Abbey plots more growth in Ireland to offset slowing UK
Executive chairman Charles Gallagher says Brexit could help ease construction labour shortages in Irish market
LISTED home builder Abbey hopes to quadruple its completions in Ireland over the coming years to as many as 400 units per annum, as it increasingly focuses on this market rather than the UK for growth, according to executive chairman Charles Gallagher.
The 82-year-old building company completed just 37 units in Ireland in the 12 months to the end of April, compared with 511 in the UK.
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Speaking after the company's annual general meeting yesterday, Mr Gallagher said Abbey expected to complete 100 units in Ireland in the current financial year.
"The aim is to push that up, in the medium term, to 200," he said. "It's all just a factor of whether we can find the sites."
He said the focus for the company in Ireland would continue to be the Dublin commuter belt, but noted that land prices remained high.
The company has been selling units at Dunshaughlin in Co Meath, and has sorted construction on a project in Navan. Mr Gallagher said the firm will start a project in Portlaoise soon.
He said the firm had "shaken hands" on about six land purchases, which if they were sealed, would double the number of plots Abbey has in Ireland to about 1,200.
"I do see the business gradually rebalancing from the UK toward Ireland," said Mr Gallagher. "I see Ireland becoming more important."
He also said that one beneficial impact of Brexit could be that it might ease construction labour supply issues in Ireland, if house building slows in the UK.
The highest number of annual completions Abbey ever had in Ireland was about 400, which was achieved about 20 years ago. "One day, I'd like to get back there," said Mr Gallagher. "That's a good economical size to run a housing business. That's where I think we'd like to be."
The average selling price of Abbey's homes is about €300,000 in Ireland and £300,000 (€336,000) in the UK.
The company made an operating profit of €53m in its last financial year, on revenue of €230.9m. It made a €58.6m operating profit the year before. Profits in the current financial year are likely to be around €40m, according to analysts, as margins continue to be eroded.
Mr Gallagher said Abbey would remain a listed company for the foreseeable future, despite more than 80pc of the business being owned by Gallagher family members.
He insisted that being public gave Abbey options in relation to finance and other matters.