Cairn Homes (CRN) was floated a little over two years ago, and the costs associated with expanding the business saw a statutory loss for the Irish housebuilder in the six months to June. However, taking out increased administrative expenses and the cost of floating on the Irish stock exchange saw gross profits jump by 191 per cent to €5.1m (£4.7m).
And the pace of growth suggests that profits will increase significantly. The group has nearly doubled the number of active sites, which will deliver over 3,250 homes. In the first half of the year, just 94 sales were completed, but there are 474 forward sales already in place with a total sales value of €188m, of which over 200 are expected to complete in the first half next year. A slight fall in the average selling price to €397,000 reflected a change in the sales mix to include more starter homes.
On the land side, non-core site disposals generated €14.1m, while acquisitions included an 8.64-acre site in a prime Dublin location. In fact, Cairn is ideally placed to benefit from an extreme supply/demand imbalance, with a total of 1,577 new homes sold in Dublin in the first six months of the year against an estimated annual requirement of nearer 18,000 new homes.
Analysts at Davy Research are forecasting adjusted pre-tax profits of €11.1m and EPS of 1.3¢ for the year to December 2017, rising to €61m and 6.7¢ the following year.
| CAIRN HOMES (CRN) | ||||
| ORD PRICE: | 173.75¢ | MARKET VALUE: | €1.32bn | |
| TOUCH: | 173.5-173.75¢ | 12-MONTH HIGH: | 174¢ | LOW: 105¢ |
| DIVIDEND YIELD: | NIL | PE RATIO: | na | |
| NET ASSET VALUE: | 94¢ | NET DEBT: | 10% | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
| 2016 | 16.00 | -0.70 | -0.10 | nil |
| 2017 | 41.18 | -0.39 | -0.04 | nil |
| % change | +157 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1= €1.09 | ||||
