High build costs limit Abbey profits growth

Housebuilder Abbey reported on Friday that its interim profits crept up in the face of high pressure from labour and material costs.

For the six months ended 31 October profit before tax came in at €23.9m, up 2% compared to the same period last year, after the housebuilding division completed 277 sales for a turnover of €99.2m as the UK market "held up well".

Revenue for the period jumped 22% to €110.7m compared to last year when the group had sold 237 homes with a turnover of €79.7m.

"Forward sales continue to be encouraging," said, Charles Gallagher, the chairman. "In particular our projects aimed directly at first-time buyers are selling well. Production continues to be impacted by tight labour and materials markets and some delays have been experienced. Costs are rising. As always trading in the last quarter will determine our final result."

Abbey had cash and cash equivalents of €93.4m at 31 October, up from €88.9m at the same point last year, and declared a final dividend of 9 cents per share making a total dividend of 119 cents per share.

"Whilst our UK forward sales position gives confidence that a reasonable result for the year will be achieved the continuing uncertain external conditions are cause for concern. The group will continue to progress all its activities but intends to be cautious about new investments in the months ahead," said Gallagher.

Abbey’s shares were down 1.55% at 1,270.00p at 0840 GMT.