Monday 18 December 2017

Analysts expecting strong year from Abbey

Exceptionally strong margins have continued through the year. Stock photo
Exceptionally strong margins have continued through the year. Stock photo
Ellie Donnelly

Ellie Donnelly

Housebuilder Abbey is expected to show improved margins when it releases full-year annual results on Wednesday.

The construction group, which is listed on both the Dublin and London stock exchanges, previously announced that volume for the full year was 586 units, comprising 495 completions in the UK, 52 in Czechia and 39 in Ireland.

While the total volume for the year is down roughly 2pc, compared with its 2015-2016 financial year, and the company has flagged revenue as falling "moderately short" of last year's number, analysts are expecting €207m in revenue, according to Davy.

Exceptionally strong margins have continued through the year, according to Abbey, and Davy analysts expect operating profit to be close to last year's level.

Last year, the company had a margin of approximately 30pc on its UK house building business and it is anticipated that this will be relatively unchanged when the results are announced on Wednesday.

According to Davy, it is expected that Abbey will report a net cash figure in excess of €100m at year-end.

This represents around €5 per share in cash and further demonstrates the strength of the group's balance sheet.

"We see Abbey's net asset value per share increasing from €13.07 last year to around €14.40 in April 2017, with some headwind allowed for the weaker sterling seen this year," a spokesperson for Davy said.

"Overall, the company is trading at a discount to net asset value, which looks cheap, given the average 16pc return on equity generated on average in the last four years," Davy added.

Irish Independent

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