Glenveagh eyes recovery as Covid-19 restrictions set to be eased

Irish homebuilder Glenveagh Properties said continued growth in reservations and a robust balance sheet has put it in a good position for recovery as the company prepares for a return to construction activity.

The phased lifting of restrictions put in place to curb the spread of Covid-19 is set to begin from May 18th.

In a trading update to the market, Glenveagh said there was continued growth in its reservations, with 570 units sold, signed or reserved.

It said it expected much of its revenue and gross profit to be heavily weighted to the second half of the year, with the restrictions imposed to curb the spread of coronavirus hampering the ability of the company to market properties in addition to slowing down the completion of some of its homes.

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The company has switched to virtual tours of properties during the pandemic restrictions as show home remain closed. However, Glenveagh said it did not foresee a pick up in reservations until in-person viewings could resume.

The planned return to construction activity will take place on a phased basis, with Glenveagh implementing changes required under new working practices and protocols before returning to construction on approximately 80 per cent of the group’s sites.

The company said the initial focus would be on completing units that were signed or reserved, and could be completed in a short time frame.

Glenveagh said it had made “appropriate and significant payments” to its subcontractor and supplier network, and would continue to support its network where necessary as the phased return to work continued.

Cut costs

Glenveagh has implemented a number of operational and financial mitigation measures to help deal with the impact of coronavirus, including temporary layoffs and furlough arrangements where necessary and moves to cut costs.

They include temporary salary and pension reductions for all employees until the end of June, with executive management taking a 20 per cent cut in basic salary on a temporary basis. Fees paid to non-executive directors have been reduced by 25 per cent, with the potential for all measures to be extended should the Government require further restrictions on activity. Land purchases have also been paused.

A the end of December 2019, the company had net cash of €53 million. Current net debt is approximately €44 million, with Glenveagh saying it had paid “substantially all liabilities” in relation to goods and services supplied before the closure of its sites.

The company has current cash resources and available committed facilities of €81 million, with a further €125 million of uncommitted facilities and net assets of €867 million.

"The safety and welfare of our employees, sub-contractors and customers remains our priority as we plan to recommence work on site. 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," said chief executive Stephen Garvey.

“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.”