TIDMCRN
RNS Number : 6450Z
Cairn Homes plc
04 September 2018
4 September 2018
Cairn Homes plc
Interim Results for the six months ended 30 June 2018
Scale achieved to meet the enormous demand for new homes
Dublin/London 4 September 2018: Cairn Homes Plc (LSE/ISE: CRN)
("Cairn", "the Company", or "the Group"), the Irish homebuilding
company, today announces our interim results for the six months
ended 30 June 2018.
HIGHLIGHTS
Financial
-- Strong revenue growth to EUR130.2 million (H1 2017: EUR41.2 million).
-- Gross profit margin of 20.0% (H1 2017: 18.7%). Gross profit
of EUR26.1 million (H1 2017: EUR7.7 million).
-- Sevenfold growth in operating profit to EUR18.1 million (H1
2017: EUR2.5 million after exceptional items of EUR0.5
million).
-- 293 closed sales in H1 2018 at an average selling price (ASP)
of EUR393,000 excluding VAT (221 houses - EUR326,000: 72 apartments
- EUR599,000) (H1 2017: 94 closed sales at an ASP of EUR280,000
excluding VAT).
-- As at 3 September 2018, total closed sales year to date of
399 units and forward sales of 517 units comprising:
- Housing: 327; and
- Apartments: 190 units (including 120 apartments at Six Hanover
Quay and 33 student apartments at Blackhall Place);
Current forward sales have a net sales value of EUR221.2
million, the majority of which will close this year with the
exception of Six Hanover Quay which is scheduled to complete as a
single transaction in Q1 2019.
-- Completed a EUR350 million debt refinancing after the period
end which provides greater flexibility, reduces our finance costs
and extends the maturity profile of our debt.
-- As Cairn transitions to a significantly more profitable
business with distributable reserves, a first dividend will be paid
from 2019 profits.
Operational
-- The Company is active on 13 developments (31 December 2017:
11 developments) which will deliver over 3,750 new homes, with 4
further site commencements anticipated over the next 6-12
months.
-- 11 of our large planning applications (c. 3,500 units) have
utilised either the new single step Strategic Housing Development
(SHD) planning process or the Strategic Development Zone (SDZ) fast
track planning process with seven granted full planning permission
(c. 1,900 units). Six additional planning applications (c. 2,500
units) will enter the SHD process this year.
-- Contracted in June 2018 to sell our landmark Six Hanover Quay
development in Dublin City Centre on completion for EUR101 million
(EUR89.7 million excluding VAT) with legal completion scheduled for
Q1 2019.
-- Completed our first student apartment development at
Blackhall Place (Dublin 7) following a EUR6 million redevelopment
of 33 apartments (112 beds). The Company has agreed to dispose of
this completed development as well as two other student apartment
developments for a total consideration of EUR45 million. This
transaction is expected to complete in H2 2018.
-- Completed the sale of all 71 units on our joint development
with NAMA at Parkside (North Dublin). Further joint development
opportunities are being pursued.
-- Annualised build cost inflation for our operations in the
last 12 months has been 2.9%. House price inflation has averaged
4.7% on our active housing developments and 7.5% on our active
apartment developments in the same period.
-- The Company has entered into a partnership with Kingspan
Group plc for the supply of off-site manufactured (OSM) timber
frame structures for our housing division. The Company will
continue to use both traditional and OSM building methods depending
on site location and scale.
-- Cairn has announced that the Group's Co-Founder, Alan
McIntosh, has decided to step down from his executive role. We are
very pleased that he will remain on the Board as a non-executive
Director. Alan, as a non-executive Director, will continue to play
an important role in the strategic development of the Company.
-- Cairn is proud to be now supporting over 2,500 jobs across our active sites.
Financial Highlights 6 months ended 6 months ended
June 2018 June 2017
EUR'000 EUR'000
Revenue 130,214 41,178
Gross Profit 26,077 7,703
Operating Profit 18,098 3,034(1)
As at 30 June As at 31 December
2018 2017
EUR'000 EUR'000
Inventories (Land & WIP) 950,728 911,496
Total Equity 730,276 721,720
Net Debt 176,324 159,394
1 Before exceptional items of EUR0.5 million in 2017
Commenting on the results, Michael Stanley, Co-Founder and CEO,
said:
"We are experiencing levels of demand for our quality new homes
exceeding our expectations. Our business has matured and in 2018 we
expect to generate revenues of EUR350 million in only our third
full year of operations. This is a remarkable achievement by our
talented team. Today we are increasing our medium term target to c.
1,400 to 1,500 units annually from 2021. Our strong profit and cash
generation this year and in 2019 will enable us to pay our first
dividend to our shareholders."
For further information, contact:
Cairn Homes plc +353 1 696 4600
Michael Stanley
Tim Kenny
Drury Communications +353 1 260 5000
Billy Murphy
Morwenna Rice
Louise Walsh
Powerscourt +44 20 7250 1446
Justin Griffiths
Nick Dibden
Jack Hickey
There will be an Analyst and Investor call today 4 September
2018 at 8.30am hosted by Michael Stanley, Co-Founder and CEO and
Tim Kenny, Group Finance Director. Please use the numbers below,
quoting the following Conference ID: 32075395#:
Ireland UK US
* Toll free - 1800 936 842 * Toll free - 0808 237 0030 * Toll free - 1866 928 7517
International
* Toll - +44 (0) 203 139 4830
Notes to Editors
Cairn Homes plc is an Irish homebuilder committed to building
high-quality sustainable homes in excellent locations and providing
exceptional customer service at each stage of the home-buying
journey. Cairn's highly experienced management team has a clear
vision of delivering innovative and thoughtfully designed homes
which meet market demand and enhance communities by placing home
owners at the very centre of the design process. The Company owns
34 residential development sites with capacity for c. 14,500
additional new homes, with over 90% of those units located in the
Greater Dublin Area (GDA) with excellent public transport and
infrastructure links. Cairn is today building on 13 development
sites in the GDA, which will deliver over 3,750 new homes.
Note regarding forward-looking statements
Some statements in this announcement are forward-looking. They
represent our expectations for our business and involve risks and
uncertainties. We have based these forward-looking statements on
our current expectations and projections about future events. We
believe that our expectations and assumptions with respect to these
forward-looking statements are reasonable. However, because they
involve known and unknown risks, uncertainties and other factors,
which are in some cases beyond our control, our actual results or
performance may differ materially from those expressed or implied
by such forward-looking statements. These forward-looking
statements speak only as of the date of this document and no
obligation is undertaken, save as required by law, by the Listing
Rules of the Irish Stock Exchange or by the listing rules of the UK
Listing Authority, to reflect new information, future events or
otherwise.
CHIEF EXECUTIVE STATEMENT
STRATEGIC OBJECTIVES
The Company's objective is to be the leading Irish homebuilder
by building in great locations and creating places and homes where
people love to live. This objective is underpinned by a very
favourable Irish macroeconomic backdrop which continues to improve.
By doing this, the Company will maximise the opportunities which
exist in the Irish new homes residential property market and
deliver substantial shareholder value. This strategy is supported
by our vision to be the most trusted and respected homebuilder in
Ireland through operating our business under five strategic
pillars:
1. Customers - make the home buying journey exceptionally positive for all of our customers;
2. Homes - design and build brilliant homes;
3. Places - create places for communities to prosper;
4. People - attract and retain the best talent in the market; and
5. Operational Excellence - leverage a commercial operational platform.
Since IPO in June 2015, Cairn has moved at pace in assembling a
unique c. 14,500 unit land bank, maximising the development
potential of each individual site through planning enhancements and
commencing a substantial construction programme in housing and
apartments which is expected to deliver up to 4,000 closed sales in
the four and a half years from IPO to 2020. This focus will enable
us to achieve considerable growth in profitability and generate
cash returns to shareholders in the near term.
Financial Review
Revenues in the first six months of 2018 increased to EUR130.2
million (H1 2017: EUR41.2 million), which is an increase of EUR89.0
million year-on-year. These revenues included EUR115.2 million from
293 unit sales (H1 2017: EUR26.3 million from 94 unit sales) and
EUR14.4 million from non-core site sales (H1 2017: EUR14.1
million).
Gross margin increased significantly to 20.0% (H1 2017: 18.7%).
Gross profit of EUR26.1 million (H1 2017: EUR7.7 million).
Operating profit grew to EUR18.1 million (H1 2017: EUR2.5
million, after EUR0.5 million exceptional costs), an increase of
EUR15.6 million.
Net finance costs (excluding an exceptional cost of EUR3.25
million) for the six months were EUR5.9 million (H1 2017: EUR2.9
million), reflecting increased drawn debt levels as a result of
site acquisitions (including the Montrose site) and increasing
construction work in progress. In accordance with IFRS 3, a
contingent consideration settlement of EUR3.25 million was charged
to profit or loss in the period ended 30 June 2018 in respect of
the Swords site acquired as part of the Argentum acquisition in
2016. This is a non-routine transaction which is non-recurring and
has been classified as an exceptional finance cost.
Inventories as at 30 June 2018 of EUR950.7 million (31 December
2017: EUR911.5 million) comprise land held for development of
EUR796.2 million (31 December 2017: EUR788.8 million), construction
work in progress of EUR151.4 million (31 December 2017: EUR104.5
million) and development land collateral of EUR3.1 million (31
December 2017: EUR18.2 million). The investment in work in progress
reflects the significant increase in development activity during
the period, with the Company now active on 13 developments (31
December 2017: 11 developments).
