Shares in home builder Cairn Homes jumped today after it said it had delivered its strongest ever financial and operational performance in 2023 in another year of strong growth for the business and said that momentum is very strong as it starts 2024.
In a trading update, Cairn Homes said it closed 1,741 new home sales during the year, up from 1,526 in 2022, while it generated revenue of about €665m, an increase from the €617.4m reported the previous year.
The company also said it generated operating profit of about €113.4m last year compared to €103.0m in 2022, adding that it was active on 20 sites nationwide during 2023.
Cairn said it agreed over 2,800 new homes in the full year, which it said showed the current demand for its homes across all tenures.
Its forward order book at the end of the year was over €900m and 2,350 homes, which it said compared to a forward order book value of €374m at this time the previous year.
The builder noted that build cost inflation continued to moderate during 2023 in line with its expectations to less than €10,000 per new home built or about 4% of hard build costs, down from €20,000 and 8% in 2022.
Cairn Homes said that agreement and approval has been reached for its first three forward fund transactions with a number of different State supported counterparties.
Construction is well underway across these mixed tenure developments at Seven Mills in Clonburris (318 new homes), Parkside in Dublin 13 (368 new homes) and Piper's Square, Charlestown in Dublin 11 (590 new homes).
The company said that this funding mechanism, on transactions which historically would have concluded on a forward sale basis, will enhance the scale, pace and delivery certainty of apartment developments to its partners.
"It also enables Cairn to materially increase our delivery of Social & Affordable apartments in areas of exceptionally high demand in the most efficient manner over the coming years," it added.
The homebuilder said it has started 2024 with a forward sales pipeline of 2,350 new homes, adding that over 500 new homes are due to close in the first three months of the year and 1,600 of its current forward sales pipeline expected to close this year.
"Cairn is therefore poised to deliver an exceptional output and financial performance in 2024, and expects to deliver year-on-year turnover and profit growth of c. 30% and c. 2,200 new homes," it stated.
Michael Stanley, Cairn's chief executive, said that continued reinvestment in the company's building platform and a €900m sales pipeline as it starts the new year leaves it poised to grow its business by a further 30% in 2024.
Mr Stanley noted that year-on-year housing supply is growing, but added that despite essential Government supports, just 10% of annual housing transactions are newly built homes purchased by first-time buyers.
"Encouragingly, awareness and take up of the First Home shared equity scheme is improving. However, a significant increase in the supply of new homes is needed, and at sales prices below the caps set by the Government for this crucial support," the Cairn CEO said.
"In the absence of enough of these affordable homes for first-time buyers to purchase, the Government is now also priortising the completion of well-located affordable rental apartment developments," he said.
"These scaled new developments, which, in the main, will be State-owned assets, could offer truly affordable, long-term or transitional housing solutions for tens of thousands of young people working in our economy," he added.
The company is due to announce its full year results on February 29.
Cairn Homes shares were higher in Dublin trade today.
