Statement regarding COVID-19
Cairn Homes plc
Statement regarding COVID-19
Dublin / London, 25 March 2020: Cairn Homes Plc ("Cairn", "the Company" or "the Group"), the leading Irish homebuilding company, today provides an update on the potential impact of COVID-19 on its business activities and in advance of its Annual General Meeting ("AGM") which is scheduled for 20 May 2020.
As advised in our 2019 preliminary results announcement on 3 March 2020, the Company had witnessed a positive start to the Spring 2020 selling season with strong levels of demand across our selling sites. Sales suites were opened on ten of our sites at that date, including successful new launches of units at Oak Park (Naas) and Mariavilla (Maynooth) in February 2020. As also advised in our 2019 preliminary results announcement, the Company's year to date closed sales and forward sales pipeline was 853 units with a sales value of €266.1 million as at 2 March 2020. Almost 85% of forward sales are contracted and encouragingly, contracted sales have been completing in recent days and weeks, as customers look to get the keys to their new homes.
The situation in respect of COVID-19 continues to evolve rapidly, as does Government guidance in relation to it. Footfall and face to face enquiries have slowed significantly over the last two weeks, although online engagement has increased. The Board is monitoring this carefully and while there remains considerable uncertainty, the Company expects sales activity to be negatively impacted over at least the near term and possibly for an indeterminate period of time.
For the moment, and aligned to Government guidelines, construction activity continues across each of our active sites under extensive health and safety protocols implemented to ensure the risk to employees and subcontractors from COVID-19 is reduced and to enable social distancing.
It remains our expectation that the Company will generate significant excess cash over the coming years and the medium term commitment to a progressive capital returns policy remains in place. However, in light of the unprecedented circumstances and considerable uncertainty, the Board has taken the decision to withdraw its intention to propose a final 2019 dividend of 2.75c per share. In addition, the Company is also suspending its current share buyback programme, of which approximately €46 million of the €60 million programme has been completed to date.
The Company had net debt of €91.2 million as at 31 December 2019, comprising of drawn debt of €148.0 million, available cash of €56.8 million and undrawn facilities of €194.0 million under its revolving credit facility. We also have a strong balance sheet with total equity of €763.7 million as at 31 December 2019 underpinned by €897.3 million in inventories, consisting of €692.8 million land held for development and €204.5 million construction work in progress. In recent weeks the Company has drawn down the available €194.0 million of its €200.0 million revolving credit facility.
In addition, the Company announces that it is suspending its existing guidance for FY20 as the impact and duration of COVID-19 remains uncertain. The Company will reinstate guidance for FY20 in due course.
The Board acknowledges that the actions announced today are significant. The Company's focus is on prudently managing the business in the long-term interests of all stakeholders through this unprecedented time. Finally, our number one priority is and always will be the health and safety of our employees, our subcontractors and our customers and we are taking the necessary actions to ensure this.
The Company's 2019 Annual Report will be available to download from its website, www.cairnhomes.com , on Friday, 27 March 2020 at 7am GMT. A separate stock exchange announcement will be released by the Company confirming this.
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For further information, contact:
Cairn Homes plc +353 1 696 4600
Michael Stanley, Co-Founder and CEO
Ian Cahill, Head of Finance
Declan Murray, Head of Investor Relations
Drury Communications +353 1 260 5000
Billy Murphy
Louise Walsh
Finsbury +44 207 251 3801
Gordon Simpson
Charles O'Brien
Notes to Editors
Cairn is the leading Irish homebuilder committed to building high-quality, competitively priced, sustainable new homes in great locations. At Cairn, the homeowner is at the very centre of the design process and we strive to provide an unparalleled customer service throughout each stage of the home-buying journey. A new Cairn home is thoughtfully designed and built to last with a focus on creating shared spaces and environments where communities prosper. Cairn owns a c. 17,000 unit land bank across 35 residential development sites, over 90% of which are located in the Greater Dublin Area ("GDA") with excellent public transport and infrastructure links. Cairn is today building on 16 sites in the GDA, which will deliver over 6,750 new homes.
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