Davy Stockbrokers has upgraded its forecasts for the house building firm Abbey, following strong half-year results. Abbey reported a 47.2 per cent increase in pre-tax profits to €18.7 million in the six months to the end of October 2000, with a share buy-back programme also greatly boosting earnings per share. The results were well ahead of estimates and Davy is now expecting the group to achieve higher pre-tax profits over the full year.

It has revised its forecast up from €30.7 million to €34.4 million, with earnings per share forecasts up from 63 cents to 69 cents. The brokers point out that the group is substantially cashrich and has more than enough cash to fund its immediate projects. The stock has remained undervalued despite a continuing positive outlook for the firm, according to Davy, which is recommending the shares as a buy.