Glenveagh Properties is on track to deliver 1,400 suburban homes in 2022, 80% of which have now been sold, signed or reserved, the homebuilder said in a trading update ahead of its AGM on Thursday afternoon.
The Dublin and London-listed company has a total order book of 2,160 across suburban and urban segments, including 357 suburban homes currently reserved for 2023 and 682 urban apartments at various stages of development.
The group said it was currently operating in a "solid trading environment" resulting from its focus on "high-quality affordable homes" and "supportive" government policy, although supply chain constrains and geopolitical instability had created inflationary pressures.
Glenveagh has seen the cost of materials and commodities increase on the back of the war in Ukraine, but it expects inflation for the year to remain at 6%. It is also seeing the "early signs of labour availability returning" amid widespread hiring challenges across the economy.
It added, however, that cost pressures were being offset by inflation in house prices that "reflects the underlying strength of the market," with house prices rising 15.3% year-on-year in February, according to the Central Statistics Office (CSO).
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"Strong demand for our high-quality, sustainable homes has resulted in the continuation of a supportive trading environment in recent months," said Stephen Garvey, CEO of Glenveagh.
"We remain focused on combining greater scale with greater integration in our supply chain, giving us enhanced certainty over more of our key inputs and driving more efficiencies throughout our business.
"We are maximising capital efficiency by deploying capital in the segments of the market where we can have greatest impact and by returning excess capital to shareholders," he added.
"The business is in a strong position, with excellent product, rigorous cost control and robust customer demand. Our position is underpinned by close alignment with government policy to increase supply urgently and to get more keys in the hands of first-time buyers, renters and people who need social housing."
Glenveagh has progressed with three forward fund transactions that have either been completed or agreed this year, including deals for 320 apartments in Citywest now under construction, 190 apartments in Castleknock and 140 residential units in Blackrock, both of which have heads of terms in place.
The Irish homebuilder also announced the sale of a high-rise apartment site with 554 residential units and ancillary commercial space at East Road in the Dublin docklands to Eagle Street Partners Group Ltd for €63m, with the transaction expected to close in the coming weeks.
Glenveagh has also entered into a supply agreement with a light gauge steel (LGS) manufacturer to create a steel frame panelised system at its Carlow facility to support the delivery of apartments and duplexes, and it will invest €10-15m over the coming years in machinery, equipment and certification to deliver 750 LGS units per year by 2024.
So far this year, the company has invested €30m in land, and it expects to complete its €190m share buyback scheme. Glenveagh has also identified a further €75m in excess capital for further share repurchases following the East Road site sale.
"The continued strategy of accelerating the monetisation of our urban portfolio provides strong visibility on reaching our target of €500m land value by year end, while also allowing the business to improve capital efficiency through a further €75m share buyback programme," Glenveagh said in its outlook
"The growth in the suburban segment, allied with the partnership's business which is set to materially deliver from 2024, means the Group expects to see continued growth in 2024 and beyond."
Photo: Glenveagh CEO Stephen Garvey and finance director Michael Rice in 2019. (Pic: RollingNews.ie)
