Cairn Homes reports strong momentum in ‘challenging environment’


Ireland’s biggest homebuilder put on a strong performance in the first half of 2022 despite a “challenging environment” but warned rising material costs have widened the affordability gap for homebuyers in Ireland.

airn Homes generated core sales of EUR 240 million in the first half of the year and completed 547 new home sales. This was an increase from the first half of 2021, when the company closed 403 home sales for a turnover of €131 million.

Cairns noted that momentum has picked up since the second lockdown ended last May, with Cairn completing 1,264 home sales last year.

In 2021, the company completed a total of 1,120 new home sales.

Cairn also reported over 750 new homes listed for sale with a net sales value of more than £295m. According to the company, this equated to a sales rate per active sales program of 4.6 new homes per week.

Cairn Homes also expects to keep its gross margin guidance of 21.5 percent for the year, up from around 20.3 percent in the second half of 2021.

Currently Cairn Homes has opened five new locations in Dublin, Kildare, Meath and Limerick so far this year and is now active in 20 development locations across Ireland.

The Management Board also intends to announce a dividend of EUR 20 million when the interim results are published in September.

The company said that while material costs are increasing, this is currently being offset by improved product mix, operational efficiencies and stronger pricing.

But Chief Executive Michael Stanley said increased construction costs are having an impact on who can buy homes. The company anticipates total construction cost inflation of about 6 to 7 percent for the year, which translates to an additional €15,000 to €17,000 per unit for infrastructure, labor and materials.

“The standard and quality of new homes being built in Ireland today is reasonably high. However, rising material costs have further widened the affordability gap for the current generation of homebuyers,” he said.

“In the current environment, without the government’s prudent intervention for first-time buyers, including the First Homes Initiative and Croí Cónaithe, the production of new homes would decline significantly.”

Cairn Homes reported that its sales were supported by a growing mortgage market, with over 29,000 first-time buyer mortgages approved in the year to May 2022. This meant an increase of 8.6 percent compared to the previous year.

The company said its outlook for the year remains unchanged, with expected sales of 600 million euros and 1,500 completed new home sales.

“Our current performance and profitability in a challenging environment has enabled us to tackle a significant number of new developments. Today we are building in 20 different locations nationwide with 1,750 closed and forward sold new homes in these developments,” said Mr. Stanley.

Goodbody analyst Shane Carberry said the order book had risen “significantly” over the period, already to 1,750 versus 1,600 from the company’s last update in May.

“We believe it is best positioned to benefit from the fragmented and underserved Irish housing market as the group continues to make progress towards its medium-term volume, margin and return targets,” he said. Cairn Homes reports strong momentum in ‘challenging environment’

Fry Electronics Team

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