Builder records loss of €54m in year to April

DUBLIN AND London-listed house builder Abbey has sold three-bedroomed houses in Ireland for as little as €135,000 in recent weeks.

The group yesterday reported it lost €54.4 million in the 12 months ended April 30th, 2008, compared with a profit of €16.8 million during the previous 12 months.

Executive chairman Charles Gallagher told The Irish Times yesterday it was “no secret” the industry is going through an extremely difficult time. “We’re selling fewer houses for less money. It’s a simple as that,” he said yesterday.

“We recently sold three-bed houses in Laois, and even Kildare, for €135,000. It’s really a Dublin market, and a south Dublin market at that, and even that is difficult,” he pointed out.

Mr Gallagher predicted the industry would take longer to recover in areas further away from the capital.

The company said yesterday it expects sales in Ireland and Britain to fall again over the rest of the year.

He said the forecast fall in sales was partly due to economic conditions and partly due to the fact that it will have fewer houses to sell in the British market over the rest of its financial year. Britain accounted for two-thirds of the houses sold in the last financial year. He added that a return to meaningful profitability depended on finding new opportunities to build and sell houses. Total group revenues were down 45 per cent at €99.3 million in its 2009 financial year, from €180 million in 2008. Turnover from its housebuilding and sales business slumped by almost 50 per cent to €85.7 million from €160 million. It lost 205.57 cent per share, compared with a 42.93 cent gain last year. The balance of its turnover came from its British plant hire business, MJ, which lost €1.1 million.

Abbey is building on between 170 and 200 plots at the moment, and, according to Mr Gallagher, the company is one of the few housebuilders that are active.

He argued that after costs and the €19,000 in levies and charges paid to local and national government, it is uneconomic to build houses in Ireland in the current climate. He explained the levies reached these levels during the boom, when “all of the actors moved to take advantage”. He said these needed to be reduced to more realistic levels but suggested this would take several years.

Most of Abbey’s sites are outside Dublin. The company has a total of 1,965 plots. About 650 are in Britain, with the rest in Ireland. Of these latter, Mr Gallagher said two-thirds were on farmland in areas where it is unlikely to begin building for some years.

The company has also been building in Prague in the Czech Republic. It said yesterday that progress with both construction and sales has been disappointing.