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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Cairn Homes Plc | LSE:CRN | London | Ordinary Share | IE00BWY4ZF18 | ORD EUR0.001 (CDI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -3.40 | -2.46% | 134.60 | 134.60 | 135.00 | 138.60 | 134.20 | 138.60 | 185,787 | 13:07:22 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Management Services | 666.81M | 85.43M | 0.1319 | 10.22 | 873.05M |
From Apr 2019 to Apr 2024
TIDMCRN
RNS Number : 0806I
Cairn Homes plc
25 August 2016
Press Release
Cairn Homes plc
Interim Results for the six months ended 30 June 2016
Dublin/London 25 August 2016: Cairn Homes Plc (LSE: CRN) ("Cairn" or "the Company"), the Irish homebuilding company, today announced the Company's interim results for the six months ended 30 June 2016.
KEY HIGHLIGHTS
Hot Features
Premium
-- Total revenues of EUR16 million, generating gross profits of EUR2.6 million and a gross profit margin of 16.5%.
-- Profit before tax (and exceptional items) of EUR0.5 million.
-- The core land-bank portfolio now consists of 27 separate sites, on which the Company will develop in excess of
11,500 units, with 90% of those units located in Dublin and the Dublin commuter belt.
-- Active on five sites (Parkside, Albany, Marianella, Ashbourne and Hanover Quay), which will deliver in excess of
1,150 units.
-- Sales continue to progress well at Parkside and Albany, with 112 houses now sale agreed and 64 of those sales
completed, with 39 of those completions taking place during the first six months of 2016.
-- Continued strong progress on the Project Clear portfolio - with proceeds of EUR32.0m realised from settlements
and asset sales and nine sites (EUR126.1 million) transferred to direct ownership.
-- Successful firm placing and placing and open offer, concluded in April, raising gross proceeds of EUR176.5
million.
-- Acquired the Argentum business and sites in Hanover Quay, Cherrywood and Maynooth.
-- Available liquidity of EUR167.1 million, comprised of cash of EUR117.1 million and undrawn facilities of EUR50
million.
Key Financial Highlights Jun 2016 Jun 2015
EUR'000 EUR'000
--------------------------------------------- ------------ -----------
Revenue 16,003 51
Gross Profit 2,643 51
Operating Profit/(Loss) (before exceptional 2,843 (897)
items)
Profit/(Loss) Before Tax (before 511 (1,048)
exceptional items)
Loss Before Tax (after exceptional (701) (33,092)
items)
Basic and Diluted Loss Per Share (EUR0.001) (EUR0.85)
Commenting on the results, Michael Stanley, CEO, said:
"Having executed our successful site acquisition phase, Cairn continues to accelerate its home-building operations. We have assembled a talented and experienced team to drive forward with our plans. We are currently building new homes on five sites, with a further five developments commencing within the next 12 months. By mid 2017, we will support over 1,000 construction jobs, including apprentices, leveraging the substantial economies that that we will benefit from as a home-builder of significant scale."
For further information, contact:
Cairn Homes plc +353 1 696 4600
Michael Stanley
Eamonn O'Kennedy
Hume Brophy +353 1 662 4712
Maria Cryan
Edel Bach
There will be an Analyst and Investor call today (25 August 2016) at 8.30am hosted by Michael Stanley, CEO and Eamonn O'Kennedy, Finance Director.
Ireland UK
* Toll - 01 696 8154 * Toll - 0203 1394 830
* Toll free - 1800 936 842 * Toll free - 0808 2370 030
Pin 68468852#
Notes to Editors
Cairn Homes is a well-capitalised Irish homebuilder, with an experienced management team, who are clearly focused on being a significant contributor in the delivery of much needed new homes in Ireland. The Company constructs high quality new houses and apartments with an emphasis on design, innovation and customer service. Cairn acquires greenfield and brownfield sites in Ireland that are suitable for residential development, with an emphasis on Dublin and the Dublin commuter belt, as well as in other major urban centres. www.cairnhomes.com
Note regarding forward-looking statements
Some statements in this announcement are forward-looking. They represent our expectations for our business and involve risks and uncertainties. We have based these forward-looking statements on our current expectations and projections about future events. We believe that our expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which are in some cases beyond our control, our actual results or performance may differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements speak only as of the date of this document and no obligation is undertaken, save as required by law or by the Listing Rules of the UK Listing Authority, to reflect new information, future events or otherwise.
CHIEF EXECUTIVE STATEMENT
Operations Review
The Company is now building new homes on five separate sites, including the recently commenced Marianella, Ashbourne and Hanover Quay sites. These five sites will deliver in excess of 1,150 units. The 20 unit scheme at Albany, South Dublin is nearing completion, whilst the first phase of Parkside is also substantially complete. Sales continue to progress well, with 112 houses now sale agreed and 64 of those sales completed, with 39 of those completions taking place during the first six months of 2016. Sales in Parkside during the summer have been stronger than expected, which will positively impact on second half completion targets. The Company expects to have the first launch of its Ashbourne 350 unit development in October of this year. The Company's operational activities will continue to accelerate over the coming months and Cairn will be building on a further five schemes within twelve months, delivering an additional 2,750 units. The Company remains confident of achieving its previously guided annual sales completion targets and its targeted EBIT margin of 20%, as it matures.
The Company has had eight successful planning grants to date, a 100% success rate and has five further applications currently under consideration by the relevant planning authorities. The Company's planning and development teams will continue to add value by amending existing planning consents, where appropriate, and designing new schemes, in order to ensure optimum delivery and enhanced returns across the portfolio. In particular, the recently granted revised planning consent for 122 units for the prime located site in Hanover Quay, Dublin 2 represents a planning gain of 22 units on the original grant.
The Company's loan to own strategy post the Project Clear acquisition continues to progress well, with proceeds of EUR32.0 million realised from settlements and asset sales in line with expectations and EUR152.2m of assets (12 sites) transferred to its direct ownership, including EUR126.1 million (9 sites) transferred to its direct ownership during the first six months of 2016. The Company is confident of realising full value on all Project Clear core sites converted to its direct ownership and on achieving targeted profit levels on its smaller non-core site disposals.
The successful acquisition phase continued during the first six months of the year, with the acquisition of sites at Cherrywood, Hanover Quay and Maynooth. In addition, following the completion of the successful placing and open offer in April, the Company acquired the Argentum business and its six sites at Naas, Greystones, Griffith Avenue, Dollymount, Swords and Ashbourne.
Residential Property Market
The ongoing supply/demand imbalance is a key factor in the continued upward trajectory in house price inflation, which was up 6.6% and 4.5% nationally and in Dublin respectively in the 12 months to the end of June 2016. Dublin prices still remain 35% back from their peak 2007 levels, whilst rents are now back above their peak levels.