Net debt of EUR176.3 million at 30 June 2018 (31 December 2017:
EUR159.4 million) comprised of drawn debt of EUR239.7 million (net
of unamortised arrangement fees and issue costs) (31 December 2017:
EUR245.2 million), available cash of EUR46.4 million (31 December
2017: EUR68.8 million) and restricted cash of EUR17.0 million (31
December 2017: EUR17.0 million).
After the period end, Cairn successfully completed a debt
refinancing of our existing EUR200 million senior debt facility
with Allied Irish Banks plc and Ulster Bank Ireland DAC into a new
EUR277.5 million Term Loan and Revolving Credit Facility with
Allied Irish Banks plc, Ulster Bank Ireland DAC and Barclays Bank
Ireland plc. Additionally, the Company completed a EUR72.5 million
Private Placement of Loan Notes with Pricoa Capital Group. The
refinance has enabled the Company to build on our pool of banking
partners with the addition of Barclays Bank Ireland plc and the
Private Placement with Pricoa Capital Group. The new facilities
provide additional financial flexibility in supporting the growth
of our business as well as reducing our finance costs and extending
the maturity profile of our debt.
The Company announced the completion of the third founder share
test period (1 March - 30 June 2018) on 20 July 2018 and confirmed
that the founder share value created would be satisfied through the
conversion of 27,110,622 founder shares into the same number of
ordinary shares, which occurred on 16 August 2018. Under the
approved terms of the Founder Share Scheme, the founders are
entitled to 20% of total shareholder return generated each year up
to and including 30 June 2022, subject to achieving a 12.5% annual
compounding hurdle rate.
OPERATIONS REVIEW
Sales
The Company delivered 293 unit legal completions in H1 2018 at
an ASP of EUR393,000 comprising 221 houses (ASP EUR326,000) (H1
2017: 94 houses at an ASP of EUR280,000) and 72 apartments (ASP
EUR599,000) (all excluding VAT).
Cairn has a strong forward sales pipeline as of 3 September 2018
of 517 units with a sales value of EUR221.2 million and an ASP of
EUR428,000 (all excluding VAT). The current forward sales pipeline
strongly underpins remaining H2 2018 completions. The increase in
ASP in the Company's forward sales pipeline (EUR374,000 as at 5
March 2018) reflects enhanced mix and increasing sales prices
across all active developments (including the 120 apartments at Six
Hanover Quay at an ASP of EUR705,000 each) (all excluding VAT). The
forward sales pipeline will be enhanced by Autumn 2018 sales
launches across our eight selling developments.
The breadth of the Company's construction activities from
affordable, starter homes in suburban locations to premium
apartments in Dublin City Centre appeals to a broad range of
buyers. Market conditions have remained very favourable in 2018 and
the Company believes that ongoing supply constraints will result in
the demand for new homes continuing to outstrip supply in the
medium term.
Demand for the Company's starter home developments is growing
across all locations, with strong sales absorption rates maintained
across all selling developments and an average weekly sales rate of
3.1 units per development since the first formal sales launch.
Improving affordability and an increasingly competitive mortgage
market is resulting in more sustained demand for well designed,
quality and competitively priced starter homes in locations where
mortgage-backed first-time buyers desire to live.
With sales absorption rates increasing across all active housing
development sites, building on sites which have an average of 425
units allows Cairn to respond quickly to increased demand by
increasing and accelerating construction. With phase 1 of
Shackleton Park (Lucan) nearing completion (267 units), the
construction of phase 2 (268 units) and the adjacent Airlie Stud
(237 units) has commenced in the year to date to meet strong demand
in an established and popular starter home location.
Cairn is now actively selling across eight separate developments
and the Company delivered completed sales across seven separate
developments in the GDA in H1 2018 - Parkside (Malahide Road);
Cairn's joint development with NAMA adjoining Parkside;
Churchfields (Ashbourne); Shackleton Park (Lucan); Glenheron
(Greystones); Albany (Killiney); and the award-winning apartment
development at Marianella (Rathgar). In addition, sales completions
at Elsmore (Naas) commenced in early H2 2018.
Sales at Glenheron (Greystones), a trade up/down development,
have been strong. This development was formally launched to the
market in April 2018 and 48 units, including the remaining 23 units
in Phase 1, with a gross sales value of EUR25 million sold on the
first day. The Company's award-winning Marianella apartment
development continues to sell well, with strong ongoing demand from
purchasers seeking to trade down as well as from investors and
young professionals.
Cairn recently completed the sale of the final unit in the 71
unit joint development with NAMA at Parkside (Malahide Road). This
successful development is now complete, just over a year after
construction commenced at the end of Q1 2017.
As announced on 28 June 2018, the Company has agreed to sell our
landmark Dublin City Centre premium apartment development at Six
Hanover Quay (120 apartments, a 5,000 sq. ft. restaurant and 1,400
sq. ft. café) for a total cash consideration of EUR101 million
(EUR89.7 million excluding VAT). Legal completion is scheduled for
Q1 2019. The contracted sale is a considerable achievement for the
Cairn team. The agreement to sell Six Hanover Quay to an Irish real
estate investment manager, and the interest which the formal sales
process generated amongst international institutional investors and
private rental sector operators seeking exposure to the Irish
residential market recovery, has broadened Cairn's buyer pool for
our other well-located developments.
The Company has also agreed to dispose of the refurbished
student apartment development at Blackhall Place (Dublin 7)
following a EUR6 million redevelopment of 33 apartments (112 beds)
as well as two other student apartment developments for a total
consideration of EUR45 million. This transaction is expected to
complete in H2 2018 and will deliver a strong profit and cash
return.
The Company will manage our residual non-core sites through an
ongoing and measured disposal programme with total realised revenue
of EUR14.4 million in H1 2018 (H1 2017: EUR14.1 million). The
Company will dispose of a small number of remaining non-core sites
over the near-term.
Construction Activity
The Company continued to make significant progress in our
construction activities during the first six months of the year and
commenced four new developments at Airlie Stud (Lucan), Oak Park
(Naas), Cork Street (Dublin 8) and a EUR6 million redevelopment of
Blackhall Place (Dublin 7). In addition, the Company commenced the
construction of new phases at our Parkside (Malahide Road),
Glenheron (Greystones) and Shackleton Park (Lucan) developments in
the first half of 2018, while construction of our apartment
development at Donnybrook Gardens is progressing well. Construction
of our joint development with NAMA at Parkside (Malahide Road)
finished at the end of Q2 2018. The Company is now active on 13
developments which will deliver up to 3,750 residential units, with
our average active housing development containing 425 residential
units and our average active apartment development containing 120
residential units.
Cairn is a developer contractor. Our directly employed site
management teams, in conjunction with central functions, manage and
control a strong supply chain and a well-established subcontractor
base, many of whom work across several active Cairn developments.
Subcontractors tender on a "supply and fit" basis and Cairn
proactively manages cost inflation through direct procurement
strategies, initiatives and fixed term framework agreements. Our
experience of build cost inflation in the last 12 months is low
single digit (c. 2.9%). This is significantly below the SCSI Tender
Price Index (7.5% in the 12 months to June 2018) and reflects our
business model and the strong, established relationships with our
subcontractor base. We carefully monitor build cost inflation and
continuously seek out innovative ways to ensure we achieve the
lowest cost without compromising quality. Direct construction costs
which are subject to build cost inflation account for on average c.
50 - 55% of net sales prices.
The Company's practice is to acquire and build on larger scale
housing developments which enables us to deliver economies of scale
through direct and indirect procurement efficiencies and amortising
fixed site costs (site works, preliminaries, site accommodation,
machinery and professional fees) over longer-term, multi-year,
multi-phase construction programmes. The same site management teams
and subcontractors work more effectively and efficiently together
as they progress through each phase, and given the uniform nature
of a number of our starter home developments, subcontractors become
more familiar with the limited number of unit types as they
progress through phases. Operational efficiencies are achieved by
standardisation across our starter home developments which are
further complimented by the use of both traditional and new
off-site construction methods, including timber frame construction
across a number of our active developments. The Company estimates
that c. 30% of all houses constructed over the next two years will
be off-site modular constructed units.
The continually improving efficiency of Cairn's construction
activities, and importantly evidence of tightly managed costs, can
be seen in the Company's impressive gross margin progression.
Land and Planning
The Company's confidence in achieving our medium-term run-rate
of c. 1,400 to 1,500 sales completions annually from 2021 is
underpinned by the great locations of the sites within our c.
14,500 unit wholly owned land bank, and more importantly the fact
that in excess of 97% of these units either have the benefit of
full planning permission, are residentially zoned or are within a
strategic development zone.
Cairn's strategic approach to assembling this unique land bank,
our demonstrable core strength in planning expertise and the
favourable planning environment in Ireland (with the SHD
fast-track, one step planning process for housing developments
greater than 100 units now up and running in earnest) is resulting
in the constant conversion of sites from the Company's land bank
into active development sites. This supports our substantial growth
plans. The Company's strong track record in delivering planning
gains continues and 11 of our large planning applications (c. 3,500
units) have utilised the single step SHD or fast-track SDZ
process;
-- 7 applications granted full planning permission (c. 1,900
units) including Cork Street (Dublin 8), Mariavilla (Maynooth) and
Blakes (Stillorgan) through the SHD process in 2018;
-- 4 applications are in the SHD process (c. 1,600 units) - a
starter home development at Citywest (Dublin 24) and apartment
developments at Montrose (Dublin 4), Cross Avenue (Blackrock) and
Griffith Avenue (Dublin 9) with formal planning applications to be
submitted on each over the coming months.
