Build cost inflation could average at 6%, says Cairn Homes

Cairn Homes expects total build cost inflation

Commentary from Cairn Homes indicates that it expects total build cost inflation of around 6% for 2022. This would encompass infrastructure, materials and labour.

In a trading update ahead of its AGM this week, the company said that build cost inflation figures are uncertain, adding that it anticipates this will remain at elevated levels in the near future. 

The company also shared that its medium-term targets are to build up to 5,500 new homes and generate in excess of €500m in operating cashflow in the three-year period to the end of 2024, while also growing its return on equity (ROE) to 15%. It said that the current demand for energy efficient, quality built new homes has sustained and is the strongest the company has experienced to date. It has an end-2024 ROE target of 15%.

The home builder is anticipating turnover of more than €600m from 1,500 closed new home sales with about 1,300 of these forecast sales already closed or sale agreed. And it continues to collaborate with the State on the delivery of social and affordable housing initiatives.

In terms of its guidance for the year it expects to deliver €100m in operating profits, which will deliver an operating margin of about 16.5%. Shareholder returns for the year will amount to a minimum of €115m through both ordinary dividends and share buybacks, the home builder said.

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