Interim Results for the Six Months Ended 30 June 2021

Guidance Upgrade and Significant Increase in Order Book

Dublin / London, 09 September 2021: Cairn Homes plc ("Cairn", "the Company" or "the Group"), the leading Irish homebuilding company, announces its interim results for the six months ended 30 June 2021.

Commenting on the results, Michael Stanley, CEO, said:

"Cairn has never been better positioned to play a leading role in the recovery of the housing market in Ireland. We have grown our order book from €214 million in January to a current high for our business of €655 million and we will deliver 2,550 quality-built family homes between this year and next. We will continue to leverage our scale and capabilities to deliver competitively priced starter homes for first time buyers. As we report today, our average selling price for these starter homes has remained largely unchanged at €371,000, including VAT."

"We welcome the suite of plans and initiatives in the Government's Housing for All strategy. Cairn for its part will continue to provide a significant number of quality built new homes predominantly for prospective homeowners, but also for the rental market. In order for the Government's plan to have the best chance of success, it is essential that it is complemented by Central Bank rules on mortgage lending that are more appropriate to today's critical needs. A framework that remains prudent but gives thousands of prospective customers earning good salaries a greater opportunity to qualify for a mortgage is urgently needed for the tens of thousands of first-time buyers who remain trapped in the affordability gap."

H1 2021 Highlights

·    Cairn had a very strong H1 2021. The strategic initiatives implemented over the last 18 months enabled us to continue to bring new product to the market during this challenging time for the sector and satisfy the very strong demand witnessed across all buyer profiles.

·     We contracted to sell 832 new homes in the first half of this year in addition to our 403 sales completions (H1 2020: 207). 

·     Our closed and forward order book has now grown to 1,750 new homes as at 8 September 2021, a strong underpin for our target of 2,550 closed sales in the two years to 2022.

·     Our starter home average selling price, excluding VAT, in the period was very competitive at €327,000 (H1 2020: €323,000).

·     Cairn's gross margin has improved again to 18.5% (H1 2020: 16.1%). The impact of build cost inflation during the period was offset by sales pricing.

·     Our construction sites reopened fully on 12 April 2021 and Cairn is now back active on 17 developments with three new site commencements planned before the end of the year. Productivity is improving and we are now again supporting over 2,000 full-time positions across our business and supply chain. Our WIP investment has increased to €285 million supporting our continued growth plans.

·     The Board is recommencing our annual ordinary dividend programme and has declared an interim dividend of 2.66 cent per ordinary share to be paid on 8 October 2021.

·     We are making significant progress on our commitment to implement a sustainability framework and selecting disclosures to measure our sustainability strategy progress by year-end.

Outlook and Guidance Upgrade

·     2021 operating profit is now expected to be c. €52 million, increasing to c. €85 million in 2022. Our cumulative operating profit guidance for the two-year period to 2022 has increased by €17 million to c. €137 million since March 2021.

·      Our gross margin will continue to improve. We expect gross margin for the second half of 2021 to be c. 19.5% which would lead to a full year margin of c. 19.0% in 2021. The Company now expects our gross margin for 2022 to be just over 20.0%.

·      Cairn's closed and forward pipeline has never been stronger and is now valued at €655 million. This comprises of 1,750 new homes as at 8 September 2021, an increase in value of €95 million since 30 June 2021.

·     The Company is increasing our unit guidance for the two-year period to 2,550 new home completions. We now expect to close c. 1,100 new homes this year, increasing to 1,450 completions in 2022.

·       In excess of €165 million of operating cashflow[2] is also expected to be generated between this year and next.

Capital Discipline and Allocation Policy

·     Cairn will continue to invest in our future growth but still expects to generate €350 - €400 million in operating cashflow² between 2021 and 2023 which provides a strong platform for significant returns to shareholders through a combination of capital returns and accretive strategic investments. We expect to continue to generate significant free cash into the long-term.

·       Any capital allocated to future investments will be subject to a 15% target hurdle rate return on capital employed.  

·      The Board is reimplementing our long-term annual dividend programme and we expect annual dividends for 2021 and 2022 will be at a minimum level of €40 million each year and thereafter will be at a pay-out ratio of 40 - 50% of distributable profits. Dividends will be paid by way of interim and final dividends, commencing with today's declared interim dividend.

