Cairn Homes is to hold off on progressing its Cork-based landbank for another couple of years as it looks to maintain its entire focus on the Greater Dublin area in the near-term.
The publicly quoted housebuilder has land in Cork, Kilkenny and Galway and said despite the current Dublin focus it still harbours national ambitions. Cairn grew revenues by 125% last year to €337m and saw operating profit increase by 267% to €53.2m. It also lowered its net debt by €25m to €134.4m.
On the back of such healthy annual results, the company said it would be formally announcing its maiden interim dividend - of 2.5c per share - in September; a year ahead of target.
Cairn sold 804 of its houses last year at an average selling price of €366,000; compared to 418 sales at an average price of €315,000 in 2017. The company closed the year building on 12 sites which, when complete, will deliver around 4,400 new homes. It has five new sites due to launch this year. Chief executive Michael Stanley said Cairn should do 1,000 house sales this year and break the 1,500 mark by 2021.
All of its live sites are in the Greater Dublin area, but stretch as far as Maynooth and Naas. Cairn also still intends to lower its landbank by not replacing spare land after completing building projects and selling non-core land. It currently has three non-core site sales planned. Cairn has land with capacity for 15,000 houses at the moment and wants an overall landbank with capacity of between 6,000 and 8,000 houses by 2025.
Mr Stanley said the company hopes to get planning approval for the high profile land it bought from RTÉ at the broadcaster's Donnybrook headquarters later this year and to be building apartments on the site by early next year.
Mr Stanley also said that the target of 35,000 homes being built per year in Ireland to alleviate housing demand is not realistic and that 25,000 would be a more achievable feat. However, he added that even that target is "very optimistic".
That should be what we are realistically aiming for; although it will likely take two-to-three years to get there
"There is still a long way to go towards scaling the industry," Mr Stanley said, pointing out that only three firms built more than 200 houses last year.
Sustainable capital and high funding costs; allied with affordability issues and the cost of building are the main constraints to a functioning housing market, he said.