A further pipeline of six SHD planning application submissions
are also well progressed. In the year to date, 1,631 units have
been granted full planning permission. As a result of the further
progress achieved in the first half of 2018, Cairn expects to
deliver an extra c. 700 units on our existing sites by maximising
densities through planning enhancements (in addition to the c.
1,900 incremental units added in 2017). This is being delivered by
amending historic planning consents with historic densities into
current, demand driven higher densities and putting practical and
relevant planning and design expertise into each planning
application.
Following the announcement by the Government of new apartment
design guidelines in February 2018, the draft guidelines for "Urban
Development and Building Heights - Guidelines for Planning
Authorities" were issued in August 2018. The guidelines are
intended to set a more responsive policy and regulatory framework
for planning the growth and development of cities and towns
upwards, rather than outwards. They propose the removal of
numerical height caps and promote higher density in areas that are
well connected with good public transport accessibility. An
important feature of the draft guidelines is a policy shift away
from traditional, two storey own-door residential developments to a
greater mix of higher density housing typologies and a greater mix
of building heights, on the basis that both density and heights
will be appropriate to their location. All of this supports the
Company's ongoing work to maximise the value of our land bank,
across both housing and high density apartment sites, with higher
densities already achieved on a number of sites, including Blakes
(Stillorgan), where planning permission was granted for heights
reaching nine storeys in parts of the development.
Cairn acquired the majority of our well-located land bank at
attractive prices within nine months of our June 2015 IPO. Since
then, the Company has made considerable progress in increasing the
value of our land bank. Cairn's land acquisitions have been at a
low level for the last 15 months. The Company is very well
positioned in terms of the size, historical cost (which compares
favourably to the high cost of land acquisitions witnessed in the
market over the past 12 months) and locations of our development
sites.
The Company's reduced level of site acquisitions in 2018 is
reflective of our evolving acquisition strategy, with a focus on
sites adjoining existing sites, and the fact that we have already
acquired the majority of the land which we need to deliver on our
strategic objectives. Cairn is exploring further joint development
opportunities and also anticipates that a number of strategic
high-density apartment sites in and around Dublin City Centre,
which may benefit from the Government's new building height
strategy, will be brought to the market in the medium term and will
consider these sites as and when they are brought to market.
Health and Safety
The Company is fully committed to the highest standards of
health and safety on our sites. The health and safety of employees,
subcontractors, customers and the general public is a key priority
for the Company. Increased construction activity levels increase
the risk of accidents on active sites and the Company continually
promotes the importance of a safe working environment and ensures
the highest industry health and safety standards are set. Each
active site has a dedicated health and safety manager, ensuring
that the Company's health and safety policies and procedures are
adhered to and implemented. Health and safety is a standing agenda
item at all Board and Audit and Risk Committee meetings and the
Company retains an independent external auditor to undertake a
monthly audit of health and safety practices and management across
all active sites.
The Cairn Team
The Company's headcount at 30 June 2018 was 154 (31 December
2017: 126). The Company has assembled a team with the requisite
skills, experience and expertise to deliver our medium-term
objectives.
MARKET CONDITIONS
Economy
The Irish economy is one of the fastest growing economies in the
euro area for a fifth consecutive year in 2018 (source: European
Commission). Employment reports point to ongoing strong momentum
with the total number of people employed growing by 3.4% in the
year to June 2018 and the unemployment rate falling to 5.9% in July
2018, the lowest rate since October 2007 (source: CSO). Consumer
spending is growing (2.2% in the year to March 2018) (source: CSO),
all underpinning future GDP growth forecasts of 5.0% in 2018, 3.5%
in 2019 and 3.1% in 2020 (source: Goodbody - Irish Economy Q2 2018
Health Check).
Residential Property Market
The medium-term demand for new homes in Ireland is 30,000 units
(source: ESRI). Goodbody estimate current annual demand at c.
35,000 new homes and Davy estimate c. 36,000 - 53,000 new homes.
The Company believes that the GDA alone requires c. 25,000 new
homes per annum driven by a growing population, increasing
employment, annual obsolescence and years of chronic undersupply.
16,274 new homes were built nationally in the year to June 2018
(source: CSO New Dwelling Completions Q2 2018), including 11,777
new homes in multi-unit developments. Goodbody currently estimate
that, based on current trends, there will be 18,000 new completions
in 2018, roughly half the estimated level of annual housing demand.
Current levels of residential construction activity are still not
meeting the needs of a growing population and expanding
economy.
Headline house price inflation (HPI) was 12.0% nationally
(Dublin - 9.0%; Rest of Ireland - 15.2%) in the 12 months to June
2018 (source - CSO). Eurostat, the statistical office of the EU,
report that 12.3% national HPI in the year to March 2018 was split
8.6% new homes and 12.9% existing homes. House price inflation on
our active developments has averaged 5.3% in the last 12
months.
Dublin prices remain 22% behind peak 2007 levels (source: CSO),
whilst rents are now 34% above their peak levels (source: Daft.ie
Q2 2018 Rental Price Report). The rental crisis continues unabated,
the level of stock available to rent remains close to record low
levels and rents are increasing across the country, and in Dublin
in particular (up 13.4% in the year to June 2018) (source - Daft.ie
Q2 2018 Rental Price Report). It is significantly more expensive to
rent than own and finance a starter home in Dublin. The Company
estimates that the gap in the cost of owning against renting has
grown from EUR494 per month or 37.3% in March 2018 to EUR578 per
month or 42.1% today (and having increased from 32.5% in September
2017). This is reflective of the spiralling rents which prospective
first time buyers are being forced to pay while simultaneously
trying to save for a deposit for their first home. The Company is
ideally positioned to continue to offer high quality new homes at
competitive prices which attract customers who are paying these
excessive rents.
Mortgage Market
Competition in the Irish mortgage market is continuing to have a
positive impact on access to mortgages, particularly for first time
buyers. However, Irish mortgage interest rates remain nearly twice
the EU average (1.78%) with an average 3.29% interest rate charged
on all variable rate mortgage drawdowns and 3.11% on all fixed rate
mortgage drawdowns in the first 6 months of 2018 which suggests
further scope for a reduction in Irish mortgage rates as
competition continues (source: CBI Retail Interest Rates - June
2018).
The value of mortgage drawdowns rose by 24.2% in the year to
June 2018 to EUR8.0 billion, while mortgage approval values
increased by 15.4% to EUR9.8 billion in the same period (Source:
BPFI Mortgage Approvals June 2018 and BPFI Mortgage Drawdowns June
2018). Full year 2018 mortgage drawdowns are forecast to increase
by 21% to EUR8.8 billion (source: Goodbody - Irish Economy Q2 2018
Health Check). The ongoing strength of approvals indicates that the
value of mortgage drawdowns is increasing, however the continued
shortage of housing for mortgage approved customers will depress
conversion rates (volume of mortgages drawdown as a percentage of
the volume of mortgages approved). The conversion rate in the year
to June 2018 was 81% compared to 82% in the year to June 2017 and
86% in the year to June 2016 (source - BPFI).
Government Initiatives
The objective of the Government's "Rebuilding Ireland" action
plan in respect of residential construction is to double the annual
level of new homes construction to 25,000 by 2021. A number of
welcome initiatives have been implemented to date, including the
launch of the EUR226 million Local Infrastructure Housing
Activation Fund (the Company owns five sites which will benefit
from this funding), the introduction of new fast-track planning for
developments greater than 100 residential units and 200 student
beds through the SHD process, the introduction of the Help to Buy
income tax rebate scheme to assist first time buyers in the
purchase of new homes and the launch of the Rebuilding Ireland Home
Loan product which provides mortgages, through local authorities,
to first time buyers acquiring new or existing homes subject to
certain approval criteria.
The new National Planning Framework, known as "Project Ireland
2040", was launched in early 2018 and aligns the country's spatial
planning and investment decisions, underpinned by EUR116 billion in
capital spending, and forms a strategy for Ireland's growth and
development until 2040.
New apartment design guidelines were announced in March 2018 and
the Company welcomes the issuance of new draft guidelines for
"Urban Development and Building Heights - Guidelines for Planning
Authorities" in August 2018, which remove numerical height caps and
actively encourages higher density developments.
The supply of affordable starter homes in Dublin remains
constrained. The average price of a new home sold in Dublin in H1
2018 was EUR419,000 incl. VAT (source: 2018 Property Price
Register), and of the 2,082 new homes sold in Dublin in the period,
only c. 51% were priced below EUR350,000.
OUTLOOK
Market conditions are very positive and the Company is making
significant progress in executing our strategy as evidenced by the
current level of construction activity across our housing and high
density apartment sites and the quantum of our forward sales
pipeline.
The Company reiterates our expectation of completing 800+ unit
sales and generating revenue of in excess of EUR350 million in
2018.