Housing supply continues to fall well short of the accepted long-term requirement of 25,000 to 30,000 homes per annum nationally, with a requirement of 8,000 to 10,000 homes in Dublin. Against this national requirement, there were just 12,666 completions in 2015 (a deficit of c. 50% against the long-term requirement), with only a modest increase on this number expected in 2016 (as evidenced by the fact that in 2016 to date, there has only been an increase of 1,000 units on the 2015 supply level), which underlines the worsening, rather than improving demand/supply imbalance.
Rising rent levels across the country and in Dublin in particular are a continuing feature of the residential housing market, illustrating the worsening demand/supply imbalance. A recent industry report (source: Daft) highlighted the continued rise in rents across the country, with national rents up 11% and Dublin rents up between 10% and 12.5% in the twelve months to June 2016. These continued rent increases are directly related to an acute shortage of housing availability, which is evidenced by the fact that there are just 3,600 properties available to rent nationally in August 2016, compared to 4,600 in August 2015 and almost 16,000 five years ago. In Dublin, there are less than two weeks supply, or 1,100 homes, available to rent currently.
Government Initiatives
The Government support for the housing sector has been confirmed by the recently published Action Plan for Housing and Homelessness, which will have a positive impact on the industry. In particular, Cairn is focused on the initiatives outlined in Pillar 3, Build More Homes, which are most relevant to its business, with the key benefits likely to flow from:
-- the local Infrastructure Housing Activation Fund (LIHAF) for EUR200m, which will help to fast-track much needed
infrastructure in order to facilitate more efficient delivery of much needed homes;
-- prioritising large pathfinder sites in key urban locations to release housing more quickly;
-- planning reforms - large housing development applications will now be subject to a one-step, rather than a
two-step planning process, thereby significantly shortening the planning cycle; and
-- measures to support construction innovation and skills.
In addition, the details of the previously announced Government Help to Buy initiative, which are expected to be included in Budget 2017, due to be announced in October, will provide assistance to first time buyers in particular.
Economy
The Irish macro-economic backdrop remains positive, with Ireland now experiencing its highest levels of GDP growth since the mid-2000s. Recent forecasts (source: Goodbody) for the Irish economy are now predicting GDP growth of 4.1% in 2016 and 2.8% in 2017. Consumer confidence remains high with the recovery in consumer spend accelerating during 2015, at 4.5% and forecast to grow 3.9% in 2016. The labour market continues to improve, with unemployment down to 8.4% in July 2016, down from 9.2% in July 2015 and is forecast to fall further during the remainder of 2016. There has also been strong employment growth, with 56,200 new jobs created in the twelve months to June 2016, an increase of 2.9% on the twelve month period to June 2015. This strong employment market is resulting in a return to wage growth, with an increase of 1.6% during 2016, with expectations of an increase in growth during 2016, which will reinforce a strengthening residential housing market. This improving economic backdrop is key to improving affordability, an important ingredient in underpinning housing demand.
Whilst it is too early to fully assess the impact of Brexit, Cairn believes that Brexit may result in increased FDI, which would further add to the demand for housing. Given the Dublin focus of our land-bank, this will potentially have a positive impact on Cairn's business in the future.
OUTLOOK
The recent improvement in mortgage approvals and drawdowns is encouraging, as is more recent evidence of increasing competition on mortgage rates and the upcoming review of the CBI macro-prudential rules due to be published in November. Affordability is improving, an important ingredient in underpinning housing demand, with wage growth returning and the likely downward trend on personal tax rates. In addition, the regulatory environment remains positive. The recently announced Government Action Plan for Housing and Homelessness combined with the Government Help to Buy initiative, which is expected to be included in Budget 2017, will help to further improve the environment in which the Company operates. Stronger than expected sales levels in Parkside over the summer months will also positively impact on second-half completion targets.
CAIRN HOMES PLC
PRINCIPAL RISKS AND UNCERTAINTIES
The principal operating risks and our approach to mitigating those risks is set out in more detail below.
Risk Description Mitigation
----------------------------------- -------------------------------------------
Economic Conditions
Cairn's business is particularly Cairn's business strategy reflects
sensitive to the performance the cyclical nature of the industry.
of the wider economy The Board and the management
and particularly changes team closely monitor economic
in interest rates, employment indicators for indications of
and general consumer weakness in the economy.
confidence. Changes in Internal process in place to
economic conditions in track margin impact of reduction
Ireland (which are linked in sales prices.
to the performance of Regular impairment reviews.
the broader global economy,
given Ireland's open
economy) are likely to
impact on house prices
and house sales rates.
----------------------------------- -------------------------------------------
Mortgage Availability
& Affordability The Group monitors mortgage
The availability of mortgage availability including any impact
finance, particularly from regulations on mortgage
the deposit and income lending and rates on an ongoing
requirements set by the basis and it is a standing item
Regulator on mortgage at Board meetings for discussion.
lending, is a significant The Group also considers the
factor in customer demand. benefits of products used in
other jurisdictions to stimulate
supply in the market and considers
whether such an approach is
appropriate for the Irish market.
----------------------------------- -------------------------------------------
Health & Safety
Health and Safety breaches The Health & Safety department
can result in injuries operates independently of the
to Cairn staff or sub-contractors construction division and reports
operating on Cairn sites directly to Head Office in order
and/or result in delays to maintain independence.
in construction or increased Reportable and non-reportable
costs, in addition to incidents are measured across
reputational damage and sites and reported to management
potential litigation. and the Board on a regular basis
in order to track trends across
and within sites.
A strong Health & Safety culture
exists across the organisation.
A formalised (industry standard)
Safety Cert system has been
introduced, which includes a
robust management system and
includes regular safety audits
and scoring of results.
----------------------------------- -------------------------------------------
Availability and Strength
of Sub-Contractors Supply agreements are fixed
The risk that the Group for all, or a significant portion
is unable to attract of a scheme, in order to ensure
the right quantity and that supply is guaranteed.
quality of sub-contractors, Given the size of the Group's
which are critical to land-bank and its position in
delivery of the Group's the market-place, it is a very
homes, due to the outsourced attractive client for sub-contractors.
business model applied Senior and middle management
by the Group. have many years of experience
in the industry and strong relationships
with and knowledge of key suppliers.
The Group ensures payments are
made on time to key suppliers
in order to maximise their liquidity
as they scale their operations
in conjunction with the Group.
Approved sub-contractors are
circulated on all relevant tenders.
