REG-Cairn Homes Plc Cairn Homes Plc: Trading Update for the Year Ended 31 December 2023

Cairn HomesAnnouncement

16/01/2024 07:00

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   Cairn Homes Plc (CRN)
   Cairn Homes Plc: Trading Update for the Year Ended 31 December 2023

   16-Jan-2024 / 07:00 GMT/BST

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               Trading Update for the Year Ended 31 December 2023

                                    Very Strong Sales and Profitability in H2
   2023 with a                                       Record Sales Pipeline of
                        over €900 Million Entering 2024

                                        

                                        

   Dublin / London, 16 January 2024: Cairn Homes plc (“Cairn”, “the  Company”
   or “the Group”) (Euronext Dublin: C5H  / LSE: CRN) today issues a  trading
   update for the year ended 31 December 2023 in advance of full year results
   to be announced on 29 February 2024.

    

   FY23 Trading Update

   The  Company  delivered  our  strongest  ever  financial  and  operational
   performance in 2023 in another year of strong growth for our business:

    

     • Closed 1,741 new  home sales  (2022: 1,526), generated  revenue of  c.
       €665.0 million (2022: €617.4  million) and expect  to deliver a  gross
       margin of c. 22.1% (2022: 21.7%).
     • Generated operating profit of c. €113.4 million (2022: €103.0 million)
       and an operating margin of c. 17.0% (2022: 16.7%).
     • Clearly illustrating  the  current demand  for  our homes  across  all
       tenures, the Company  sale agreed  over 2,800  new homes  in the  full
       year. As a  result our forward  order book at  year-end was over  €900
       million (net of  VAT) and  2,350 homes,  which compares  to a  forward
       order book value of €374 million at this time the previous year.
     • Build cost inflation  continued to  moderate throughout  2023 in  line
       with our expectations to less than €10,000 per new home built or c. 4%
       of hard build costs (2022: €20,000 and 8%).
     • The Company’s  sustainable  and growing  profitability  is  supporting
       significant investment in our construction activities. Four new  sites
       and new phases  across six  of our  existing large-scale,  multi-year,
       developments were  commenced.  The  Company was  active  on  20  sites
       nationwide during 2023.
     • New home commencements  continue to  focus on our  core starter  homes
       market. Over  80%  of  Cairn’s  starter homes  are  available  to  our
       customers at prices which are  below State support pricing caps.  This
       allows more of our  prospective customers to  qualify for the  State’s
       impactful initiatives including Help to Buy and the First Home  shared
       equity scheme. Our mature  business platform and  low land cost  allow
       the delivery  of  competitively  priced  First  Time  Buyer  homes  in
       locations of proven demand.
     • Agreement and approval has  been reached for  our first three  forward
       fund  transactions  with  a   number  of  different  State   supported
       counterparties. Construction  is  well  underway  across  these  mixed
       tenure developments  at  Seven Mills  (Clonburris  – 318  new  homes),
       Parkside (Dublin 13 – 368  new homes) and Piper’s Square,  Charlestown
       (Dublin 11 – 590 new  homes). This funding mechanism, on  transactions
       which historically would have concluded on a forward sale basis,  will
       enhance  the  scale,   pace  and  delivery   certainty  of   apartment
       developments to  our partners.  It also  enables Cairn  to  materially
       increase our delivery of  Social & Affordable  apartments in areas  of
       exceptionally high demand in the most efficient manner over the coming
       years.
     • Completed €42.6 million of our €75 million share buyback programme and
       acquired 38.7 million shares. The remaining €32.4 million in the  FY23
       share buyback programme is expected  to be completed during the  early
       months of 2024 subject to market conditions.
     • Dividends paid to shareholders  during 2023 amounted  to 6.2 cent  per
       ordinary share (€41.9  million). Significant cash  generation in  2024
       and beyond will  continue to fund  consistent and growing  shareholder
       returns.

    

   FY24 Outlook & Guidance

   Cairn starts  2024 with  a  forward sales  pipeline  of 2,350  new  homes.
   Momentum is very strong entering the year  with over 500 new homes due  to
   close in the  first three  months of  the year  and 1,600  of our  current
   forward sales pipeline expected to close in 2024.

    

   Cairn is therefore poised to  deliver an exceptional output and  financial
   performance in  2024, and  expects to  deliver year-on-year  turnover  and
   profit growth of c. 30% and:

    

     • c. 2,200 new homes 1 1;
     • operating profit of c. €145 million; and
     • 15% return on equity 2 2.

    

   The Company will provide  a further update when  we release our full  year
   2023 results on 29 February 2024.

    

   Commenting on the full  year 2023 trading  update, Michael Stanley,  Chief
   Executive Officer, said:

   “Our Company is experiencing sustained positive momentum. We are  building
   record numbers  of new  homes and  we have  delivered our  strongest  ever
   operational and financial performance  in 2023. Continued reinvestment  in
   our building platform and  a €900 million sales  pipeline as we start  the
   new year leaves us poised to grow our business by a further 30% in 2024.” 
                    

    

   “We are passionate about the homes we build and after closing 1,741  homes
   last year, over 20,000 people  now live in the  7,500 Cairn homes we  have
   built to date. We look forward to  doubling that number over the next  few
   years.” 

    

   “More broadly,  year-on-year  housing  supply  is  growing.  Yet,  despite
   essential Government supports, a mere  10% of annual housing  transactions
   are newly built homes purchased by First Time Buyers. Only just over 5,000
   young families  received keys  to new  homes  in Ireland  in the  past  12
   months.”

    

   “Encouragingly, awareness  and take  up of  the First  Home shared  equity
   scheme is improving. However, a significant increase in the supply of  new
   homes is needed, and at sales prices below the caps set by the  Government
   for this crucial support.” 

    

   “In the absence of enough of these affordable homes for First Time  Buyers
   to purchase,  the Government  is now  also priortising  the completion  of
   well-located affordable rental  apartment developments.  These scaled  new
   developments, which, in the main, will be State-owned assets, could  offer
   truly affordable, long-term or transitional housing solutions for tens  of
   thousands of young people working in our economy.” 

    

   For further information, contact:

    

   Cairn Homes plc                  +353 1 696 4600

   Michael Stanley, Chief Executive Officer

   Shane Doherty, Chief Financial Officer

   Stephen Kane, Director of Corporate Finance & Investor Relations

   Declan Murray, Head of Finance & Treasury

    

   Drury Communications                 +353 1 260 5000

   Billy Murphy

   Gavin McLoughlin

   Morwenna Rice 

    

    

   Notes to Editors

   Cairn Homes plc (“Cairn”)  is an Irish  homebuilder committed to  building
   high-quality, competitively priced, sustainable new homes and  communities
   in great locations. At Cairn, the homeowner  is at the very centre of  the
   design  process.  We  strive  to  provide  unparalleled  customer  service
   throughout each stage  of the  home-buying journey.  A new  Cairn home  is
   expertly designed, with a focus on creating shared spaces and environments
   where communities thrive. Cairn owns  a c. 16,300-unit landbank 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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    3 1 The accounting treatment for forward fund units is on an equivalent
   unit basis

    4 2 Defined as Profit after Tax divided by Total Equity at year end

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   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   ISIN:           IE00BWY4ZF18
   Category Code:  TST
   TIDM:           CRN
   LEI Code:       635400DPX6WP2KKDOA83
   OAM Categories: 3.1. Additional regulated information required to be
                   disclosed under the laws of a Member State
   Sequence No.:   297584
   EQS News ID:    1815487


    
   End of Announcement EQS News Service

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