PROFITS AT housebuilder Abbey exceeded €15 million in its last financial year, but the company expects sales to drop over the next 12 months as the British market tightens.
Abbey said yesterday that sales in the 12 months ended April 30th, its financial year, were €97.1 million, 3 per cent down on 2009, when they were €99.8 million.
Operating profits were €12.8 million. More than €2 million in finance income brought pretax profits to €15.1 million. After tax, its earnings per share came to 49.92 cent.
The group lost €54.4 million before tax last year as it had to write €58 million off the value of its housing stock and land bank.
Abbey sold 535 houses during the year, 395 in Britain, 112 in Ireland and 28 in the Czech Republic.
“A strong second-half performance in the UK underpinned our results,” the group said. “Market conditions over the period sustained the improvement and a better cost environment helped support our margins.”
However, executive chairman Charles Gallagher said the British market has since weakened considerably and added that sales are likely to fall this year. “We’re talking 400 sales for the group as a whole,” he said.
The building group said this year could mark the low point of the recession in Britain. House prices there have begun to fall again and there are concerns that borrowing costs could increase.
Mr Gallagher added that the Irish market is showing no real signs of recovery, although the decline is less pronounced than it has been.
He pointed out that there is a lack of both customers and credit in this country.
Abbey is concentrating on rebuilding its British land bank this year. On April 30th, it controlled land with planning permission for 1,613 individual plots.
Of these, 441 were in England. Since then, it has acquired a further four sites with a total of 207 plots in England.
“Terms have been agreed for further acquisitions and we expect to increase our UK land stocks this year,” it was noted in Abbey’s statement.
Its plant hire business, MJ’s operations, lost €780,000 on a turnover of €10.1 million during the year. The group recorded a gain of €273,000 from the sale of some MJ property on its income statement.
Abbey’s board plans to recommend a dividend of 5 cent per share. The company said its strong financial position allowed to do this. It argued that paying sustainable dividends, in other than exceptional circumstances, would make it attractive to a wide pool of investors and aid it in broadening its shareholder base.
The group ended the year with almost €52 million in cash and €52 million in British government bonds.
Shareholders’ funds were €160 million, or €6.51 per share, at the end of April.
