Cairn Home's revenue soars as demand for housing grows

Cairn Home's interim results show apartments are now more expensive to buy than houses.

Cairn Homes posted revenue of over €240m for the first half of the year, an 84% increase on the same period last year. Operating profit for the firm also jumped to €36m.

The demand for housing has boosted business for Cairn Homes as it posted its “strongest” half year earnings to date.

Ireland’s largest housebuilder Cairn posted revenue of over €240m for the first half of the year, an 84% increase on the same period last year. Operating profit for the firm also jumped to €36m.

The company said said Ireland faces “alarming risk” as more people enter full-time employment while housing supply is lagging behind targets.

New housing supply is expected to be at around 25,000 new homes in 2022, which remains significantly below growing demand levels estimated at approximately 35,000 new homes needed a year into the medium-term.

“Providing new homes for these working people to own or rent is societally vital and increasing supply across all private and state delivery platforms in parallel is the only effective response,” said Cairn Homes CEO Michael Stanley.

Its latest earnings report showed Cairn delivered 547 closed sales in H1 across 13 developments at an average selling price of €439,000. Among these deals were 275 houses and 272 apartments. Apartments were the most expensive to buy.

The average selling price for one of these houses by Cairn was €406,000 while the average price of one of their apartments was €472,000.

The average selling price for a Cairn house in H1 last year was €356,000 while the average price for a Cairn apartment was €301,000.

However, the company said it “remains vigilant to the challenging environment today”.

The cost of building a new home has increased by €32,500 to €35,000 since Cairn's construction sites reopened in April last year. During this period, total build cost was €15,000. The cost of homes is to increase in parallel to the total cost to build figure.

Cairn expects total build cost inflation for the year to reach between 7% to 8% which would lead to a single housing unit costing between €17,500 and €20,000.

High input costs such as staffing and energy have led to a rise in prices, according to the house builder. Cairn employs around 3,000 people, including indirect employees.

“The majority of commodity prices have stabilised in recent months, however energy costs, in particular for energy intensive manufacturers, are expected to remain volatile,” it said.

The company said it expects to deliver between 5,000 and 5,500 new homes in the three years leading up to 2024.

The firm is also scaling 22 active sites nationwide, including Castletroy in Limerick, and total construction work in progress for these sites is €346m.

The company's board have recommended an interim dividend of 0.03c per ordinary share, which will be paid in October. The company also announced a €75m share buyback programme this year, which is 90% complete with 57 million shares repurchased at an average purchase price of €1.19.

All repurchased shares have been cancelled.