The fundamentals of the business remain strong, and the Company
looks forward to significant growth in sales, profit and cash
generation. The Company is increasing the medium term target to
revenue of c. EUR550 million from c. 1,400 to 1,500 sales units
annually from 2021. Cairn expects to generate substantial cash and
profits in the 2018 and 2019 financial years which will enable the
Company to declare and pay our first dividend to our
shareholders.
CAIRN HOMES PLC
PRINCIPAL RISKS AND UNCERTAINTIES
The principal operating risks and our approach to mitigating
those risks is set out in more detail below.
Risk Description Mitigation
Economic Conditions
Cairn's business is sensitive Cairn's business strategy reflects the
to the performance of the wider cyclical nature of the industry.
economy and particularly changes The Board and the management team closely
in interest rates, employment monitor economic indicators for indications
and general consumer confidence. of weakness in the economy.
Changes in economic conditions Internal systems are in place to track
in Ireland (which are linked the margin impact of reduction in sales
to the performance of the broader prices/increased construction costs.
global economy, given Ireland's Regular site appraisal reviews are undertaken
open economy) are likely to to address any risk of impairment.
impact on house prices and house The Company continues to monitor the
sales rates. potential impacts of Brexit.
-----------------------------------------------------
Mortgage Availability & Affordability
The availability of mortgage The Company monitors mortgage availability,
finance, particularly the deposit including any impact from regulations
and income requirements set on mortgage lending and rates on an ongoing
by the Regulator on mortgage basis and it is a standing item for discussion
lending, is fundamental to customer at Board meetings.
demand. The Company also monitors volumes of
first time buyers, in order to quantify
the impact of the changes to the Central
Bank of Ireland Loan to Value (LTV) ratios
and the Government Help to Buy tax rebate
scheme, as this results in more immediately
realisable mortgage demand. The Company
is monitoring the position on the possible
changes to the Help to Buy income tax
rebate scheme.
-----------------------------------------------------
Health & Safety
Health and safety breaches can The Health and Safety department operates
result in injuries to Cairn independently of the construction division
staff or subcontractors operating and reports directly to senior management
on Cairn sites and/or result in order to maintain independence. Health
in delays in construction or and safety is also a standing item on
increased costs, in addition the Audit and Risk Committee and Board
to reputational damage and potential agendas.
litigation. Reportable and non-reportable incidents
are measured across sites and reported
to management and the Board on a regular
basis in order to track trends across
and within sites.
A strong health and safety culture exists
across the organisation.
A formalised (industry standard) Safe-T
Cert system has been implemented, which
incorporates a robust management system
and includes monthly independent safety
audits and scoring of results.
-----------------------------------------------------
Availability and Strength of
Subcontractors Supply agreements with subcontractors
The risk that the Company is are fixed for all, or a significant portion
unable to attract the right of each scheme, in order to ensure that
quantity and quality of subcontractors, supply is guaranteed.
which are critical to the construction Given the size of the Company's land
and delivery of the Company's bank and its position in the marketplace,
new homes, due to the outsourced it is a very attractive client for subcontractors.
business model applied by the Senior and middle management have many
Company. years of experience in the industry and
strong relationships with and knowledge
of key subcontractors.
The Company ensures payments are made
on time to subcontractors in order to
maximise their liquidity as they scale
their operations in conjunction with
the Company.
A panel of approved subcontractors is
in place and circulated on all relevant
tenders.
-----------------------------------------------------
CAIRN HOMES PLC
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Risk Description Mitigation
Succession Planning
A risk that the loss of key "9 box" succession planning methodology
staff will result in a loss in place, in order to identify succession
of key corporate knowledge and gaps and actions to close any gaps identified.
consequential impact on operations. Performance management process ensures
annual goal-setting and structured performance
feedback with mid-year and year-end staff
ratings.
Ensuring that remuneration policy is
robust enough to meet market demands.
Succession planning actions will be directly
linked to compensation outcomes to ensure
reward and retention of best talent.
-------------------------------------------------
Recruitment and Retention of
Key Personnel The Company's ambitious growth plans
The risk that the Company does and plc status make it an attractive
not have a sufficiently robust place of employment for high calibre
HR strategy in place in order staff.
to ensure the Company's recruitment The Company ensures that it has a remuneration
policy/plans are delivered and policy in place that is competitive in
that key staff are retained. the market-place to retain key staff.
The LTIP plan further incentivises and
aligns staff to Company performance.
Annual performance reviews in place to
ensure that Company strategy and goals
are communicated to key staff and to
provide regular feedback to staff to
ensure they are kept motivated.
The Company utilises a talent acquisition
recruitment specialist to ensure recruitment
of high quality staff.
-------------------------------------------------
Financial Controls Framework
The risk or failure to adhere Financial controls and policies in place
to agreed policies, procedures in order to manage risks across the key
and processes due to a lack areas.
of financial controls, leading Support Office personnel with direct
to potential financial misstatement, site operational knowledge in place in
fraudulent behaviour or a potential order to monitor site activity and site
financial loss to the Company. costs.
An outsourced internal audit function
has been set up in order to test the
Company's internal control framework
and to suggest improvements where required.
These improvements are presented to the
Audit and Risk Committee and are reviewed
periodically to assess implementation.
-------------------------------------------------
Liquidity Management
The risk that the Company does The Company aims to ensure that it always
not maintain sufficient liquidity has sufficient liquidity in place to
headroom to ensure that it can meet its cash flow requirements for the
always meet its working capital next 3 years.
requirements as they fall due. The Company prepares regular forecasts
Risk that slower than expected that look at both its short-term and
sales impact on the Company's longer-term requirements.
liquidity position. Regular monitoring, forecasting and reporting
The risk that failure to comply of banking covenants.
with the Company's banking covenants Speed of delivery on individual schemes
results in the withdrawal of takes account of sales absorption rates
funding lines. across each individual scheme.
An unforeseen stretch in liquidity can
be managed through a reduction in the
pace of build on one or more sites if
necessary.
-------------------------------------------------
CAIRN HOMES PLC
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Risk Description Mitigation
Government Policy including
Planning Regulations The Company monitors all policy changes
Inability to adhere to the complex through its planning department and the
and stringent regulatory environment experienced team is well placed to interpret
that applies to the building regulatory changes.
industry. Risk that the Government The Company uses external advisors who
and planning authorities will advise on any changes to relevant legislation.
introduce new legislation or Rigorous design standards in place for
legislative changes that result the new homes the Company builds.
in material cost, or time delays Participation in industry advocacy groups.
for the Company. The changes to the planning regime and
the establishment of the Strategic Housing
Development planning process (involving
a one step process with An Bord Pleanála
for all sites delivering greater than
100 residential units), enacted into
legislation in June 2017, have ensured
that the timeframe to obtain planning
permission on large sites has reduced.
-------------------------------------------------
Programme Risk/Project Planning
The risk that the Company incurs Robust project plans and controls are
costs which are higher than in place.
expected or experiences delays Monthly reporting of all project costs,
in construction due to poor with variances and explanations highlighted
planning. in monthly reports and discussed at monthly
on-site meetings attended by site management
teams and senior management. The construction
programme is linked clearly to the sales
programme, with regular analysis by site
comparing sales status with forecast
completion dates.
Key oversight personnel in place across
all projects.
-------------------------------------------------
Availability and Quality of
Materials Current size and growth prospects make
The risk that the Company is the Company an attractive customer for
unable to source the materials suppliers. Continued scaling of the business
it requires at the right time should ensure that the Company has access
and at the best price, due to to necessary materials at competitive
availability and volume constraints, prices.
or risk that subcontractors Framework agreements in place with key
utilise poor quality, prohibited suppliers providing certainty over supply
or dangerous materials. and pricing.
There is strong quality monitoring through
on-site engineers and materials are tested
at concrete plants and on site.
-------------------------------------------------
CAIRN HOMES PLC
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE
HALF-YEARLY FINANCIAL REPORT
For the six month period ended 30 June 2018
The Directors are responsible for preparing this interim
management report in all material respects, in accordance with IAS
34 Interim Financial Reporting as adopted by the EU, the
Transparency (Directive 2004/109/EC) Regulations 2007 ("the
Transparency Directive"), and the Transparency Rules of the Central
Bank of Ireland.
In preparing the interim financial information, the Directors
are required to:
- prepare and present the interim financial information in
accordance with IAS 34 Interim Financial Reporting as adopted by
the EU, the Transparency Directive, and the Transparency Rules of
the Central Bank of Ireland;
- ensure the interim financial information has adequate disclosures;
- select and apply appropriate accounting policies; and
- make accounting estimates that are reasonable in the circumstances.
The Directors are responsible for designing, implementing and
maintaining such internal controls as they determine are necessary
to enable the preparation of interim financial information that is
free from material misstatement whether due to fraud or error.
We confirm that to the best of our knowledge:
(1) the condensed set of financial statements in the half-yearly
financial report of Cairn Homes plc ("the Company") for the six
months ended 30 June 2018 ("the interim financial information")
which comprises the condensed consolidated statement of
comprehensive income, condensed consolidated statement of financial
position, condensed consolidated statement of changes in equity,
condensed consolidated statement of cash flows and the related
explanatory notes, have been presented and prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the European
Union.
(2) The interim financial information presented, as required by
the Transparency Directive, includes:
a. an indication of important events that have occurred during
the first 6 months of the financial year, and their impact on the
condensed set of financial statements;
b. a description of the principal risks and uncertainties for
the remaining 6 months of the financial year;
c. related party transactions that have taken place in the first
6 months of the current financial year and that have materially
affected the financial position or the performance of the
enterprise during that period; and
d. any changes in the related party transactions described in
the last annual report that could have a material effect on the
financial position or performance of the enterprise in the first 6
months of the current financial year.
