Cairn Homes plc Trading Statement (3206N)
January 17 2019 - 1:00AM
UK Regulatory
TIDMCRN
RNS Number : 3206N
Cairn Homes plc
17 January 2019
17 January 2019
Cairn Homes plc
Trading Update for the year ended 31 December 2018
Strong Results Underpinning Capital Return Plans
Dublin/London, 17 January 2019: Cairn Homes plc ("Cairn", or the
"Company") (ISE/LSE: CRN), the leading Irish homebuilding company,
today issues a Trading Update for the year ended 31 December 2018
in advance of full year results to be announced on 7 March
2019.
Cairn delivered a strong trading performance in 2018 with 804
new homes sold in the full year (2017: 418 unit sales), with 511 of
these homes sold in H2. Total revenues for 2018 were c. EUR337m
(2017: EUR149.5m). Excluding our non-core site sales, revenues from
new homes sold were c. EUR294m (2017: EUR131.5m).
The full year gross margin is expected to be approximately 20.5%
(2017: 18.2%). The Company anticipates reporting an operating
profit of c. EUR53m (2017: EUR14.5m) and closing net debt of c.
EUR140m (2017: EUR159.4m). Cairn's 2018 performance has delivered
substantial increases in revenue (+125%), gross margin (+230 bps)
and operating profit (+266%).
The Company's average selling price([1]) in 2018 was EUR366k
(2017: EUR315k). The average selling price in H2 2018 of EUR351k
was lower than in H1 2018 (EUR393k) due to mix changes - we sold
our first duplex housing units and were pleased to deliver 68 Part
V homes across our various sites to local authorities at an average
selling price of EUR207k. Cairn's new homes and apartments appeal
to various segments of the market, including our first time buyer
starter homes where the average selling price in 2018 was EUR312k
(2017: EUR301k).
As at 16 January 2019, the Company has a strong forward sales
pipeline with a sales value of EUR159.5m (344 units at an average
selling price of EUR464k). We will reopen sales suites on seven of
our active sites in Q1 2019, all in excellent locations with proven
demand. In addition, first sales launches on active sites this year
will include Mariavilla in Maynooth; Gandon Park in Lucan; Oak Park
in Naas; Donnybrook Gardens in Dublin 4; and Citywest in Dublin 24.
Our forward sales, the increasing number of active selling sites
and the broadening of our product range continues to underpin our
targets for 2019 and beyond.
As part of Cairn's intention to implement a progressive capital
return policy, including the potential for share buybacks in
addition to dividends, the Company intends to propose a capital
reduction resolution to shareholders no later than our 2019 annual
general meeting on 22 May 2019. The resolution will seek to convert
a substantial part of our share premium account into distributable
reserves. This process is aligned with the commitment given to
shareholders that a dynamic capital management policy would be
pursued at the earliest opportunity. Following the substantial
investment in scaling our business and building our work in
progress over the last number of years, Cairn is now generating
significant free cash flow and all profits generated from 2019
onwards will add to our distributable reserves.
Market conditions in Ireland remain positive, notwithstanding
Brexit uncertainty. The Irish economy continues to be the top
performing economy in the EU and the Company believes that a
minimum of 35,000 new homes are required nationally, including
20,000 in the Greater Dublin Area. Demand is being driven by strong
population growth and strengthening employment levels, while
affordability is being supported by positive wage inflation and
increasing competition amongst mortgage providers. The supply of
new homes is less than 50% of annual demand and increasing capacity
within the industry remains constrained by the lack of scaled
homebuilders.
Cairn's low cost, well located land bank, our experienced team
and our scaled and cost efficient operational platform means we are
perfectly positioned to maximise this opportunity now and into the
future.
Michael Stanley, Co-Founder and CEO, said:
"2018 has seen Cairn Homes plc double the number of quality
homes built and sold to 804, boosting our revenues to c. EUR337m.
Considering this was only our third full trading year, this
performance illustrates the positioning and growing maturity of our
business, the capability of our talented team and the depth of
unsatisfied demand for new family homes in Ireland.
We look forward with real confidence to 2019 and beyond.
Importantly, our business's significant cash generation has the
potential to accelerate our capital return plans and reward our
shareholders for their investment in Cairn Homes plc."
-ENDS-
For more information, please contact:
Cairn Homes plc +353 1 696 4600
Michael Stanley
Tim Kenny
Drury Porter Novelli +353 1 260 5000
Billy Murphy
Morwenna Rice
Louise Walsh
Finsbury +44 207 251 3801
Gordon Simpson
Charles O'Brien
Notes to Editors
Cairn Homes plc is an Irish homebuilder committed to building
high-quality sustainable homes in excellent locations and providing
unparalleled 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
33 residential development sites with capacity for over 14,500 new
homes, over 90% of which are located in the Greater Dublin Area
(GDA) with excellent public transport and infrastructure links.
Cairn is today building on thirteen sites in the GDA, which will
deliver over 4,750 new homes.
1 All average selling prices exclude VAT
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contact rns@lseg.com or visit www.rns.com.
END
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