Shares in homebuilder Cairn Homes ended over 7% higher after it upgraded its guidance for 2022 and said it now expects operating profits of €95-€100m for the year.
This was up from the previously guided figure of €85m.
In a trading update for the year to the end of December, Cairn Homes said it expects its turnover to come in above €600m, with 1,500 closed new homes sales from active sites which have full planning permission.
Cairn Homes said that after a disruptive first half with site closures due to Covid-19 restrictions, the second half of 2021 represented its strongest ever performance in terms of new homes sold, margin progression, profitability and cash generation.
It said this helped it to deliver full year results which were ahead of guidance.
The company closed 1,120 new home sales, up from 743 in 2020, and generated total core revenue of about €419m compared to €246.9m in 2020.
In today's trading statement, Cairn Home said it was seeing build cost inflation of about €15,000 per new home.
But despite this, it said it achieved strong margin growth through improved mix with more apartments sold, embedded supply chain efficiencies and improved pricing in middle and upper-end apartments and houses.
Cairn said the affordability of its starter homes remains a key objective and its 2021 average selling price was €350,000, compared to €348,000 in 2020, in prime, sought-after suburban locations.
The company said it intends to propose a final 2021 dividend of €20m - 2.7 cent per ordinary share - subject to shareholder approval at its 2022 AGM, following a 2.66 cent per ordinary share interim dividend paid in October 2021.
It also said that given the significant levels of cash being generated and its current share price, Cairn intends to recommence a "sizeable" share buyback programme.
"This will begin with an irrevocable, non-discretionary arrangement with Goodbody Stockbrokers and Numis Securities Limited to repurchase ordinary shares on our behalf up to a maximum consideration of €75m, commencing on 13 January 2022," it added.
Michael Stanley, the chief executive of Cairn Homes, said the company delivered on all of its business objectives for 2021 despite the impact of public health restrictions early in the year which closed construction sites across Ireland.
"We achieved a key milestone in the second half of the year when we sold our 5,000th new home since we commenced business in 2015," Mr Stanley said.
The CEO said the company this year will support over 3,000 full time positions on 22 active sites, building high quality, sustainable new homes on well located developments with full planning permission.
"The trajectory of the business has enabled us to upgrade our guidance for 2022. We now plan to close 1,500 sales, boosting revenues to over €600m, while also significantly increasing operating cashflow from prior guidance," Michael Stanley said.
Mr Stanley said that return on equity is a key metric for the company as it is for the shareholders who have backed the business since its inception.
"It is their long-term permanent capital which has enabled our business to scale successfully and deliver significant quantities of new homes to an under-supplied market. It is therefore important that we were able to reinstate dividend payments in 2021 and we are now also recommencing a sizeable share buyback programme," he added.
Shares in Cairn Homes ended higher in Dublin trade this evening.