On behalf of the Board
Michael Stanley Tim Kenny
Chief Executive Officer Group Finance Director
CAIRN HOMES PLC
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME (UNAUDITED)
For the six month period ended 30 June 2018
For the six month period ended For the six month period
30 June 2018 ended 30 June 2017
--------------------------------------------- -------------------------------------
Before Exceptional Before Exceptional
Exceptional Items Total Exceptional Items Total
Items (Note 15) Items (Note 15)
Note EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Continuing operations
Revenue 2 130,214 - 130,214 41,178 - 41,178
Cost of sales (104,137) - (104,137) (33,475) - (33,475)
------------ ------------ ---------- ------------ ------------ ---------
Gross profit 26,077 - 26,077 7,703 - 7,703
Other income 3 - - - 523 - 523
Administrative expenses (7,979) - (7,979) (5,192) (500) (5,692)
------------ ------------
Operating profit 18,098 - 18,098 3,034 (500) 2,534
Finance income 4 - 4 12 - 12
Finance costs 4 (5,900) (3,250) (9,150) (2,938) - (2,938)
------------ ---------- ------------ ------------ ---------
Profit/(loss) before
taxation 12,202 (3,250) 8,952 108 (500) (392)
Tax (charge)/credit 5 (946) 120
---------- ---------
Profit/(loss) for the period 8,006 (272)
Other comprehensive income - -
---------- ---------
Total comprehensive income/(loss)
for the period 8,006 (272)
---------- ---------
Profit/(loss) attributable to:
Owners of the Company 7,508 (272)
Non-controlling interests 498 -
---------- ---------
Profit/(loss) for the year 8,006 (272)
---------- ---------
Basic earnings/(loss) per share 13 0.99 (0.04
cent cent)
---------- ---------
Diluted earnings/(loss) per 13 0.95 cent (0.04
share cent)
---------- ---------
CAIRN HOMES PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(UNAUDITED)
As at 30 June 2018
30 June 31 Dec 2017
2018
Unaudited Audited
Assets Note EUR'000 EUR'000
Non-current assets
Property, plant and equipment 1,402 1,372
Intangible assets 860 821
Restricted cash 8 17,002 17,002
---------- ----------------
19,264 19,195
Current assets
Inventories 6 950,728 911,496
Trade and other receivables 7 5,553 5,540
Cash and cash equivalents 8 46,423 68,803
---------- ----------------
1,002,704 985,839
Total assets 1,021,968 1,005,034
---------- ----------------
Equity
Share capital 9 828 828
Share premium 9 749,616 749,616
Share-based payment reserve 14,772 14,222
Retained earnings (37,233) (44,741)
---------- ----------------
Equity attributable to owners of the
Company 727,983 719,925
Non-controlling interest 11 2,293 1,795
---------- ----------------
Total equity 730,276 721,720
---------- ----------------
Liabilities
Non-current liabilities
Loans and borrowings 10 227,923 226,838
Deferred taxation 5 5,273 5,611
---------- ----------------
233,196 232,449
Current liabilities
Loans and borrowings 10 11,826 18,361
Trade and other payables 12 44,805 31,636
Current taxation 1,865 868
---------- ----------------
58,496 50,865
Total liabilities 291,692 283,314
---------- ----------------
Total equity and liabilities 1,021,968 1,005,034
---------- ----------------
CAIRN HOMES PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(UNAUDITED)
For the six month period ended 30 June 2018
Attributable to owners of the Company
----------------- ----------
Share Share Share-Based Retained Total Non-Controlling Total
Capital Premium Payment Earnings Interests Equity
Reserve
---- ----- ---- ---------- ---------- ------------- ---------- ---------- ----------------- ----------
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---- ----- ---- ---------- ---------- ------------- ---------- ---------- ----------------- ----------
As at 1 January 2018 828 749,616 14,222 (44,741) 719,925 1,795 721,720
----------------------------------- ---------- ---------- ------------- ---------- ---------- ----------------- ----------
Total
comprehensive
income
for the period
---------------- ---------- ---------- ------------- ---------- ---------- ----------------- ----------
Profit for the period - - - 7,508 7,508 498 8,006
----------------------------------- ---------- ---------- ------------- ---------- ---------- ----------------- ----------
- - - 7,508 7,508 498 8,006
---------- ---------- ------------- ---------- ---------- ----------------- ----------
Transactions
with owners
of the Company
---------------- ---------- ---------- ------------- ---------- ---------- ----------------- ----------
Equity-settled share-based
payments - - 550 - 550 - 550
----------------------------------- ---------- ---------- ------------- ---------- ---------- ----------------- ----------
- - 550 - 550 - 550
---------- ---------- ------------- ---------- ---------- ----------------- ----------
As at 30 June 2018 828 749,616 14,772 (37,233) 727,983 2,293 730,276
----------------------------------- ---------- ---------- ------------- ---------- ---------- ----------------- ----------
CAIRN HOMES PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(UNAUDITED)
For the six month period ended 30 June 2017
Attributable to owners of the Company
--------------------------------------------------------
Share Share Share-Based Retained Total Non-Controlling Total
Capital Premium Payment Earnings Interests Equity
Reserve
----- ---- ------------- --------- ------------ ---------- -------- ---------------- --------
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
----- ---- ------------- --------- ------------ ---------- -------- ---------------- --------
As at 1 January 2017 794 697,733 24,779 (58,935) 664,371 - 664,371
------------------------------- ------------- --------- ------------ ---------- -------- ---------------- --------
Total
comprehensive
loss
for the period
----------------- ------------- --------- ------------ ---------- -------- ---------------- --------
Loss for the period - - - (272) (272) - (272)
------------------------------- ------------- --------- ------------ ---------- -------- ---------------- --------
- - - (272) (272) - (272)
------------- --------- ------------ ---------- -------- ---------------- --------
Transactions
with owners
of the Company
----------------- ------------- --------- ------------ ---------- -------- ---------------- --------
Issue of ordinary shares
for cash 34 51,883 - - 51,917 - 51,917
------------------------------- ------------- --------- ------------ ---------- -------- ---------------- --------
Share issue costs - - - (1,282) (1,282) - (1,282)
------------------------------- ------------- --------- ------------ ---------- -------- ---------------- --------
Equity-settled share-based
payments - - 121 - 121 - 121
------------------------------- ------------- --------- ------------ ---------- -------- ---------------- --------
34 51,883 121 (1,282) 50,756 - 50,756
------------- --------- ------------ ---------- -------- ---------------- --------
Changes in
ownership
interests
-----------------
Investment in subsidiary
by non-controlling
shareholders - - - - - 1,268 1,268
------------------------------- ------------- --------- ------------ ---------- -------- ---------------- --------
- - - - - 1,268 1,268
As at 30 June 2017 828 749,616 24,900 (60,489) 714,855 1,268 716,123
------------------------------- ------------- --------- ------------ ---------- -------- ---------------- --------
CAIRN HOMES PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
For the six month period ended 30 June 2018
For the six For the six month
month period period ended
ended 30 June 30 June 2017
2018
EUR'000 EUR'000
-------------------------------------------------- --------------- --- ------------------
Cash flows from operating activities
---- --------------- --- ------------------
Profit/(loss) for the period 8,006 (272)
--------------- ---
Adjustments for:
---- --------------- --- ------------------
Share-based payments expense 550 121
--------------- --- ------------------
Finance costs 9,150 2,938
--------------- --- ------------------
Finance income (4) (12)
Depreciation and amortisation 158 178
Taxation 946 (120)
--------------- ------------------
18,806 2,833
-------------------------------------------------- --------------- --- ------------------
Increase in inventories (39,128) (39,195)
--------------- --- ------------------
Increase in deposits paid - (10,750)
--------------- --- ------------------
Increase in trade and other receivables (13) (5,609)
--------------- --- ------------------
Increase in trade and other payables 11,286 11,465
Tax paid (287) -
--------------- --- ------------------
Net cash used in operating activities (9,336) (41,256)
--------------- --- ------------------
Cash flows from investing activities
---- --------------- --- ------------------
Interest received - 12
---
Purchases of property, plant and
equipment (227) (559)
---
Purchases of intangible assets (104) (261)
---
Net cash used in investing activities (331) (808)
--------------- --- ------------------
Cash flows from financing activities
---- --------------- --- ------------------
Proceeds from issue of share capital,
net of issue costs paid - 50,635
--------------- --- ------------------
Proceeds from borrowings, net of
debt issue costs 5,294 22,312
--------------- --- ------------------
Repayment of loans (11,896) -
----
Investment in subsidiary by non-controlling
interest - 1,268
Settlement of contingent consideration
for Argentum acquisition (3,250) -
Interest paid (2,861) (2,669)
--------------- --- ------------------
Net cash (used in)/from financing
activities (12,713) 71,546
--------------- --- ------------------
Net (decrease)/increase in cash
and cash equivalents in the period (22,380) 29,482
Cash and cash equivalents at beginning
of period 68,803 45,645
--------------- ------------------
Cash and cash equivalents at end
of period 46,423 75,127
--------------- ------------------
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL
STATEMENTS
1. Basis of Preparation
Cairn Homes plc ("the Company") is a company domiciled in
Ireland. The Company's registered office is 7 Grand Canal, Grand
Canal Street Lower, Dublin 2. The Company and its subsidiaries
(together referred to as "the Group") is predominantly involved in
the development of residential property for sale.