----------------------------------- -------------------------------------------
Succession Planning
A risk that the loss Ensuring that a strong number
of key staff will result two is in place across all key
in a loss of key corporate functional areas.
knowledge and consequential Regular interaction across the
impact on operations. various departments in order
to ensure strong knowledge transfer.
Performance monitoring of key
individuals.
Active talent management and
staff development.
Ensure that remuneration policy
is robust enough to meet market
demands.
----------------------------------- -------------------------------------------
CAIRN HOMES PLC
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Risk Description Mitigation
------------------------------- -----------------------------------------
Recruitment and Retention
of Key Personnel The Group's ambitious growth
The risk that the Group plans make it an attractive
does not have a sufficiently place of employment for high
robust HR strategy in calibre staff.
place in order to ensure The Group has a remuneration
the Group's recruitment policy in place that is competitive
policy/plans are delivered in the marketplace.
and that key staff are The Group is putting a HR policy
retained. in place in order to ensure
a more positive work environment
is in place.
Performance reviews are performed
to keep staff motivated.
------------------------------- -----------------------------------------
Financial Controls Framework
The risk or failure to Policies are in place across
adhere to agreed policies, the Group in order to minimise
procedures and processes risks in key areas.
due to a lack of financial The Group only commenced its
controls in place, leading principal activities from the
to potential financial date of IPO in June 2015, as
misstatement, fraudulent a result the financial control
behaviour or a potential environment continues to be
financial loss to the developed in conjunction with
Group. the growth in the underlying
business.
Head Office personnel with direct
site operational knowledge monitor
site activity.
------------------------------- -----------------------------------------
Liquidity Management
The risk the Company The Group will ensure that it
does not maintain sufficient always has sufficient liquidity
liquidity headroom to in place to meet its cash flow
ensure that it can always requirements for the next 18
meet its working capital months.
requirements as they The Group prepares regular forecasts
fall due. Risk that slower that look at both its short-term
than expected sales impact and longer-term requirements.
on the Company's liquidity Regular monitoring, forecasting
position. and reporting of banking covenants.
The risk that failure Speed of delivery on individual
to comply with the Group's schemes takes account of sales
banking covenants results absorption rates across each
in the withdrawal of individual scheme.
funding lines.
------------------------------- -----------------------------------------
Loan To Own
The risk that the Group The Group has appointed Hudson
does not manage the loan Advisors, who are an experienced
foreclosure process arising Central Bank approved loan servicing
from the original acquisition agent and are operating to the
of the Project Clear business plans that the Group
portfolio, which could put in place to manage the foreclosure
have legal, operational process.
and/or financial implications Regular meetings with the Group's
for the Group. loan service agent and all relevant
advisors in order to ensure
that the Group is fully briefed
on the implementation of its
loan to own strategy.
------------------------------- -----------------------------------------
Planning Regulations
Inability to adhere to Group monitors all policy changes
the complex and stringent through its planning department
regulatory environment and the experienced team is
that applies to the building well placed to interpret regulatory
industry. Risk that the changes.
Government will introduce The Group uses external advisors
new legislation that who advise it on any changes
results in material cost, to relevant legislation.
or time delays for the Rigorous design standards for
Group. the homes that the Group develops.
Participation in industry advocacy
groups.
------------------------------- -----------------------------------------
Programme Risk/Project
Planning Robust project plans and controls
The risk that the Group are in place.
incurs costs which are Monthly reporting of all project
higher than expected costs, with variances and explanations
or experiences delays highlighted in monthly reports.
in construction due to Key oversight personnel in place
poor planning across all projects.
------------------------------- -----------------------------------------
CAIRN HOMES PLC
STATEMENT OF DIRECTORS' RESPONSIBILITY IN RESPECT OF THE HALF-YEARLY FINANCIAL REPORT
For the six month period ended 30 June 2016
Each of the directors, whose names and functions are listed in on page 25, confirm our responsibility for preparing the half year financial report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the Transparency Rules of the Central Bank of Ireland and with IAS 34 Interim Financial Reporting, as adopted by the EU, and to the best of each person's knowledge and belief:
(a) the condensed interim financial statements comprising the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and related notes 1 to 19 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
(b) the interim management report includes a fair review of the information required by:
(I) Regulation 8(2) of the Transparency (Directive 2004/109/EC) Regulations 2007, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(ii) Regulation 8(3) of the Transparency (Directive 2004/109/EC) Regulations 2007, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
Signed on behalf of the Board
John Reynolds Michael Stanley
Chairman Chief Executive Officer
CAIRN HOMES PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
For the six month period ended 30 June 2016
For six month period For the period from
ended 30 June 2016 incorporation on 12
Nov 2014 to 30 June
2015
---------------------------------------------- ---------------------------------------
Before Exceptional Before Exceptional
Exceptional items Total Exceptional items Total
Items (Note Items
15)
Note EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Continuing
operations
Revenue 2 16,003 - 16,003 51 - 51
Cost of sales (13,360) - (13,360) - - -
------------ ------------ ----------- ------------ ------------ -----------
Gross profit 2,643 - 2,643 51 - 51
Other income 3 3,531 - 3,531 - - -
Administration
expenses (3,331) (1,212) (4,543) (948) (1,086) (2,034)
Fair value charge
relating
to Founder Shares - - - - (29,100) (29,100)
------------ ------------ ----------- ------------ ------------ -----------
Operating
profit/(loss) 2,843 (1,212) 1,631 (897) (30,186) (31,083)
Finance income 21 - 21 8 - 8
Finance costs 4 (2,353) - (2,353) (159) (1,858) (2,017)
------------ ------------ ----------- ------------ ------------ -----------
Profit/(Loss)
before
taxation 511 (1,212) (701) (1,048) (32,044) (33,092)
Income tax credit 5 122 213
----------- -----------
Loss for the period
attributable
to owners of the
Company (579) (32,879)
Other - -
comprehensive
income
----------- -----------
Total
comprehensive
loss
for the period
attributable
to owners of the
Company (579) (32,879)
----------- -----------
Basic loss per
share 12 (EUR0.001) (EUR0.85)
----------- -----------
Diluted loss per
share 12 (EUR0.001) (EUR0.85)
----------- -----------
The notes to the interim consolidated financial statements on pages 13 to 23 form an integral part of this financial information.
