Housebuilding group Abbey flags decline in operating profit

Irish housebuilding group Abbey has said operating profit for its latest financial year will be down on the previous 12 months and has given a mixed outlook for the current year.

In a trading update ahead of the publication of its latest annual results in early July, the Co Meath-based company - which builds in Ireland, the UK and the Czech Republic - said turnover for the 12 months to the end of April was ahead of the previous year, but lower margins mean operating profit will be lower than the preceding year.

"This trend of falling margins seems set to continue in the current year," the group said but added that forward sales "are good".

In its 2017/2018 year, Abbey generated an operating profit of €58.5m, down from €60.8m in the previous year.

Abbey also built less homes in its latest financial year - 579 against 606 previously.

It built 36 in Ireland, 32 in the Czech Republic and 511 in the UK, where the market is coming under pressure amid low mortgage lending levels and heightening Brexit uncertainty.

Last December on the back of a solid set of first half figures, Abbey said it would be "cautious" about making new landbank investments, particularly in the UK, due to Brexit uncertainty.

Meanwhile, shares in fellow listed housebuilder Cairn Homes fell by over 1%, to €1.32, after Davy lowered its forecasts for the company's revenues this year and next by 1% and 2%, respectively.

Cairn's shares have risen sharply since the start of this year, but are still down by over 27% over the last 12 months.

Davy did, however, up its price target for the Cairn stock by 1% to €1.65.

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