directors shall not, unless otherwise determined
by an ordinary resolution of the Company, be less than
three or more than 15 in number. Directors may be
appointed by the Company by ordinary resolution or by
the Board.
A Director appointed by the Board shall retire from
office at the next AGM of the Company, but shall then
be eligible for reappointment. The Board may appoint
one or more Directors to hold any office or employment
with the Company for such period (subject to the
Companies Act requirements) and on such terms as
it may decide and may revoke or terminate any such
appointment. At each AGM, any Director who has been
appointed by the Board since the previous AGM, and
any Director selected to retire by rotation, shall retire
from office. At each AGM, one-third of the Directors
are required to retire by rotation or, if the number is
not an integral multiple of three, the number nearest to
one-third but not exceeding one-third. In addition, any
Director who has been a Director at the preceding two
AGMs is required to retire by rotation, provided that
they were not appointed or reappointed at either such
AGM or ceased to be a Director and been reappointed
since either such AGM. Notwithstanding this, the Board
has determined that all Directors will be subject to
annual re-election by shareholders at each AGM.
The Company may, by ordinary resolution of which
special notice has been given in accordance with the
Companies Act, remove any Director before their period
of office has expired notwithstanding anything in the
Articles or in any agreement between that Director and
the Company. A Director may also be removed from
office by the service of a notice to that effect signed
by or on behalf of all the other Directors, being not less
than three in number.
Powers of the Directors
The business of the Company shall be managed by
the Board, which may exercise all the powers of the
Company, subject to the provisions of the Articles and
any ordinary resolution of the Company. The Articles
specify that the Board may exercise all the powers of
the Company to borrow money and to mortgage or
charge all or any part of its undertakings, property and
assets and uncalled capital and to issue debentures and
other securities, subject to the provisions of the Articles.
Takeovers and significant agreements
The Company is party to the following significant
agreements that take effect, alter or terminate on
a change of control of the Company following a
takeover bid:
•
•
•
the Company’s share schemes and plans;
the Company’s payment guarantee bonds
except with prior written consent from the bond
provider; and
the Group’s revolving credit facility whereby upon
a “change of control” all amounts become due and
payable.
Information rights
Beneficial owners of shares who have been nominated
by the registered holder of those shares to enjoy
information rights under Section 146 of the Companies
Act 2006 are required to direct all communications to
the registered holder of their shares, rather than to the
Company’s registrars or to the Company directly.
Disclosure of information to auditors
The Directors who held office at the date of approval
of this Directors’ Report confirm that, so far as they
are each aware, there is no relevant audit information
of which the Company’s auditors are unaware, and the
Directors have taken all the steps that they ought to
have taken as Directors to make themselves aware of
any relevant audit information and to establish that the
Company’s auditors are aware of that information.
Independent Auditors
As set out on page 123, the auditors,
PricewaterhouseCoopers LLP, have indicated their
willingness to continue in office, and a resolution that
they be reappointed will be proposed at the next AGM
on 16 November 2023.
Annual General Meeting
The Notice of the AGM to be held on 16 November
2023, together with details of the Resolutions to be
considered, will be sent out in a separate circular. Full
details of the deadlines for exercising voting rights in
respect of the resolutions to be considered at the AGM
will be set out in the Notice of the AGM.
By order of the Board
Leanne Johnson
Company Secretary
13 September 2023
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MJ Gleeson plc Annual Report & Accounts 2023Financial StatementsOther InformationStrategic ReportCorporate Governance Statement of Directors’ Responsibilities
in Respect of the Financial Statements
The Directors are responsible for preparing the Annual
Report and Accounts and the financial statements in
accordance with applicable law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have prepared the Group and Company
financial statements in accordance with UK-adopted
international accounting standards.
Under company law, Directors must not approve the
financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of
the Group and Company and of the profit or loss of
the Group for that period. In preparing the financial
statements, the Directors are required to:
• select suitable accounting policies and then apply
them consistently;
• state whether applicable UK-adopted international
accounting standards have been followed, subject to
any material departures disclosed and explained in
the financial statements;
• make judgements and accounting estimates that are
reasonable and prudent; and
• prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the Group and Company will continue in
business.
The Directors are responsible for safeguarding the
assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and
explain the Group’s and Company’s transactions and
disclose with reasonable accuracy at any time the
financial position of the Group and Company and
enable them to ensure that the financial statements and
the Annual Report on Remuneration comply with the
Companies Act 2006.
The Directors are responsible for the maintenance
and integrity of the Company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and
Accounts and the financial statements, taken as a whole,
is fair, balanced and understandable and provides the
information necessary for shareholders to assess the
Group’s and Company’s position and performance,
business model and strategy.
Each of the Directors, whose names and functions are
listed in the Governance Report, confirm that, to the
best of their knowledge:
•
•
the Group and Company financial statements, which
have been prepared in accordance with UK-adopted
international accounting standards, give a true and
fair view of the assets, liabilities and financial position
of the Group and Company, and of the profit of the
Group; and
the Strategic Report includes a fair review of the
development and performance of the business
and the position of the Group and Company,
together with a description of the principal risks and
uncertainties that it faces.
In the case of each Director in office at the date the
Directors’ report is approved:
• so far as the Director is aware, there is no relevant
audit information of which the Group’s and
Company’s auditors are unaware; and
•
they have taken all the steps that they ought to have
taken as a Director in order to make themselves
aware of any relevant audit information and to
establish that the Group’s and Company’s auditors
are aware of that information.
By order of the Board
Graham Prothero
Director
Stefan Allanson
Director
13 September 2023
13 September 2023
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MJ Gleeson plc Annual Report & Accounts 2023
Tulip Fields, Spalding,
Lincolnshire
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MJ Gleeson plc Annual Report & Accounts 2023
153
The Rowans,
Workington, Cumbria
154
MJ Gleeson plc Annual Report & Accounts 2023
Financial Statements
Independent Auditors’ Report
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
Statement of Financial Position
Statements of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
156
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MJ Gleeson plc Annual Report & Accounts 2023
155
Independent auditors’ report to the
Independent auditors’ report to the
members of MJ Gleeson plc
members of MJ Gleeson plc
Report on the audit of the financial statements
Opinion
In our opinion, MJ Gleeson plc’s group financial statements and company financial statements (the “financial statements”):
• give a true and fair view of the state of the group’s and of the company’s affairs as at 30 June 2023 and of the group’s profit
and the group’s and company’s cash flows for the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards as applied in accordance
with the provisions of the Companies Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts 2023 (the “Annual Report”), which
comprise: the Statements of Financial Position as at 30 June 2023; the Consolidated Income Statement, the Consolidated
Statement of Comprehensive Income, the Statement of Changes in Equity and the Statements of Cash Flows for the year then
ended; and the notes to the financial statements, which include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not
provided.
We have provided no non-audit services to the company or its controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
• The reporting units where we performed audit work accounted for 100% of the Group's profit before tax and 100% of the
Group's total assets.
• Enquiries have been made of management regarding their risk assessment and governance process in place to address
climate risk impacts, with no risk of material misstatement identified in this respect.
Key audit matters
• Carrying value of land and work in progress (group)
• Valuation of building safety provisioning (group)
• Carrying value of investments (parent)
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MJ Gleeson plc Annual Report & Accounts 2023
Materiality
• Overall group materiality: £1,577,150 (2022: £2,772,000) based on 5% of profit before tax before exceptionals.
• Overall company materiality: £1,498,150 (2022: £1,625,000) based on 1% of total assets.
• Performance materiality: £1,182,750 (2022: £2,079,000) (group) and £1,123,613 (2022: £1,218,750) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether or
not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we
make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
• Carrying value of land and work in progress (group)
We focused upon this area because the value of the
Group's land and work in progress represent a
significant proportion of assets in the Group
Statement of Financial Position. Determining the
recoverable amount of land and work in progress
requires a high degree of estimation. For work in
progress in Gleeson Homes (the house building
division), the key judgements include forecasting
future costs to complete and selling prices which can
be affected by market conditions and unexpected
events. In Gleeson Land (the land promotion
division), the valuation of work in progress requires
judgement regarding the future viability of each
project. Based upon this assessment, it may be
necessary to record provisions to determine the final
carrying value of work in progress for each site.
For land and work in progress in Gleeson Homes, we:
•
•
•
•
•
•
Assessed the adequacy of controls over allocation of
costs to sites, through testing of controls over the
allocation of materials and labour costs to the correct
sites;
Visited a sample active sites to confirm the existence
and condition of the work in progress, and compared
this to the total WIP at year end for the relevant sites;
Attended a sample of valuation meetings observing
the controls in operation and also key judgments
being made;
Tested a sample of land additions in the year; tested
a sample of WIP additions in the year to invoice;
Assessed management’s ability to accurately forecast
revenue, by comparing revenue per the latest
valuation sheets, available as at year end, to the
actual revenue achieved for that site in the year;
Assessed management’s ability to forecast cost of
sales and gross margin, investigating any unexpected
variances between the forecast and the figure
actually achieved;
• Considered the monthly margin by site to ensure that
there was consistent margin recognition throughout
the year, and explanations were obtained for any
volatile movement; performed additional margin
review over sites completed in the year and those
active over both FY22 and FY23;
Agreed margin taken through FY23 to the margin as
per the latest valuation sheet;
Performed substantive testing over the costs to
complete in the year end valuation for a sample of
sites;
Examined a sample of sites which have an unusual
gross profit margin (+/- 5% on the average margin for
FY23), and obtained explanations for these;
Performed an independent assessment of the cost
accrual for additional costs on sites where all homes
have been sold;
•
•
•
•
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MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report
Independent auditors’ report to the
members of MJ Gleeson plc CONTINUED
•
•
•
•
•
Substantively tested managements provision for
abortive site costs;
Tested a sample of journals transferring costs from
WIP to Cost of Sales upon plot sale;
Analysed standing stock levels and low margin sites;
Performed detailed testing over specific and general
contingencies; and
Assessed changes in build rates against changes in
costs associated with site operation timelines.
For work in progress in Gleeson Land, we:
•
•
Tested a sample of costs incurred during the year;
Tested the transfer from work in progress to cost of
sales for all those sites sold during the year;
• Discussed and challenged the status of a sample of
•
projects with management and corroborated
explanations received, as necessary;
Assessed the group's provisioning methodology;
Recalculated the provision made by management
against year-end work in progress by applying the
Group’s provisioning methodology and challenged
and corroborated as necessary;
• Reviewed the disclosures in the annual accounts in
respect of this critical accounting estimate.
Based on the procedures performed we did not identify any
material adjustments to the carrying value of the Group’s land
and work in progress at year end.
We have reviewed the detailed desktop reports prepared by
the external surveyors and estimates made by inhouse
resource for all buildings assessed the required provision for
the 3 extra buildings. For all existing sites, updated reports
have been received from management's experts, providing a
clearer assessment of the required costs; these reports have
been assessed by PwC and the associated costs assessed as
reasonable. We have also tested management’s manual
overlay to the provision, primarily adjustments to the expected
tenant and retailer compensation.
Based on the procedures performed we did not identify any
material adjustments to the provision included in the group
accounts. We are also satisfied that the recognition and
disclosure of the provision is in line with IAS 37, and the
disclosure of the estimates and sensitivities are in line with IAS
1.
We obtained management's impairment assessment of the
investments in subsidiaries as at 30 June 2023. Where an
impairment trigger was identified, we have obtained
management's assessment of the recoverable amount of the
subsidiary. For subsidiaries that management have deemed to
have no impairment triggers, we have reviewed the trading
performance and net asset position of the subsidiary to confirm
management's assessment as accurate. For subsidiaries
where a trigger has been noted, these are all non-trading and
management have noted an impairment based on a discounted
cash flow model. We have obtained and tested this discounted
cash flow assessment, specifically we have tested the key
assumptions (discount rate, future expected income/expenses
and the timing of these). We also assessed the market
capitalisation of the Company as at 30 June 2023, and
compared it to the net assets of the Group and Parent
Company.
Based on this work we are satisfied that the carrying value of
the investments held by the company are supported and
concur with the impairment recognised.
