Friday 15 November 2019

Abbey warns of 'difficult' outlook despite profit surge

Abbey executive chairman Charles Gallagher
Abbey executive chairman Charles Gallagher
John Mulligan

John Mulligan

PRE-TAX profits at Irish homebuilder Abbey jumped 77pc to €5.9m in the six months to the end of October as its turnover rose on the back of higher house prices. But it warned that the immediate outlook "remains difficult".

The listed company said its housebuilding division sold 157 homes in the first half of the financial year, including 134 in the UK, 21 in Ireland and two in the Czech Republic.

It said trading in the UK was "satisfactory" in the period and that turnover and the average sales price "increased significantly" compared to a year earlier.

However, the company warned that house sales in the autumn had been "hard won", with some discounting necessary in order to push through completions. It expects a "reasonable" outcome for the full financial year.

Operating profits were €4.1m in the first half, up from €2.2m during the first six months of the last financial year.

The company continues to sell a small number of homes in Ireland and development at a new site in Shankill, Co Dublin is set to start in the New Year.

Abbey said its sales in Prague remained disappointing.

Land bank

"The immediate outlook remains difficult," said Abbey. "UK house prices remain stable at best and competition for profitable opportunities is intense."

It said it was continuing efforts to increase its land bank and had bought 123 plots in the first half. Its UK plant-hire business, M&J Engineers, generated a €691,000 operating profit in the first half on revenue of €7.1m.

Abbey came close this year to ending its nearly 40-year history as a listed company in Ireland after UK-based Gallagher Holdings triggered a mandatory offer for the builder after it had increased its shareholding to more than 50pc in August.

Gallagher Holdings offered to buy out the company in a deal that valued it at about £114m (€142m).

But Abbey executive chairman Charles Gallagher said at the group's AGM in October that the intention was never that Abbey would be delisted.

"There's no great drive to bring the company private," he said at the time.

Irish Independent

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