Abbey profits dip 10% in ‘patchy’ market

Housebuilder Abbey saw its profits fall almost 10 per cent with market conditions billed as "patchy" for the group as it works to increase its activity in Ireland.

The Dublin-listed developer said profit before tax fell to €21.59 million in the six months to the end of October, down from €23.93 million a year earlier.

Abbey’s housebuilding division completed 293 sales in the period, 233 of which were in the UK with the remainder spread across Ireland and the Czech Republic, with a turnover of €92.54 million.

UK sales were down 2.5 per cent while sales rose in the company’s other markets.

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Chairman Charles Gallagher said the group's margins have held up well, "reflecting a higher proportion of affordable homes in our sales mix". He added, however, that "market conditions are patchy with lower priced homes proving more saleable".

“There is still much work to do in the last quarter and, as is usual, any setback can significantly impact our results,” Mr Gallagher said.

Davy analyst Colin Sheridan said the company's margins have not deteriorated to the extent that the broker had been expecting. "The company has retained a strong balance sheet," he added.

Abbey’s UK plant hire business, M&J Engineers, generated operating profits of €923,000 in the period on turnover of €10.51 million. “No immediate improvement is likely and a difficult second half is in prospect,” Mr Gallagher said.

Investment

The company had €106.25 million in cash at the end of October with plans to invest significantly in land in the coming year.

Abbey’s board is declaring a dividend of 10 cents per share to be paid on April 30th, adding to the 11 cents per share approved at the agm in October. Gallagher Holdings, which controls 83.58 per cent of the company, will receive €3.68 million in dividends.

“The group is on course for a fair outcome for the year,” Mr Gallagher said, adding that there is “still considerable uncertainty in the outlook and trading conditions can change quickly”.

“The group is working hard to increase its activity in Ireland,” he said.