CAIRN HOMES PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2016
30 Jun 31 Dec
2016 2015
Unaudited Audited
Assets Note EUR'000 EUR'000
Non-current
assets
Property, plant
& equipment 540 130
Intangible assets 208 130
Restricted cash 9 27,000 27,000
---------- -------------
27,748 27,260
Current assets
Loan assets 6 16,000 382,951
Inventories 7 657,122 149,331
Deposits paid 8 2,225 5,000
Trade and other
receivables 11,104 2,962
Cash and cash equivalents 9 117,082 6,551
---------- -------------
803,533 546,795
Total
assets 831,281 574,055
---------- -------------
Equity
Share
capital 10 794 637
Share premium 10 697,733 521,390
Share-based payment
reserve 29,134 29,118
Retained earnings (61,601) (53,155)
---------- -------------
Total
equity 666,060 497,990
---------- -------------
Liabilities
Non-current
liabilities
Loans and borrowings 11 148,419 63,543
Derivative
liability - 514
Deferred taxation 5 6,120 815
---------- -------------
154,539 64,872
Current liabilities
Trade and other
payables 10,682 11,193
---------- -------------
Total liabilities 165,221 76,065
---------- -------------
Total equity and liabilities 831,281 574,055
---------- -------------
The notes to the interim consolidated financial statements on pages 13 to 23 form an integral part of this financial information.
CAIRN HOMES PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
For the six month period ended 30 June 2016
Share Capital
-------------------------- ------------------------------------------- --------- ------------ ---------- --------
Ordinary A Ordinary Deferred Founder Share Share-based Retained Total
Shares Shares Shares Shares Premium payment Earnings
Reserve
-------------------------- --------- ----------- --------- -------- --------- ------------ ---------- --------
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
-------------------------- --------- ----------- --------- -------- --------- ------------ ---------- --------
As at 01 January 2016 517 - 20 100 521,390 29,118 (53,155) 497,990
-------------------------- --------- ----------- --------- -------- --------- ------------ ---------- --------
Total comprehensive loss
for the period
-------------------------- --------- ----------- --------- -------- --------- ------------ ---------- --------
Loss for the period - - - - - - (579) (579)
-------------------------- --------- ----------- --------- -------- --------- ------------ ---------- --------
- - - - - - (579) (579)
-------------------------- --------- ----------- --------- -------- --------- ------------ ---------- --------
Transactions with owners
of the company
-------------------------- --------- ----------- --------- -------- --------- ------------ ---------- --------
Issue of ordinary shares
for cash 157 - - - 176,343 - - 176,500
-------------------------- --------- ----------- --------- -------- --------- ------------ ---------- --------
Share issue costs - - - - - - (7,867) (7,867)
-------------------------- --------- ----------- --------- -------- --------- ------------ ---------- --------
Equity-settled
share-based
payments - - - - - 16 - 16
-------------------------- --------- ----------- --------- -------- --------- ------------ ---------- --------
157 - - - 176,343 16 (7,867) 168,649
-------------------------- --------- ----------- --------- -------- --------- ------------ ---------- --------
As at 30 June 2016 674 - 20 100 697,733 29,134 (61,601) 666,060
-------------------------- --------- ----------- --------- -------- --------- ------------ ---------- --------
The notes to the interim consolidated financial statements on pages 13 to 23 form an integral part of this financial information.
CAIRN HOMES PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
For the period from incorporation 12 Nov 2014 to 30 June 2015
Share Capital
------------------------- ------------------------------------------- --------- ------------ ---------- ---------
Ordinary A Ordinary Deferred Founder Share Share-based Retained Total
Shares Shares Shares Shares Premium payment Earnings
Reserve
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
As at 12 November 2014 - - - - - - - -
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
Total comprehensive loss
for the period
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
Loss for the period - - - - - - (32,879) (32,879)
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
- - - - - - (32,879) (32,879)
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
Transactions with owners
of the company
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
Issue of ordinary shares
for cash 443 - - - 442,617 - - 443,060
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
Share issue costs - - - - - - (14,605) (14,605)
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
Issue of founder shares
for cash - - - 100 100 - - 200
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
Issue of ordinary shares
for business
combination 27 - - - 26,630 - - 26,657
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
Issue of A ordinary
shares
for cash - 20 - - - - - 20
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
Conversion of A ordinary
shares to deferred
shares - (20) 20 - - - - -
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
Equity-settled
share-based
payments - - - - - 29,101 - 29,101
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
470 - 20 100 469,347 29,101 (14,605) 455,567
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
As at 30 June 2015 470 - 20 100 469,347 29,101 (47,484) 451,554
------------------------- --------- ----------- --------- -------- --------- ------------ ---------- ---------
The notes to the interim consolidated financial statements on pages 13 to 23 form an integral part of this financial information.
CAIRN HOMES PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
For the six month period ended 30 June 2016
For the six For the period
month period from incorporation
ended 30 on 12 Nov
June 2016 2014 to 30
June 2015
-------------------------------- ----- -------------- --------------------
Note EUR'000 EUR'000
-------------------------------- ----- -------------- --------------------
Cash flows from operating
activities
-------------------------------- ----- -------------- --------------------
Loss for the period (579) (32,879)
-------------------------------- ----- --------------
Adjustments for:
-------------------------------- ----- -------------- --------------------
Share-based payments expense 16 29,101
-------------------------------- ----- -------------- --------------------
Non-cash expense in relation
to the acquisition of Emerley
Holdings Limited - 2,944
-------------------------------- ----- -------------- --------------------
Finance costs 2,353 159
-------------------------------- ----- -------------- --------------------
Finance income (21) (8)
-------------------------------- -----
Depreciation 37 -
-------------------------------- -----
Taxation (122) (213)
-------------------------------- ----- -------------- --------------------
1,684 (896)
-------------------------------- ----- -------------- --------------------
Increase in inventories (77,660) (41,834)
-------------------------------- ----- -------------- --------------------
Decrease in loan assets 26,768 -
-------------------------------- ----- -------------- --------------------
Increase in deposits paid (625) (5,095)
-------------------------------- ----- -------------- --------------------
Increase in trade and other
receivables (2,344) (402)
-------------------------------- ----- -------------- --------------------
(Decrease)/Increase in trade
and other payables (1,469) 1,819
-------------------------------- ----- -------------- --------------------
Net cash used in operating
activities (53,646) (46,408)
-------------------------------- ----- -------------- --------------------
Cash flows from investing
activities
-------------------------------- ----- -------------- --------------------
Acquisition of Argentum 15 (86,074) -
-------------------------------- ----- --------------
Cash acquired on acquisition
of Argentum 15 818 -
-------------------------------- ----- --------------
Cash acquired on acquisition
of Emerley Holdings Limited - 1,963
-------------------------------- ----- --------------
Purchases of property, plant
and equipment (410) (3)
-------------------------------- ----- --------------
Purchases of intangible (68) -
assets
-------------------------------- ----- --------------
Net cash used in investing
activities (85,734) 1,960
-------------------------------- ----- -------------- --------------------
Cash flows from financing
activities
-------------------------------- ----- -------------- --------------------
Proceeds from issue of share
capital, net of issue costs
paid 10 168,018 433,375
-------------------------------- ----- -------------- --------------------
Proceeds from borrowings,
net of debt issue costs 11 99,527 -
-------------------------------- ----- -------------- --------------------
Repayment of loans 11 (15,500) -
-------------------------------- ----- -------------- --------------------
Interest paid (2,134) -
-------------------------------- ----- -------------- --------------------
Net cash from financing
activities 249,911 433,375
-------------------------------- ----- -------------- --------------------
Net increase in cash and
cash equivalents in the
period 110,531 388,927
-------------------------------- -----
Cash and cash equivalents 6,551 -
at beginning of period
-------------------------------- ----- -------------- --------------------
Cash and cash equivalents
at the end of period 117,082 388,927
-------------------------------- ----- -------------- --------------------
The notes to the interim consolidated financial statements on pages 13 to 23 form an integral part of this financial information.
