LONDON (Alliance News) - Abbey PLC on Tuesday said trading in the early part of its new financial year was encouraging, but said its outlook has since been "clouded" by Brexit, after noting it grew its pretax profit in its recently ended financial year thanks to a buoyant UK housebuilding market.
The building and property development company posted a pretax profit of EUR61.5 million for the year ended April 30, up from the EUR49.1 million reported a year earlier, after it completed more sales and its rental income grew.
Abbey said its housebuilding operations completed 597 sales, up from the 557 completed a year earlier, which generated revenue of EUR198.6 million, compared to the EUR152.7 million reported a year earlier. Rental income came in at EUR984,000 for the year, up from EUR942,000 for the prior year, it added.
Abbey said trading in the UK was good throughout the year and sales had been consistent, supported by the UK's Help-To-Buy scheme. Price rises overall outstripped rising costs, Abbey said, and forward sales in the new year were in line with its budget.
The company said its owned or controlled land bank in the UK was 1,498 at the year-end, but since it has purchased additional land and is currently seeking further opportunities to buy land.
Meanwhile, in Ireland, Abbey reported "gradual progress", having launched its Delgany project in June, but said it was keeping its projects in Laois and Kildare on hold until it sees an improvement in local demand. Effective demand for new home ownership in many parts of the wider Dublin metropolitan area "remains muted", Abbey said.
Abbey recommended a dividend of 8.00 cents per share for the year, compared to the 7.00 cents offered a year earlier.
Yet, whilst trading in the early part of its new financial year was "encouraging" and Abbey set budgets for the year for increased activity across the business, the company said the "outlook is now clouded by Brexit".
"A slowdown in the UK economy is now being forecast and in particular a correction in the housing market after its strong performance in recent years. Prospects for the short, medium and long term are now very unclear. A prolonged period of gradual relative decline for London and South East England is possible if the withdrawal of London from its role in Europe is carried through," said Executive Chairman Charles Gallagher.
"In Ireland, still recovering from last decade's financial crisis prospects seem brighter, however, Brexit casts a considerable shadow. The group is, with its strong balance sheet, well placed to cope with the uncertainty and hopes to continue to making steady progress. The impact of Brexit will emerge over future reporting periods but there is no doubt that the Referendum outcome is a material short term negative shock," Gallagher added.
Shares in Abbey were untraded on Tuesday, having last traded at 1,044.00 pence.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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