·    Surplus free cashflow after progressive ordinary dividends and investment opportunities is intended to be returned to shareholders through special dividends and/or share buybacks. 

For further information, contact:

Cairn Homes plc                                                                                                                                                   +353 1 696 4600

Michael Stanley, Chief Executive Officer

Shane Doherty, Chief Financial Officer

Ian Cahill, Head of Finance

Declan Murray, Head of Investor Relations

Drury Communications                                                                                                                                        +353 1 260 5000

Billy Murphy

Louise Walsh

Morwenna Rice                                                                         

An analyst and investor call will be hosted by Michael Stanley, CEO, and Shane Doherty, CFO, today 9 September 2021 at 8.30am (BST). Please use the numbers below, quoting the following access code: 090873:

Notes to Editors       

Cairn Homes plc ("Cairn") is the leading Irish homebuilder committed to building high-quality, competitively-priced, sustainable new homes in great locations. At Cairn, the homeowner is at the very centre of the design process and we strive to provide an unparalleled customer service throughout each stage of the home-buying journey. A new Cairn home is thoughtfully designed and built to last with a focus on creating shared spaces and environments where communities prosper. Cairn owns a c. 16,500 unit land bank across 35 residential development sites, over 90% of which are located in the Greater Dublin Area ("GDA") with excellent public transport and infrastructure links.

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, by the Listing Rules of Euronext Dublin or by the Listing Rules of the UK Listing Authority, to reflect new information, future events or otherwise.
 

CHIEF EXECUTIVE STATEMENT

IMPLEMENTATION OF STRATEGY

The Company's objective is to be the leading Irish homebuilder by building homes and creating places where people love to live. By using our low-cost landbank across our 35 housing and apartment sites as the foundation for a long-term homebuilding business, Cairn continues to maximise the significant opportunities which exist to capitalise on the pent-up demand across all tenures in the Irish new homes residential property market.

Cairn's historic approach to capital allocation, through a timely and well executed acquisition strategy in 2015 and 2016, a period representing a low point in land values in the last few decades, together with the successful scaling of our business has resulted in more than 4,900 customers choosing a new Cairn home to date. Our landbank comprises suburban and commuter belt low-density housing sites (c. 11,700 units at an average historic site cost of c. €30,000 per unit) and city centre, suburban and commuter belt high-density apartment sites (c. 4,800 units at an average historic site cost of c. €59,000 per unit).

The Government's recently announced "Housing For All" strategy has a target of delivering 300,000 new homes in Ireland by 2030, including 54,000 affordable homes. The plan recognises the important role the private sector will play in the delivery of this much needed social and affordable housing for the 375,000 households in Ireland earning between €50,000 and €80,000 who cannot access social housing and have limited access to mortgages. With Cairn's scale, capability and low cost landbank, we are working on a number of very innovative initiatives in this area. We are confident that we can deliver high quality new homes at great value for money with relevant affordable housing partners and stakeholders across our sites, all of which are located in our main urban centres where the greatest demand exists in areas of high employment.

Following the disruption caused to our business since March 2020, Cairn's operational focus is firmly set on scaling our business.  Our growth strategy will be delivered through a combination of:

·    Regional Expansion: we have extended our development footprint beyond the Greater Dublin Area with a recent site commencement in Cork which will be followed by further site commencements in Galway and Kilkenny in the next year;

·     The Strength of our Team: we are investing in our people and extending our capacity and capability. We have significantly expanded our team across all areas of our business, including key management appointments;

·   "Better Ways to Build": an initiative established to ensure our competitive advantage continues into the future. This initiative is focused on: driving further operational excellence and efficiencies; our innovation agenda; and fostering deeper partnerships across our stakeholder groups; and

·    Increasing Annual Volumes: with a target of 2,550 closed sales in the two year period to the end of 2022, we will be active on an average of 20 sites during this period.

This growth strategy will allow us to respond to demand quicker and importantly across all tenures of the market. Delivery of our strategy is supported by our established operating platform and the strong capabilities within our business. Our loyal and expanding supply chain is one of our main assets and we are further strengthening the depth and resilience of these relationships and partnerships through continual engagement and supportive financial and strategic initiatives, in tandem with leveraging our scale across our supply chain. Significant investment in our IT infrastructure and operational capabilities is also creating a more unified product delivery platform.