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
1. Basis of Preparation
Cairn Homes plc ("the Company") is a company domiciled in Ireland. The Company's registered office is 7 Grand Canal, Grand Canal Street Lower, Dublin 2. The Company and its subsidiaries (together referred to as "the Group") is predominantly involved in the development of residential property for sale.
These unaudited condensed interim consolidated financial statements and the information set out in this report cover the six month period ended 30 June 2016, have been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union.
The Group condensed interim financial statements do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS as adopted by the European Union. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since 31 December 2015. They should be read in conjunction with the statutory consolidated financial statements of the Group, which were prepared in accordance with IFRS as adopted by the European Union, as at and for the period ended 31 December 2015. Those statutory financial statements have been filed with the Registrar of Companies and are available at www.cairnhomes.com. The audit opinion on those statutory financial statements was unqualified and did not contain any matters to which attention was drawn by way of emphasis.
The accounting policies, presentation and method of computations adopted in the preparation of the condensed interim financial statements are consistent with those followed in the preparation of the Group's financial statements for the period from incorporation on 12 November 2014 to 31 December 2015.
The new IFRS standards, amendments to standards or interpretations that are effective for the first time in the financial year ending 31 December 2016 have not had a significant impact on the Group's reported profit or net assets in these interim financial statements.
The preparation of consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results could differ materially from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The key judgements and estimates impacting these interim financial statements are:
-- carrying value of inventories and allocations from inventories to cost of sales (Note 7) -- transfer of loan assets to development land collateral within inventories (Notes 6 and 7) -- acquisition accounting, including allocation of fair value of consideration (Note 15)
The interim condensed consolidated financial statements are presented in Euro, which is the functional currency of the Company and presentation currency of the Group, rounded to the nearest thousand.
The interim condensed consolidated financial statements were approved by the Directors on 24 August 2016.
2. Revenue
For six month For the period
period ended from incorporation
30 June 2016 on 12 Nov
2014 to 30
June 2015
----------------------------- -------------- --------------------
EUR'000 EUR'000
----------------------------- -------------- --------------------
Residential property sales 15,390 -
-----------------------------
Income from property rental 613 51
----------------------------- -------------- --------------------
16,003 51
Residential property sales includes EUR3.8 million from the sale of residential properties acquired in Project Clear (Note 7).
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS (Continued)
3. Other income
For six month For the period
period ended from incorporation
30 June 2016 on 12 Nov
2014 to 30
June 2015
------------------------------ -------------- --------------------
EUR'000 EUR'000
------------------------------ -------------- --------------------
Gains on settlement of loans 1,443 -
------------------------------
Other gains 2,088 -
------------------------------ -------------- --------------------
3,531 -
During the period, gains of EUR1.4 million were made from the settlement of certain loans from the Project Clear distressed loan portfolio (Note 6), relating to development sites which the Group will not develop itself.
Other gains includes a benefit of EUR2.1 million relating to the release of a liability which had been assumed for certain expected payments to third parties, arising on the Project Clear distressed loans acquisition, that are no longer payable.
4. Finance costs
For six For the period from
month period incorporation on
ended 12 Nov 2014 to 30
30 June June 2015
2016
--------------------------- -------------- -----------------------------------------
Before
Total Exceptional Exceptional Total
items items
---------------------------
EUR'000 EUR'000 EUR'000 EUR'000
Finance Costs
---------------------------
Interest expense
on financial liabilities
measured at amortised
cost (2,226) (159) (1,858) (2,017)
---------------------------- -------------- ------------- -------------- ----------
Other finance costs (127) - - -
---------------------------- -------------- ------------- -------------- ----------
(2,353) (159) (1,858) (2,017)
-------------- ------------- -------------- ----------
The above interest expense for the period to 30 June 2016 relates to interest on the drawn Term Loan and Revolving Credit Facility, net of amortised finance costs and transaction costs, plus commitment fees on the undrawn facility during the period.
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS (Continued)
5. Current and deferred taxation
For six For the
month period period from
ended 30 incorporation
June 2016 on 12 Nov
2014 to
30 June
2015
-----------------------------------
EUR'000 EUR'000
----------------------------------- -------------- ---------------
Current tax charge for the period - -
----------------------------------- -------------- ---------------
Deferred tax credit for the
period (122) (213)
----------------------------------- -------------- ---------------
Total income tax credit (122) (213)
-----------------------------------
Deferred tax
-----------------------------------
The deferred tax liability is
comprised of the following: 30 Jun 2016 31 Dec 15
----------------------------------- -------------- ---------------
EUR'000 EUR'000
----------------------------------- -------------- ---------------
Opening balance 815 -
----------------------------------- -------------- ---------------
Liability on acquisition of
Emerley Holdings Limited - 1,127
-----------------------------------
Liability on acquisition of 5,427 -
Argentum (Note 15)
-----------------------------------
Credited to profit or loss (122) (312)
----------------------------------- -------------- ---------------
As at period end 6,120 815
----------------------------------- -------------- ---------------
6. Loan assets
30 Jun 2016 31 Dec 2015
-------------------- ------------ ------------
EUR'000 EUR'000
-------------------- ------------ ------------
Loan receivables 16,000 378,681
-------------------- ------------ ------------
Construction bonds - 4,270
-------------------- ------------ ------------
16,000 382,951
-------------------- ------------ ------------
The loan receivables were acquired at a substantial discount to their nominal value reflecting their distressed state at the time of acquisition. The fair value of the loan receivables at acquisition was based on the value of the secured real estate collateral. Direct transaction costs incurred relating to the acquisition of these loans were capitalised.
During the period the Group realised proceeds of EUR28.2 million from the settlement of loans. At 30 June 2016, loans with a carrying value of EUR16 million are expected to be repaid.
