Gleeson set out its 3,000 home target at its Jul. ’23 CMD. This compares to 1,772 homes delivered in FY24 and an FY22 peak of 2,000, having doubled the size of the business over five years from 1,013 in FY17. In this note, we put some meat on the bones of how the target will be achieved. A significant, 100 site pipeline (vs. current sales sites of 62) and an improving backdrop give us confidence in Gleeson’s ability to achieve its target. Our base case shows the target being achieved in FY30 at the latest whilst taking a cautious view over the pace of recovery in FY25/FY26. Our analysis shows a return to consistent earnings growth in a more stable market, with a PBT CAGR of 25% (FY24-30). This alone should drive a higher share price but we believe Gleeson is likely to regain its historic valuation premium as growth becomes more visible. We remain long term supporters of the Gleeson story and retain our Buy rec.