Our approach to customer-focused product innovation is now more important than ever as many people will view the family home as a place to both live and work in close proximity to recreational and other amenity facilities and this is informing our approach to design. With our approach to sustainability and this focus on innovation informing both our construction activities and our design-led approach, the foundations are laid for Cairn to be the leading homebuilder in Ireland into the long-term across our two key market segments: competitively priced, well located, A-rated starter homes on multi-modal transport links in areas of proven demand at prices where first time buyers can access mortgage finance; and well located, well-designed and quality built multifamily new homes where strong demand remains from domestic and international institutional investors who are seeking a stable, long-term exposure to the Irish residential sector.

The Company is committed to building homes and creating places that contribute positively to communities and society and minimise our impact on the environment. This is a key area of focus for our business, and we have made significant progress in formalising our Sustainability Agenda in recent times. Having completed our materiality assessment in 2020, we are currently implementing our sustainability framework which our non-financial disclosures (on which we will report annually) will be aligned to. A strong governance framework exists from our Steering Group, comprising board members and senior management, through to our Implementation Group and Working Groups ensuring layered operational governance and sustainability management. We will announce these non-financial disclosures later this year. Our entire business is fully committed to a sustainable future, and we are embedding this into both our day to day activities and the overall culture of Cairn.

FINANCIAL REVIEW

Our H1 2021 financial performance is reflective of a business that is moving on from COVID-19 related disruptions. H1 2021 revenues were €130.6 million (H1 2020: €80.9 million), including €130.4 million from 403 closed sales (H1 2020: €69.7 million from 207 closed sales). Our closed sales had an average selling price ("ASP") of €324,000 (H1 2020: €337,000). All ASPs exclude VAT. 

Gross profit for the period was €24.2 million (H1 2020: €13.0 million), equating to a gross margin of 18.5% (H1 2020: 16.1%). Despite a 13-week construction shutdown at the start of 2021, COVID-19 related costs have become less impactful as productivity and programme management becomes more efficient.

Operating profit of €11.7 million (H1 2020: €5.8 million) resulted in an operating margin of 8.9% (H1 2020: 7.1%), after operating expenses of €12.5 million (H1 2020: €7.3 million), including areas such as I.T., health & safety and business effectiveness as well as €0.3 million of unproductive labour in the period owing to site closures as a result of the COVID-19 pandemic. All of this reflects our disciplined approach to cost and cash management whilst investing in the future of the business.

Finance costs for the period reduced to €4.1 million (H1 2020: €4.5 million), reflected both a lower average cost of funds and lower drawings under committed debt facilities compared to the same period last year.

Profit after tax for the period was €6.4 million (H1 2020: €1.2 million), resulting in earnings per share of 0.85 cent (H1 2020: 0.16 cent).

Our well-capitalised balance sheet had inventories at 30 June 2021 of €961.2 million (31 December 2020: €968.2 million), comprised of land held for development of €676.2 million (31 December 2020: €690.3 million) and WIP of €285.0 million (31 December 2020: €277.8 million). Continued WIP investment underpins the construction of new homes predominantly relating to our strong forward order book, the continued evolution of our operational scale and is a continuation of the strategic decision taken in May 2020 to invest in our residential sites which would deliver sales volumes into 2022 and beyond. The reduction in land held for development represents the release of land held from our 403 sales completions and aligns with our ambition to monetise a significant portion of our landbank over time and reduce it to a more normalised level of c. 4 - 5 years' supply.

We generated €23.4 million of cash from operations in H1 2021 (H1 2020: cash used in operations of €66.8 million) as our landbank continues to unwind. Net debt of €149.4 million at 30 June 2021 (31 December 2020: €168.3 million) comprised of drawn debt of €183.2 million (net of unamortised arrangement fees and issue costs) (31 December 2020: €202.8 million) and available cash of €33.7 million (31 December 2020: €34.5 million).

