Cairn Homes shares rise 2% on sales and buyback

Cairn Homes shares rise 2% on sales and buyback

Shares in housebuilder Cairn Homes rose almost 2% as it said it sold more homes and booked future orders while extending a buyback programme of its own shares.

In a trading update, Cairn said it sold 1,080 units last year and had revenues from house sales of €402m, an increase of 37% from 2018.

Including forward sold homes, the company said it had booked 1,820 unit sales in the year — meaning it has already achieved a large part of its sales target for 2020.

Saying it will have generated €500m in cash by the end of 2022, the company pledged to return cash to shareholders by extending a shares buyback programme, which expired this week, to €60m, while saying it was committed to paying out a “progressive” dividend when it reports full details of the 2019 earnings in March.

With Glenveagh Properties, Cairn is only one of two Irish housebuilders listed on the stock markets, at a time of huge demand.

However, the performance of its shares have been badly hit in recent years, as investors worried about the fallout from Brexit and other matters.

Cairn Homes shares, which traded below €1 in August, have since risen to trade at €1.33 in the latest session, valuing the firm at over €1bn.

Before Vat, it said its average selling price was €372,000 last year, compared with €366,000 in 2018, while its first-time-buyer homes sold at an average of €314,000, compared with €312,000 in the previous year.

“With more certainty around Brexit, the robust performance of the Irish economy, and the fact that housing supply still falls significantly short of demand, we believe our business model is well-positioned to take full advantage and we look forward with real confidence to 2020 and beyond,” said chief executive Michael Stanley.

Davy stockbrokers said: “Cairn Homes has entered 2020 in an exceptionally strong position from a forward sales perspective.”

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