Cairn Homes sees revenue rise in first half of 2021

Irish homebuilder Cairn Homes said revenue rose in the first half of the year as it almost doubled the number of new home sales compared with 2020.

The group said revenue for the six months was €131 million, with 403 closed new home sales. That compares with €81 million from 207 closed sales in the first half of 2020, when the pandemic restrictions were in full effect.

The company also said it has a closed and forward sales pipeline of 1,530 new homes with a net sales value of €560 million, an increase of 605 new homes and €253 million in the four months since it last issued an update in March.

Cairn Homes has 16 active developments back to full production, with three new site openings planned in the second half of the year.

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It said its full-year gross margin was expected to be about 18.5 per cent, with house price inflation slightly ahead of build cost inflation.

The group has a target of 2,500 new homes completed by the end of 2022, with more than 60 per cent of that covered by closed and forward sales.

Cumulative operating profit for the two-year period is now expected to be €125 million, with more than €150 million of operating cashflow expected to be generated by the end of 2022.

Cairn said it would continue to invest in future growth, estimating that it would generate €350 to €400 million in operating cashflow by 2023. The group said that would provide a strong platform for significant returns to shareholders through a combination of capital returns and accretive strategic investments. The board is now reimplementing its long-term annual dividend programme, with dividends for 2021 and 2022 at a minimum level of €40 million each year. Following that, annual dividends will be at a payout ratio of 40-50 per cent of distributable profits.

Dividend

Cairn’s board said it intends to announce a €20 million dividend of 2.66 cent per ordinary share in its 2021 interim results on September 9th 2021.

"Over the past five years, Cairn's primary focus has been providing competitively priced starter homes for first-time buyers. As our market evolves we will continue to take a solutions-based approach, particularly given the significant challenge customers face accessing mortgage finance," said Michael Stanley, chief executive of Cairn.

"Yet, demand for new homes has never been stronger and the lack of supply has never been more acute. While political debate on housing has raged back and forth, the reality today is that it remains hugely difficult for a whole generation of young people in Ireland to own a family home.

“Government leadership’s comments on prioritisation this week point the way forward. It requires a significant increase in capacity and delivery involving both public and private sectors working in parallel. It is also imperative that good planning secured for thousands of new homes does not get consistently stymied by referrals to national and European courts. Now it’s about moving forward, timely execution and making things happen.”