The €18.9 million reduction in net debt was due to a number of factors, including land release associated with unit sales closings, and profitability for the period. Our total WIP spend in H1 2021 was €98.2 million (H1 2020: €105.0 million), reflecting the 13-week site shut down and our commitment to investing in sites which will deliver volumes and revenue into the future. We continued to invest heavily in the future of our business across recruitment, health and safety and IT.

Available liquidity (cash and undrawn facilities) of €193.7 million as at 30 June 2021 (31 December 2020: €174.5 million) leaves us very well placed to focus on the continued growth of our business.

OUR CUSTOMERS

Cairn delivered 403 closed sales in H1 2021 across 13 developments at an ASP of €324,000 comprising 167 houses at an ASP of €356,000 and 236 apartments at an ASP of €301,000 (H1 2020: 207 closed sales across 11 developments at an ASP of €337,000 comprising 206 houses at an ASP of €337,000 and 1 apartment at an ASP of €348,000). Our H1 2021 ASP across our starter home schemes was €327,000 (H1 2020: €323,000), starting at very competitive entry level price points from €285,000. Our product mix in H1 2021 was more heavily weighted towards high density apartments, including closing the final 182 apartments at The Quarter at Citywest (cumulative total of 282 apartments sold at an ASP of €294,000).

Our show homes reopened on 10 May 2021 in line with Irish Government and public health guidelines, with viewings on an appointment only basis. During the period our show homes were closed, we continued as scheduled with all planned launches through virtual sales launches to prospective purchasers.

The demand for new Cairn homes, across all price points from entry level starter homes to trade-up/down, has never been stronger. Enquiry lists across all our active selling sites remain at historic highs, with particularly strong interest in our commuter locations. Our virtual launches through our online sales platforms, including virtual reality tours, delivered some of the strongest sales rates ever recorded by our business. This momentum continued when we reverted to more traditional launches in mid-May and has continued into the early Autumn 2021 selling season.

Our year to date closed sales and current forward sales pipeline is 1,750 new homes as at 08 September 2021 with a net sales value of €655 million. The Company agreed or contracted to sell 832 new homes in the first six months of 2021 (in addition to 403 new homes completions), which is testament to the quality and price points of the new homes we are delivering across all buyer profiles and the level of demand which exists in the market for well-designed, high quality new homes.

The Company continued the phased delivery of contracted multifamily new homes at Shackleton Park and Gandon Park (Lucan - 229 new homes with the final 26 homes to be delivered in H2 2021) and completed the Quarter in Citywest (Dublin 24 - 282 apartments). Cairn has two other multifamily transactions contracted with phased delivery dates out to 2022.

The multifamily investment market recovered strongly in the first six months of 2021 with investment volumes of €1.5 billion some 25% higher than the full year output in 2020. Demand for purpose built, well-located multifamily developments remains strong from domestic and international institutional investors seeking long-term, stable income with low vacancy rates and voids in an economy driven by strong demographics and a lack of suitably built rental accommodation, particularly in the Greater Dublin Area. The stock of homes available to rent in Ireland was at a historic 15-year low of just 2,455 homes on 1 August 2021, some 74% below the 15-year average of 9,300 homes and national rental inflation in the year to June 2021 was 5.6% (source: Daft.ie Q2 Rental report, RTB). Prime yields remain at c. 3.75%. 

With a long-term landbank containing c. 4,800 apartment units and strong ongoing demand from domestic and international institutional investors for new, well-designed apartment blocks in city centre, suburban and commuter belt locations from established counterparties with proven delivery capability, the Company continues to see significant demand as a partner of choice from the multifamily sector for our well located apartment sites. With the location and price points of our apartment developments in established residential areas, demand for this product from the more traditional trade-down market also remains strong, while a number of our apartment developments are likely to be attractive as potential affordable rental opportunities.

PRODUCTION

Our residential construction sites reopened fully on 12 April 2021 in line with Irish Government and public health guidelines. For the duration of the second construction lockdown, which commenced on 8 January 2021, we were permitted to continue building out Part V units which were due for practical completion before 30 April 2021, completing new homes contracted to close before 31 January 2021 and proceed with utility connection works. This meant the majority of our sites remained partially operational during this period. As a business, our primary priority is operating and maintaining safe environments for our employees, subcontractors, suppliers, customers and the communities in which we live and work. We updated our "return to work" protocols when our sites reopened fully with safety protocols, procedures and work practices in adherence to social distancing requirements. As a business, we were able to get back to near full production capacity within a short space of time given the successful implementation of this new way of working by our employees and supply chain previously in 2020.

