Despite the disposal of 229 PRS units, we retain our FY estimates as the sales were already reflected in forecasts. It does, however, highlight the underlying attractiveness of Dublin as an investor market – this is Cairn’s 4 th PRS disposal, and Cairn’s 2 nd to Carysfort Capital. The stock trades on 1.3x price to book which implies 23% upside. We would further argue that the book value underrepresents the true asset value.
13 Jan 20
UK Housebuilding Sector: 2020 vision: Sharpness and clarity for industry prospects
For fighter pilots, it is a minimum requirement. But having 20/20 ‘visual acuity’ (correct term) does not necessarily mean you have perfect vision (as convention assumes); instead, it indicates sharpness and clarity of vision at a distance. It is measured by a Snellen Chart, which displays letters of progressively smaller size and whereby 20/20 means that the test subject sees the same line of letters at 20 feet that a person with normal vision sees at 20 feet (or 6 metres; but 6/6 simply didn’t catch on).
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08 Jan 20
Securing cash income and land
Cairn announced two deals yesterday; the phased disposal of 150 PRS units at Mariavilla, and the purchase of 97 acres of land adjacent to its existing 174 acre land bank at Clonburris. Although these deals should have no material impact on capital return plans, they should both serve to underpin the long term aim of returning surplus cash to shareholders considering the c10 year land bank has just been extended by c2 years. We retain our €1.60 target price.
29 Nov 19
Turning point reached
Having previously raised all the capital required to invest in its land bank, Cairn Homes has now passed a significant mile-stone; paying its first dividend, and, commencing a share buy-back. It is now expected that both of these features will repeat regularly, given the anticipated cash flows. Furthermore, the very long landbank implies a c5year land buying holiday further supporting cash flow. We raise our price target to €1.60 price target which implies 36% upside.
05 Nov 19
UK Housebuilding Sector in 3Q 2019: ‘And then there were 17’
Dame Agatha Christie (née Miller) published more than 80 books and plays; and the Guinness Book of World Records lists her as the best-selling novelist of all time with roughly two billion copies sold. ‘And then there were none’ was originally published in 1939, with an un-politically correct title; and it is still the world’s best-selling mystery (with more than 100 million sold). It is also number six on the list of best-selling books of all-time.
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07 Oct 19
First dividend and initial share buy-back
Cairn Homes hits a point of maturity with these results; trading is good and the land bank is long (c15 years), but in addition, it is announcing its inaugural and progressive biannual dividend payment, and embarking on a €25m share buy-back plan. We retain our buy rating and set a Target Price of 160€c.
12 Sep 19
UK Housebuilding Sector in 1Q 2019
Y2K is a numeronym and was the common abbreviation for the year 2000 software problem; and, for the benefit of millennial readers, the abbreviation combines the letter ‘Y’ for year and ‘K’ for the SI unit prefix kilo, meaning 1000. Hence, 2K signifies 2000.
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09 Apr 19
Small Cap Feast
Circassia Pharma (CIR.L) - specialty pharmaceutical company focused on respiratory disease transferring from the Main Market. No funds being raised. Due 4 Feb. Greenfields Petroleum (TSX-V:GNF) production focused company with operated assets in Azerbaijan seeking AIM dual listing including $60m private placement. Mkt cap $12.6m CAD. Expected late January 2019. Chaarat Gold Holdings—RTO, the Company intends to acquire Kapan Mining and Processing CJSC, which owns the Shahumyan medium-sized polymetallic mine in Kapan in the Republic of Armenia. No raise, market cap of £110.1m, due early Feb
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22 Jan 19
UK Housebuilding Sector
This ominous-sounding term originated from the work of famed Swedish meteorologist, Tor Bergeron (1897-1977), but it only entered popular vernacular this year – and there have been ample opportunities in 2018 to use it.
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09 Apr 18
Completions were 94 units in H1 and they expect to achieve at least 375 in the full year (WH forecast 400). A key to this story is executing on a plan to build 1200 units pa. These results are an important step towards this. Another key element to this story is the long and well bought land bank. With 10 years of land, they have at least 5 years of excess land. HPI in Dublin in the 12 months to June was 11.1%. With approximately E4.25bn on GDV 10% HPI would add E425m to GP (some of this will go into material and labour costs, and tax), compared to a NAV of E716m. We remain Buyers and the PT is under review as we factor in the positive impact of higher house prices.
05 Sep 17
Small Cap Breakfast
Warehouse REIT - The Company will invest in a diversified portfolio of UK warehouse assets located in urban areas. The Company is targeting a dividend yield of 5.5p equivalent to a yield of 5.5 percent. for the year ending 31 March 2019. Issue price 100p. Raising up to £150m. | OnTheMarket—Intention to float on AIM to raise c. £50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m. | Charter Court Financial Services Group—Intention to float. Specialist lender serving the UK residential mortgage market | ContourGlobal LP—Report on Bloomberg that the thermal energy power generator is considering a London listing. Part vendor sale and £20m primary raise. Hipgnosis Songs Fund investment Company offering pure-play exposure to Songs and associated musical intellectual property rights. Offer raising £200m at 100p. The Company has decided to extend the closing date for the Placing, Offer for Subscription and Intermediaries Offer to 1 August 2017. The Company may bring forward this closing date at any time. Admission 15 September 2017
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05 Sep 17
UK Housebuilding Sector: Q1 2017
Baron King of Lothbury, also known as Mervyn King former Governor of the Bank of England, is married to Barbara, a Finnish lady. She was his girlfriend in 1970 but distance and steam-driven telecoms conspired to keep them apart. Barbara went on to marry someone else and divorce - before being reunited with King in the late 1990s. They married in 2007 and King, who had never had children, was presented with two step-children and four grandchildren; and, in a Sunday Times interview, he quoted the Finnish apothegm “Grandchildren are the dessert of life”.
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10 Apr 17
Timing is Everything
Cairn Homes’ timing since its IPO in 2015 has been exemplary. It has deployed the c. €670.0m funds raised in building one of the largest land banks in the Greater Dublin Area at prices consistent with strong prospective margins. Having completed its capital deployment phase, it now embarks on a significant build programme. This coincides with the launch of the Irish Government’s Help to Buy scheme. Like the UK counterpart, we expect this to be of significant benefit to new home builders. As such, this launch reinforces our confidence in Cairn’s medium term prospects and prompts a 10.3% increase in our target price.
02 Nov 16
Cairn Homes’ interim results provide the company with a platform from which to outline its leading position within a well-supported and recovering Irish housing market. Continued development of the land resource and the nascent build programme will be a focus as will comment on the Government’s ambitious Housing Action Plan. Since the final results, the share price has marked time but has showed recent signs of recovery; momentum which the interims should reinforce.
24 Aug 16
Falling into Place
Cairn Homes is nearing the end of the initial stage of its development; acquiring a land holding sufficient for its long term aspirations. With this in place, it now turns to the build programme. We have moderated our near term expectations for this roll out to reflect management’s evolving strategy and the new Government’s housing initiatives. Cairn’s capabilities are maturing at a pace consistent with the recovery in the underlying Irish housing market which now looks to have significant Government support. While we have reduced our target price to reflect new short term forecasts, we remain buyers of the shares.
25 May 16
Clarity + Confidence = Upside
After a hectic 2015, Cairn Homes’ debut results as a listed company should provide investors with a positive update on its progress. Critically, this is likely to reveal more detail on its expected site openings and, therefore, the development towards optimal operating scale. Greater visibility on this basis and further evidence of a supportive Irish housing market should reinforce the investment case.
23 Feb 16