Cairn Homes Plc: Results for the Six Months Ended 30 June 2024

Results for the Six Months Ended 30 June 2024

Our ambitious objectives are underpinned by our record H1 performance

Dublin / London, 04 September 2024: Cairn Homes plc (“Cairn”, the “Company” or the “Group”) (Euronext Dublin: C5H / LSE: CRN) today announces its interim results for the six months ended 30 June 2024.

The Company delivered a record H1 performance which underpins our target of achieving a 15% ROE[1] in FY24 against the backdrop of continuing favourable market conditions. Cairn remains on track for another year of exceptional growth in volumes, revenue and profitability.

Key Financial Highlights

• Generated revenues of €366.1 million, a 67% increase on H1 2023 (€219.5 million) from 894 closed units2 (H1 2023: 535 closed units).
• Delivered operating profit of €61.4 million (H1 2023: €29.6 million) and a 330bps growth in operating margin to 16.8% (H1 2023: 13.5%) reflecting the benefits of our scaled operating platform.
• Generated €49.5 million in operational cash flow, a significant increase from the €30.7 million used in operating activities in H1 2023.
• Net debt of €157.0 million (H1 2023: €228.6 million). Added a fourth lender, Home Building Finance Ireland (HBFI) and total committed facilities are currently €385.0 million.
• Basic EPS increased by 140% to 7.2 cent (H1 2023: 3.0 cent).
• Interim DPS increased by 23% to 3.8 cent (H1 2023: 3.1 cent).
• Returned c.€70.0 million to our shareholders in 2023 and H1 2024 through our FY23 share buyback programme and commenced a new €45.0 million programme.

Key Operational and Sustainability Highlights

• Continued to grow our multi-year forward sales pipeline. Our closed and forward order book has increased to 3,450 new homes with a net sales value of €1.32 billion.
• Evolved our land acquisition strategy and year-to-date have acquired and entered into options on six predominately low-density sites in the Greater Dublin Area which will deliver up to 4,500 new homes primarily for our core first time buyer market.
• Closed our first two forward fund transactions at our mixed tenure developments in Parkside and Seven Mills and are progressing a number of other forward fund transactions which we expect to enter into during H2 2024. 
• Commenced our fourth scaled energy efficient Passive House development and are currently building nearly 1,750 apartments to this internationally recognised building standard which reduces energy demand by over 40% when compared to Near Zero Energy Building (nZEB) standards.
• Retained our A- Carbon Disclosure Project (CDP) score and awarded an A- CDP Supplier Engagement rating.
• Progressed the €10 million Cairn Apprenticeship Scheme, which will launch in Q4 2024 and help to attract and retain graduates in the construction sector in Ireland through various innovative initiatives.
• Recognised by our peers as Developer of the Year at the National Property Awards 2024 and won the prestigious Green Construction Award at the Green Awards 2024, highlighting our commitment to delivering exceptional scaled developments  focused on sustainability and a greener future.

Macroeconomic and Housing Backdrop

• Ireland’s economy continues to be one of the strongest performing economies in the EU. Its economic growth is underpinned by strong population growth of 13% between 2016 and 2024 to an estimated 5.38 million people (as at April 2024), record employment of 2.75 million people, an increase of 17% from pre-Covid levels, and a continued moderation of consumer price inflation to 2.2% in July 2024 having been as high as 9.6% in June 2022 (source all: CSO).
• A Government budget surplus of more than €8 billion is forecast for 2024, equating to c.3% of GNI* which supports the State’s record €5.5 billion investment in private and Social & Affordable housing in Ireland this year (source: Department of Finance).
• 31,389 new homes delivered in the 12 months to June 2024, a 3% increase year on year, with 12,730 new homes completed in H1 2024. Despite this positive industry response there remains a significant structural undersupply of new homes with an estimated annual housing requirement of between 49,400 – 81,400 new homes required to 2050 in a high population growth scenario (sources: CSO, Report of The Housing Commission).

Outlook and Guidance

• The Company remains in a period of significant operational and volume growth and is committed to both continually reinvesting in our business to fund sustainable multi-year growth and distributing surplus capital to shareholders. Cairn also continues to progress specific returns accretive market opportunities which may result in enhanced shareholder returns.
• Supported by the strength of our scaled operating platform and our multi-year closed and forward order book (3,450 units and €1.32 billion), Cairn is confident of delivering a strong output and financial performance in 2024. The Company reaffirms our FY24 guidance:

• c.2,200 units2;
• operating profit of c.€145 million; and
• ROE of 15%.

• 2025 is expected to be another year of strong volume, revenue and profit growth as Cairn continues to leverage our exceptional scaled operating platform.