• Valuation of building safety provisioning (group)
In FY22 Gleeson identified 14 buildings over 11
metres which were developed by Gleeson Homes in
the past 30 years. Management engaged an external
party to perform initial assessments to evaluate the
potential remediation work required, which was
audited in the prior year. A further 3 in-scope
buildings have been identified during FY23 due to a
reassessment of the buildings heights. Additional
surveys and reports for the existing 14 buildings have
also been obtained, providing management with more
accurate information to assess the liability.The key
assumptions are the potential cost of investigation,
the costs of replacement materials and works, the
cost of disruption to residents, and the timing of
forecast expenditure. Hence, we identified the
valuation of building safety provisioning as a
significant risk.
• Carrying value of investments (parent)
We focused upon this area because of the size of the
balance and the judgement required in determining
the carrying value. The key judgement is the
underlying cash generation and profitability of the
Parent Company's subsidiaries which can be affected
by market conditions as well as the new Building
Safety Act extending the liability period for defective
claims from 6 to 30 years.
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MJ Gleeson plc Annual Report & Accounts 2023
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and controls,
and the industry in which they operate.
The Group is organised into two main operating divisions being Gleeson Homes and Gleeson Land, and each operating division
represents a single reporting unit. The Group financial statements are a consolidation of these 2 reporting units and the Group’s
central entities which include a further 3 reporting units. Of the Group’s 5 reporting units, we identified 4 which, in our view, required
an audit of their complete financial information, either due to their size or their risk characteristics. This, together with additional
procedures performed on the Group’s remaining centralised functions, gave us the evidence we needed for our opinion on the
Group financial statements as a whole. All work was performed by the Group audit team.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the process management adopted to assess the extent of
the potential impact of climate risk on the Group’s financial statements and support the disclosures made within Task Force on
Climate-Related Financial Disclosures.
We also considered the consistency of the disclosures in relation to climate change (including the disclosures in the Task Force
on Climate-related Financial Disclosures (TCFD) section) within the Annual Report with the financial statements and our
knowledge obtained from our audit
Our climate experts assisted us in challenging the completeness of management’s climate risk assessment in particular relating
to The Financial Stability Board created the Task Force on Climate-related Financial Disclosures (“TCFD”) within the annual
report.
Our procedures did not identify any material impact in the context of our audit of the financial statements as a whole for the year
ended 30 June 2023.
Management's assessment highlights that the valuation of inventory is impacted most significantly by climate risk, in relation to
the latest Building Regulations and potential flood risks. We have assessed this risk into the audit testing of inventory,
highlighting no risk of material misstatement within the valuation of inventory.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent
of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall
materiality
How we
determined it
Rationale for
benchmark
applied
Financial statements - group
£1,577,150 (2022: £2,772,000).
5% of profit before tax before exceptionals
Based on the benchmarks used in the annual report, profit before tax is
the primary measure used by the shareholders in assessing the
performance of the group, and is a generally accepted auditing
benchmark. The exceptional item is trading in nature, however
management have noted it not to be representative of the underlying
operations of the business, it was deemed appropriate to exclude this
from our calculation of materiality.
Financial statements -
company
£1,498,150 (2022:
£1,625,000).
1% of total assets
We believe total assets is
the primary measure used
by shareholders in
assessing the performance
of the entity.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The
range of materiality allocated across components was between £42,090 and £1,498,150. Certain components were audited to a
local statutory audit materiality that was also less than our overall group materiality.
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Independent auditors’ report to the
members of MJ Gleeson plc CONTINUED
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of
our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% (2022: 75%) of overall materiality, amounting to £1,182,750
(2022: £2,079,000) for the group financial statements and £1,123,613 (2022: £1,218,750) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was
appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £78,850 (group
audit) (2022: £138,600) and £74,908 (company audit) (2022: £81,250) as well as misstatements below those amounts that, in our
view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group's and the company’s ability to continue to adopt the going concern basis
of accounting included:
• We obtained from management their latest assessments that support their conclusions with respect to the going concern basis
of preparation of the financial statements, corroborating these to the board approved budgets and confirming the mathematical
accuracy of these assessments;
• We evaluated the historical accuracy of the budgeting process to assess the reliability of the data;
• We evaluated management’s base case forecast and severe but plausible downside scenario and challenged the adequacy
and appropriateness of the underlying assumptions, comparing these to the 2008 financial market crash;
• Reviewed the terms and conditions of their RCF agreements that are applicable both during the year and for the going concern
•
assessment period;
In conjunction with the above we have also reviewed management’s analysis of both liquidity and covenant compliance to
satisfy ourselves that no breaches are anticipated over the period of assessment or have occured in the year to date; and
• Reviewed the disclosures made within the annual report and the financial statements to confirm these are consistent with
management's model.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group's and the company’s ability to continue as a going concern for
a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's and
the company's ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The directors are responsible for the other information, which includes reporting based on the Task Force on
Climate-related Financial Disclosures (TCFD) recommendations. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report,
any form of assurance thereon.
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MJ Gleeson plc Annual Report & Accounts 2023
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and
matters as described below.
Strategic report and Directors' Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors'
Report for the year ended 30 June 2023 is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit,
we did not identify any material misstatements in the Strategic report and Directors' Report.
Directors' Remuneration
In our opinion, the part of the Annual Report on Remuneration to be audited has been properly prepared in accordance with the
Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of
the corporate governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance
Code specified for our review. Our additional responsibilities with respect to the corporate governance statement as other
information are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement, included within the Corporate Governance Report is materially consistent with the financial statements
and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging
risks and an explanation of how these are being managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them, and their identification of any material uncertainties to the group’s and company’s ability
to continue to do so over a period of at least twelve months from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of the group's and company’s prospects, the period this assessment covers
and why the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in
operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group and company was substantially less in scope
than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking
that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether
the statement is consistent with the financial statements and our knowledge and understanding of the group and company and
their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the financial statements and our knowledge obtained during the
audit:
161
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report
Independent auditors’ report to the
members of MJ Gleeson plc CONTINUED
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the group’s and company's position, performance, business
model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems; and
• The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the
Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors' Responsibilities in Respect of the Financial Statements, the directors are
responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied
that they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group or the company or to cease operations, or have no realistic alternative but
to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to health and safety legislation and building safety legislation, and we considered the extent to which non-
compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a
direct impact on the financial statements such as the Listing Rules and the Companies Act 2006. We evaluated management’s
incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and
determined that the principal risks were related to deliberate manipulation of results via improper revenue recognition,
management bias in key accounting estimates and posting of inappropriate journal entries to manipulate the group’s result for the
period. Audit procedures performed by the engagement team included:
• Discussions with management, including consideration of known or suspected instances of non-compliance with laws and
regulation and fraud;
• Challenging assumptions and judgements made by management in their significant accounting estimates, particularly in
relation to the valuation of land and work in progress and the expected cash outflows in respect of the building safety provision;
and
Identifying and testing journal entries on a sample basis, in particular journal entries posted with unusual account combinations
or posted by unexpected users. Specifically we tested journal entries with credits to revenue, duplicate journals, and journals
transferring costs within work in progress.
•
• Reviewed board minutes and inquired with management over any non compliance with laws and regulations, including
discussions with management's internal experts surrounding the building safety act.
162
MJ Gleeson plc Annual Report & Accounts 2023
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements.
Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received
from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
•
the company financial statements and the part of the Annual Report on Remuneration to be audited are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 14 November 2016 to audit the
financial statements for the year ended 30 June 2017 and subsequent financial periods. The period of total uninterrupted
engagement is 7 years, covering the years ended 30 June 2017 to 30 June 2023.
Other matter
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these
financial statements will form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the
Financial Conduct Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report
provides no assurance over whether the annual financial report will be prepared using the single electronic format specified in
the ESEF RTS.
Andy Ward (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Leeds
13 September 2023
163
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report
Consolidated Income Statement
For the year ended 30 June 2023
2023
Pre-
exceptional
items
£000
2023
Exceptional
items
(note 3)
£000
Note
2022
Pre-
exceptional
items
£000
2022
Exceptional
items
(note 3)
£000
2022
Total
£000
373,409
(262,753)
110,656
(54,543)
684
–
373,409
(12,867)
(275,620)
(12,867)
–
–
97,789
(54,543)
684
2023
Total
£000
328,319
(238,228)
90,091
(57,974)
420
–
–
–
(1,022)
–
(1,022)
32,537
56,797
(12,867)
43,930
–
–
191
(2,261)
(1,022)
30,467
210
(6,298)
172
(1,482)
55,487
(9,976)
–
–
(12,867)
2,445
172
(1,482)
42,620
(7,531)
Revenue
Cost of sales
Gross profit
Administrative expenses
Other operating income
Operating profit
Finance income
Finance expenses
Profit before tax
Tax
Profit for the year
attributable to the equity
holders of the parent
2
5
7
7
8
328,319
(238,228)
90,091
(56,952)
420
33,559
191
(2,261)
31,489
(6,508)
24,981
(812)
24,169
45,511
(10,422)
35,089
Earnings per share
Basic
Diluted
10
10
42.89 p
42.86 p
41.49 p
41.47 p
78.12 p
77.92 p
60.23 p
60.08 p
Consolidated Statement of
Comprehensive Income
For the year ended 30 June 2023
2023
Pre-
exceptional
items
£000
2023
Exceptional
items
(note 3)
£000
24,981
(812)
Note
2022
Pre-
exceptional
items
£000
2022
Exceptional
items
(note 3)
£000
2022
Total
£000
45,511
(10,422)
35,089
2023
Total
£000
24,169
15
(148)
(148)
–
–
(148)
(148)
120
120
–
–
120
120
24,833
(812)
24,021
45,631
(10,422)
35,209
Profit for the year
Other comprehensive
(expense)/income
Items that may be
subsequently reclassified
to profit or loss
Change in value of shared
equity receivables at fair value
Other comprehensive
(expense)/income for the
year (net of tax)
Total comprehensive
income/(expense) for the
year
The notes on pages 169 to 197 form part of these financial statements.
164
MJ Gleeson plc Annual Report & Accounts 2023 Statements of Financial Position
At 30 June 2023
Non-current assets
Property, plant and equipment
Investments in subsidiaries
Trade and other receivables
Deferred tax assets
Current assets
Inventories
Trade and other receivables
UK corporation tax
Cash and cash equivalents
Total assets
Non-current liabilities
Trade and other payables
Provisions
Current liabilities
Trade and other payables
Provisions
Total liabilities
Net assets
Equity
Share capital
Share premium
Own shares
Retained earnings
Total equity
Note
11
12
14
20
13
14
21
16
18
16
18
23
23
Group
2023
£000
11,206
–
51
797
12,054
2022
£000
8,112
–
5,051
941
14,104
Company
2023
£000
2022
£000
–
–
95,203
98,994
–
442
–
452
95,645
99,446
344,626
13,947
542
5,159
286,882
29,243
3,565
33,764
–
117,878
542
248
364,274
353,454
118,668
–
77,196
3,565
1,001
81,762
376,328
367,558
214,313
181,208
(8,171)
(8,206)
(16,377)
(9,703)
(12,049)
(21,752)
–
–
–
–
–
–
(68,662)
(5,273)
(73,935)
(72,291)
(1,339)
(143,716)
(122,265)
–
–
(73,630)
(143,716)
(122,265)
(90,312)
(95,382)
(143,716)
(122,265)
286,016
272,176
70,597
58,943
1,167
15,843
(743)
269,749
286,016
1,166
15,843
(471)
255,638
272,176
1,167
15,843
(743)
54,330
70,597
1,166
15,843
(471)
42,405
58,943
Retained earnings of the Company
The profit of the Company in the financial year amounted to £22,007,000 (2022: £13,252,000).
The financial statements on pages 164 to 197 were approved by the Board of Directors on 13 September 2023 and
signed on its behalf by:
Graham Prothero
Director
Stefan Allanson
Director
Company registration number: 09268016
The notes on pages 169 to 197 form part of these financial statements.