Cairn averaged in excess of 2,000 people (including direct employees, subcontractors and other sector professionals) working across our active sites on a daily basis while fully operational since April 2021 and to date we have had less than 20 positive Covid-19 cases, reflecting the effectiveness of our extensive and thorough work practices.

We continued to demonstrate our enduring commitment to our subcontractors and supply chain during this second construction lockdown through tangible and impactful initiatives to assist in maintaining their financial and operational integrity and resilience. We remain in constant engagement with our supply chain and provide assistance in critical cash flow management (in some instances by accelerating payment runs), maintain regular communication and have committed to future work pipelines and planned site commencements. Our collaborative approach and the value which our business model, growth agenda and long-term sustainable business offers has strengthened these critical relationships with our supply chain partners.

Cairn commenced construction on three sites in H1 2021: a new trade-up/down site at Mercer Vale (South Dublin), our first regional site at Castletreasure, Douglas (Cork) and the final phase of our successful starter home development at Shackleton Park (Lucan). Aligned to our growth strategy, our pre-construction development team continues to progress design team appointments, construction programmes and phasing plans across our future sites, with enabling works commencing on a number of these ahead of H2 2021 and H1 2022 site commencements.

Cairn has a current committed procurement order book of in excess of €350 million on active sites (orders placed and prices fixed on labour and materials) and our top 20 subcontractors account for 64% of all procurement since IPO (an average of €32 million each), working across an average of 12 developments each. Build cost inflation has averaged c. 3 - 4% for the last 12 months, however this is currently running at a higher level on certain commodities (5% +). The current environment has driven certain commodity prices to abnormal levels which we believe will be short-term in nature and our procurement function and scale is dealing with this on a case by case basis.

We obtained seven grants of planning permission in the year to date comprising  448 new homes. In addition, Cairn currently has a number of planning applications in the single-step Strategic Housing Development ("SHD") planning process and the fast-track Strategic Development Zone ("SDZ") planning processes.

PRODUCT INNOVATION

Two of the key pillars of our "Better Ways to Build" initiative are driving further operational excellence and efficiencies and our innovation agenda:

1.     Operational Excellence: continual focus on more efficient ways to build our new homes through the adoption of further off-site manufactured ("OSM") methodologies. A key focus area for our business is standardisation of delivery efficiency in procurement and operations where key new home components such as bathrooms, utility rooms, kitchens, service routing, ventilation systems, heating systems and balcony systems are all refined to be consistent across our projects. Separately, our innovative use of panelised light gauge steel structures in the delivery of smaller multi-unit blocks such as duplex units and apartments blocks of 3-4 storeys in height is being rolled out across more of our developments over the next year. We have invested heavily in our broader procurement strategy, leveraging our scale but also conscious of current challenges with commodity prices. Category and supplier relationship management within our supply chain is a key focus area which will deliver further resilience, improved collaboration and innovation within our dedicated procurement function.

2.   Innovation Agenda: customers now want a home where they can both live and work, in close proximity to recreational and other amenity facilities, through a hybrid work-life balance model of workplace and remote working. Our focus on customer-focused product innovation has intensified with a greater emphasis on the importance of delivering high quality residential accommodation with playgrounds, parks, greenways and other amenities in our developments. As a business we are investing heavily in our construction activities on our environmental agenda which we are pursuing through initiatives like our employment of engineered soil solutions. We believe that regulators and relevant local authorities, as key stakeholders in our industry, should adopt more environmentally friendly construction methods and innovations.

ECONOMY

With GDP growth of 5.9%, Ireland's 2020 economic performance outpaced that of all other EU countries (EU27, -6%), the US (-3.4%) and the UK (-9.8%) (source all: CSO, OECD). This growth has continued in 2021 despite the challenging backdrop with GDP growth of 10.7% in the year to Q1 2021 (source: CSO), demonstrating the strength of the Irish economy. At 23.3%, Ireland's two-year GDP growth to June 2021 is 25.3% above the EU 27 average of -2.0%.

