Cairn sells 150 homes to cuckoo fund as it reports profit of €24m
LISTED builder Cairn Homes has sold 150 homes in Lucan, Co Dublin to Irish investment management firm Carysfort Capital and Wall Street financial giant Angelo Gordon for €48.6m.
This works out at €324,000 per unit for the mix of apartments and duplexes at the Shackleton Park development in Lucan.
The homes, which have yet to be completed, will be rented out once finished.
Cairn last year sold 229 new homes to a so-called ‘cuckoo fund’ controlled by Angelo Gordon at the same development, which comprises of over 1,100 new homes.
In a trading update yesterday, Cairn said two additional large private rental sector (PRS) projects currently under construction will be marketed for sale in mid-2021.
The company, headed by Michael Stanley, says it expects to report operating profit of around €24m for 2020, down from €68m in 2019.
Cairn closed 743 new homes sales last year, including 536 closings in the second half of 2020.
It generated total revenues of around €260m in what the company said was a “stop-start year”.
The company said its sales mix in 2020 was more oriented towards housing compared to previous years and that it reduced its average selling price to €332,000 – excluding Vat – from €372,000 in 2019.
The full-year gross margin is expected to be around 16.3pc, down from 19.6pc the prior year. This includes the additional costs associated with the pandemic including a two-month site closure and increased site management and preliminary costs.
The company had a gross cash position of around €34m and net debt of about €170m as at December 31.
It has around €980m in inventories, which includes around €690m of land held for development.
Michael Stanley, co-founder and CEO of Cairn, said: “The number of new homes we have completed and our profitability in 2020, allied with our large 2021 order book, are all strong endorsements of our business model, ambition and hard work.”
The company said it will “increase our unit sales and profitability in 2021”.
However, it refrained from providing any guidance on its expected financial performance this year until it announces its 2020 preliminary results on March 4.
Shares in the company were trading up just under 2pc on Euronext Dublin yesterday afternoon.