165
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Statement of Changes in Equity
For the year ended 30 June 2023
Group
At 1 July 2021
Profit for the year
Other comprehensive income
Total comprehensive income for
the year
Share issue
Transfer of own shares
Purchase of own shares
Utilisation of own shares
Share-based payments
Movement in tax on share-based
payments taken directly to
equity
Dividends
Transactions with owners,
recorded directly in equity
At 30 June 2022
Profit for the year
Other comprehensive expense
Total comprehensive income for
the year
Share issue
Purchase of own shares
Utilisation of own shares
Share-based payments
Movement in tax on share-based
payments taken directly to
equity
Dividends
Transactions with owners,
recorded directly in equity
Note
Share
capital
£000
1,165
Share
premium
£000
15,843
Own
shares
£000
–
Retained
earnings
£000
227,923
Total
equity
£000
244,931
–
–
–
1
–
–
–
–
–
–
1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(136)
(403)
68
–
35,089
35,089
120
120
35,209
35,209
–
136
–
268
1,568
1
–
(403)
336
1,568
–
–
(128)
(9,338)
(128)
(9,338)
(471)
(7,494)
(7,964)
1,166
15,843
(471)
255,638
272,176
–
–
–
1
–
–
–
–
–
1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(330)
58
–
–
–
24,169
(148)
24,169
(148)
24,021
24,021
–
–
(58)
(307)
1
(330)
–
(307)
362
362
(9,907)
(9,907)
(272)
(9,910)
(10,181)
23
23
23
23
24
8
9
23
23
23
24
8
9
At 30 June 2023
1,167
15,843
(743)
269,749
286,016
166
MJ Gleeson plc Annual Report & Accounts 2023 Statement of Changes in Equity
For the year ended 30 June 2023
Company
At 1 July 2021
Profit for the year
Total comprehensive income for
the year
Share issue
Transfer of own shares
Purchase of own shares
Utilisation of own shares
Share-based payments
Movement in tax on share-based
payments taken directly to
equity
Dividends
Transactions with owners,
recorded directly in equity
At 30 June 2022
Profit for the year
Total comprehensive income for
the year
Share issue
Purchase of own shares
Utilisation of own shares
Share-based payments
Movement in tax on share-based
payments taken directly to
equity
Dividends
Transactions with owners,
recorded directly in equity
23
23
23
23
24
8
9
23
23
23
24
8
9
Note
Share
capital
£000
Share
premium
£000
1,165
15,843
Own
shares
£000
–
–
–
–
(136)
(403)
68
–
Retained
earnings
£000
36,638
Total
equity
£000
53,646
13,252
13,252
13,252
13,252
–
136
–
268
1,568
1
–
(403)
336
1,568
–
–
(119)
(119)
(9,338)
(9,338)
(471)
(7,485)
(7,955)
–
–
1
–
–
–
–
–
–
1
–
–
–
–
–
–
–
–
–
–
1,166
15,843
(471)
42,405
58,943
–
–
1
–
–
–
–
–
1
–
–
–
–
–
–
–
–
–
–
–
–
(330)
58
–
–
–
22,007
22,007
22,007
22,007
–
–
(58)
(307)
1
(330)
–
(307)
190
190
(9,907)
(9,907)
(272)
(10,082)
(10,353)
At 30 June 2023
1,167
15,843
(743)
54,330
70,597
167
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023
Operating activities
Profit before tax
Group
Company
Note
2023
£000
2022
£000
2023
£000
2022
£000
30,467
42,620
22,207
13,248
Adjustments for:
Depreciation of property, plant and equipment
Share-based payments
Profit on redemption of shared equity receivables
Increase in provisions including exceptional items
Loss on disposal of property, plant and equipment
Impairment of investments in subsidiaries
Finance income
Finance expenses
Operating cash flows before movements
in working capital
11
24
15
18
11
12
7
7
3,972
(307)
(285)
91
305
–
(191)
2,261
3,124
1,568
(375)
13,129
403
–
(172)
1,482
–
(307)
–
–
–
3,791
–
1,568
–
–
–
73
(30,000)
(20,014)
1,930
1,336
36,313
61,779
(2,379)
(3,789)
Increase in inventories
Decrease/(increase) in receivables
(Decrease)/increase in payables
Increase in amounts due from subsidiary
undertakings
Increase in amounts due to subsidiary undertakings
(57,744)
19,337
(7,490)
(46,921)
(8,165)
13,244
–
–
–
–
Cash (used in)/generated from operating activities
(9,584)
19,937
–
(31)
(1,593)
(36,227)
24,386
(15,844)
–
280
265
(34,310)
35,382
(2,172)
Tax paid
Finance costs paid
Net cash flow (deficit)/surplus from operating
activities
(2,770)
(2,066)
(7,059)
(1,043)
(2,770)
(1,903)
(7,178)
(946)
(14,420)
11,835
(20,517)
(10,296)
Investing activities
Proceeds from disposal of shared equity receivables
Interest received
Dividends from subsidiaries
Purchase of property, plant and equipment
Net cash flow (deficit)/surplus from investing
activities
1,279
7
–
1,566
20
–
–
–
–
14
30,000
20,000
11
(4,441)
(3,684)
–
–
(3,155)
(2,098)
30,000
20,014
Financing activities
Net proceeds from issue of shares
Purchase of own shares
Dividends paid
Principal element of lease payments
Net cash flow deficit from financing activities
23
9
17
1
(330)
(9,907)
(794)
(11,030)
1
(403)
(9,338)
(564)
1
(330)
(9,907)
–
1
(403)
(9,338)
–
(10,304)
(10,236)
(9,740)
Net decrease in cash and cash equivalents
(28,605)
(567)
(753)
(22)
Cash and cash equivalents at beginning of period
33,764
34,331
1,001
1,023
Cash and cash equivalents at end of period
21
5,159
33,764
248
1,001
168
MJ Gleeson plc Annual Report & Accounts 2023 Notes to the Financial Statements
For the year ended 30 June 2023
1 Accounting policies
MJ Gleeson plc (“the Company”) is a public limited company that is listed on the London Stock Exchange and is
incorporated and domiciled in England, United Kingdom. The address of the registered office is 6 Europa Court,
Sheffield Business Park, Sheffield, S9 1XE.
Basis of preparation
Both the Company financial statements and the Group financial statements have been prepared and approved by
the Directors in accordance with UK-adopted International Accounting Standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those standards.
The consolidated Group and Company financial statements have been prepared on a going concern basis and under
the historical cost convention, except as otherwise stated below.
The principal accounting policies set out below have been applied consistently to all periods presented in the
consolidated Group and Company financial statements.
The Company has taken advantage of section 408 of the Companies Act 2006 and consequently a statement of
comprehensive income of the Company is not presented as part of these financial statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and all of its subsidiary
undertakings (together referred to as “the Group”).
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from
the date that control commences until the date that control ceases.
Going concern
The Group’s business activities are set out in the Strategic Report on pages 1 to 97. The principal risks identified are
reported under Risk Management on pages 36 to 41.
In July 2023, the Group renegotiated its committed facility with Lloyds Bank plc and Santander UK plc. The
facility has a limit of £135m (previously £105m), which expires in October 2026 with two further optional one-year
extensions.
The Group ended the year with cash and cash equivalents of £5.2m (30 June 2022: £33.8m).
Current forecasts are based on the latest three-year budget approved by the Board in July 2023. This reflected
a cautious view on the trading outlook based on the current market conditions and the degree of macro-
economic risk.
These forecasts were then subject to a range of sensitivities including a severe but plausible scenario together
with the likely effectiveness of mitigating actions. The assessment considered the combined impact of a number of
realistically possible, but severe and prolonged changes to principal assumptions from a downturn in the housing
and land markets including:
•
reduction in Gleeson Homes volumes of approximately 20%;
• permanent reduction in Gleeson Homes selling prices by 5%; and
• a delay on the timing of Gleeson Land transactions and 15% fall in land selling values.
Under these sensitivities, after taking certain mitigating actions, the Group continues to have a sufficient level of
liquidity, operate within its financial covenants and meet its liabilities as they fall due.
Based on the results of the analysis undertaken, the Directors have a reasonable expectation that the Company
and the Group have adequate resources available to continue in operation for the foreseeable future and operate
in compliance with the Group’s bank facilities and financial covenants. As such, the financial statements for the
Company and the Group have been prepared on a going concern basis.
169
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
1 Accounting policies CONTINUED
Revenue recognition
Revenue represents the fair value of the consideration received or receivable in respect of the sale, or sale and
leaseback, of homes and land, net of value added tax and discounts, which is based on an underlying signed legal
agreement. Revenue is recognised when control transfers to a customer as follows:
• Revenue from the sale, or sale and leaseback, of homes and sales extras is a single performance obligation that
is satisfied when control is transferred to the customer, which is deemed to be on legal completion when title of
the property passes to the customer. Where deposit and exchange funds are received in advance, no revenue
is recognised until legal completion occurs and the remaining funds are received. Revenue on multi-unit sales
follows the same treatment, with revenue recognised on legal completion of each unit in accordance with the
contracted terms. There are no contracts which would satisfy the requirements to recognise over time rather
than at a point in time in accordance with IFRS 15 “Revenue from contracts with customers”.
• Revenue from land sales, including land sold under option agreements, freehold land sales, or fixed-price land
sales, is typically a single performance obligation that is satisfied at the earlier of when unconditional contracts
to sell are exchanged and control has passed to the customer or when contracts to sell are completed and
title has passed. Revenue from planning promotion agreements is recognised at the point at which the Group
is unconditionally entitled to a share of the disposal proceeds under the terms of the promotion agreement
contract. Payment terms vary on each land sale; where deferred receipts exceed one year from completion, the
transaction price is adjusted to reflect the time value of money. Variable consideration such as an overage is
not recognised until the point at which it is considered highly probable that there will not be a significant future
reversal, which typically occurs when the amount is agreed by all parties.
The Group has adopted the practical expedient allowed under IFRS 15 “Revenue from contracts with customers” that
states an entity need not adjust the amount of consideration for the effects of a significant financing component
if the entity expects, at contract inception, that the period between when the entity transfers a promised good or
service to a customer and when the customer pays for that good or service will be one year or less.
Segmental reporting
An operating segment is a component of the Group that engages in business activities from which it may earn
revenue and incur expenses, including revenue and expenses that relate to transactions with any of the Group’s
other components, and for which discrete financial information is available. All segmental operating results are
reviewed regularly by the Executive Directors to make decisions about resources to be allocated to the segment and
to assess its performance. Segmental results, assets and liabilities include items directly attributable to a segment,
as well as those that can be allocated on a reasonable basis. Segmental capital additions is the total cost incurred
during the period to acquire property, plant and equipment.
Exceptional items
Exceptional items are defined as items of income or expenditure which, in the opinion of the Directors, are material
in nature or magnitude and of such significance that they require separate disclosure on the face of the income
statement in accordance with IAS 1 “Presentation of financial statements”. Should these items be reversed, disclosure
of this would also be classified within exceptional items.
Finance income and expenses
Finance income comprises interest income on bank deposits and the unwinding of discounts on deferred receivables
and shared equity receivables. Interest income is recognised as it accrues, using the effective interest method.
Finance expenses comprise interest and fees on bank facilities, leases and the unwinding of discounts on deferred
payables. Also included is the amortisation of fees associated with the arrangement of financing. Interest expense is
recognised in the income statement using the effective interest method.
170
MJ Gleeson plc Annual Report & Accounts 2023 1 Accounting policies CONTINUED
Leases
The Group assesses whether a contract is, or contains, a lease at inception of the contract. The Group recognises a
right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets.
For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over
the term of the lease unless another systematic basis is more representative of the time pattern in which economic
benefits from the leased assets are consumed.
A lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the
Group uses an incremental borrowing rate that is the rate of interest that the lessee would have to pay to borrow
over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-
of-use asset in a similar economic environment.
Right-of-use assets are initially measured at cost, comprising the initial measurement of the lease liability, plus any
initial direct costs and an estimate of asset retirement obligations, less any lease incentives. Subsequently, right-of-
use assets are measured at cost, less any accumulated depreciation and any accumulated impairment losses, and are
adjusted for certain remeasurements of the lease liability. Depreciation is calculated on a straight-line basis over the
length of the lease.
For a modification that decreases the scope of the lease, the lease liability is remeasured at the effective date of
the modification using a revised discount rate representative of the remainder of the lease term. Where this is not
readily determined, the incremental cost of borrowing will be used. The carrying amount of the right-of-use asset
will decrease to reflect the partial or full termination of the lease. Any gain or loss relating to the lease modification is
recognised in the income statement.
Non-financial assets
1. Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any recognised impairment loss.
Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight-line
method, on the following basis:
• Property: over the term of the lease for right-of-use assets
• Plant and equipment: between three and six years
Depreciation of these assets is charged to the income statement.
2. Investments
Investments are stated at cost less impairment.
3. Inventories
Inventories are valued at the lower of cost and net realisable value and are subject to regular impairment reviews.
