Profit at building group Abbey falls as UK market stumbles

Housebuilder Abbey said pretax profit fell in its last financial year as the British market threw up some obstacles to its progression.

The company also said a lower contribution from its UK housing division would likely “materially impact” overall group profit.

Pretax profit for the year April 30th was of €53 million, down from €53.5 million a year earlier. Dividends of 119 cent per share were paid during the year.

Britain still accounts for the bulk of Abbey's business, with 511 sales during the year versus 36 in Ireland and 32 in the Czech Republic. That generated turnover of €209.1 million with operating profit of €48 million.

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Although the market was supported by initiatives such as the “help to buy” programme, margins are falling back from those achieved in recent years and costs such as sub-contract labour, materials and regulatory costs, have risen.

“In recent months we have experienced a disappointing succession of planning decisions that have delayed the start of a number of new projects,” the company said in a statement. “As a result UK turnover is expected to fall this year.”

Progress

The company said it was making gradual progress in boosting activity in Ireland, with projects in Dunshaughlin and Cabinteely on sale over the past six months and a new project in Navan due to launch in September that will increase output for the current financial year.

“Stable prices together with rising costs are a challenging backdrop for the business,” the company said.

At the end of the financial year, the group held €97.1 million in cash at the end of the financial year.

Abbey said the outlook continues to be uncertain.

“House prices are broadly stable however costs continue to rise. The regulatory environment is constantly evolving with initially at least a negative impact on productivity,” the company said in a statement. “Credit conditions for customers remain tight and the ‘Help to Buy’ schemes in both the UK and Ireland are supporting many of our buyers. The abrupt withdrawal of ‘Help to Buy’ would have a material impact on our business. Overall however the group is in a healthy financial position and will continue to seek out opportunities to build new homes in all its markets.”