During the period, the Group has commenced the foreclosure process, whereby the substantial majority of loans will be recovered by obtaining the underlying collateral. Accordingly, the loans in foreclosure have been derecognised as financial assets, and the related collateral assets have been transferred to inventory, as detailed further in Note 7, which reflects the substance of these assets.
As a consequence, the related construction bonds have been transferred to trade and other receivables. The carrying value of construction bonds as at 30 June 2016 was EUR3.8 million.
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS (Continued)
7. Inventories
30 Jun 2016 31 Dec 2015
-------------------------------- ------------ ------------
EUR'000 EUR'000
-------------------------------- ------------ ------------
Land held for development 420,407 132,074
--------------------------------
Construction work in progress 24,560 17,257
--------------------------------
Development land collateral 212,155 -
(for loans in the foreclosure
process)
-------------------------------- ------------ ------------
657,122 149,331
-------------------------------- ------------ ------------
The directors consider that all inventories are essentially current in nature although the Group's operational cycle is such that a considerable proportion of inventories will not be realised within 12 months. It is not possible to determine with accuracy when specific inventories will be realised as this will be subject to a number of factors such as consumer demand and the timing of planning permissions.
Having considered the current market conditions and development potential, the directors do not consider there to be any factors that give rise to concern in relation to the net realisable value of the Group's inventories as at 30 June 2016. Consequently, the directors believe that the carrying value of inventories is stated at the lower of cost and net realisable value.
Following the end of the sub-participation period in February 2016, as further detailed in Note 6, the Group has commenced the foreclosure process of transferring development land collateral into its direct ownership. Consequently, the cost of the development land collateral attaching to the relevant Project Clear distressed loan assets is now shown within inventories. The carrying value of this collateral property at 30 June 2016 was EUR212.2 million.
During the period, assets attached to 9 of the original distressed loans acquired, with a total cost of EUR126.1 million, have transferred from development land collateral to directly owned land held for development. In addition, the Group realised proceeds of EUR3.8 million from the sale of residential properties acquired in Project Clear, which are included in revenue (Note 2).
8. Deposits Paid
30 Jun 2016 31 Dec 2015
--------------- -------------- --------------
EUR'000 EUR'000
--------------- -------------- --------------
Deposits paid 2,225 5,000
--------------- -------------- --------------
2,225 5,000
--------------- -------------- --------------
Deposits paid at 30 June 2016 represent booking deposits paid on purchase agreements relating to two separate development properties. As at 30 June 2016, these acquisitions had not closed. One of these deposits relates to a contract to purchase a site, which formed part of the Argentum transaction (Note 15), which is expected to complete in the coming weeks.
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS (Continued)
9. Restricted Cash and Cash and Cash Equivalents
30 Jun 2016 31 Dec 2015
----------------- -------------- --------------
EUR'000 EUR'000
----------------- -------------- --------------
Non-current
----------------- -------------- --------------
Restricted cash 27,000 27,000
----------------- ============== ==============
EUR27 million of restricted cash is required to be maintained in an interest-bearing blocked deposit for the duration of the Group's senior debt facilities (Note 11), as part of the collateral for those facilities. The estimated fair value of restricted cash at 30 June 2016 is EUR27 million.
30 Jun 2016 31 Dec 2015
--------------------------- -------------- --------------
EUR'000 EUR'000
--------------------------- -------------- --------------
Current
--------------------------- -------------- --------------
Cash and cash equivalents 117,082 6,551
--------------------------- ============== ==============
Cash deposits are made for varying short-term periods depending on the immediate cash requirements of the Group. All deposits can be withdrawn without significant changes in value and accordingly the fair value of current cash and cash equivalents is identical to the carrying value.
10. Share Capital and Share Premium
30 Jun 31 Dec
2016 2015
------------------- -------------- --------- -------------- ---------
Number EUR'000 Number EUR'000
------------------- -------------- --------- -------------- ---------
Authorised
------------------- -------------- --------- -------------- ---------
Ordinary Shares
of EUR0.001 each 1,000,000,000 1,000 1,000,000,000 1,000
------------------- -------------- --------- -------------- ---------
Founder Shares of
EUR0.001 each 100,000,000 100 100,000,000 100
------------------- -------------- --------- -------------- ---------
Deferred Shares
of EUR0.001 each 120,000,000 120 120,000,000 120
------------------- -------------- --------- -------------- ---------
A Ordinary Shares
of EUR1.00 each 20,000 20 20,000 20
------------------- -------------- --------- -------------- ---------
Total Authorised
Share Capital 1,240 1,240
------------------- -------------- --------- -------------- ---------
Share Share Total
Capital Premium
-------------------- ------------ --------- --------- --------
As at 30 June 2016 Number EUR'000 EUR'000 EUR'000
-------------------- ------------ --------- --------- --------
Issued and fully
paid
-------------------- ------------ --------- --------- --------
Ordinary Shares of
EUR0.001 each 674,252,686 674 697,633 698,307
-------------------- ------------ --------- --------- --------
Founder Shares of
EUR0.001 each 100,000,000 100 100 200
-------------------- ------------ --------- --------- --------
Deferred Shares of
EUR0.001 each 19,980,000 20 - 20
-------------------- --------- --------- --------
A Ordinary Shares - - - -
of EUR1.00 each
-------------------- --------- --------- --------
794 697,733 698,527
-------------------- ------------ --------- --------- --------
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS (Continued)
10. Share Capital and Share Premium (continued)
Share Share Total
Capital Premium
-------------------- ------------ --------- --------- --------
As at 31 December
2015 Number EUR'000 EUR'000 EUR'000
-------------------- ------------ --------- --------- --------
Issued and fully
paid
-------------------- ------------ --------- --------- --------
Ordinary Shares of
EUR0.001 each 516,663,977 517 521,290 521,807
-------------------- ------------ --------- --------- --------
Founder Shares of
EUR0.001 each 100,000,000 100 100 200
-------------------- ------------ --------- --------- --------
Deferred Shares of
EUR0.001 each 19,980,000 20 - 20
-------------------- --------- --------- --------
A Ordinary Shares - - - -
of EUR1.00 each
-------------------- --------- --------- --------
637 521,390 522,027
-------------------- ------------ --------- --------- --------
Share Issues
On 19 April 2016, the Company issued 48,875,000 Ordinary Shares at EUR1.12 each through a Firm Placing and 110,713,709 Ordinary Shares at EUR1.12 each through a Placing and Open Offer, raising gross proceeds of EUR176.5 million.
Share issue costs of EUR7.9 million have been charged directly in equity to retained earnings.
