Abbey looks to buy development sites as its British and Irish house sales rise

IRISH house-building group, Abbey has offered a rare glimpse of positivity from the property sector by saying it is looking to buy new development sites in both Ireland and Britain.

Addressing shareholders at its annual general meeting in Dublin yesterday, Abbey’s executive chairman Charles Gallagher said that trading in the first few months of the group’s current financial year – which runs to the end of April – “has been steady” and added that its excess housing stock is now gradually being cleared.

“In southern England, good levels of business have been achieved in recent weeks.

“In Ireland, sales have been improving of late as some confidence returns to the market. In some locations, we may soon sell out and we are keen to find further outlets, particularly in the Dublin area.

“On present trends, the group is on course for a satisfactory outcome this year,” Mr Gallagher said.

Back in July, Abbey reported a full-year pre-tax loss of €54.4 million for the 12 months to the end of April, down from a pre-tax profit of €16.8m for the previous year.

Similarly, operating losses came in at €55.6m – down from an operating profit of €15.1m the previous year. No dividend was recommended for shareholders and the losses were boosted by a €58.1m impairment charge.

However, Abbey is now generally more upbeat about the prospects for its core geographical markets of Ireland and Britain (it also operates in the Czech Republic). Mr Gallagher said that December’s budget would be “very important” not just for the public finances but in helping some recovery in consumer confidence.

He also said that there are real signs of a recovery in the British housing market and that despite lagging behind that market, the Irish housing sector is recovering and the Government’s National Asset Management Agency (NAMA) proposal could help the land market here to “find a level”.

Mr Gallagher said Abbey may look at buying assets likely to be taken over by NAMA.

Abbey’s share price got a significant lift on the back of yesterday’s update, gaining as much as 18c in Dublin to close at €5.18 – a 3.6% increase on Thursday’s close.

Rival Irish firm McInerney Holdings said earlier this week that it too has seen signs of stabilisation in its British operations in the last couple of months.