Cairn Homes warns of cost pressures, reaffirms annual outlook

Cairn, which had reported a cost inflation of 6% for 2021, said build increases are being fully offset by improving product mix and stronger pricing.

Cairn Homes Plc on Tuesday forecast total build cost inflation for 2022 to be higher at about 6%-7%, pressured by rising materials and labour prices, although the housebuilder reaffirmed its annual outlook.

Homebuilders across Europe have been facing challenges of higher costs, particularly in key materials such as steel and timber, since the start of the Ukraine crisis earlier this year.

Cairn, which had reported a cost inflation of 6% for 2021, said build increases are being fully offset by improving product mix and stronger pricing, as the housebuilder maintained its annual gross margin outlook of 21.5%.

The company also said it saw strongest-ever sales period for the six months ending June 30, selling over 750 new homes for more than €295m, and that it intends to announce a €20m dividend during its interim results announcement in September.

Michael Stanley, Chief Executive Officer, Cairn Homes said: “Continued reinvestment in increased new homes output remains our core strategy. Our current performance and profitability in a challenging environment has allowed us to commence a significant number of new developments.

"Today, we are building in 20 separate locations nationally with 1,750 closed and forward sold new homes across these developments.

"The standard and quality of new homes being built in Ireland today is appropriately high. However, rising material costs have further stretched the affordability gap for the current generation of homebuyers," he added.

Cairn Homes will announce its interim results for 2022 on 8 September.

• Reuters