11. Loans and Borrowings
30 Jun 2016 31 Dec 2015
---------------------------- -------------- --------------
EUR'000 EUR'000
---------------------------- -------------- --------------
Non-current liabilities
---------------------------- -------------- --------------
Bank loans
---------------------------- -------------- --------------
Repayable as follows:
---------------------------- -------------- --------------
Between one and two years - -
---------------------------- -------------- --------------
Between two and five years 148,419 63,543
---------------------------- -------------- --------------
Total Borrowings 148,419 63,543
---------------------------- -------------- --------------
On 8 February 2016, EUR42 million was drawn down on the Term Loan by the Group. A further EUR8 million was drawn on 11 March 2016, with a further EUR50 million drawn on 3 May 2016, in line with the terms of the Term Loan.
On 9 June 2016, the Group repaid the Revolving Credit Facility of EUR15.5 million. The Group has an undrawn Revolving Credit Facility of EUR50 million available as at 30 June 2016.
The amount presented in the financial statements is net of related unamortised arrangement fees and transaction costs.
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS (Continued)
12. Earnings per Share
The basic loss per share for the period ended 30 June 2016 is based on the loss attributable to ordinary shareholders of EUR0.579 million and the weighted average number of ordinary shares outstanding for the period. There is no difference between basic and diluted loss per share. The potential ordinary shares from share-based payment arrangements are not dilutive in view of the loss made in the period.
30 Jun 2016 30 Jun 2015
------------------------------------- ------------ ------------
Loss attributable to ordinary
shareholders (EUR'000) (579) (32,879)
------------------------------------- ------------ ------------
Weighted average number of ordinary
shares for period 579,351,198 38,677,150
------------------------------------- ------------ ------------
Basic and diluted loss per share 0.1 cents 85 cents
------------------------------------- ------------ ------------
13. Dividends
There were no dividends declared and paid by the Company during the reporting period and there were no dividends proposed by the directors in respect of the reporting period up to the date of authorisation of these interim financial statements.
14. Related Party Transactions
Edward Square Limited, an entity directly owned by Alan McIntosh, a director, recharged EUR0.105 million in the period to the Group for professional services and expenses incurred on behalf of the Group.
15. Business Combination
On 21 April 2016, the Company acquired 100% of the share capital of Argentum Property Holdco Limited ("Argentum") for a consideration of EUR91.2 million. This acquisition had been conditional on the successful completion of the Company's Firm Placing and Placing and Open Offer. The purpose of the acquisition was to acquire Argentum's business of the development of residential properties at Ashbourne, Naas, Greystones, Griffith Avenue, Dollymount and Swords.
The fair value of recognised amounts of assets acquired and liabilities assumed were as follows:
EUR'000
Inventories 94,324
Receivables 1,050
Deposit paid 1,600
Cash and cash equivalents 818
Current liabilities (1,178)
Deferred tax liability (5,427)
Total Fair Values of Net Assets
Acquired 91,187
Consideration satisfied by:
Cash paid to date (including
EUR5 million deposit paid
in 2015) 91,074
To be paid 113
Consideration Fair Value 91,187
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS (Continued)
15. Business Combination (continued)
The total fair value of assets acquired was EUR91.2 million, which has been satisfied by the cash consideration of EUR91.2 million. Inventories of EUR94.3 million reflect the fair value, as at the date of acquisition, of development properties owned by Argentum and a conditional purchase contract to acquire the Greystones site. The completion of the acquisition of the Greystones sites is expected to take place in the coming days at a cost of EUR14.4 million, which is payable to the vendors of the Greystones site. The combined total of the consideration paid for Argentum and the payment to complete the Greystones site purchase is EUR105.6 million.
Transaction costs of EUR1.2 million have been charged to the profit or loss in accordance with IFRS 3. As the acquisition of a business is a non-routine transaction, these have been classified as an exceptional item.
From the acquisition date to 30 June 2016, this acquisition contributed revenue and operating profit of nil to the consolidated results of the Group. If the acquisition had occurred with effect from the beginning of the period, it would have contributed revenue and operating profit of nil to the consolidated results of the Group for the period.
16. Financial Risk Management
The Group has exposure to the following risks arising from financial instruments:
-- credit risk -- liquidity risk -- market risk
This note presents information about the Group's exposure to each of the above risks, and the Group's objectives, policies and processes for measuring and managing risk.
Risk management framework
The Company's Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group's loan assets, trade and other receivables and cash and cash equivalents. The carrying amount of financial assets represents the maximum credit exposure.
Exposure to credit risk
The Group's principal financial assets comprise cash and short term deposits. Group management in conjunction with the Board manage risk associated with cash and short term deposits by depositing funds with a number of Irish financial institutions and AAA rated international institutions. At 30 June 2016, the Group's deposits were held in three Irish financial institutions with a minimum credit rating of BBB-.
30 Jun 31 Dec
2016 2015
Carrying
amount EUR'000 EUR'000
Loan receivables (Note
6) 16,000 378,681
Other receivables ** 6,239 5,131
Restricted cash - non
current 27,000 27,000
Cash and cash equivalents
- current 117,082 6,551
-------- --------
166,321 417,363
-------- --------
**Other receivables includes construction bonds and excludes VAT receivables.
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS (Continued)
16. Financial Risk Management (continued)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or other financial assets. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.
The Group monitors the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other payables and commitments. All trade and other payables (EUR10.7 million) at 30 June 2016 are considered current with the expected cash outflow equivalent to their carrying value.
Management monitors the adequacy of the Group's liquidity reserves (comprising undrawn borrowing facilities as detailed in note 11 and cash and cash equivalents as detailed in note 9) against rolling cash flow forecasts. In addition, the Group's liquidity risk management policy involves monitoring short term and long term cash flow forecasts.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Currency risk
The Group is not exposed to currency risk. The Group operates only in the Republic of Ireland.
Interest rate risk
At 30 June 2016, the Group had Term Loan and Revolving Credit facilities with AIB and Ulster Bank that had a principal drawn balance of EUR150 million, with a variable interest rate of Euribor (with a 0% floor), plus a margin of 3%. The Group has an exposure to cash flow interest rate risk where there are changes in Euribor rates.
Fair value of financial assets and financial liabilities
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: valuation techniques for which the lowest level of inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly;
Level 3: valuation techniques for which the lowest level of inputs that have a significant effect on the recorded fair value are not based on observable market data.
The following table shows the Group's financial assets and liabilities and the methods used to calculate fair value.
