Housebuilder Glenveagh Properties has reported lower revenues and pre-tax profits for 2023 but said that underlying market demand for new homes continues to be very strong and it will provide the keys to 2,700 new homes in 2024.
Revenues for the year slipped by 6% to €607.9m from €644.7m in 2022, when that year's figure was inflated by a site disposal in Dublin.
Its pre-tax profits for the year fell by 13% to €55.1m from €63m, but the company's operating profits inched 1% higher to €70.9m from €70.1m.
Earnings per share for the year rose by 5% to eight cent from 7.6 cent in 2022.
Glenveagh said that 1,328 suburban unit sales were closed last year, which was broadly in line with the 1,354 units closed in 2022.
It noted that all sites required to deliver its 2024 targets have planning in place and are active, with a focus on delivering higher volume from bigger sites.
Asking prices last year came to about €336,000, up from €330,000 in 2022, which Glenveagh said reflected underlying house price inflation, changes in product and site mix, and its "commitment to delivering homes that are affordable for customers".
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The company said that underlying market demand for new homes continued to be very strong during the year, driven by a robust economic environment, ongoing increases in population and a range of demand-side initiatives from the Government.
Glenveagh's chief executive Stephen Garvey said the company achieved its objectives in 2023, which sets it up very well to operate at scale in 2024 and beyond.
"Our business is performing effectively, delivering at pace and at scale the new homes that Irish people badly need - energy-efficient and high-quality homes designed for value and affordability, that work well with government initiatives. In 2024 we will see families, couples and individuals move into over 2,700 new homes that we have delivered," Mr Garvey said.
He said the company is operating in a more favourable planning environment that is unrecognisable from two years ago.
"However, while the planning system is catching up with the backlog successfully, prospective homebuyers need to see ongoing investment by the State in additional planning and infrastructure resources to prevent a recurrence of backlogs, as output levels across the housebuilding industry continue to rise sharply to meet the supply shortage," he added.
Breaking down its divisions, Glenveagh reported suburban revenue of €470.8m, an increase of 3.6% on 2022's revenue of €454.5m. A total of 1,328 suburban units were closed last year - broadly in line with the 1,354 units closed in 2022.
It noted that it delivered almost 700 units - about 52% of its suburban units - as part of Government support initiatives to provide social, cost rental and affordable housing.
Meanwhile, urban revenues decreased by 36.8% to €120.1 last year, down from €190.2m in 2022. mainly due to a 2022 comparative that included approximately €63m from the disposal of the East Road site.
Two of its key contracted urban projects, Marina Village and Premier Inn, were completed last year, while all of the remaining contracted projects - at Cluain Mhuire, Citywest and Castleknock - are set to be completed this year and to deliver approximately 650 units.
The house builder also noted that significant increased funding has been proposed for the Land Development Agency and a number of its urban portfolio sites are currently being evaluated by the agency for prospective selection and activation this year.
Glenveagh also said that 2023 was a milestone year for its Partnerships business segment.
Both its Ballymastone and Oscar Traynor Road projects received final planning permissions in the second half of 2023 and construction works started on both sites in the final quarter. As a result, it posted its first revenue in this business segment of €17m.
"We expect, by the end of this year, to have commenced the construction of almost 1,300 homes under our partnership schemes. We also anticipate lodging a planning application in FY 2024 for the next phase of the Ballymastone development, comprising approximately 400 mixed tenure units," the company added.
50,000 housing units a year needed
Glenveagh CEO Stephen Garvey said the company had experienced 'frustration' with the planning system at the start of 2023 which delayed the housebuiler in delivering more units to the market.
He told Morning Ireland that there had been a turnaround as the year progressed with 4,500 units granted permission and a further 3,000 units making their way through the planning system.
"That allows us to deliver 2,700 homes to people this year across both apartments and houses and in our mixed-tenure developments in Dublin in partnership agreements that we have with Fingal Local Authority and Dublin City Council," he explained.
Mr Garvey said the company had the potential to deliver more housing 'but we need to see the policies and the systems and the right trajectory'.
"Ultimately, the country needs around 50,000 units a year to be delivered," he said.
The Glenveagh chief executive said the company had a favourable view of the Government's residential zoned land tax.
"We're about delivering housing. We're not about hoarding land. We see [the tax] as a way to incentivise land owners to sell land into the system," he said.
"We're concentrating more towards partnership agreements with local authorities and land development agencies as a way to deliver more housing. The next phase for us is to work with Local Authorities and state agencies to deliver more housing on their lands," he added.
Mr Garvey said he believed the Sinn Féin leader's desire to see the average price of a house in Dublin declining to €300,000 was "unachievable".
"To deliver a house, including all the hard costs, is costing us about €300,000 today. When you take in land, margins and VAT, these add other substantial costs," he said.
Asked later at a press conference about whether Glenveagh had a preference about who was in the next Government, Mr Garvey said the big challenge for whoever is going to make up the next administration is getting housing output from around 33,000 units currently to 50,000 units.
He said he would credit to the current Government for introducing initiatives that helped on the demand side.
But he said the big issue facing whoever is in the next administration is viability.
"It doesn't matter who's really in power," he said.
"The challenge is faced by both."
Mr Garvey also said that the appetite among institutions for investment in apartment developments here is muted due to high interest rates and the impact on yields, as well as rent caps.
"Institutional appetite is quite limited at this point in time," he said.
"But we'll see how things fair over the next 12 to 24 months."
Shares in the company ended lower in Dublin trade today.
