Abbey reports losses of €54.4m

HOUSEBUILDER Abbey made losses of €54.4m in the year to end April 2009, when exceptional charges are included.

Its pre-exceptional loss was €5.3m for theyear, worse than marketestimates.

The figures reflect losses on land and housing values in Britain and Ireland, the group’s two core markets.

The exceptional charges include a write-down of €58.1m in the group’s land bank.

Those downgrades have reduced group net asset value per share to 612c against 844c at end April 2008. No dividend is being paid in the light of the poor figures.

Exceptional charges for the full year totalled €61m, including €2.95m set aside for bad debts on properties.

Write-downs in the second half mushroomed to €46m and appear to have been taken primarily against the value of land and work in progress in Ireland.

During the year, the group sold just 129 homes in Ireland. And in the face of the housing slump, it has struggled to maintain a reasonable sales profile.

Areas outside Dublin have been worst affected, the group said.

Sales in Britain totalled 338 units, with that market showing some pick up since the year end in April.

The group’s Prague business reported no completions.

And the company described both building and sales progress in the city as disappointing.

Overall sales fell by 45% to €99.6m over the year.

Its plant hire business in Britain continues to experience tough trading conditions and reported a loss of €1.1m for the year.

Abbey said house prices have fallen further since the end of April but that record low interest rates have created the right conditions for a recovery.

Shares in the group fell by over 1% by mid-day yesterday to €4.35, with analysts suggesting that at current levels the shares had already priced in the sharp cut in land valuations.

Analysts said the figures ere poor but not unexpected, with the poor performances by house building and plant hire at the core of the poor results.

They were worse than analysts had been anticipating.

Abbey had net cash of €43.8m and €29.9m in British government bonds.

With clear evidence of stability returning to the British housing market, Goodbody Stockbrokers said: “We believe Abbey’s balance sheet strength leaves it in a strong position to weather the economic storm.”