Housebuilder Cairn Homes said it was poised to grow its business 30 per cent this year after the company recorded its strongest financial and operational performance to date.
The group said it expected to see year-on-year turnover and profit growth of 30 per cent in 2024, with about 2,200 new homes built, and operating profit of €145 million.
That builds on a strong financial performance last year. In a trading update for the year ended December 31st, 2023, Cairn said it closed 1,741 new home sales, generating total income of €665 million. That compared with the €617.4 million the company made in sales in the previous year on 1,526 homes. Gross margin is expected to be 22.1 per cent, up from 21.7 per cent.
Cairn said demand for its homes led to agreed sales of more than 2,800 new homes in the full year, with a forward order book at year-end of more than €900 million net of VAT, up from a forward order book value of €374 million the same time a year earlier.
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Inflation in building costs moderated throughout the year to less than €10,000, about 4 per cent of hard build costs. That was about half the inflation rate seen in 2022, when build-cost inflation was at 8 per cent.
Cairn has already started four new sites, and new phases across six of its existing large developments were commenced in 2023, with 20 sites active nationwide during the year.
“Our company is experiencing sustained positive momentum,” said chief executive Michael Stanley. “We are building record numbers of new homes and we have delivered our strongest-ever operational and financial performance in 2023. Continued reinvestment in our building platform and a €900 million sales pipeline as we start the new year leaves us poised to grow our business by a further 30 per cent in 2024.”
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The company also completed €42.6 million of a €75 million share buyback programme and expects to complete the remainder early this year. A total of €41.9 million was paid to shareholders during the year, at a rate of 6.2 cent per ordinary share.
Looking ahead, the company expects to close 500 new homes in the first three months of the year. Some 1,600 of its current forward sales pipeline is expected to close in 2024.
Mr Stanley said a “significant increase” in the supply of new homes is needed, at sales prices below the caps set by the Government for home buyer supports.
“In the absence of enough of these affordable homes for first time buyers to purchase, the Government is now also prioritising the completion of well-located affordable rental apartment developments,” he said. “These scaled new developments, which, in the main, will be State-owned assets, could offer truly affordable, long-term or transitional housing solutions for tens of thousands of young people working in our economy.”
Full year results will be announced on February 29th.
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