Cairn Homes, the Irish home builder, announced a decrease in both pretax profit and revenue for the first half of the year due to a change in product mix. However, despite the setback, the company has raised its full-year guidance and expanded its buyback program.
Pretax profit for the first half of the year dropped to €24.3 million ($26.1 million), down from €31.8 million in the previous year. Gross profit, which is Cairn Homes' preferred metric, also declined to €46.5 million compared to €51.7 million last year. This decline is attributed to the change in product mix, resulting in more units sold at lower average prices. Although overall pricing has remained relatively stable, there has been persistent inflation in build costs, albeit at a moderating pace.
Revenue for the period decreased to €219.5 million, down from €240.4 million.
Despite these challenges, Cairn Homes is optimistic about its future prospects. The company's forward orderbook currently stands at 2,730 homes, with a net sales value surpassing €1 billion. It expects sales completions of at least 1,800 new homes in 2023, representing an 18% increase compared to the previous year's figures. As a result, there is also an anticipated rise in operating profit, projected to range between €110 million and €115 million for the year - up from the earlier guidance of €105 million-€110 million and the achieved €103 million in 2022.
To reward its shareholders, Cairn Homes has declared an interim dividend of 3.1 European cents per share, a slight increase from the previous year's 3.0 cents. Additionally, the company has expanded its ongoing share buyback program from €40 million to €75 million.
Despite the challenges posed by the shifting product mix, Cairn Homes is confident in its ability to navigate the market and deliver strong results. With an optimistic outlook and strategic initiatives in place, the company remains committed to growth and shareholder value.