Builder Cairn Homes hopes to begin construction within a year on the high-profile site it bought from State broadcaster RTÉ for €107 million, according to chief executive Michael Stanley.
Cairn said on Thursday that it earned pretax profits of €41.5 million in 2018, almost seven times the €6 million it reported for the previous year.
Mr Stanley confirmed that Cairn was continuing to work on plans for the RTÉ site, where it could build more than 500 apartments.
“We would hope to begin building on the site by the end of this year, but a more realistic target would be early next year,” he said.
Mr Stanley added that Cairn has had “a lot of interaction” with locals and planners.
The project will be put through the fast-track planning system as it involves more than 100 new dwellings. This allows developers to directly seek permission to build from An Bord Pleanála, which must decide on applications within 18 weeks.
However, the builder must first consult with the board and local authority. Mr Stanley said Cairn could begin this midway through this year.
Cairn bought the land from the State broadcaster in 2017 for €107.5 million on the basis that it had the capacity for about 500 apartments. The company’s chief executive noted that final plans could involve more than this number.
The company expects to sell more than 1,000 new homes this year, up from 804 in 2018, and to reach its target of 1,500 a year by 2021. It is selling from nine sites at a rate of close to three new homes a week.
Revenue rose 125 per cent to €337 million last year, with €294.2 million from new homes sold, compared with €131.5 million in 2017.
The group’s 804 sales last year was almost double 2017’s total of 418. It sold them for an average of €366,000, compared with €315,000 a year earlier.
Gross margin
Gross profit rose 155 per cent to €69.1 million, with the gross margin edging up to 20.5 per cent.
Operating profit was €53.2 million for the year, up 267 per cent from €14.5 million in 2017. Adjusted earnings per share for the period were 4.4 cent.
Cairn said it was planning a first interim ordinary dividend of 2.5 cent per share.
“The strong performance in 2018 reflects the continuing success of our strategy, as we capitalise on the recovery of the Irish residential property market by establishing our reputation for high-quality, competitively-priced new homes,” said Mr Stanley.
“Cairn’s operational capability across our attractive land bank, combined with pent-up consumer and institutional demand for well-built homes, will drive revenues, profitability and cash generation in 2019 and beyond. This in turn enables us to commence a progressive capital return strategy this year.”
Construction activity had picked up pace since the beginning of 2019, Cairn said. It plans to begin work on five further sites that will yield about 2,200 new homes.
At the end of the year, Cairn had development land and construction work in progress of €933.4 million. Cash generated from operations was €40.1 million, and net debt was reduced to €134.4 million.