Inventories comprise all direct costs incurred in bringing the individual inventories to their present condition at the
reporting date, including direct materials, direct labour costs and related overheads. For Gleeson Land, inventories
also comprise all direct costs incurred in promoting land through the planning system through to the point of sale,
less the value of any impairment losses. Inventories are recognised in cost of sales as an allocation of the latest
forecast gross margin expected to be generated over the remaining life of that site, which is an output of the site
valuation process. These valuations, which are carried out at regular intervals throughout the year, use actual and
forecast selling prices, land costs and build costs. Land purchased with deferred consideration terms is included in
inventories at its net present value.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs
of completion and the estimated costs necessary to make the sale. In Gleeson Homes, the key assumptions
underpinning the assessment of net realisable value are forecast costs to complete, site margins, contingencies and
selling prices. In Gleeson Land, expected land value, planning outcome, the remaining duration of the promotion or
option agreement and forecast costs to complete are used to determine net realisable value.
171
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
1 Accounting policies CONTINUED
Impairment of non-financial assets
The carrying amounts of non-financial assets are reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
The recoverable amount of an asset is the greater of its value in use and its fair value less costs of disposal. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable amount.
Impairment losses are recognised in the income statement.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss
has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined if no impairment loss had been
recognised.
Financial assets
1. Shared equity receivables
Shared equity receivables are loans that were offered to certain customers to assist in the purchase of their home.
Shared equity receivables are recorded at fair value through other comprehensive income (“OCI”), representing
the amount receivable discounted to present day values. The difference between the nominal value and the initial
fair value is credited over the deferred term to finance income, with the financial asset increasing to its full cash
settlement value on the anticipated receipt date. The Group holds a second charge over property sold under shared
equity schemes. Changes in the fair value of shared equity receivables are recognised in other comprehensive
income. Interest calculated using the effective interest method and impairment losses on shared equity receivables
are recognised in the income statement.
2. Trade and other receivables
Trade and other receivables are initially measured at fair value and subsequently measured at amortised cost using
the effective interest method, less any provision for impairment.
Deferred land receivables are discounted to present values when repayment is due in more than one year after initial
recognition.
3. Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits and cash held in solicitors’ client accounts on
the Group’s behalf and are subject to an insignificant risk of changes in value.
Impairment of financial assets
An assessment of expected credit losses associated with financial assets carried at amortised cost is undertaken
on a forward-looking basis. For trade receivables, the simplified approach as permitted by IFRS 9 “Financial
instruments” is applied, which requires expected lifetime losses to be recognised from initial recognition of the
receivables.
Non-financial liabilities
1. Provisions
Provisions are recognised when there is a present legal or constructive obligation arising from past events and it is
probable that there will be an outflow of resources required to settle the obligation. Provisions are measured at the
best estimate of the Directors and discounted to present value where the effect is material.
2. Contingent liabilities
Where there is a possible obligation arising from past events that will be confirmed only by the occurrence or non-
occurrence of one or more uncertain future events then, unless the possibility of such an outflow of resources in
settlement is remote, a contingent liability is disclosed.
172
MJ Gleeson plc Annual Report & Accounts 2023 1 Accounting policies CONTINUED
Financial liabilities
1. Trade and other payables
Trade and other payables are initially measured at fair value and are subsequently measured at amortised cost, using
the effective interest rate method.
Deferred land payables are discounted to present values when repayment is due in more than one year after initial
recognition.
2. Loans and borrowings
Interest-bearing bank loans are initially measured at fair value (being proceeds received, net of direct issue costs)
and are subsequently measured at amortised cost. Capitalised finance costs are held in other receivables and
amortised over the period of the facility, less any provision for impairment.
Tax
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the taxable income for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying values of assets and liabilities for financial
reporting purposes and the values used for taxation purposes. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against which the asset can be utilised.
Employee benefits
1. Defined contribution pension plans
Obligations for contributions to defined contribution pension schemes are charged to the income statement in the
period to which the contributions relate.
2. Share-based payments
Equity-settled share-based payments (“share options”) are measured at fair value at the date of grant. Fair value
is measured using generally accepted option pricing models, taking into account the terms and conditions upon
which the options were granted. The fair value of options granted is recognised as an employee expense with a
corresponding credit to equity, spread on a straight-line basis over the vesting period. Where non-market vesting
conditions apply, the expense is based on the estimate of shares that will eventually vest. These awards are granted
by the Company and the cost of the share-based award relating to each subsidiary is calculated, based on an
appropriate apportionment, at the date of grant and recharged through intercompany.
Own shares held by Employee Benefit Trusts
The Employee Benefit Trusts (“EBT”) holds shares in the Company for the purpose of settling employee share
purchase plan awards, deferred bonus awards for the Executive Directors, and employee share options through
shares purchased from the market. The cost of the Company’s purchase of its own shares is shown as a reduction in
shareholders’ equity through the “own shares” reserve until such time as they are vested to employees.
Dividends
Dividends are recorded in the financial statements when paid. Final dividends are recorded in the financial
statements in the period in which they receive shareholder approval.
173
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
1 Accounting policies CONTINUED
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates
and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making the judgements about carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision affects both current and future periods.
The key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year at the balance sheet date are listed below.
1. Margin recognition
Cost of sales is recognised for completed home sales as an allocation of the latest forecast gross margin expected
to be generated over the remaining life of a site, which is an output of the site valuation process. These valuations,
which are updated at regular intervals throughout the year, use actual and forecast selling prices, land costs and
build costs and are sensitive to future movements in both the estimated costs to complete and expected selling
prices. These estimates are reflected in the margin recognised on sites in relation to sales recognised in the current
and future years. There is a degree of inherent uncertainty in making such estimates. The Group has internal controls
that are designed to ensure that an effective assessment of the costs to complete a development is made on a
regular basis. If gross margin on homes sold decreased by 100 basis points, profit before tax in the year would have
been £3.2m lower (2022: £3.3m lower).
2. Carrying value of inventories (land and work in progress)
Inventories are stated at the lower of cost and net realisable value. For Gleeson Homes, the assessment of net
realisable value is performed on a site-by-site basis, taking into account an estimation of costs to complete and
remaining revenue. If forecast gross margins reduced by 5%, there would be no material impact on profit before tax
or the carrying value of inventory.
For Gleeson Land, the assessment of net realisable value is performed on a site-by-site basis. Net realisable value is
largely dependent on the prospect of obtaining a successful planning consent. Given this, there is some uncertainty
over the net realisable value of each site. These assessments include a degree of inherent uncertainty when
estimating the profitability of a site and in assessing any impairment provisions that may be required. If a single site
in the portfolio failed to obtain planning permission before the expiration of the agreement, the carrying value would
decrease by £0.5m (2022: £0.4m), based on an average site. The single largest site inventory balance in the portfolio
is £2.6m (2022: £2.4m).
3. Building safety
As set out in note 18, the Group undertakes periodic reviews of all buildings over 11 metres in which the Group had,
over the last 30 years, some involvement in developing.
The Group has recorded a building safety provision which represents the best estimate of the life-critical fire-safety
remediation costs associated with these buildings. The building safety provision requires a number of key estimates
and judgements in its calculation. If it is deemed that the costs are probable and can be reliably measured then, as
per IAS 37 “Provisions, contingent liabilities and contingent assets”, a provision is recorded. If costs are considered
possible or cannot be reliably estimated then they are recorded as contingent liabilities. The key judgements include,
but are not limited to, the identification of these properties, the time period to consider and which properties should
then be included. Judgement is also required in respect of the underlying nature of the building and materials used
where intrusive surveys have not yet been carried out. The key estimates applied to these properties include the
potential costs of investigation, the costs of replacement materials and works, the costs of disruption to residents of
these buildings and the timing of forecast expenditure.
If forecast remediation costs on these buildings were 20% higher, the exceptional charge in the consolidated income
statement would be £2.6m higher. See note 18 for further details.
174
MJ Gleeson plc Annual Report & Accounts 2023 1 Accounting policies CONTINUED
4. Climate change and environmental risk
Significant judgement is required to assess the impact of climate change on the operations of the business and the
carrying value of its assets, including land held in inventory. Climate change has the potential to significantly impact
our business strategy through restricted land availability, disrupted build programmes, material and labour shortages
and increased costs. No provisions or impairment of assets have been recognised in these financial statements, but
detailed scenario analysis is presented in the TCFD section on page 76 to 85.
5. Carrying value of investments (Company only)
Investments are stated at cost less impairment. Significant judgement is required to determine whether an
impairment trigger has taken place, and in calculating an impairment, judgement is required to determine the value
in use or net realisable value. It was identified that Gleeson Construction Services Limited incurred a loss during
the year, which is an indicator that an impairment loss may have occurred – see note 12 for further details. For the
investment held in MJ Gleeson Group Limited, an increase in the loss of MJ Gleeson Group Limited or its subsidiary,
Gleeson Construction Services Limited, of 10% each year would lead to an increase in the impairment of £200,000.
Adoption of new and revised standards
For the year ended 30 June 2023, the Group and Company have applied the following new and revised standards
that were mandatorily effective for an accounting period beginning on or after 1 January 2022:
• Amendments to IFRS 3, “Business combinations”, IAS 16, “Property, plant and equipment”, and IAS 37 “Provisions,
contingent liabilities and contingent assets” and Annual Improvements to IFRS Standards 2018-2020.
The adoption of these standards and amendments has not had any material impact on the disclosures or amounts
reported in these financial statements.
Standards not yet applied
There are a number of standards and interpretations issued by the International Accounting Standards Board that
are effective for financial statements after this reporting period. The following have not been adopted by the Group
and Company in preparing the financial statements for the year ended 30 June 2023:
•
IAS 1 “Classification of liabilities” (effective 1 January 2023)
• Amendments to IAS 8 “Accounting policies, changes in accounting estimates and errors” (effective
1 January 2023)
• Amendments to IAS 12 “Taxation” (effective 1 January 2023)
• Amendments to IAS 1 “Presentation of financial statements” (effective 1 January 2024)
The application of the standards and interpretations not yet applied is not expected to have a material impact on
the Group and Company’s financial performance or position, or give rise to additional disclosures in the financial
statements.
175
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
2 Segmental analysis
The Group is organised into the following two operating divisions under the control of the Executive Board, which is
identified as the Chief Operating Decision Maker as defined under IFRS 8 “Operating segments”:
• Gleeson Homes
• Gleeson Land
All of the Group’s operations are carried out entirely within the United Kingdom. Segmental information about the
Group’s operations is presented below:
2023
Pre-
exceptional
items
£000
2023
Exceptional
items
(note 3)
£000
2022
Pre-
exceptional
items
£000
2022
Exceptional
items
(note 3)
£000
2023
Total
£000
–
–
–
320,848
7,471
328,319
334,571
38,838
373,409
–
–
–
2022
Total
£000
334,571
38,838
373,409
38,360
11,061
49,421
(5,491)
172
(1,482)
(1,022)
–
(1,022)
–
–
–
34,023
1,032
35,055
(2,518)
191
(2,261)
(1,022)
30,467
210
(812)
(6,298)
24,169
51,227
11,061
62,288
(5,491)
172
(1,482)
55,487
(9,976)
45,511
(12,867)
–
(12,867)
–
–
–
(12,867)
42,620
2,445
(7,531)
(10,422)
35,089
Revenue
Gleeson Homes
Gleeson Land
Total revenue
Divisional operating profit
Gleeson Homes
Gleeson Land
Group administrative expenses
Finance income
Finance expenses
Profit before tax
Tax
Profit for the year
320,848
7,471
328,319
35,045
1,032
36,077
(2,518)
191
(2,261)
31,489
(6,508)
24,981
All revenue in the Gleeson Homes segment relates to the sale of residential properties. All revenue for the Gleeson
Land segment is in relation to the sale of land interests. There is no revenue relating to Group activities.
No single customer accounts for more than 10% of revenue (2022: no single customer).
Balance sheet analysis of business segments:
2023
Liabilities
£000
Net assets/
(liabilities)
£000
(86,033)
240,689
(1,733)
(2,546)
–
41,474
(1,306)
5,159
Assets
£000
326,722
43,207
1,240
5,159
Assets
£000
280,481
49,230
4,083
33,764
2022
Liabilities
£000
Net assets/
(liabilities)
£000
(85,170)
(5,869)
(4,343)
–
195,311
43,361
(260)
33,764
272,176
376,328
(90,312)
286,016
367,558
(95,382)
2023
2022
Capital
additions
£000
Depreciation
£000
Capital
additions
£000
Depreciation
£000
4,441
–
4,441
3,877
95
3,972
3,684
–
3,684
3,022
102
3,124
Gleeson Homes
Gleeson Land
Group activities
Cash and cash equivalents
Other information:
Gleeson Homes
Gleeson Land
176
MJ Gleeson plc Annual Report & Accounts 2023 3 Exceptional items
Restructuring
In February 2023, we announced the restructuring of Gleeson Homes from nine regional management teams to six
and moved to a standard operating structure with consistent roles, responsibilities, processes and reporting. The
restructuring impacted a significant proportion of our colleagues, but the final number of redundancies was kept to
a minimum.