These unaudited condensed interim consolidated financial
statements and the information set out in this report cover the six
month period ended 30 June 2018 and have been prepared in
accordance with IAS 34 "Interim Financial Reporting" as adopted by
the European Union.
The condensed interim consolidated financial statements do not
include all the information required for a complete set of
financial statements prepared in accordance with IFRS as adopted by
the European Union. However, selected explanatory notes are
included to explain events and transactions that are significant to
an understanding of the changes in the Group's financial position
and performance since 31 December 2017. They should be read in
conjunction with the statutory consolidated financial statements of
the Group, which were prepared in accordance with IFRS as adopted
by the European Union, as at and for the year ended 31 December
2017. Those statutory financial statements have been filed with the
Registrar of Companies and are available at www.cairnhomes.com. The
audit opinion on those statutory financial statements was
unqualified and did not contain any matters to which attention was
drawn by way of emphasis.
The new IFRS standards, amendments to standards or
interpretations that are effective for the first time in the
financial year ending 31 December 2018 have not had a significant
impact on the Group's reported profit or net assets in these
interim financial statements.
IFRS 15, Revenue from Contracts with Customers, replaced IAS 18
Revenue Recognition and IAS 11 Construction Contracts for the
period ended 30 June 2018. IFRS 15 is based on the principle that
revenue is recognised when control of a good or service transfers
to a customer. The Group has assessed its contractual arrangements
with customers in the current and prior periods. In respect of its
residential property sales and site sales contracts, control passes
to customers at legal completion and revenue is therefore
recognised at that point in time. Based on the Group's assessment
of IFRS 15, it has no impact on the residential property sales or
residential site sales recognised up to the end of the period. The
Group will continue to review all contracts as they occur in the
future to ensure that their treatment is consistent with IFRS
15.
IFRS 9, Financial instruments replaced IAS 39, Financial
Instruments: Recognition and Measurement for the period ended 30
June 2018. The standard addresses the classification, recognition,
measurement and derecognition of financial assets and liabilities,
and introduces new rules for hedge accounting and a new impairment
model for financial assets. The Group considers that there is no
material impact on the accounting for financial liabilities. The
new requirements affecting the accounting for financial liabilities
that are designated at fair value through profit or loss do not
impact on the Group as it does not have any such liabilities. The
Group considers that there is no material impact on its financial
assets which continue to be accounted for at amortised cost. In
view of the arrangements with customers where payment is ordinarily
received at the point of legal completion, the Group does not
generally have significant trade receivables arising from its
property sales. Accordingly, the requirements for bad debt
provisions under IFRS 9 to be based on an expected credit loss
model (rather than an incurred credit loss model) do not have a
significant impact on the Group. Also, the Group had no hedging
arrangements in the current or prior period.
The Group's other accounting policies, presentation and method
of computations adopted in the preparation of the condensed interim
financial statements are consistent with those followed in the
preparation of the Group's financial statements for the year ended
31 December 2017.
The preparation of consolidated financial statements requires
management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets,
liabilities, income and expenses. Actual results could differ
materially from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to
estimates are recognised prospectively.
The key judgements and estimates impacting these interim
financial statements are the carrying value of inventories and
allocations from inventories to cost of sales (note 6). The interim
condensed consolidated financial statements are presented in Euro,
which is the functional currency of the Company and presentation
currency of the Group, rounded to the nearest thousand.
The interim condensed consolidated financial statements were
approved by the Directors on 3 September 2018.
2. Revenue
For six month For six month
period ended period ended
30 June 2018 30 June 2017
EUR'000 EUR'000
-------------- --------------
Residential property sales 115,159 26,331
Residential site sales 14,377 14,147
-----------------------------
Income from property rental 678 700
-------------- --------------
130,214 41,178
-------------- --------------
3. Other income
For six month For six month
period ended period ended
30 June 2018 30 June 2017
EUR'000 EUR'000
-------------- --------------
Other income - 523
-------------- --------------
- 523
-------------- --------------
In the prior period, other income of EUR0.5 million represented
net income on certain loans originally acquired in the Project
Clear loan portfolio.
4. Finance costs
For six month For six month
period ended period ended
30 June 2018 30 June 2017
EUR'000 EUR'000
-------------- --- --------------
Interest expense on financial liabilities
measured at amortised cost
Settlement of contingent consideration
- exceptional item 5,900 2,938
3,250 -
------------------------------------------- -------------- --------------
9,150 2,938
------------------------------------------- -------------- --------------
Finance costs for the period to 30 June 2018 include interest
and amortised transaction costs on the drawn Term Loans and
Revolving Credit Facility, plus commitment fees on the undrawn
element of the Revolving Credit Facility during the period.
Also, in accordance with IFRS 3 Business Combinations, a
contingent consideration settlement of EUR3.25 million was charged
to profit or loss in the period ended 30 June 2018 in relation to
the Swords site which was acquired as part of the Argentum
acquisition in 2016. This is a non-routine transaction which is
non-recurring and has thus been classified as an exceptional item
(note 15).
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
(continued)
5. Taxation
For six month For six month
period ended period ended
30 June 2018 30 June 2017
EUR'000 EUR'000
----------------------------------------- ---------------- --------------
Current tax charge for the period 1,284 -
---------------- --------------
Deferred tax credit for the period (338) (120)
---------------- --------------
Total tax charge/(credit) 946 (120)
---------------- --------------
Deferred tax
-----------------------------------------
The deferred tax liability is comprised
of the following: For six month For year
period ended ended
30 June 2018 31 December
2017
---------------- --------------
EUR'000 EUR'000
---------------- --------------
Opening balance 5,611 5,490
---------------- --------------
(Credited)/charged to profit or loss (338) 121
---------------- --------------
Closing balance 5,273 5,611
---------------- --------------
6. Inventories
30 June 2018 31 Dec 2017
EUR'000 EUR'000
------------- ------------
Land held for development 796,228 788,791
Construction work in progress 151,381 104,492
----------------------------------------
Development land collateral (for loans
in the foreclosure process) 3,119 18,213
------------- ------------
950,728 911,496
------------- ------------
The Directors consider that all inventories are essentially
current in nature although the Group's operational cycle is such
that a considerable proportion of inventories will not be realised
within 12 months. It is not possible to determine with accuracy
when specific inventories will be realised as this will be subject
to a number of factors such as consumer demand and the timing of
planning permissions.
As the build costs on each site can take place over a number of
reporting periods the determination of the cost of sales to release
on each sale is dependent on up to date cost forecasting and
expected profit margins across the various developments. There is a
risk that one or all of the assumptions may require revision as
more information becomes available, with a resulting impact on the
carrying value of inventory or the amount of profit recognised. The
risk is managed through ongoing site profitability reforecasting
with any necessary adjustments being accounted for in the relevant
reporting period. The Directors considered the evidence from
impairment reviews and profit forecasting models across the various
sites and are satisfied with the carrying values of inventories
(development land and work in progress), which are stated at the
lower of cost and net realisable value, and with the methodology
for the release of costs on the sale of inventory.
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
(continued)
7. Trade and other receivables
30 June 2018 31 Dec 2017
EUR'000 EUR'000
--------------- --------------
Construction bonds 4,292 4,344
--------------------
Other receivables 1,261 1,196
--------------- --------------
5,553 5,540
--------------- --------------
The carrying value of all trade and other receivables is
approximate to their fair value.
8. Restricted cash and cash and cash equivalents
30 June 2018 31 Dec 2017
EUR'000 EUR'000
------------------ --------------
Non-current
------------------ --------------
Restricted cash 17,002 17,002
------------------ --------------
As at 30 June 2018, EUR17 million was required to be maintained
in an interest-bearing blocked deposit for the duration of the
Group's senior debt facilities (note 10), as part of the collateral
for those facilities. The estimated fair value of this restricted
cash at 30 June 2018 is EUR17 million. All this restricted cash was
released to current assets after 30 June 2018 as a result of the
Group's refinancing in July 2018 (note 19).
30 June 2018 31 Dec 2017
EUR'000 EUR'000
--------------- --------------
Current
--------------- --------------
Cash and cash equivalents 46,423 68,803
--------------- --------------
Cash deposits are made for varying short-term periods depending
on the immediate cash requirements of the Group. All deposits can
be withdrawn without significant changes in value and accordingly
the fair value of current cash and cash equivalents is identical to
the carrying value.
