Irish builder Cairn Homes has sales of 2,000 houses a year within its sights, says chief executive, Michael Stanley.
The company pledged to return €95 million to investors this year after earning €58 million operating profit in 2021 on its strongest ever performance.
It now expects to sell 1,500 homes this year and earn between €95 million and €100 million profit from its business, up to 15 per cent more than its previous prediction of €85 million.
Speaking after Cairn updated markets on Wednesday, Mr Stanley confirmed that sales of 2,000 homes a year were “well within” the company’s sights.
“It’s fair to say that our growth trajectory is healthy, I would expect to get there,” he added.
However, he did not pinpoint when Cairn would reach the milestone, stressing that its forecast for this year remained 1,500 sales.
Mr Stanley also pointed out that 2,000 sales was not a final target. “We have never put a cap on this,” he added.
The builder is working on 22 sites, mostly in the Dublin area. It is shifting some focus away from the capital, beginning work on a project in Cork this year.
Cairn earned €419 million revenue last year from selling 1,120 homes at an average of €350,000 each, beating its operating profits prediction by 10 per cent.
Combined cashflow from this year and 2021 is likely to total €265 million, some of which the company intends returning to investors.
Shares buyback
Cairn will buy back shares worth a maximum of €75 million from shareholders this year.
In addition it will pay a final dividend of €20 million, 2.7 cent a share, assuming shareholders back this at its annual general meeting.
Mr Stanley emphasised shareholder returns was a key way in which the company measured its performance.
“It is therefore important that we were able to reinstate dividend payments in 2021 and we are now also recommencing a sizeable share buyback programme,” he said.
Many of Cairn's biggest shareholders have been with the company since it floated on the Irish Stock Exchange almost seven years ago, he noted.
Its statement highlighted that the second half of the year was Cairn’s strongest in terms of house sales and profits. The builder expects revenues this year to reach €600 million.
Mr Stanley said the company had met all its objectives in 2021, despite Covid-19 lockdowns that halted most building in the opening months of last year.
Cairn sold its 5,000th house during the second half of 2021. Its chief executive pointed out that the company could not have built 2,000 of those homes without the fast-track planning scheme for large housing projects.
Dubbed the strategic housing initiative, this allowed anyone building more than 100 homes in a single project to bypass local councils and apply for permission direct to An Bord Pleanála.
The scheme ends next month. Mr Stanley argued that any replacement should try to incorporate the fast-track scheme’s successful elements.
“If we go back to the old way it will slow down productivity and output, unless there are some positive elements of the strategic housing initiative included,” he warned.
Mr Stanley maintained that the scheme had met its key objective, which was to aid large housing projects in getting planning permission.
Cairn has successfully brought 40 projects through the planning system since its mid-2015 stock market launch.