The restructuring expense of £1,022,000 consists of redundancy costs of £975,000 and professional fees of £47,000.
The amount, combined with the number of colleagues directly and indirectly impacted by the restructure, and the
fact that this was a one-off cost, make this an exceptional item in the year. Termination benefits are further disclosed
in note 6.
Building safety
In the prior year, the Group established an exceptional provision for the costs estimated to remediate life-critical
fire-safety issues on buildings over 11 metres in which the Group had some involvement in developing over the last
30 years. In February 2023, the Group entered into the long form agreement of the Department for Levelling Up,
Housing and Communities (“DLUHC”) self-remediation terms following its initial pledge in April 2022.
We continue to carry out investigation work, intrusive surveys and fire risk assessments. As a result of these
investigations, three additional buildings were identified by Gleeson and notified to DLUHC this year. These buildings
are of masonry construction, two of which were conversions from their previous use as mills and one of which was
previously notified to DLUHC as a single development, but comprises two separate buildings. The overall provision
has been reassessed in light of these and a further assessment of the remediation works required on the 14 buildings
previously notified.
Whilst the estimated remediation costs were increased for the three new buildings identified during the year, this
was offset by reductions in the estimated costs associated with the 14 existing buildings based on the work carried
out during the year and latest information. As such, no further exceptional costs were recognised in the year for life-
critical fire-safety remedial works (2022: £12,867,000).
Cost of sales
Administrative expenses
4 Expenses and auditors’ remuneration
Profit for the year is stated after charging/(crediting):
Staff costs
Depreciation of property, plant and equipment
Profit on redemption of shared equity receivables
Loss on disposal of property, plant and equipment
Auditors' remuneration:
Audit of these financial statements
Audit of financial statements of subsidiaries pursuant to legislation
Non-audit services
2023
£000
–
1,022
2023
£000
49,549
3,972
(285)
305
304
85
–
Note
6
11
15
11
2022
£000
12,867
–
2022
£000
47,220
3,124
(375)
403
254
66
–
177
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
5 Other operating income
Profit on redemption of shared equity receivables
Other operating income
6 Staff costs
Wages and salaries
Termination benefits
Share-based payment (credit)/charge
Social security costs
Other pension costs
Note
15
2023
£000
285
135
420
Note
24
19
Group
Company
2023
£000
42,349
975
(307)
4,899
1,633
49,549
2022
£000
39,023
–
1,568
5,235
1,394
47,220
2023
£000
1,557
–
(190)
(231)
63
1,199
The monthly average number of employees, excluding Non-Executive Directors, during the year was:
Gleeson Homes
Gleeson Land
Group activities
Group
2023
No.
784
18
4
806
2022
£000
375
309
684
2022
£000
2,071
–
921
588
70
3,650
2022
No.
730
14
4
748
The monthly average number of Company employees and Non-Executive Directors during the year was eight
(2022: nine).
Key management remuneration
Key management personnel, as defined under IAS 24 “Related party disclosures”, have been identified as the Board
of Directors, the Chief Executive of Gleeson Homes and Managing Director of Gleeson Land, and the Divisional
Managing Directors of Gleeson Homes. A summary of key management remuneration is as follows:
Short-term employee benefits
Post-employment benefits
Share-based payment (credit)/charge1
Group
Company
2023
£000
2,540
140
(229)
2,451
2022
£000
3,990
134
1,302
5,426
2023
£000
1,059
57
(190)
926
2022
£000
2,248
62
921
3,231
1 Share-based payments reflect the IFRS 2 “Share-based payment” (credit)/charge through the income statement.
178
MJ Gleeson plc Annual Report & Accounts 2023 7 Finance income and expenses
Finance income
Interest on bank deposits
Unwinding of discount on long-term receivables
Other interest income
Finance expenses
Interest on bank overdrafts and loans
Bank facility charges
Unwinding of discount on long-term payables
Unwinding of discount on lease liabilities
Net finance expenses
8 Tax
Current tax
Current year expense
Adjustment in respect of prior years
Current tax expense for the year
Deferred tax
Current year expense
Adjustment in respect of prior years
Impact of rate change
Deferred tax expense for the year
Total tax charge
2023
£000
2022
£000
–
185
6
191
(1,905)
(25)
(168)
(163)
2
152
18
172
(820)
(516)
(49)
(97)
(2,261)
(1,482)
(2,070)
(1,310)
Group
2023
£000
5,834
(42)
5,792
495
(53)
64
506
2022
£000
7,571
(165)
7,406
253
(165)
37
125
6,298
7,531
Note
20
20
20
Corporation tax has been calculated at 20.7% of assessable profit for the year (2022: 17.7%). The applicable UK
corporation tax rate is 20.5% - representing a rate of 19% to 31 March 2023 and 25% effective from 1 April 2023.
The charge for the year can be reconciled to the profit before tax per the consolidated income statement as follows:
179
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
8 Tax CONTINUED
Total tax charge reconciliation
Profit before tax
Note
2023
£000
30,467
%
2022
£000
42,620
%
Tax at current corporation tax rate
6,246
20.5
8,098
19.0
Expenses not deductible for tax purposes
Non-qualifying depreciation
Relief for share-based payments
Capital allowances super deduction
Land remediation relief
Impact of rate differences
Adjustments in respect of prior years –
current tax
Adjustments in respect of prior years –
deferred tax
Residential property developers tax
Total tax charge and effective tax rate for the
year
42
128
111
(131)
(354)
64
(42)
(53)
287
0.1
0.4
0.4
(0.4)
(1.1)
0.2
(0.1)
(0.2)
0.9
13
82
84
(161)
(412)
37
(165)
(165)
120
6,298
20.7
7,531
–
0.2
0.2
(0.4)
(0.9)
0.1
(0.4)
(0.4)
0.3
17.7
20
The difference between the headline rate of 20.5% and the effective tax rate of 20.7% is primarily driven by land
remediation relief and residential property developers tax. Further explanations are provided following the current
tax reconciliation.
The current tax charge for the year can be reconciled to the profit before tax per the consolidated income statement
as follows:
Current tax charge reconciliation
Profit before tax
2023
£000
30,467
%
2022
£000
42,620
%
Tax at current corporation tax rate
6,246
20.5
8,098
19.0
Expenses not deductible for tax purposes
Non-qualifying depreciation
Relief for share-based payments
Capital allowances super deduction
Land remediation relief
Impact of capital allowances in excess of depreciation
Adjustments in respect of prior years – current tax
Residential property developers tax
Short-term timing differences
Current tax charge and effective tax rate for the year
42
128
(144)
(131)
(354)
(295)
(42)
211
131
5,792
0.1
0.4
(0.5)
(0.4)
(1.1)
(1.0)
(0.1)
0.7
0.4
19.0
13
82
263
(161)
(412)
(292)
(165)
141
(161)
7,406
–
0.2
0.6
(0.4)
(0.9)
(0.6)
(0.4)
0.3
(0.4)
17.4
The most significant factor impacting the Group’s current tax charge is land remediation relief, whereby tax relief is
granted on an additional 50% of qualifying land remediation expenditure. This is for costs incurred on remediating
contaminated land and bringing it to a safe and usable condition for the purposes of development. Many of our sites
are on brownfield land and require significant remediation prior to use. The government provides this benefit as an
incentive to remediate contaminated land. No deferred tax is recognised on this permanent benefit.
The impact of capital allowances in excess of depreciation arises where assets qualify for capital allowances in a
different period than they are depreciated for accounting purposes. A temporary timing difference is created and
deferred tax is recognised on the difference between the carrying amount of the asset and the amount deductible
for tax purposes in future years. For capital investments made between 1 April 2021 and 31 March 2023 an additional
super deduction capital allowance at 130% was available on qualifying assets. No deferred tax is recognised on the
permanent element of this benefit.
180
MJ Gleeson plc Annual Report & Accounts 2023 8 Tax CONTINUED
The current tax relief for share-based payments is lower than the cumulative IFRS 2 “Share-based payment” charge
for the options exercised, with current and deferred tax being recognised to reflect this difference. The anticipated
tax relief has been calculated based on the share price at the balance sheet date and apportioned for the portion
of the vesting period which has passed. This anticipated corporation tax relief is greater than the cumulative IFRS 2
charge in the income statement and as such some deferred tax is recognised in equity.
From 1 April 2022, residential property developers tax (“RPDT”) has been charged at 4% on certain profits from
residential development activities. The additional 4% RPDT is recognised as part of the tax expense and creates a
permanent difference in excess of the headline rate of Corporation Tax at 20.5%. No deferred tax is recognised in
relation to this permanent difference.
Short-term timing differences comprise items other than depreciation of property, plant and equipment, where the
amount is included in the tax computation in a different period from when it is recognised in the income statement.
Deferred tax is recognised on these items.
Prior period adjustments relate to estimates and judgements included in the prior year accounts in respect of
tax and subsequently adjusted when the tax computations were finalised and submitted to HMRC. Some of
these differences related to deferred tax, with the adjustment being recognised accordingly for the prior period
adjustment.
Non-deductible expenditure is a permanent difference and comprises business expenses, such as entertaining costs,
recognised in the income statement but not allowable as a deduction against taxable income. No deferred tax is
recognised on these differences.
Tax recognised on equity-settled share-based payments
Group
Company
Note
2023
£000
2022
£000
2023
£000
2022
£000
Current tax related to equity-settled share-
based payments
Deferred tax related to equity-settled share-
based payments
Total tax recognised on equity-settled
share-based payments
–
(39)
–
20
(362)
(362)
167
128
(190)
(190)
9 Dividends
Amounts recognised as distributions to equity holders:
Interim dividend for the year ended 30 June 2023 of 5.0p (2022: 6.0p) per share
Final dividend for the year ended 30 June 2022 of 12.0p (2021: 10.0p) per share
2023
£000
2,911
6,996
9,907
(39)
158
119
2022
£000
3,507
5,831
9,338
A final dividend of 9p per share has been proposed for the year ended 30 June 2023, equating to £5,241,000
(2022: £6,999,000). This is subject to approval by shareholders at the AGM on 16 November 2023 and has not been
recognised in these financial statements.
10 Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
Profit for the year
Adjust for exceptional items (note 3)
Adjust for tax on exceptional items
Profit for the year – pre-exceptional items
2023
£000
24,169
1,022
(210)
24,981
2022
£000
35,089
12,867
(2,445)
45,511
181
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
10 Earnings per share CONTINUED
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per
share
Effect of dilutive potential ordinary shares:
– Share-based payments
Weighted average number of ordinary shares for the purposes of diluted earnings
per share
Basic earnings per share
Diluted earnings per share
Basic earnings per share – pre-exceptional items
Diluted earnings per share – pre-exceptional items
11 Property, plant and equipment
2023
No. 000
2022
No. 000
58,246
58,259
41
145
58,287
58,404
2023
p
41.49
41.47
42.89
42.86
2022
p
60.23
60.08
78.12
77.92
Cost or valuation
At 1 July 2021
Additions
New leases entered in the year
Leases exited in the year
Disposals
At 30 June 2022
Additions
New leases entered in the year
Disposals
At 30 June 2023
Accumulated depreciation
At 1 July 2021
Charge for the year
Leases exited in the year
Disposals
At 30 June 2022
Charge for the year
Disposals
At 30 June 2023
Net book value
At 1 July 2021
At 30 June 2022
At 30 June 2023
Group
Plant and
equipment
£000
Property
£000
2,727
–
1,133
(68)
–
3,792
–
1,619
–
5,411
790
467
(6)
–
1,251
619
–
1,870
1,937
2,541
3,541
10,388
3,684
206
(34)
(1,701)
12,543
4,441
1,311
(876)
17,419
5,641
2,657
(28)
(1,298)
6,972
3,353
(571)
9,754
4,747
5,571
7,665
Total
£000
13,115
3,684
1,339
(102)
(1,701)
16,335
4,441
2,930
(876)
22,830
6,431
3,124
(34)
(1,298)
8,223
3,972
(571)
11,624
6,684
8,112
11,206
Company
Plant and
equipment
£000
1
–
–
–
–
1
–
–
–
1
1
–
–
–
1
–
–
1
–
–
–
The Group has recorded a depreciation charge of £3,972,000 (2022: £3,124,000), of which £1,750,000
(2022: £609,000) has been charged in cost of sales and £2,222,000 (2022: £2,515,000) in administrative expenses.
