Housebuilder Abbey PLC (LON:ABBY) reported a 2.1% rise in pre-tax profit for the first half but shares fell as it said costs are rising and production continues to be hit by tight labour and materials markets.
In a trading update for the six months to October 31, Abbey said pre-tax profit increased to €23.93mln from €23.42mln a year ago as revenue rose to €110.7mln from €90.4mln. The housebuilding division completed 277 sales, including 239 in the UK, 19 in Ireland and 19 in Czechia with a turnover of €99.17mln. Rental income for the period amounted to €534,000. Last year the group sold 237 homes with a turnover of €79.65mln. Margins reduced in line with expectations as the cost of sales rose to €81.2mln from €62.9mln. Abbey also experienced some delays to production, which was hit by tight labour and materials markets.
Forward sales “continue to be encouraging” with projects aimed at first-time buyers “selling well”, the group said.
“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,” chairman Charles Gallagher said.
“The group will continue to progress all its activities but intends to be cautious about new investments in the months ahead.”
The company declared a special dividend of 100 cents per share and an ordinary dividend of 9 cents as it ended the period with €93.38mln in cash, up from €88.9mln last year.
Shares fell 1.5% to 1,270p.