Cairn Homes launches share buyback after record year for profit

(Alliance News) - Cairn Homes PLC said on Wednesday it saw strongest ever performance delivering profitability ahead of expectations, prompting the housebuilder to return cash to shareholders.

Shares in Cairn Homes were up 12% at 106.20 pence on Wednesday in London.

The Dublin-based property developer said it had closed 1,120 new home sales in 2021, up 50% from 743 in 2020, and generated total core revenue of EUR419 million. This is up 70% from its 2020 revenue figure of EUR246.9 million.

An additional EUR4 million in revenue was reported from land and commercial site sales, down 73% from EUR14.7 million in 2020.

Cairn Homes delivered a full year gross margin of 20%, up from 16% in 2020..

As a result of its strong performance, Cairn Homes said it was upgrading its 2022 guidance.

It now expects to deliver 1,500 closed new homes sales; gross margin growth in core housebuilding of up to 22%, up from the previously guided 20%; between EUR95 to EUR100 million operating profit, up from the previously guided EUR85 million; and EUR165 million of operating cashflow, up from EUR100 million in 2021.

Cairn Homes added that, given the significant levels of cash being generated and its current share price, the company intends to recommence a share buyback programme. This will begin with an arrangement with Goodbody Stockbrokers UC and Numis Securities Ltd to repurchase shares on its behalf up to a maximum consideration of EUR75 million from Thursday.

The company also intends to propose a final 2021 dividend of 2.70 cent per share. An interim dividend of 2.66 cent per share was paid in October 2021.

Chief Executive Michael Stanley said: "I am pleased to say that we have delivered on all of our business objectives for 2021 despite the impact of public health restrictions early in the year which closed construction sites across Ireland. We achieved a key milestone in the second half of the year when we sold our 5,000th new home since we commenced business in 2015.

The trajectory of the business has enabled us to upgrade our guidance for 2022. We now plan to close 1,500 sales, boosting revenues to over EUR600 million, while also significantly increasing operating cashflow from prior guidance".

By Heather Rydings; heatherrydings@alliancenews.com

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