Glenveagh shares up as house sales defy lockdown

The share price of Glenveagh Properties received a boost yesterday after it said people are continuing to reserve homes at its developments.

The deals are taking place despite Glenveagh’s sites and showhouse villages currently being under lockdown due to the coronavirus.

Shares in the home builder were trading up almost 9pc in Dublin yesterday afternoon.

In March the company closed its construction sites in line with Government guidelines aimed at limiting the spread of Covid-19.

So far this year Glenveagh, which is largely focused on the Greater Dublin Area, has sold, signed or reserved at total of 570 homes, according to a trading update.

Just fewer than 100 of these property deals have been agreed since February 26, as the company’s sales team continue to provide interactive virtual tours of its developments.

Stephen Garvey, CEO of Glenveagh Properties, said: “Despite the suspension of much of our activities during recent weeks we continued to add to our strong order book highlighting the attractiveness of the group’s product offering.”

Given the current restrictions on movement and work, Glenveagh said both its revenues and gross profit will be heavily weighted towards the second half of this year.

It continues to suspend all forward financial guidance until the impact of the global pandemic on the company becomes clearer.

Work is scheduled to resume on around 80pc of the group’s construction sites from May 18, although it will be on a phased basis.

The company will initially focus on completing units that are signed or reserved and are capable of being completed within a short timeframe.

Meanwhile, in order to manage costs, Glenveagh has implemented temporary layoffs and furlough arrangements, which will continue to be utilised “where necessary and appropriate”.

It has also introduced salary and pension reductions for all employees until the end of June.

Land purchases by Glenveagh remain on hold and the group has postponed nonessential capital expenditure.

“Our confidence in the future of our business is driving us to take the right actions to protect our performance, deliver positive cash flows and ensure we are well-placed for a recovery, underpinned by our strong balance sheet,” Mr Garvey said.

Glenveagh has current cash resources and available committed facilities totalling €81m, with a further €125m of uncommitted facilities.

Its net debt is currently approximately €44m, up from €4m at the end of March, as the company had paid all of its bills to suppliers before the closure of its sites .

Robert Eason, analyst at Goodbody Stockbrokers, said the statement was “comforting and a clear illustration of the strength of the balance sheet”.