At 30 June 2023, the net book value of right-of-use assets was £4,776,000 (2022: £2,773,000), of which £3,544,000
(2022: £2,541,000) is within property and £1,232,000 (2022: £232,000) is within plant and equipment. The depreciation
charge recorded for right-of-use assets was £930,000 (2022: £602,000). Refer to note 17 for further details.
The Company recorded a depreciation charge of £nil (2022: £nil).
182
MJ Gleeson plc Annual Report & Accounts 2023 12 Investments in subsidiaries
Cost
At 1 July 2021
Impairment
At 30 June 2022
Impairment
At 30 June 2023
Company
£000
99,067
(73)
98,994
(3,791)
95,203
The investments in subsidiaries are assessed annually to determine whether there is any indication that any of the
investments might be impaired. Gleeson Construction Services Limited incurred a loss during the year, which is an
indicator that an impairment loss may have occurred and, therefore, the recoverable amount of the investment was
calculated.
MJ Gleeson Group Limited is the intermediate holding company of Gleeson Construction Services Limited and does
not generate revenue or incur any significant costs of its own. Gleeson Construction Services Limited manages the
unwind of historic construction and employment liability claims and does not generate any revenue, but it incurs
losses which reduce the net asset value.
The recoverable amount of MJ Gleeson Group Limited and its subsidiary, Gleeson Construction Services Limited, was
determined based on a value-in-use calculation incorporating discounted cash flow projections at a discount rate
of 6.1%.
The carrying value of the investment in MJ Gleeson Group Limited was £5,994,000 (2022: £6,067,000) and the
recoverable amount was calculated as £2,203,000 (2022: £5,994,000), resulting in an impairment loss of £3,791,000
(2022: £73,000).
Subsidiary undertakings
The following are the principal subsidiary undertakings of MJ Gleeson plc. MJ Gleeson plc owns 100% of the ordinary
share capital of the subsidiaries, all of which are incorporated in England and Wales and operate in the United
Kingdom. The registered address for all subsidiary undertakings of MJ Gleeson plc is 6 Europa Court, Sheffield
Business Park, Sheffield, S9 1XE.
Company name
Gleeson Developments Limited
Gleeson Regeneration Limited
Gleeson Developments (North East) Limited
Gleeson Land Limited
Gleeson Land (Fleet) Limited1
Principal activity
House building
House building
House building
Land promotion and sale
Land promotion and sale
1 Shares held by Gleeson Land Limited.
Incorporation Number
00848808
03920096
03867699
05181745
05742750
183
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
12 Investments in subsidiaries CONTINUED
The following are the other subsidiary companies of MJ Gleeson plc:
Company name
MJ Gleeson Group Limited
Gleeson Construction Services Limited2
Colroy Limited3
Haredon Developments Limited3
Gleeson Capital Solutions Limited
Gleeson Classic Homes Limited1
Gleeson Homes Southern Limited1
Gleeson Housing Developments Limited1
Gleeson PFI Investments Limited
Gleeson Properties Limited
Gleeson Properties (Kingley) Limited3
Gleeson Properties (Petersfield) Limited3
Gleeson Services Limited
KW Cannock Properties Limited
MJ Gleeson (International) Limited
MJG (Management) Limited
Oakmill Properties Limited3
Sindale Properties Limited1
1 Shares held by Gleeson Developments Limited.
2 Shares held by MJ Gleeson Group Limited.
3 Shares held by Gleeson Properties Limited.
Principal activity
Intermediate holding company
Legacy construction services
Dormant*
Dormant*
Dormant*
Dormant*
Dormant*
Dormant*
Dormant*
Dormant*
Dormant*
Dormant*
Dormant*
Dormant*
Dormant*
Dormant*
Dormant*
Dormant*
Incorporation Number
00479529
00783607
00882558
00759754
05276021
01952198
01530449
01460800
05337924
00805039
05281899
05075336
00885340
05899918
00955626
00941012
05206658
04201608
* Exempt from audit by virtue of s479A of the Companies Act 2006.
13 Inventories
Land held for development
Work in progress
2023
£000
112,649
231,977
344,626
2022
£000
113,745
173,137
286,882
Net realisable value provisions held against inventories at 30 June 2023 were £6,980,000 (2022: £5,933,000). The
amount of inventory write-down recognised as an expense in the period was £2,676,000 (2022: £3,341,000) and
the amount of reversal of previously recognised inventory write-down was £391,000 (2022: £2,211,000). The cost of
inventories recognised as an expense in cost of sales was £236,074,000 (2022: £261,293,000).
Company
The Company held no inventories at 30 June 2023 (2022: £nil).
184
MJ Gleeson plc Annual Report & Accounts 2023 14 Trade and other receivables
Current receivables
Trade receivables
VAT recoverable
Prepayments and accrued income
Shared equity receivables
Amounts due from subsidiary undertakings
Non-current receivables
Trade receivables
Shared equity receivables
Group
2023
£000
9,904
2,414
1,251
378
–
2022
£000
20,423
6,615
978
1,227
–
13,947
29,243
Company
2023
£000
2022
£000
–
14
122
–
–
86
19
–
117,742
117,878
77,091
77,196
–
51
51
4,793
258
5,051
–
–
–
–
–
–
The Directors consider that the carrying amount of trade and other receivables approximates their fair value and
includes an allowance for impairment of trade receivables.
See note 15 for reference to credit risk associated with trade receivables and further disclosures in respect of shared
equity receivables.
Amounts due from subsidiary undertakings are unsecured, repayable on demand, and interest free. Expected credit
losses are based on the assumption that repayment of the loan is demanded at the reporting date. No allowance for
expected credit losses is deemed necessary in respect of amounts owed by Group undertakings.
15 Financial instruments
The Group and Company’s finance assets and liabilities are as follows:
Group
Financial assets
Cash and cash equivalents
Trade and other receivables
Shared equity receivables
Financial liabilities
Land payables
Trade and other payables
Lease liabilities
Book value
2023
£000
5,159
9,904
936
15,999
2022
£000
33,764
25,216
1,844
60,824
Carrying value
2023
£000
2022
£000
5,159
9,904
429
15,492
33,764
25,216
1,485
60,465
Book value
2023
£000
2022
£000
Carrying value
2023
£000
2022
£000
(14,348)
(14,622)
(14,052)
(14,622)
(57,637)
(5,144)
(77,129)
(64,363)
(3,009)
(81,994)
(57,637)
(5,144)
(76,833)
(64,363)
(3,009)
(81,994)
185
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
15 Financial instruments CONTINUED
Company
Financial assets
Cash and cash equivalents
Amounts due from subsidiary undertakings
Financial liabilities
Trade and other payables
Amounts due to subsidiary undertakings
Book value
2023
£000
248
117,742
117,990
Book value
2023
£000
(1,241)
(142,475)
(143,716)
2022
£000
1,001
77,091
78,092
2022
£000
(2,807)
(119,458)
(122,265)
Carrying value
2023
£000
2022
£000
248
117,742
117,990
1,001
77,091
78,092
Carrying value
2023
£000
2022
£000
(1,241)
(142,475)
(143,716)
(2,807)
(119,458)
(122,265)
Risk exposure
The Company operates a central treasury function providing services to the Group. The treasury function arranges
loans and funding, invests any surplus liquidity and manages financial risk. The treasury function is not a profit centre
and no speculative trades are permitted or executed. It operates within specific policies, agreed by the Board, to
control and monitor financial risk within the Group.
Cash and cash equivalents
Cash and cash equivalents comprises cash, demand deposits and cash held in solicitors’ client accounts on the
Group’s behalf. The carrying amount of these assets equals their fair value.
Credit risk
The Group’s and Company’s credit risk is primarily attributable to its trade and other receivables. The Group applies
a simplified approach in calculating expected credit losses. The Group does not track changes in credit risk, but
instead recognises a loss allowance based on lifetime expected credit losses at each reporting date. The expected
credit loss is based on the risk of default estimated by the Group’s management based on prior experience, forward-
looking assessments of the economic environment and relative counter-party risk. For this purpose, a default is
determined to have occurred if the Group becomes aware of evidence that it will not receive all contractual cash
flows that are due. The Directors consider that the carrying value of trade and other receivables approximates to
their fair value and no expected credit loss is recognised.
The credit risk on cash and cash equivalents is limited because the counterparties are banks with high credit ratings
assigned by international credit rating agencies.
At 30 June 2023, the Group’s most significant credit risk was with a housebuilder and amounted to £4,179,000
(2022: £7,539,000) of the trade and other receivables carrying amount, with the deferred receivables secured by
way of first legal charge over the land. The fair value of any land held as security is considered by the Board to be
sufficient in relation to the carrying amount of the receivable to which it relates.
The Group’s remaining credit risk is spread over a number of counterparties and customers.
The ageing of gross trade receivables at the reporting date was:
Not past due
Past due 0–30 days
Past due 31–120 days
Past due 121–365 days
Past due more than one year
186
2023
£000
9,744
236
–
20
453
Group
2022
£000
25,413
–
71
203
29
10,453
25,716
2023
£000
Company
2022
£000
–
–
–
–
–
–
–
–
–
–
–
–
MJ Gleeson plc Annual Report & Accounts 2023 15 Financial instruments CONTINUED
All trade receivables are from UK customers. The amounts due are included at expected realisable value.
Included in trade receivables not past due are £nil (2022: £4,793,000) receivables due in more than one year.
In addition to the above, the Company has intercompany receivables which are repayable on demand.
The movement in the allowance for impairment of trade receivables during the year was as follows:
Balance at 1 July
Impairment loss recognised
Release of impairment allowance
Balance at 30 June
Group
Company
2023
£000
260
239
(24)
475
2022
£000
2023
£000
2022
£000
139
217
(96)
260
–
–
–
–
–
–
–
–
Trade and other receivables deemed to have no reasonable expectation of recovery following unsuccessful
attempts to pursue the debt are written off in the financial statements, but are still subject to enforcement activity.
Subsequent recoveries of amounts previously written off are credited to the income statement.
Market risk
The Group has no significant exposure to foreign currency risk or equity risk.
Interest rate risk
The Group closely monitors its exposure to variations in interest rates but has limited exposure. At 30 June 2023 the
Group had no material interest-bearing financial liabilities.
Bank borrowings
Bank overdraft
2023
Weighted average
interest rate
2022
Weighted average
interest rate
%
5.74
–
£000
–
–
%
2.95
–
£000
–
–
Based on average net cash balances during the year, a 1.5% change in interest rates, which the Directors consider to
be a reasonably possible change, would affect profit before tax by £265,000–£358,000 (2022: £71,000–£200,000
impact based on 1.5% change).
Liquidity risk
Liquidity risk is the risk that the Group does not have sufficient financial resources available to meet its obligations
as they fall due. The Group manages liquidity risk by monitoring forecast and actual cash flows and matching
the expected cash flow timings of financial assets and liabilities with the use of cash and cash equivalents and
loans and borrowings. At the balance sheet date, the total unused committed amount was £105,000,000 (2022:
£105,000,000) and cash and cash equivalents were £5,159,000 (2022: £33,764,000).
In July 2023, the Group refinanced its committed facility with Lloyds Bank plc and Santander UK plc. The new
facility has a limit of £135m (previously £105m), expires in October 2026 and has two consecutive one-year optional
extensions provided by both banks.
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements:
187
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
15 Financial instruments CONTINUED
Non-derivative financial liabilities
Group
30 June 2023
Trade and other
payables
Lease liabilities
30 June 2022
Trade and other
payables
Lease liabilities
Carrying
amount
£000
Undiscounted
contractual
cash flows
£000
On demand
or within 6
months
£000
71,689
5,144
76,833
71,650
5,818
77,468
61,419
618
62,037
Carrying
amount
£000
Undiscounted
contractual
cash flows
£000
On demand
or within 6
months
£000
78,985
3,009
81,994
79,182
3,369
82,551
70,172
369
70,541
6–12
months
£000
5,687
642
6,329
6–12
months
£000
1,634
342
1,976
1–2
years
£000
2,489
1,271
3,760
1–2
years
£000
6,426
628
7,054
2–5
years
£000
More than
5 years
£000
2,055
1,807
3,862
–
1,480
1,480
2–5
years
£000
More than
5 years
£000
950
1,257
2,207
–
773
773
Company
The non-derivative financial liabilities of the Company in the current and prior year are predominantly intercompany
balances that are payable on demand. The external balances are payable within six months.