Commenting on the results, Michael Stanley, CEO, said:

“The Company has delivered a stellar half-year performance across all key metrics, most importantly in housing delivery with our turnover increasing by 67% year-on-year. By the end of this year Cairn will have delivered over 9,500 energy efficient new homes to our customers across Ireland. We have a scaled, sustainable and mature business platform, positioning us for continued growth as we enter into our tenth year of business in 2025.” 

For further information, contact:

Cairn Homes plc                  +353 1 696 4600

Michael Stanley, Chief Executive Officer

Richard Ball, Chief Financial Officer

Stephen Kane, Director of Corporate Finance & Investor Relations

Ailbhe Molloy, Investor Relations Manager

Drury Communications                 +353 1 260 5000

Billy Murphy

Claire Fox

Andrew Smith  

An analyst and investor call will be hosted by Michael Stanley, CEO, and Richard Ball, CFO, today 4 September 2024 at 8.30am (BST). Please use the numbers below, quoting the access code 297278:

Notes to Editors

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.17,200 unit landbank across 36 residential development sites, over 90% of which are located in the Greater Dublin Area (GDA) with excellent public transport and infrastructure links.

Note Regarding Forward-Looking Statements

Some statements in this announcement are, or may be deemed to be forward-looking with respect to the financial condition, results of operations, business, viability and future performance of Cairn Homes plc and certain plans and objectives of the Company. They represent our expectations for our business and involve risks and uncertainties. We have based these forward-looking statements on our current expectations and projections about future events. We believe that our expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which are in some cases beyond our control, and which include, among other factors policy, brand, economic, financial, development, compliance, people and climate risks, our actual results or performance may differ materially from those expressed or implied by such forward-looking statements. Past performance cannot be relied upon as a guide to future performance and should not be taken as a representation that trends or activities underlying past performance will continue in the future. These forward-looking statements are made as of the date of this document. Cairn Homes plc expressly disclaims any obligation or undertaking to publicly update or revise these forward-looking statements, other than as required by applicable law.

CHIEF EXECUTIVE STATEMENT

OUR SCALED OPERATING PLATFORM IS DELIVERING SIGNIFICANT MOMENTUM

Cairn is a home and community builder, leading the market in creating sustainable foundations upon which Ireland can thrive. Our objective is to deliver sustainable new homes at industry leading pace, scale and value for money. Our strategy is designed to support this objective - building communities that serve our country’s present and growing future needs and to play a leading role at the forefront of our industry in making a meaningful contribution to society. Following over a decade of structural undersupply of new homes in Ireland, the demand outlook for energy-efficient, A-rated new homes across all buyer profiles is very strong which is underpinned by a growing population, strong economy, and supportive Government policies.

Cairn has a unique competitive advantage with our mature scaled delivery platform, established supply chain partners and low-cost landbank in locations of proven demand. Our 36 site low-cost landbank includes 13 high-density apartment sites (c.5,000 units at an average historic site cost of c.€66,000 per unit) and 23 low-density housing sites (c.12,200 units at an average historic site cost of c. €25,000 per unit).

Cairn’s sustainability agenda is fully integrated into our operating platform and is central to our growth strategy. Our sustainability targets are embedded into every aspect of our business and underpin our commitment to biodiversity, decarbonisation, sustainable building practices, health & safety and quality. In the first six months of 2024, we commenced a further three Passive House apartment schemes and retained our A- CDP score an A- CDP Supplier Engagement Rating. Our continued commitment to our scope 1, 2 and 3 decarbonisation targets, Biodiversity Net Gain and The Cairn Apprenticeship Scheme are further examples of our leadership in sustainability.

The Company delivered a record H1 performance and is in a period of significant operational and volume growth. We are committed to both continually reinvesting in our business to fund sustainable multi-year growth and distributing surplus capital to shareholders. Our disciplined approach to capital allocation has, and will continue to, generate value for the business, our shareholders and all of our wider stakeholders.

FINANCIAL HIGHLIGHTS

The Group delivered a strong financial performance in the first half of 2024 with 894 closed units2 (H1 2023: 535 closed units). This resulted in revenues of €366.1 million, a significant increase from €219.5 million in H1 2023, including €19.0 million from development site sales (H1 2023: €2.2 million).

Gross profit for the period was €80.4 million (H1 2023: €46.5 million), resulting in a gross margin of 22.0% (H1 2023: 21.2%, FY 2023 22.1%). Our gross margin was consistent with FY 2023 and highlights the continued progress being made to mitigate the effects of build cost inflation by concentrating on our supply chain, procurement strategies and driving our innovation agenda across our construction activities.

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