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
(continued)
9. Share capital and share premium
30 June 2018 31 Dec 2017
Number EUR'000 Number EUR'000
-------------- ------------- -------------- ------------
Authorised
-------------- ------------- -------------- ------------
Ordinary shares of EUR0.001
each 1,000,000,000 1,000 1,000,000,000 1,000
-------------- ------------- -------------- ------------
Founder shares of EUR0.001
each 100,000,000 100 100,000,000 100
-------------- ------------- -------------- ------------
Deferred shares of EUR0.001
each 120,000,000 120 120,000,000 120
-------------- ------------- -------------- ------------
A Ordinary shares of EUR1.00
each 20,000 20 20,000 20
-------------- ------------- -------------- ------------
Total authorised share
capital 1,240 1,240
-------------- ------------- -------------- ------------
Share Capital Share Premium Total
As at 30 June 2018 Number EUR'000 EUR'000 EUR'000
------------------------------ ------------ -------------- -------------- --------
Issued and fully paid
------------ -------------- -------------- --------
Ordinary shares of EUR0.001
each 761,672,549 762 749,570 750,332
------------ -------------- -------------- --------
Founder shares of EUR0.001
each 46,292,771 46 46 92
------------ -------------- -------------- --------
Deferred shares of EUR0.001
each 19,980,000 20 - 20
-------------- -------------- --------
A Ordinary shares of EUR1.00 - - - -
each
------------------------------ -------------- -------------- --------
828 749,616 750,444
------------ -------------- -------------- --------
Share Capital Share Premium Total
As at 31 December 2017 Number EUR'000 EUR'000 EUR'000
------------------------------ ------------ -------------- -------------- --------
Issued and fully paid
------------ -------------- -------------- --------
Ordinary shares of EUR0.001
each 761,672,549 762 749,570 750,332
------------ -------------- -------------- --------
Founder shares of EUR0.001
each 46,292,771 46 46 92
------------ -------------- -------------- --------
Deferred shares of EUR0.001
each 19,980,000 20 - 20
-------------- -------------- --------
A Ordinary shares of EUR1.00 - - - -
each
------------------------------ -------------- -------------- --------
828 749,616 750,444
------------ -------------- -------------- --------
Long Term Incentive Plan
The Group operates an equity settled Long Term Incentive Plan
(LTIP), which was approved at the May 2017 Annual General Meeting,
under which conditional awards of 2,561,541 shares have been made
to senior executives. The shares will vest on satisfaction of
service and performance conditions attaching to the LTIP. Vesting
of 80% of the awards will be based on Earnings per Share (EPS)
performance and 20% will be based on Total Shareholder Return (TSR)
over a 3 year period. The Group recognised an expense of EUR0.550
million related to the LTIP in profit or loss during the period
ended 30 June 2018.
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
(continued)
10. Loans and borrowings
30 June 2018 31 Dec 2017
EUR'000 EUR'000
--------------- --------------
Current liabilities
Bank loans
-----------------------------
Repayable within one year 11,826 18,361
----------------------------- --------------- --------------
Total borrowings 11,826 18,361
----------------------------- --------------- --------------
Non-current liabilities
Bank loans
--------------- --------------
Repayable as follows:
--------------- --------------
Between one and two years 227,923 226,838
--------------- --------------
Total borrowings 239,749 245,199
--------------- --------------
The amount presented in the financial statements is net of
related unamortised arrangement fees and transaction costs.
The above maturity profile, which is based on the facilities
that existed at 30 June 2018, has subsequently changed as a result
of the Group's refinancing after the period end. The Group's
committed new post period end facilities total EUR350 million which
comprise a new EUR277.5 million Term Loan and Revolving Credit
Facility with Allied Irish Bank plc, Ulster Bank Ireland DAC and
Barclays Bank Ireland plc, repayable by 31 December 2022 and a
EUR72.5 million Private Placement of Loan Notes with Pricoa Capital
Group, repayable between 2024 and 2026 (note 19).
11. Non-controlling interest
The non-controlling interest at 30 June 2018 of EUR2.3 million
(31 December 2017: EUR1.8 million) relates to the 35% share of the
net assets of a subsidiary entity, Balgriffin Cells P13-P15 DAC,
which is held by National Asset Management Agency ("NAMA"). Cairn
Homes plc holds 65% of the equity share capital in this subsidiary
which is involved in the development of residential property.
12. Trade and other payables
30 June 2018 31 Dec 2017
EUR'000 EUR'000
--------------- --------------
Trade payables 20,319 8,193
-----------------
Accruals 20,007 14,202
-----------------
VAT liability 3,697 7,854
-----------------
Other creditors 782 1,387
----------------- --------------- --------------
44,805 31,636
--------------- --------------
The carrying value of all trade and other payables is
approximate to their fair value.
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
(continued)
13. Earnings per share
The basic earnings per share for the period ended 30 June 2018
is based on the earnings attributable to ordinary shareholders of
EUR7.5 million and the weighted average number of ordinary shares
outstanding for the period.
For six month For six month
period ended period ended
30 June 2018 30 June 2017
Profit/(loss) attributable to owners of
the Company (EUR'000) 7,508 (272)
------------------------------------------------- -------------- --- --------------
Numerator for basic and diluted earnings/(loss)
per share 7,508 (272)
------------------------------------------------- -------------- --- --------------
Weighted average number of ordinary shares
for period (basic) 761,672,549 697,890,074
-------------- --- --------------
Dilutive effect of Founder Shares and options 27,337,398 -
------------------------------------------------- -------------- --- --------------
Denominator for diluted earnings/(loss)
per share 789,009,947 697,890,074
------------------------------------------------- -------------- --- --------------
Earnings/(loss) per share
---
0.99 cent (0.04 cent)
* Basic 0.95 cent (0.04 cent)
* Diluted
------------------------------------------------- -------------- --- --------------
The diluted earnings per share calculation reflects the number
of ordinary shares issued through conversion of Founder Shares in
August 2018 (note 19). The impact of share options is also
reflected in the calculation.
Additional ordinary shares may be issued under the Founder Share
scheme in future periods up to and including 2022 if the
performance condition under the rules of the scheme is reached.
14. Dividends
There were no dividends declared and paid by the Company during
the reporting period and there were no dividends proposed by the
Directors in respect of the reporting period up to the date of
authorisation of these interim financial statements.
15 Exceptional items
Six month period ended 30 June 2018
The terms of the agreements for the Argentum acquisition in 2016
included contingent consideration which could be payable in certain
circumstances in relation to the Swords site. The exceptional
finance cost of EUR3.25 million (note 4) in the period relates to
the settlement of this contingent consideration which was agreed
with the Argentum vendors during the period. This is required to be
charged to profit or loss in the consolidated financial statements
in accordance with IFRS 3 Business Combinations. As this is a
material non-routine transaction which is non-recurring it has been
classified as an exceptional item.
Six month period ended 30 June 2017
In the prior period, transaction costs of EUR0.5 million,
incurred in connection with the Euronext Dublin Listing which was
completed in July 2017, were charged to profit or loss. As the
listing of the Group is a non-routine transaction, these costs were
classified as an exceptional item.
16. Related party transactions
There were no related party transactions during the period other
than Directors' remuneration.
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
(continued)
17. Financial risk management
The Group has exposure to the following risks arising from
financial instruments:
-- credit risk;
-- liquidity risk; and
-- market risk.
This note presents information about the Group's exposure to
each of the above risks, and the Group's objectives, policies and
processes for measuring and managing risk.
(a) Risk management framework
The Board of Directors has overall responsibility for the
establishment and oversight of the Group's risk management
framework.
(b) Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the
Group's trade and other receivables and cash and cash equivalents.
The carrying amount of financial assets represents the maximum
credit exposure.
Exposure to credit risk
The Group's principal financial assets comprise cash and short
term deposits. Group management in conjunction with the Board
manage risk associated with cash and short term deposits by
depositing funds with a number of Irish financial institutions and
AAA rated international institutions. At 30 June 2018, the Group's
deposits were held in three Irish financial institutions with a
minimum credit rating of BBB-.
30 June 31 Dec 2017
2018
Carrying amount - amortised
cost EUR'000 EUR'000
Construction bonds and other
receivables 5,553 5,540
Restricted cash - non-current 17,002 17,002
Cash and cash equivalents -
current 46,423 68,803
-------- ------------
68,978 91,345
-------- ------------
(c) Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or other financial
assets. The Group's approach to managing liquidity is to ensure, as
far as possible, that it will always have sufficient liquidity to
meet its liabilities when they fall due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
The Group monitors the level of expected cash inflows from trade
and other receivables together with expected cash outflows on trade
and other payables and commitments. All trade and other payables
(EUR44.8 million) at 30 June 2018 are considered current with the
expected cash outflow equivalent to their carrying value.
Management monitors the adequacy of the Group's liquidity
reserves (comprising undrawn borrowing facilities and cash and cash
equivalents) against rolling cash flow forecasts. In addition, the
Group's liquidity risk management policy involves monitoring short
term and long term cash flow forecasts.
The Group's refinancing since the period end (note 19) will
increase the available committed funding, reduce the Group's
finance costs and extend the maturity profile from 2019 to between
2022 and 2026.
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
(continued)
17. Financial risk management (continued)
(d) Market risk
Market risk is the risk that changes in market prices, such as
foreign exchange rates, interest rates and equity prices will
affect the Group's income or the value of its holdings of financial
instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters,
while optimising the return.
(i) Currency risk
The Group is not exposed to significant currency risk. The Group
operates only in the Republic of Ireland.
(ii) Interest rate risk
At 30 June 2018, the Group had the following facilities:
(a) Term Loan and Revolving Credit facilities with Allied Irish
Bank plc and Ulster Bank Ireland DAC that had a principal drawn
balance of EUR180 million (EUR150 million Term Loan and EUR30
million Revolving Credit Facility), of which EUR70 million has a
fixed interest rate of 0% plus a margin of 3%, with the balance on
a variable interest rate of 3 month Euribor (with a 0% floor), plus
a margin of 3%. The Group has an exposure to cash flow interest
rate risk where there are changes in Euribor rates. The Group's
refinancing after the period end (note 19) will result in reduced
interest rates on the new Term Loan and Revolving Credit
Facility.
