TIDMCRN
RNS Number : 4680L
Cairn Homes plc
13 January 2021
T rading Update for the Year Ended 31 December 2020
Profitable 2020 with in Excess of EUR 200m Forward Sales Carried
into 2021
13 January 2021: Cairn Homes plc ( " Cairn" , or the " Company "
) (Euronext Dublin/LSE: CRN), the leading Irish homebuilding
company, today issues a Trading Update for the year ended 31
December 2020 in advance of full year results to be announced on 4
March 2021.
-- Closed 743 new homes sales, including 536 closings in H2.
-- Business delivers a resilient c. EUR24 million operating profit in stop-start year.
-- Balance sheet strength underpinned by c. EUR980 million
inventories and c. EUR180 million available liquidity.
-- As of today the Company has 698 closed and forward sales with
a net value of EUR214 million.
-- Cairn's 2020 sales mix was heavily biased towards starter
homes which had an average VAT inclusive selling price to our
customers of EUR354k.
-- Strong H2 performance with clear sales and profitability momentum into 2021.
-- Demand for well-built new homes greater than ever, given structural undersupply.
Cairn is also pleased to announce a new contracted private
rental sector ("PRS") forward sale of 150 new homes valued at
EUR48.6 million. Two additional large PRS projects currently under
construction will be marketed for sale in mid-2021.
Michael Stanley, Co-Founder and CEO of Cairn, commented:
"I believe Cairn exited 2020 a stronger and more resilient
business. I am very proud of our entire team and grateful to our
subcontractors, suppliers and all who helped us to work safely and
productively in a very difficult environment.
The number of new homes we have completed and our profitability
in 2020, allied with our large 2021 order book, are all strong
endorsements of our business model, ambition and hard work.
Our balance sheet and financial strength allowed us to invest
heavily in ramping up our output across all of our active sites
after the first lockdown in May. This investment is clearly bearing
fruit as we have been able to respond to the significant increase
in demand from homebuyers evident in the latter part of the
year.
Ireland desperately needs well-capitalised construction
companies building high quality, competitively priced homes. This
needs to happen at significant pace and scale and Cairn will
continue to play a lead role once the current public health
restrictions ease and our construction sites reopen."
2020 Trading Update
For the financial year ended 31 December 2020, the Company
closed 743 new home sales (2019: 1,080 closed new home sales) and
generated total revenues of c. EUR260 million (2019: EUR 435.3
million), including c. EUR14
million from non-core site sales (2019: EUR32.2 million).
Cairn ' s sales mix in 2020 was more oriented towards housing
compared to previous years (2020 sales split c. 85% housing / c.
15% apartments) reducing our average selling price ("ASP")
(excluding VAT) to EUR 332,000 (2019: EUR 372,000). Within our core
market, our first time buyer starter home ASP (excluding VAT) was
EUR 312,000 (2019: EUR 314,000). This reflects the continued
competitive pricing of our high quality, energy efficient, A-rated
starter homes at levels where first time buyers can get access to
mortgage finance.
The full year gross margin is expected to be c. 16. 3% (2019:
19.6%), with a slightly higher gross margin of c. 16. 4% delivered
in H2 2020 compared to 16.1% in H1. This includes the additional
costs associated with the pandemic including a two-month site
closure and increased site management and preliminary costs as the
business continues to operate under new work protocols and
operating procedures that adher e to social distancing
requirements.
Operating profit for the full year is expected to be c. EUR24.1
million (2019: EUR 68.0 million), resulting in an operating margin
of c. 9. 3% (2019: 15.6%). Cairn generated a meaningful operating
profit despite the challenges faced in 2020. We also used this year
to invest heavily in our future business across construction work
in progress ("WIP"), recruitment, health and safety and IT.
Continued investment in WIP and product delivery has been a key
part of our strategy since our construction sites reopened in May
2020 as we meet the increasing demand from our customers for new
homes in the early part of 2021 and beyond.
The Company had a gross cash position of c. EUR 34 million and
net debt of c. EUR170 million as at 31 December 2020 and the
business traded cash flow positively in H2. Our balance sheet is
underpinned by c. EUR980 million in inventories, consisting of c.
EUR690 million of land held for development and c. EUR290 million
of WIP , equating to a net investment of c. EUR85 million in our
construction activities in the year, fully supported by our strong
forward order book. The Company had available liquidity of c. EUR
180 million as at 31 December 2020.
The ongoing Covid-19 pandemic continues to remind people of the
importance of the value of communities and the quality of their
living environment, boosting the demand for well-built family
homes. This, together with the Government ' s emphasis on
supporting first time buyers through Help to Buy and affordable
housing initiatives more generally are supportive of Cairn ' s
scaled platform.
The Company is very conscious of t he Government ' s recent
announcement of additional restrictions as part of the national
effort to halt the spread of Covid -19 , including the closure of
residential construction sites until 31 January 202 1. We hope that
the disruption which this causes to our business and housing
completions for 2021 is minimised by the potential reopening of
sites in early February 2021. As with the previous construction
lockdown, the Company will not be availing of any financial support
from the Government during this period.
Cairn today announces a new PRS multifamily forward sale of 150
residential units comprising apartments and duplexes at Shackleton
Park, Lucan, Co. Dublin to Carysfort Capital and Angelo Gordon for
a total cash consideration of EUR48.6 million. These new homes will
be delivered on a phased basis between H2 2021 and H2 2022.
This PRS forward sale further reinforces Cairn ' s credentials
as one of Ireland's leading PRS market counterparties. In addition,
the very positive private sales momentum which we witnessed across
our starter homes and trade-up/down schemes in Q4 2020 means we
start 2021 with an exceptionally strong forward sales pipeline of 6
98 new homes with a net sales value of EUR2 14 million as at 12
January 2021, of which 588 are expected to close this year.
Cairn will significantly increase our unit sales and
profitability in 2021. However, with the uncertainty surrounding
the current lockdown, we believe it is more prudent to provide
guidance on our expected 2021 financial performance when we
announce our 2020 p reliminary r esults on 4 March 2021 .
-ENDS-
For further information, contact:
Cairn Homes plc +353 1 696 4600
Michael Stanley, Co-Founder and CEO
Shane Doherty, Chief Financial Officer
Ian Cahill, Head of Finance
Declan Murray, Head of Investor Relations
Drury Communications +353 1 260 5000
Billy Murphy
Louise Walsh
Notes to Editors
Cairn Homes plc ( " Cairn" ) is the leading Irish homebuilder
committed to building high-quality, competitively-priced,
sustainable new homes in great locations. At Cairn, the homeowner
is at the very centre of the design process and we strive to
provide an unparalleled customer service throughout each stage of
the home-buying journey. A new Cairn home is thoughtfully designed
and built to last with a focus on creating shared spaces and
environments where communities prosper. Cairn owns a c. 16,500 unit
land bank across 35 residential development sites, over 90% of
which are located in the Greater Dublin Area ( " GDA" ) with
excellent public transport and infrastructure links.
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