Fair values
The fair values of the Group’s financial assets and liabilities are not materially different from the carrying values.
Shared equity receivables are measured at fair value through other comprehensive income (“FVOCI”). The following
summarises the major methods and assumptions used in estimating the fair values of financial instruments.
Shared equity receivables measured at FVOCI
Balance at 1 July
Redemptions
Shared equity provision
Unwind of discount (finance income)
Fair value movement recognised in other comprehensive income
Balance at 30 June
Group
2023
£000
1,485
(849)
70
16
(293)
429
2022
£000
2,522
(1,071)
–
35
(1)
1,485
Shared equity receivables represent shared equity loans advanced to customers and secured by way of a second
charge on the property sold. They are carried at fair value, which is determined by discounting forecast cash flows
for the residual period of the contract. The difference between the nominal value and the initial fair value is credited
over the deferred term to finance income, with the financial asset increasing to its full cash settlement value on the
anticipated receipt date.
Redemptions in the year of shared equity loans carried at fair value of £849,000 (2022: £1,071,000) generated a
profit on redemption of £285,000 (2022: £375,000), which has been recognised in other operating income in the
consolidated income statement.
188
MJ Gleeson plc Annual Report & Accounts 2023 15 Financial instruments CONTINUED
In addition, a net decrease in the value of shared equity receivables of £148,000 (2022: increase of £120,000) has
been recognised in other comprehensive income. This is made up as follows:
Fair value movement recognised in other comprehensive income
Fair value recycled through profit and loss
Total movement recognised in other comprehensive income
Group
2023
£000
(293)
145
(148)
2022
£000
(1)
121
120
Forecast cash flows are determined using inputs based on current market conditions and the Group’s historic
experience of actual cash flows resulting from such arrangements. These inputs are by nature estimates and
as such the fair value has been classified as Level 3 under the fair value hierarchy laid out in IFRS 13 “Fair value
measurement”. There have been no transfers between fair value levels in the financial year.
Significant unobservable inputs into the fair value measurement calculation include regional house price movements
based on the Group’s actual experience of regional house pricing and management forecasts of future movements,
the anticipated period to redemption of loans that remain outstanding and a discount rate based on current
observed market interest rates offered to private individuals on secured second loans.
The key assumptions applied in calculating fair value as at the balance sheet date were:
• Forecast regional house price inflation: 0%
• Average period to redemption: 6 years
• Discount rate: 12%
The sensitivity analysis of changes to each of the key assumptions applied in calculating fair value, whilst holding all
other assumptions constant, is as follows:
Change in assumption
Forecast regional house price inflation – increase by 1%
Average period to redemption – increase by 1 year
Discount rate – decrease by 1%
2023
Increase/
(decrease)
in fair value
£000
2022
Increase/
(decrease)
in fair value
£000
51
(103)
45
107
(116)
102
Capital risk management
In line with the disclosure requirements of IAS 1 “Presentation of financial statements”, the Group regards its capital
as being the equity as shown in the statement of changes in equity.
Note 23 to the financial statements provides details regarding the Company’s share capital movements in the year.
The primary objective of the Group’s capital management is to ensure that it maintains investor, creditor and market
confidence and to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments in light of changes in economic conditions.
To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders and issue or
return capital to shareholders.
Neither the Company nor any of the subsidiaries are subject to externally imposed capital requirements.
189
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
16 Trade and other payables
Current payables
Trade payables
Land payables
Lease liabilities
Other taxation and social security
Contract liabilities
Accruals and deferred income
Amounts due to subsidiary undertakings
Non-current payables
Land payables
Lease liabilities
Group
Company
2023
£000
18,649
9,766
1,259
2,629
1,486
34,873
–
68,662
4,286
3,885
8,171
2022
£000
2023
£000
2022
£000
15,006
14,165
667
2,385
2,212
37,856
–
72,291
7,361
2,342
9,703
8
–
–
79
–
6
–
–
77
–
1,154
142,475
143,716
2,724
119,458
122,265
–
–
–
–
–
–
Amounts due to subsidiary undertakings are unsecured, repayable on demand, and interest free.
Contract liabilities relate to customer deposits and exchange monies that have not yet met the performance
obligations to be classified as revenue. Of the prior year balance, £1,593,000 (2022: £2,294,000) has been
recognised in revenue in the current year as the performance obligations were met.
2023
Plant and
equipment
£000
2,209
(977)
1,232
Property
£000
5,130
(1,586)
3,544
Total
£000
7,339
(2,563)
4,776
Property
£000
3,604
(1,063)
2,541
2022
Plant and
equipment
£000
898
(666)
232
17 Leases
Right-of-use assets
Cost
Accumulated depreciation
Net book value
Lease liabilities
Current liabilities
Non-current liabilities
Total lease liabilities
Amounts recognised in the consolidated income statement
Depreciation on right-of-use property assets
Depreciation on right-of-use plant and equipment assets
Interest on lease liabilities
Total
Amounts recognised in the statement of cash flows
Principal element of lease payments
Interest element of lease payments
Total cash outflow
190
Total
£000
4,502
(1,729)
2,773
2022
£000
667
2,342
3,009
2022
£000
467
135
97
699
2022
£000
564
97
661
2023
£000
1,259
3,885
5,144
2023
£000
619
311
163
1,093
2023
£000
794
163
957
MJ Gleeson plc Annual Report & Accounts 2023 18 Provisions
Group
As at 1 July 2021
Provisions made during the year
As at 30 June 2022
Provisions made during the year
Provisions used during the year
As at 30 June 2023
Current provisions
Non-current provisions
Dilapidations
£000
Building safety
£000
Restructuring
£000
259
262
521
199
(21)
699
–
12,867
12,867
–
(117)
12,750
–
–
–
1,022
(992)
30
2023
£000
5,273
8,206
13,479
Total
£000
259
13,129
13,388
1,221
(1,130)
13,479
2022
£000
1,339
12,049
13,388
Dilapidations
The dilapidations provision covers the Group’s leased property estate. The expected provision needed at the end of
each lease is recognised on a straight-line basis over the term of the lease. There is no material uncertainty in either
the timing or amount.
Building safety
The building safety provision includes estimated costs to remediate life-critical fire-safety issues on buildings over
11 metres in which the Group had some involvement in developing over the last 30 years. By signing the Department
for Levelling Up, Housing and Communities’ (“DLUHC”) pledge in April 2022, and the long form agreement in
February 2023, the Group has committed to put right life-critical fire-safety issues in relation to these buildings.
The Group was involved in the development of 17 buildings over 11 metres, none of which were over 18 metres.
The Group originally notified DLUHC of 15 buildings in total, but one building has subsequently been identified as
completed more than 30 years ago, and three further buildings have been identified during the year. The Group
retains no freehold ownership of these or any other buildings. All of the buildings, including any external wall
systems or cladding, were signed off by approved inspectors as compliant with the relevant building regulations at
the time of their completion.
The Group has carried out an extensive exercise to locate the records of all buildings affected in which, over the
last 30 years, the Group had some involvement in developing. A third-party firm of surveyors has been engaged
to examine all of the buildings covered under the DLUHC pledge. A programme of intrusive inspections and fire
risk assessments is underway, where permitted by the building owners. Despite our best efforts progress has been
slower than we would like but we are committed to undertaking any remedial work as soon as agreement can be
reached. The impact of the additional buildings identified this year, and reductions to costs assessed on the original
14 buildings have been taken into account in assessing the current provision.
As a result of the work performed, the provision of £12,750000 (2022: £12,867,000) represents the Board’s best
estimate of the life-critical fire-safety remediation costs for these buildings, which may develop further as the
programme of intrusive inspections progresses. The Group has provided for the cost of remediation where there is a
liability, where build issues have been identified or it is considered that such build issues are likely to exist. We have
incurred costs of £117,000 in the year for the costs of inspections, which were included in the provision estimate.
The Group reviews the building safety provision at each reporting date and, where necessary, adjusts it to reflect
the current best estimate of these remediation costs. We expect this to be utilised in the short term and any
uncertainty over timing depends on the speed with which we reach agreement with building owners and carry out
the necessary works.
Restructuring
As set out in note 3, the restructuring of the Gleeson Homes business during the year resulted in additional one-off
costs of £1,022,000. Of this expenditure, £992,000 was paid out in the year, with the remaining £30,000 provided
for at 30 June 2023.
191
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
18 Provisions CONTINUED
Company
At 30 June 2023, the Company did not have any provisions (2022: £nil).
19 Employee benefits
Defined contribution pension plan
The Group operates a defined contribution pension plan. The assets of the pension plan are held separately from
those of the Group in funds under the control of the trustees.
Group
The total pension cost charged to the consolidated income statement of £1,633,000 (2022: £1,394,000) represents
contributions payable to the defined contribution pension plan by the Group at rates specified in the plan rules. At
30 June 2023, contributions of £250,000 (2022: £254,000) due in respect of the current reporting period had not
been paid over to the pension plan. Since the year end, this amount has been paid.
Company
The total pension cost charged to the income statement of £63,000 (2022: £70,000) represents contributions
payable to the defined contribution pension plan by the Company at rates specified in the plan rules. At 30 June
2023, contributions of £2,000 (2022: £2,000) due in respect of the current reporting period had not been paid over
to the pension plan. Since the year end, this amount has been paid.
20 Deferred tax assets
Group
At 1 July 2021
Adjustment in respect of prior year
(Charge)/credit to income
Charge to equity
Impact of rate change
At 30 June 2022
Adjustment in respect of prior year
(Charge)/credit to income
Credit to equity
Impact of rate change
At 30 June 2023
Plant and
equipment
£000
Short-term
timing
differences
£000
Share-
based
payments
£000
228
165
(310)
–
(93)
(10)
(21)
(349)
–
(66)
(446)
345
–
(153)
–
(15)
177
9
157
–
58
401
660
–
210
(167)
71
774
65
(303)
362
(56)
842
Total
£000
1,233
165
(253)
(167)
(37)
941
53
(495)
362
(64)
797
At the balance sheet date, the Group has unrecognised tax losses of £8,876,000 (2022: £8,876,000) available for
offset against future profits. Losses may be carried forward indefinitely against future taxable trading profits. These
losses have not been recognised as a deferred tax asset as it is not considered probable that there will be suitable
profits or gains available in future periods against which they may be offset.
Of the total deferred tax asset, £771,000 (2022: £216,000) is expected to be recovered within 12 months of the
balance sheet date.
192
MJ Gleeson plc Annual Report & Accounts 2023 20 Deferred tax assets CONTINUED
Company
At 1 July 2021
(Charge)/credit to income
Charge to equity
Impact of rate change
At 30 June 2022
Adjustment in respect of prior year
Charge to income
Credit to equity
Impact of rate change
At 30 June 2023
21 Net cash/(debt)
Cash and cash equivalents
Lease liabilities
Net cash/(debt)
Plant and
equipment
£000
Short-term
timing
differences
£000
Share-
based
payments
£000
2
–
–
–
2
–
–
–
–
2
88
(72)
–
(16)
–
–
–
–
–
–
477
88
(158)
43
450
65
(224)
190
(41)
440
Group
Company
2023
£000
5,159
(5,144)
15
2022
£000
33,764
(3,009)
30,755
2023
£000
248
–
248
Total
£000
567
16
(158)
27
452
65
(224)
190
(41)
442
2022
£000
1,001
–
1,001
At 30 June 2023, monies held by solicitors on behalf of the Group and included within cash and cash equivalents
were £1,150,000 (2022: £15,417,000).
No monies were held by solicitors on behalf of the Company at the balance sheet date (2022: £nil).
