Cairn Homes (LSE: CRN), the Irish housebuilder, saw its shares jump to a fresh 52-week high after reporting an 82% rise in first-half earnings per share and a 60% increase in revenue, prompting an upgrade to full-year guidance.
The stock opened at 227p in early trade today, up from Tuesday’s close of 224p, and rose as high as 240p, a gain of more than 5% and above its previous 52-week high of 228p.
Cairn’s interim results, covering the six months to 30 June, showed revenue up 60% to €455.5m and operating profit up 75% to €74.8m, driven by 1,139 home completions versus 708 a year earlier. Basic earnings per share rose 82% to 9.3 cents. Alongside the results, the company raised its interim dividend 10% to 4.5 cents, payable on 2 November, and launched a new €50m share buyback running via Goodbody Stockbrokers and Deutsche Bank until 1 September next year.
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The results were underpinned by a record order book of 5,020 homes worth €1.89bn, up 23% year-on-year, giving management the confidence to lift full-year guidance to revenue of about €1.08bn, operating profit of about €185m and return on equity of about 17.0%, up from a prior 16.5% target. Net debt fell to €194.5m from €307.4m a year earlier, while available liquidity nearly doubled to €304.1m. Chief executive Michael Stanley said the 60% increase in home delivery came alongside “an exceptionally strong financial performance and return on investment”, adding that the company was “pleased to upgrade our full year guidance, increase our interim dividend and initiate a new €50 million share buyback programme”.
Net average selling prices rose just 1.6% to €393,000, a slower pace than wage and build cost inflation over the same period, meaning the earnings gain came largely from higher volumes rather than pricing. With shares already trading near record highs before the results, much of the upgrade may already be reflected in the current price.
