Cairn Homes rise on higher margins

Shares in Cairn Homes rose over 1.5%, as the Dublin housebuilder increased sales and boosted margins. It indicated it was on course to sell significantly more homes, amid the huge demand for housing.

Its sales count in the first half of the year was 94 homes, and forward sales increased to 474 units, the firm said.

All of its 33 sites, which include the one in Montrose it purchased from RTÉ this summer, could deliver 12,700 homes. Originally floated in London, the shares have been listed in Dublin this summer.

They have surged in London by almost 30% this year.

Revenues, which climbed by 157% to €41.2m in the six months to the end of June, were boosted by the sale of non-core sites. Gross margins climbed to 18.7%, from 16.5%.

After a charge of €500,000 linked to the cost of its Dublin shares listing, it had a pre-tax loss of €392,000.

“We’re currently building on nine sites, which will deliver 3,250 new homes,” chief executive officer, Michael Stanley, said.

The housebuilder said the severe shortage of homes means the Dublin area requires 18,000 new units to catch up with supply.

Investec Ireland said it was still upbeat on the shares, “given the quality and scale of Cairn’s land bank and the chronic supply-demand imbalance in the Irish residential market”.

“Cairn remains in an enviable, market-leading position in a strongly recovering Irish housing market,” said Davy Stockbrokers.

Goodbody forecasts Irish house price will rise 10% this year, and by 7% in 2018.