Abbey returns to profit at home

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Co Meath-based housebuilder, Abbey has said it is confident in a sustained recovery in the domestic residential property market, after seeing its Irish division turn a profit for the first time in four years.

The Clonee-headquartered group — which operates in Ireland, Britain and the Czech Republic — yesterday reported a 113% increase in annual pre-tax profits for the 12 months to the end of April, of €24.1m. Operating profit jumped from €8.3m to €20.4m. Following a tax charge of €5.3m, the group made a total annual profit of €18.7m.

Total revenue went from €98.5m to €114.2m, while earnings per share jumped 143% to 87.04c.

While the vast majority of Abbey’s 390 house sales last year were carried out in the UK (Ireland numbering 22 and the Czech Republic 15); each of Abbey’s geographical operations returned to profit and hopes are high for sustained recovery at home.

Abbey’s executive chairman, Charles Gallagher, said yesterday that the company hopes to up its Irish unit sales to around 100 in the medium-term. The Irish operations generated an operating profit — the first since 2010 — of €439,000 last year.

Mr Gallagher believes the Irish market should be able to reach a sustainable level of 15,000-20,000 new house builds per year within five years (up from the current level of around 8,000) and stressed that there is currently no danger of another property bubble emerging.

“A lot will depend on healing the overall financial situation; managing the repossession issue, maintaining employment growth and dealing with the mortgage debt overhang. The healing process is under way but there’s still a bit of a way to go,” he said.

New developments built by Abbey in the past year have proved successful and the company has acquired a number of additional sites around the Dublin commuter belt. According to Mr Gallagher, positive sales trends from new builds in commuter belt areas will be the real acid test of a sustainable recovery in the market.

He added that while some hiccups might still be seen, a recent pick-up in the Dublin housing market should be viewed as the first sign of an overall recovery, with further industry progress expected over the next 12 months.


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