Asset/Liability Carrying Level Method Assumptions
value
----------------- ---------- ------- --------------- -------------------------------
Loan assets Amortised 3 Discounted Valuation based on discounted
- as at cost Cash Flow cash flows from expected
30 June settlement proceeds.
2016
----------------- ---------- ------- --------------- -------------------------------
Loan assets Amortised 3 Assessed Valuation of collateral
- as at cost in relation is subjective based
31 December to collateral on agents' guide sales
2015 value prices and market observation
of similar property
sales where available,
expected scale of development
and development costs
assumptions.
----------------- ---------- ------- --------------- -------------------------------
Borrowings Amortised 3 Discounted Variable rate loan which
cost Cash Flow is interest bearing
at market rates. Carrying
value approximates to
fair value.
----------------- ---------- ------- --------------- -------------------------------
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS (Continued)
16. Financial Risk Management (continued)
Fair value of financial assets and financial liabilities (continued)
The following table shows the carrying values of financial assets and liabilities including their values in the fair value hierarchy. The table does not include fair value information for financial assets and liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
30 Jun Fair Value
2016
--------------------------- --------- ----------------------------
Carrying Level Level Level
Value 1 2 3
--------------------------- --------- -------- -------- --------
EUR'000 EUR'000 EUR'000 EUR'000
--------------------------- --------- -------- -------- --------
Financial Assets measured
at amortised cost
--------------------------- --------- -------- -------- --------
Loan assets 16,000 16,000
--------------------------- --------- -------- -------- --------
Other receivables 6,239
--------------------------- --------- -------- -------- --------
Cash and cash equivalents
- current 117,082
--------------------------- ---------
Restricted cash -
non current 27,000
--------------------------- ---------
166,321
--------------------------- ---------
Financial Liabilities
measured at amortised
cost
--------------------------- --------- -------- -------- --------
Trade and other payables 10,682
--------------------------- ---------
Borrowings 148,419 148,419
--------------------------- ---------
159,101
---------------------------
31 Dec Fair Value
2015
--------------------------- --------- ----------------------------
Carrying Level Level Level
Value 1 2 3
--------------------------- --------- -------- -------- --------
EUR'000 EUR'000 EUR'000 EUR'000
--------------------------- --------- -------- -------- --------
Financial Assets measured
at amortised cost
--------------------------- --------- -------- -------- --------
Loan assets 382,951 382,951
--------------------------- --------- -------- -------- --------
Other receivables 861
--------------------------- --------- -------- -------- --------
Cash and cash equivalents
- current 6,551
--------------------------- ---------
Restricted cash -
non current 27,000
--------------------------- ---------
417,363
--------------------------- ---------
Financial Liabilities
measured at amortised
cost
--------------------------- --------- -------- -------- --------
Trade and other payables 11,193
--------------------------- ---------
Borrowings 63,543 63,543
--------------------------- ---------
74,736
---------------------------
Financial Liabilities
measured at fair value
---------------------------
Derivative liability 514 514
--------------------------- ---------
514
--------------------------- ---------
CAIRN HOMES PLC
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS (Continued)
17. Commitments and contingent liabilities
In relation to the Group's Cherrywood site, on the grant of planning consent for that site, there is a conditional contract to acquire a directly adjoining lot at a cost of EUR9.2 million.
18. Events after the Reporting Period
On 16 August 2016, the Company issued 15,021,937 Ordinary Shares (through the conversion of 15,021,937 Founder Shares) to the Founder Group of Michael Stanley, Alan McIntosh and Kevin Stanley.
19. Approval of Financial Statements
These financial statements were approved by the Board on 24 August 2016.
Independent Review Report to Cairn Homes plc
Introduction
We have been engaged by the Company to review the condensed set of consolidated financial statements in the half-yearly financial report for the six months ended 30 June 2016 which comprises the condensed consolidated statement of comprehensive income, condensed consolidated statement of financial position, condensed consolidated statement of changes in equity, condensed consolidated statement of cash flows and the related explanatory notes. The financial reporting framework that has been applied in their preparation is International Financial Reporting Standards ("IFRS") as adopted by the EU. Our review was conducted in accordance with the Financial Reporting Council's ("FRC's") International Standard on Review Engagements ("ISRE") (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the half-yearly report for the six months ended 30 June 2016 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU, the TD Regulations and the Transparency Rules of the Central Bank of Ireland, and the Disclosure and Transparency Rules of the UK's Financial Conduct Authority.
Basis of our report, responsibilities and restriction on use
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the TD Regulations and the Transparency Rules of the Central Bank of Ireland, and the Disclosure and Transparency Rules of the UK's Financial Conduct Authority. As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRS as adopted by the EU. The directors are responsible for ensuring that the condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. Our responsibility is to express to the company a conclusion on the condensed set of consolidated financial statements in the half-yearly financial report based on our review.
We conducted our review in accordance with the Financial Reporting Council's International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
We read the other information contained in the half-yearly financial report to identify material inconsistencies with the information in the condensed set of consolidated financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the review. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Transparency (Directive 2004/109/EC) Regulations 2007 as amended ("the TD Regulations") and the Transparency Rules of the Central Bank of Ireland, and the Disclosure and Transparency Rules of the UK's Financial Conduct Authority. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
KPMG 24 August 2016
Chartered Accountants
1 Stokes Place
St. Stephen's Green
Dublin 2
CAIRN HOMES PLC
COMPANY INFORMATION
Directors Solicitors
John Reynolds (Non-Executive A&L Goodbody
Chairman)
Michael Stanley (Chief Executive IFSC
Officer)
Andrew Bernhardt (Non-Executive, North Wall Quay
British)
Gary Britton (Non-Executive) Dublin 1
Giles Davies (Non-Executive,
British)
Alan McIntosh (Executive, Eversheds
British)
Aidan O'Hogan (Non-Executive) One Earlsfort Centre
Eamonn O'Kennedy (Group Finance Earlsfort Terrace
Director)
Dublin 2
Secretary and Registered Pinsent Masons LLP
Office
7 Grand Canal 30 Crown Place
Grand Canal Street Earl Street
Lower
Dublin 2 London EC2A 4ES
Registrars Beauchamps
Computershare Investor Riverside
Services (Ireland) Limited Two
Herron House Sir John Rogerson's
Quay
Corrig Road Dublin 2
Sandyford Industrial
Estate
Dublin 18 Principal
Bankers
Allied Irish
Banks plc
Auditors Bankcentre
KPMG Ballsbridge
Chartered Accountants Dublin 4
1 Stokes Place
St. Stephens Bank of Ireland
Green
Dublin 2 87-89 Pembroke
Road
Ballsbridge
Website Dublin 4
www.cairnhomes.com
Ulster Bank Ireland
Limited
33 College Green
Dublin 2
This information is provided by RNS
The company news service from the London Stock Exchange
END
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