Net cash/(debt) at 1 July 2021
Cash flows
New leases
Leases exited in the year
Finance expenses
Net cash/(debt) at 30 June 2022
Cash flows
New leases
Finance expenses
Net cash/(debt) at 30 June 2023
Cash
and cash
equivalents
£000
34,331
(567)
–
–
–
Lease
liabilities
£000
(2,322)
661
(1,339)
88
(97)
Total
£000
32,009
94
(1,339)
88
(97)
33,764
(3,009)
30,755
(28,605)
–
–
5,159
957
(2,929)
(163)
(5,144)
(27,648)
(2,929)
(163)
15
193
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
22 Bonds and securities
At 30 June 2023, the Group had bonds and securities with the NHBC of £47,895,000 (2022: £44,149,000), provided
in support of ongoing contracts.
The Directors have determined that the Group and Company require no specific provision for bonds, securities or
guarantees for subsidiary companies.
23 Share capital
Issued and fully paid 2p ordinary shares:
At 1 July 2021
Shares issued during year
At 30 June 2022
Shares issued during year
At 30 June 2023
Number
58,255,788
50,549
58,306,337
36,023
58,342,360
£000
1,165
1
1,166
1
1,167
Ordinary shares
The Company has one class of ordinary share that carries no rights to fixed income. All issued shares are fully paid.
During the year, the Group issued 36,023 ordinary shares (2022: 50,549 ordinary shares) at the nominal value of
2 pence per share in settlement of share-based payments as set out in note 24.
Own shares reserve
The own shares reserve represents the cost of shares in MJ Gleeson plc purchased in the market or issued by the
Company and held by the Employee Benefit Trusts (“EBT”) on behalf of the Company in order to satisfy share-based
payments and other share awards that have been granted by the Company.
The EBT has agreed to waive the right to dividend shares held within the EBT, and these shares do not count in the
calculation of the weighted average number of shares used to calculate earnings per share until such time as they
vest to the relevant employee.
Own shares held by the EBT
2023
2022
Number
136,935
£000
743
Number
60,769
£000
471
194
MJ Gleeson plc Annual Report & Accounts 2023 24 Share-based payments
The Group operates a number of share-based payment schemes, a summary of which is shown below. The share
purchase plans encourage employee share ownership, whereby the Company contributes one share for every three
shares purchased and is available to employees after the completion of their probationary period. The long-term
incentive plans (“LTIP”) are part of remuneration for the Executive Directors and senior management. Additional
information regarding the share-based payment arrangements for the Executive Directors is set out in the Annual
Report on Remuneration on pages 134 to 147. All schemes are equity-settled.
Date of grant
Outstanding at 1 July 2021
Granted in the year
Forfeited
Exercised
Outstanding at 30 June 2022
Granted in the year
Forfeited
Exercised
Outstanding at 30 June 2023
Remaining contractual life
Weighted average exercise
price
Weighted average share
price at date of exercise –
current year
Weighted average share
price at date of exercise –
prior year
Share
purchase
plans
No. of
shares
45,303
9,404
(19)
LTIP
09/10/18
No. of
shares
46,575
LTIP
10/12/19
No. of
shares
192,752
LTIP
24/09/20
No. of
shares
394,153
LTIP
27/09/21
No. of
shares
–
LTIP
20/10/22
No. of
shares
–
LTIP
22/02/23
No. of
shares
–
–
–
(8,527)
(46,575)
46,161
16,390
(13,699)
(11,272)
37,580
Rolling
scheme
–
–
–
–
–
–
nil
–
–
–
–
–
363,532
(18,179)
(7,805)
–
–
192,752
375,974
355,727
–
–
–
–
–
–
–
–
–
–
–
624,357
363,532
(115,828)
(49,310)
(47,920)
(74,264)
(76,924)
–
–
–
–
–
–
326,664
307,807
550,093
363,532
nil
–
nil
12 months 24 months 24 months
–
–
–
–
£6.27
n/a
n/a
n/a
n/a
n/a
n/a
£7.32
n/a
n/a
n/a
n/a
n/a
n/a
Fair value is used to measure the value of the outstanding options. The weighted average life for all schemes
outstanding at the end of the year was 17 months (2022: 14 months).
Share purchase plans
The fair value of each share granted in the share purchase plan is equal to the share price at the date of the grant.
Shares are granted on a monthly basis.
195
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report Notes to the Financial Statements
For the year ended 30 June 2023 CONTINUED
24 Share-based payments CONTINUED
Long Term Incentive Plan (“LTIP”)
The fair value of options granted is calculated using either a modified Monte Carlo model or Black–Scholes model.
The inputs into the model at each grant date and the estimated fair value were as follows:
Date of grant
The model inputs were:
Share price at grant date
Total shareholder return target
Exercise price
Expected volatility1
Expected dividends2
Expected life
Risk-free interest rate
Fair value of one option
LTIP
10/12/19
LTIP
24/09/20
LTIP
27/09/21
LTIP
20/10/22
LTIP
22/02/23
£8.00
n/a3
£0.00
27%
n/a2
£6.16
n/a3
£0.00
33%
n/a2
£8.14
n/a3
£0.00
34%
n/a2
£3.94
n/a3
£0.00
43%
n/a2
£4.56
n/a3
£0.00
44%
n/a2
31 months
33 months
33 months
33 months
30 months
0.57%
£3.64
0.10%
£4.645
0.5%4
£5.355
3.7%
£2.20
3.7%
£3.95
1 Expected volatility was determined by calculating the historical volatility of the Company’s share price; volatility was measured over the
previous three years.
2 Awards made under the LTIP allows, on vesting, for an additional award of shares to be made to the option holder equivalent to the
dividends paid over the vesting period on the underlying shares.
3 The 2020, 2021 and 2022 LTIP grant include EPS and relative TSR targets for the Executive Directors as set out on page 139 together
with non-market, profit-related targets for other participants. Non-market conditions are not factored into the fair value but are instead
captured by adjusting the number of shares expected to vest.
4 Risk-free interest rate varies based on the type of target set; the weighted average of these is shown.
5 Volatility rates and fair value of options vary based on the type of target set; the weighted average of the three types is shown.
The total share-based payment credit to the consolidated income statement was £307,000 (2022: charge of
£1,568,000).
25 Contingent liabilities
As set out in note 18, the Group is undertaking a review of all of its historic building contracts for buildings over
11 metres in which, over the last 30 years, the Group had some involvement in developing. All of these buildings,
including any external wall systems or cladding, were signed off by approved inspectors as compliant with the
relevant building regulations at the time of their completion.
As set out in note 12, there are certain legacy activities of the Group where claims arise under historic contracts in
Gleeson Construction Services Limited which were carried out in the ordinary course of activities.
These financial statements have been prepared based on currently available information and the current best
estimate of the extent and future costs of work required, or in resolving known historic claims.
26 Capital commitments
At 30 June 2023, the Group had no material capital commitments (2022: £nil). The Company had no capital
commitments (2022: £nil).
196
MJ Gleeson plc Annual Report & Accounts 2023 27 Related party transactions
Identity of related parties
The Group has a related party relationship with key management personnel.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation.
Transactions with key management personnel
The Group’s key management personnel are the Executive and Non-Executive Directors, as identified on pages
104 to 105, the Chief Executive and Divisional Managing Directors of Gleeson Homes and the Managing Director of
Gleeson Land.
During the year ended 30 June 2021, the Group exchanged contracts on a conditional agreement to purchase an
area of land from Hampton Investment Properties Ltd (“HIPL”) for £1,050,000. HIPL is a company in which North
Atlantic Smaller Companies Investment Trust plc (“NASCIT”), a substantial holder in the company, holds a majority
investment. In addition, Christopher Mills, a Non-Executive Director of the Company, is considered a related party
by virtue of his interest in and directorship of NASCIT and his position as a Director of HIPL. The land, if purchased,
will form part of a new Gleeson Homes site being developed in the ordinary course of business. Approval of this
purchase was granted by the majority of shareholders at the AGM in December 2019.
Other than disclosed above, there were no other transactions with key management personnel in either the current
or prior year.
Identity of related parties with which the Company has transacted
The Company receives charges from various suppliers in respect of services for the whole Group. The Company
allocates and consequently invoices these charges to subsidiaries.
Subsidiaries
Administrative
expenses
2023
£000
3,049
2022
£000
3,470
Receivables
outstanding
2023
£000
2022
£000
Payables
outstanding
2023
£000
2022
£000
117,742
77,091
(142,475)
(119,458)
197
MJ Gleeson plc Annual Report & Accounts 2023Corporate GovernanceOther InformationFinancial StatementsStrategic Report The Rowans,
Workington, Cumbria
198
MJ Gleeson plc Annual Report & Accounts 2023
Other Information
Five Year Review
Further Information
200
201
i
S
t
r
a
t
e
g
c
R
e
p
o
r
t
C
o
r
p
o
r
a
t
e
G
o
v
e
r
n
a
n
c
e
i
F
n
a
n
c
a
i
l
S
t
a
t
e
m
e
n
t
s
O
t
h
e
r
I
n
f
o
r
m
a
t
i
o
n
MJ Gleeson plc Annual Report & Accounts 2023
199
Five Year Review
Revenue
Operating profit pre-exceptional items
Net finance (expense)/income
Profit before tax and exceptional items
Exceptional items
Profit before tax
Tax charge
Profit after tax
Discontinued operations1
Profit for the year
Total assets
Total liabilities
Net assets
Total dividend per share for the year
Basic earnings per share
Basic earnings per share – pre-exceptional
Net assets per share
1 All results classified as continuing from 2021.
2023
£000
328,319
33,559
(2,070)
31,489
(1,022)
30,467
(6,298)
24,169
–
24,169
376,328
(90,312)
286,016
pence
14.0
41.5
42.9
490
2022
£000
373,409
56,797
(1,310)
55,487
(12,867)
42,620
(7,531)
35,089
–
2021
£000
288,575
43,083
(1,372)
41,711
–
41,711
(7,839)
33,872
–
35,089
33,872
2020
£000
147,181
5,929
(363)
5,566
–
5,566
(758)
4,808
(289)
4,519
2019
£000
249,899
40,999
213
41,212
–
41,212
(7,648)
33,564
(297)
33,267
367,558
313,134
322,051
281,240
(95,382)
(68,203)
(109,446)
(77,344)
272,176
244,931
212,605
203,896
pence
pence
pence
18.0
60.2
78.1
467
15.0
58.2
58.2
420
–
8.7
8.7
366
pence
34.5
61.5
61.5
374
200
MJ Gleeson plc Annual Report & Accounts 2023 Further Information
Corporate directory
Registered office
MJ Gleeson plc
6 Europa Court
Sheffield Business Park
Sheffield S9 1XE
Registered number
09268016
Incorporated in England and Wales
Company Secretary
Leanne Johnson
Independent auditors
PricewaterhouseCoopers LLP
Central Square
29 Wellington Street
Leeds LS1 4DL
Bankers
Lloyds Bank plc
10 Gresham Street
London EC2V 7AE
Santander UK plc
2 Triton Square
Regent’s Place
London NW1 3AN
Solicitors
Skadden, Arps, Slate,
Meagher & Flom (UK) LLP
40 Bank Street
Canary Wharf
London
E14 5DS
Stockbrokers
Singer Capital Markets
One Bartholomew Lane
London EC2N 2AX
Liberum Capital Limited
Ropemaker Place, Level 12
25 Ropemaker Street
London EC2Y 9LY
Registrars and
transfer office
Equiniti
Aspect House
Spencer Road
Lancing BN99 6DA
Our website
For more information on our
homes, investor relations and career
opportunities please visit
WWW.MJGLEESONPLC.COM
Shareholder information
Shareholder enquiries
Any shareholder with enquiries should, in the first
instance, contact our registrars using the address
provided in the Corporate Directory.
Share price information
London Stock Exchange
Symbol: GLE
Investor relations
MJ Gleeson plc
6 Europa Court
Sheffield Business Park
Sheffield S9 1XE
Email: companysecretary@mjgleeson.com
Tel: 0114 261 2900
Hudson Sandler
25 Charterhouse Square
London ECM1 6AE
Email: mgarraway@hudsonsandler.com
Tel: 07771 860938
Financial calendar
Financial year end
Full year results announced
Annual General Meeting
30 June 2023
14 September 2023
16 November 2023
The production of this report supports the work of the Woodland Trust,
the UK’s leading woodland conservation charity. Each tree planted will
grow into a vital carbon store, helping to reduce environmental impact
as well as creating natural havens for wildlife and people.
Corporate GovernanceFinancial StatementsOther InformationStrategic Report MJ Gleeson plc
6 Europa Court
Sheffield Business Park
Sheffield
S9 1XE
companysecretary@mjgleeson.com
0114 261 2900
www.mjgleesonplc.com