Monday, 21 Oct 2019

Builder Abbey faces 'uncertain' outlook as profits drop

Shares in the stock market-listed homebuilder Abbey were down more than 2pc yesterday, after the group warned of an “uncertain” outlook.

In addition, pre-tax profits at the company fell to €53m in the 12 months to April 30, declining from €58.6m the previous year.

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The group, which is largely focused on the UK, said it is currently trading profitably.

However, looking forward, a lower UK housing contribution this year will likely “materially impact” overall group profits, Abbey said in its preliminary results. It added that the outlook continues to be “uncertain”.

Overall, the business said it is in a healthy financial position and will continue to seek out opportunities to build new homes in all its markets.

During the year, Abbey’s housebuilding operations completed 579 sales, generating an operating profit of €48m. The majority of the homes – 511 – were sold in the UK. Trading across the Irish Sea continued at good levels throughout the 12-month period, with sales holding up well, supported by the Help-to-Buy programme.

However, it said margins are falling back from the elevated levels of recent years.

The Irish market – where the company sold houses in Dunshaughlin, Co Meath and Cabinteely in Dublin – accounted for 36 of the sales, while 32 units were sold in the Czech Republic.

In Ireland, stable prices together with rising costs are “a challenging backdrop for the business”, but gradual progress is being made towards boosting its activity.

Abbey’s next Irish project will launch in Navan in September. The company said the project will “ensure a significant jump in output this year”.

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