(b) a EUR50 million Term Loan facility with Activate Capital at
a variable interest rate of 1 month Euribor (with a 0% floor), plus
a margin of 6%. The Group has not hedged its interest rate exposure
on this Term Loan and retains an exposure to interest rate risk
where there are changes in the prevailing 1 month Euribor rate.
(c) a EUR10 million short-term loan facility with Allied Irish
Bank plc, at a variable interest rate of 3 month Euribor (with a 0%
floor), plus a margin of 5%. This was repaid in August 2018.
(d) an additional Term Loan facility with Allied Irish Bank plc
in relation to the joint development with NAMA (note 11) with a
drawn balance of EUR1.8 million, at a variable interest rate of 3
month Euribor (with a 0% floor), plus a margin of 4.25%. This was
repaid in July 2018.
(e) Fair value of financial assets and financial liabilities
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
For financial reporting purposes, fair value measurements are
categorised into Level 1, 2 or 3 based on the degree to which
inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement in its
entirety, which are described as follows:
Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2: valuation techniques for which the lowest level of
inputs which have a significant effect on the recorded fair value
are observable, either directly or indirectly; and
Level 3: valuation techniques for which the lowest level of
inputs that have a significant effect on the recorded fair value
are not based on observable market data.
The following table shows the Group's financial assets and
liabilities and the methods used to calculate fair value.
Asset/ Liability Carrying Level Method Assumptions
value
----------------- ---------- ------ ----------- ------------------------------------
Borrowings Amortised 2 Discounted Valuation based on future repayment
cost Cash Flow and interest cash flows discounted
at period end market interest
rates.
----------------- ---------- ------ ----------- ------------------------------------
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
(continued)
17. Financial risk management (continued)
Fair value of financial assets and financial liabilities
(continued)
The following table shows the carrying values of financial
assets and liabilities including their values in the fair value
hierarchy. The table does not include fair value information for
financial assets and liabilities not measured at fair value if the
carrying amount is a reasonable approximation of fair value.
30 June 2018 Fair Value
----------------------------
Carrying Level 1 Level 2 Level
Value 3
------------- -------- -------- --------
EUR'000 EUR'000 EUR'000 EUR'000
-------------------------------- ------------- -------- -------- --------
Financial assets measured
at amortised cost
------------- -------- -------- --------
Construction bonds and other
receivables 5,553
------------- -------- -------- --------
Cash and cash equivalents
- current 46,423
-------------
Restricted cash - non-current 17,002
-------------
68,978
-------------
Financial liabilities measured
at amortised cost
------------- -------- -------- --------
Trade payables and accruals 40,326
-------------
Borrowings 239,749 241,345
-------------
280,075
31 Dec 2017 Fair Value
----------------------------
Carrying Level 1 Level 2 Level
Value 3
------------ -------- -------- --------
EUR'000 EUR'000 EUR'000 EUR'000
-------------------------------- ------------ -------- -------- --------
Financial assets measured
at amortised cost
------------ -------- -------- --------
Construction bonds and other
receivables 5,540
------------ -------- -------- --------
Cash and cash equivalents
- current 68,803
------------
Restricted cash - non-current 17,002
------------
91,345
------------
Financial liabilities measured
at amortised cost
------------ -------- -------- --------
Trade payables and accruals 22,395
------------
Borrowings 245,199 245,199
------------
267,594
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
(continued)
18. Commitments and contingent liabilities
On 27 June 2018, the Group agreed to sell its prime Dublin City
Centre premium apartment development at Six Hanover Quay (120
apartments, a 5,000 sq. ft. restaurant and 1,400 sq. ft. café) on
completion for a total cash consideration of EUR101 million
(EUR89.7 million excluding VAT). Construction activity is ongoing
with legal completion scheduled for Q1 2019.
The Group is not aware of any other commitments or contingent
liabilities that should be disclosed in these financial
statements.
19. Events after the reporting period
After the period end, the Group successfully completed a debt
refinancing of its existing EUR200 million Term Loan and Revolving
Credit Facility with Allied Irish Bank plc and Ulster Bank Ireland
DAC, which was repayable by 11 December 2019, into a new EUR277.5
million Term Loan and Revolving Credit Facility with Allied Irish
Bank plc, Ulster Bank Ireland DAC and Barclays Bank Ireland plc,
repayable by 31 December 2022. Additionally, the Company completed
a EUR72.5 million Private Placement of Loan Notes with Pricoa
Capital Group, repayable on 31 July 2024 (EUR15 million), 31 July
2025 (EUR15 million) and 31 July 2026 (EUR42.5 million). The new
facilities are secured by a debenture incorporating a fixed and
floating charge over certain assets of the Group.
The Group announced the completion of the third founder share
test period (1 March - 30 June 2018) on 20 July 2018 and confirmed
that the founder share value created would be satisfied through the
conversion of 27,110,622 founder shares into the same number of
ordinary shares, which occurred on 16 August 2018. Under the
approved terms of the Founder Share Scheme, the founders are
entitled to 20% of total shareholder return generated each year up
to and including 30 June 2022, subject to achieving a 12.5% annual
compounding hurdle rate.
The Group has agreed to dispose of the refurbished student
apartment development at Blackhall Place, Dublin as well as two
other student accommodation development sites which recently
received planning permission for a
total consideration of EUR45 million.
20. Approval of financial statements
These financial statements were approved by the Board on 3
September 2018.
Independent Review Report to Cairn Homes plc
Introduction
We have been engaged by Cairn Homes plc ("the Company") to
review the condensed set of consolidated financial statements in
the half-yearly financial report for the six months ended 30 June
2018 which comprises the condensed consolidated statement of
comprehensive income, condensed consolidated statement of financial
position, condensed consolidated statement of changes in equity,
condensed consolidated statement of cash flows and the related
explanatory notes. Our review was conducted having regard to the
Financial Reporting Council's ("FRC's") International Standard on
Review Engagements ("ISRE") (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity'.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of consolidated
financial statements in the half-yearly report for the six months
ended 30 June 2018 is not prepared, in all material respects, in
accordance with IAS 34 Interim Financial Reporting as adopted by
the EU, the Transparency (Directive 2004/109/EC) Regulations 2007
("the Transparency Directive"), and the Transparency Rules of the
Central Bank of Ireland.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Transparency Directive and the Transparency Rules of the
Central Bank of Ireland. As disclosed in note 1, the annual
financial statements of the Group are prepared in accordance with
IFRS as adopted by the EU. The Directors are responsible for
ensuring that the condensed set of financial statements included in
this half-yearly financial report has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of consolidated financial statements in the
half-yearly financial report based on our review.
Scope of review
We conducted our review having regard to the Financial Reporting
Council's International Standard on Review Engagements (UK and
Ireland) 2410 Review of Interim Financial Information Performed by
the Independent Auditor of the Entity. A review of interim
financial information consists of making enquiries, primarily of
persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (Ireland) and consequently
does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
We read the other information contained in the half-yearly
financial report to identify material inconsistencies with the
information in the condensed set of consolidated financial
statements and to identify any information that is apparently
materially incorrect based on, or materially inconsistent with, the
knowledge acquired by us in the course of performing the review. If
we become aware of any apparent material misstatements or
inconsistencies, we consider the implications for our report.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the Company in accordance with the
terms of our engagement to assist the Company in meeting the
requirements of the Transparency Directive and the Transparency
Rules of the Central Bank of Ireland. Our review has been
undertaken so that we might state to the Company those matters we
are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company for our
review work, for this report, or for the conclusions we have
reached.
KPMG 3 September 2018
Chartered Accountants
1 Stokes Place
St. Stephen's Green, Dublin 2
CAIRN HOMES PLC
COMPANY INFORMATION
Directors Solicitors
John Reynolds (Non-Executive Chairman) A&L Goodbody
Michael Stanley (Chief Executive Officer) IFSC
Tim Kenny (Group Finance Director) 25-28 North Wall
Quay
Alan McIntosh (Non-Executive, British) Dublin 1
Gary Britton (Non-Executive)
Giles Davies (Non-Executive, British) Eversheds-Sutherland
Andrew Bernhardt (Non-Executive, British) One Earlsfort
Centre
Earlsfort Terrace
Secretary and Registered Office Dublin 2
Tara Grimley
7 Grand Canal Pinsent Masons LLP
Grand Canal Street Lower 30 Crown Place
Dublin 2 Earl Street
London EC2A 4ES
Registrars
Computershare Investor Services Beauchamps
(Ireland) Limited
Herron House Riverside Two
Corrig Road Sir John Rogerson's
Quay
Sandyford Industrial Dublin 2
Estate
Dublin 18
Principal Bankers/Lenders
Auditors Allied Irish
Banks plc
KPMG Bankcentre
Chartered Accountants Ballsbridge
1 Stokes Place Dublin 4
St. Stephen's Green
Dublin 2 Ulster Bank Ireland
DAC
33 College Green
Website Dublin 2
www.cairnhomes.com
Barclays Bank
Ireland plc
Two Park Place
Hatch Street
Dublin 2
Pricoa Capital Group
One London Bridge
8(th) Floor
London
SE1 9BG
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR UOUURWOAKRUR
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