Cairn Homes ready to spend €120m on development sites
Shares in Cairn Homes rose yesterday after the company said it was assessing new sites worth as much as €120m.
In its results for the period from November 9 last to June 30 this year, Cairn said its land acquisition team was carrying out detailed due diligence on 11 sites. Those sites have a total projected cost of around €120m and total potential units of approximately 1,600.
Cairn, which listed on the London Stock Exchange in June, is building homes in Donaghmede on Dublin's northside and Killiney on the southside at present.
Company chief executive Michael Stanley commented: "Following on from our very successful IPO, Cairn Homes has progressed the acquisition, planning and development of premium sites in the Dublin, Galway and Meath regions.
"The availability of prime development lands continues to be a positive for Cairn Homes and the company is confident in its pipeline to deliver quality homes in a market where there is an acute shortage of supply," he added.
The company had cash on hand of just over €388m at the end of June. The firm raised €440m in its initial public offering.
Cairn added that it had "acquired, or contracted to acquire, nine... development sites at a cost of €130m, with an estimated net development value of €568.9m. The firm paid just over €5m for a site at Ard na Glaise in Stillorgan.
Davy Stockbrokers' Colin Sheridan was broadly positive on the results.
"Despite some price moderation in recent months following the implementation of the Central Bank's macro-prudential rules, the company now sees a more sustainable property market into the future.
"It highlights a number of favourable regulatory changes, such as the vacant site levy, the lowering of the affordable portion of sites from 20pc to 10pc and the draft Dublin development plan changes around apartment regulations.
"These will act as tailwinds as its strategy progresses," he added.
Goodbody's Colm Foley reiterated his "buy" rating on the shares.
We believe a well-capitalised homebuilder such as Cairn Homes has a strong competitive advantage against a decimated industry," he said.
The shares climbed 2.1pc yesterday.