Cairn Homes shares jump as it reaffirms full year outlook

Shares in homebuilder Cairn Homes jumped in Dublin trade today after it reaffirmed its full year guidance and announced a new sharebuy back plan.

In a trading update for the six months to the end of June, Cairn Homes said it had closed sales of 894 homes in the first half of this year, which generated revenue of about €365m.

This marked a 66% year increase on the 535 closed sales the same time last year and the €220m the company had reported in revenues.

Cairn said today its closed and forward orderbook has increased to about 3,100 new homes with a net sales value of nearly €1.2 billion.

It said it was poised to deliver an “exceptional output and financial performance in 2024”, adding that it expects to deliver year-on-year growth of about 30%.

The company today also reaffirmed its full year guidance of 2,200 units and operating profit of about €145m.

Cairn said today it expected around 10 new site commencements this year.

During the first half of the year it launched nationwide with its first developments in Kilkenny (Nyne Park) and Cork (Bayly) respectively.

Cairn also today announced a €45m share buyback programme, which it said represented €40m in respect of a new programme and the remaining €5m of the 2023 programme.

It also said its Board intends to announce a 3.8 cent interim dividend per ordinary share at interim results in September.

Michael Stanley, Cairn’s chief executive, said the homebuilder saw a very strong spring sales season for first time buyer homes, which has added to its order book of over 3,000 homes.

“We will grow our output by 30% this year and invest heavily in 10 new site commencements, including eight in the second half of 2024. Recent data on increased mortgage approvals for first time buyers is positive news and the broader homebuilding industry is also responding to improved realisable demand by increasing the supply of new family homes,” Mr Stanley said.

But he said the current ill-health of the rental market perhaps remains a greater challenge for the economy and growing population.

“In recent years, more than 70,000 homes previously for private rental are no longer available, the majority having been purchased by homebuyers from smaller landlords exiting the market. Privately funded replacement stock, particularly apartments in urban areas has been very low and as a result, many of Ireland’s young and fully employed population are faced with a shrinking and illiquid rental market,” he stated.

Shares in the company moved higher in Dublin trade today.