7th Mar 2019 11:27
LONDON (Alliance News) - Cairn Homes PLC on Thursday reported a sharp rise in revenue and profit on the back of growth in the Irish residential property market.
In 2018, the Irish homebuilder reported a significant rise in pretax profit to EUR37.6 million from EUR6.0 million on its revenue more than doubling to EUR337.0 million from EUR149.5 million in 2017.
During the year, Cairn Homes almost doubled its closed sales to 804, netting EUR294.2 million, from 418 with an increased average selling price of EUR366,000, a 16% jump on the EUR315,000 achieved in 2017.
The company said house price inflation averaged 4.5% across its active sites in 2018.
"The strong performance in 2018 reflects the continuing success of our strategy, as we capitalise on the recovery of the Irish residential property market by establishing our reputation for high-quality, competitively priced new homes. We achieve this by designing and building in great locations, creating places and homes where people love to live," said Co-Founder & Chief Executive Michael Stanley.
Cairn Homes said 2018 was a "significant" year of growth for its construction activities and it is now active on 13 sites hoping to deliver 4,750 residential units.
Cairn Homes obtained full planning permission for 2,106 units in 2018 with 4,200 units under planning application.
The homebuilder said its construction activity has increased since the start of 2019 with work starting on five sites, expected to deliver about 2,200 new homes. As at March 6, Cairn Homes said its closed sales and sales pipeline was "strong" with a sales value of EUR201.4 million from 471 units with an average selling price of EUR428,000.
Going forward, Cairn Homes said about 2,500 to 3,000 out of its 4,400 apartment unit portfolio could "satisfy" the EUR1 billion private rented sector market in the greater Dublin area.
The housebuilder is expecting free cash generation of about EUR350 million to EUR400 million by the end of 2021, allowing Cairn Homes to pay its first interim dividend, of 2.5 euro cents, expected in September 2019.
The company expects further capital returns in the future in the form of ordinary dividends, special dividends or share buybacks.
Cairn Homes generated EUR40.1 million in cash during 2018.
At December 31, the homebuilder had EUR933.4 million in development land & construction work in progress compared to EUR911.5 million the year before.
Stanley added: "Cairn's operational capability across our attractive landbank, combined with pent-up consumer and institutional demand for well built homes, will drive revenues, profitability and cash generation in 2019 and beyond. This in turn enables us to commence a progressive capital return strategy this year. We look forward to the future with confidence."
Shares in Cairn Homes were down 1.7% at EUR1.31 each on Thursday.
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