LONDON (Alliance News) - Abbey PLC Wednesday reported a rise in pretax profit in its recently-ended financial year, boosted by strong sales in the UK, and said early trading in the current year is in line with its expectations.
The building and property development company reported growth in pretax profit in the year ended April 30 to EUR49.1 million, more than double the EUR24.1 million it made the year before.
Abbey said that its housebuilding operations completed 557 sales in the year, generating a turnover of EUR152.7 million and an operating profit of EUR42.4 million. Rental income during the year was EUR942,000.
Trading in the UK was boosted by the government's Help to Buy scheme, it said, adding that price rises have continued to outstrip rising costs, supporting firm margins. 514 of the 557 sales were made in the UK, and forward sales in the new year are in line with its budgets, Abbey said.
In Ireland, in which it made 27 sales, "slow but steady progress" has been achieved. The successful launch of the Lucan project in the spring is progressing well, the company said, with new projects in Delgany, County Wicklow and Cornelscourt in County Dublin due to enter production imminently. The projects in Laois and Kildare remain on hold pending some improvement in local demand.
In Prague, 16 sales were made, and a similar level of activity is expected for the current year, Abbey said, adding that it plans to start its housing project in Prezletice in the autumn as the project near Na Vidouli in Stodulky progresses well.
Abbey added that early trading in the new year is in line with its expectations and it is budgeting for further progress this year.
The company will pay a final dividend of 7 cents.
"The short-term outlook is good. The group is targeting a significant increase in turnover this year and whilst margins may be eroded a satisfactory year is in prospect. The longer-term outlook is more uncertain. House prices in the UK now reflect the easy money conditions of the last two years and may struggle to advance rapidly in an environment of rising interest rates and possibly lagging wage growth," Abbey said in a statement.
"Costs impacted by both labour and material supply bottle necks may continue to rise quickly. The sweet spot of the UK cycle is probably behind us. In Ireland the medium term prospects seem brighter, however, the weight of speculative money chasing relatively few opportunities will temper returns. Overall the group is well placed to make steady progress," it added.
Shares in Abbey were untraded on Wednesday, last quoted at 875.00 pence.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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