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Cairn Homes records profit of €5.6m despite 'headwinds'


Building: Cairn Homes construction Site

Building: Cairn Homes construction Site

Building: Cairn Homes construction Site

Cairn Homes expects to report profit of €5.6m for the first half of this year despite "the significant headwinds faced around production capacity and sales in April and May."

In order to help mitigate the spread of Covid-19 the company's building sites were closed for two months earlier this year.

Cairn made a profit of €27.3m made in the same period last year, according to a trading update from the group.

With much of the economy in lockdown, the Dublin-listed housebuilder closed 207 new home sales in the six months to June 30, down on the 390 closures in the first half of 2019.

Cairn Homes is primarily focused on building houses in Dublin and the surrounding counties, the average selling price per home was €322,000 in the first half of 2020, up slightly on last year.

Revenue for the first six months of this year is expected to be around €80.6m, a fall of 58pc on the corresponding period in 2019.

The company expects its half year gross margin to be around 16pc, down from 18.6pc, on the back of additional costs stemming from the global pandemic.

Productivity levels on sites have improved over the last three months, Cairn said, adding that it is achieving around 80pc of pre-pandemic levels.

Cairn had a gross cash position of around €155m and net debt of about €187m at June 30.

It said it is "encouraged" by the level of underlying demand and sales since its show homes reopened by appointment in June.

Its closed and current forward sales pipeline has grown to 970 new homes as of August 10.

However, due to the Covid-19 shutdown, around 300 of Cairn's forward sales are now expected to close in the first half of next year.

Further sales launches are scheduled over the remainder of the summer and into early autumn, having been postponed from spring.

CEO Michael Stanley,said: "Notwithstanding the impact of the pandemic on our operations, the resilience of the business has shone through in recent months.

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Sales interest has picked up appreciably in recently months, underpinned by strong demand for high quality, energy efficient new homes in attractive locations."

Shares in the company were up 2.4pc in Dublin yesterday and Goodbody analyst Robert Eason said: "Overall this is a comforting statement from Cairn Homes,"

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