For the period January to July 2021, VAT receipts of €9.7 billion were 28% ahead of the same period in 2020, reflecting a strong recovery in consumption, while income tax receipts at €14.3 billion were 17.9% ahead of 2020 (source all: Department of Finance). Unemployment stands at 12.4% (August 2021), down from 27.2% in January (source: CSO). This is expected to continue to fall as the re-opening of our economy gathers pace and as the Pandemic Unemployment Payment is tapered in line with the removal of restrictions.

Household savings increased by €13.6 billion in the year to June 2021, a 29% increase compared to the preceding 12 months (source: CBI). These "pandemic savings", equivalent to 11% of disposable incomes, will be one of the drivers for the domestic economy over the coming years.

The impact of these "pandemic savings" is evidenced in mortgage data. 18,716 mortgages (value €4.4 billion) were drawn down in H1 2021, an increase of 22% over H1 2020. First time buyers ("FTB") drawdowns were even stronger with 9,614 mortgages (value €2.2 billion) drawn, an increase of 25% over H1 2020. Mortgage approvals indicate the scale of pent up demand, with 13,796 FTB mortgages (value €3.4 billion) approved in H1 2021, an increase of 65% in volume compared to H1 2020. At €249,158, the average value for FTB mortgages approved in H1 2021 is 4.2% ahead of H1 2020 (source: all BPFI).

Annual housing demand of 33,000 new homes is forecast to 2040 in a high international migration scenario that would see our population growing to 6 million by 2040 from 5.01 million today (source: ESRI - Regional Demographics and Structural Housing Demand, December 2020). Demographics continue to underpin demand, with the Irish population increasing to 5.01 million in April 2021 (+ 0.7% YoY), the first time the Irish population has exceeded 5 million since 1851. There were 20,535 new homes built in Ireland in 2020 (-3% YoY).

House price inflation is running at 2.2% for new homes and 6.7% for second-hand homes in the year to June 2021 (source: CSO).

GOVERNMENT INITIATIVES

The Government's new "Housing For All" strategy was launched on 2 September 2021. This is a signature 10 year plan to increase new housing supply, support home ownership and increase affordability. With a target of delivering 300,000 new homes by 2030, the plan includes a number of encouraging targets including: completing 10,000 shared equity mortgage loans by 2025 (previously only one year funding approved); the provision of €4.5 billion additional funding for Irish Water to assist in accelerating and increasing housing delivery for this critical utility; and increased funding of €1 billion for the Land Development Agency (to €3.5 billion) to deliver 5,000 affordable homes on non-State land. Total capital funding of €20 billion (€4 billion a year) is committed for the next 5 years to finance this signature strategy.

The fast track SHD planning process will end on 25 February 2022 and will be replaced by the new Large Scale Residential Development ("LSRD") process for planning applications greater than 100 residential units or 200 student beds. The new LSRD process aims to incorporate some of the positives from the SHD process. Cairn has been part of the stakeholder consultation with the Department of Housing, Planning and Local Government in implementing the new process. With our continued industry leading track record in obtaining positive planning decisions through the SHD process, we are actively progressing all relevant remaining sites through the fast track route before its expiry in February 2022.

PRINCIPAL RISKS & UNCERTAINTIES

Following a comprehensive review of our risk management framework during 2020, we have improved our processes around identifying, assessing, mitigating and managing the risks facing the Company. Details of this review and the principal risks and uncertainties facing the Company can be found in the Risk Report included in our 2020 Annual Report. These risks, in particular policy, brand, economic, financial, development, compliance and people remain the most likely to affect Cairn in the second half of the current year, however as part of our continued forward-looking focus, we determined that climate change is now also an additional principal risk for Cairn. We are committed to identifying and proactively managing risks associated with climate change in ways that ensure Cairn can both continue to deliver on its mission and address the key impacts of climate change. Our approach to identifying and managing risk is active and progressive, with a focus on operational as well as strategic risk, current risk and the potential for future risks to our longer-term plans. We will continue to actively identify and assess internal and external factors that may change our risk profile throughout the remainder of the financial year.

OUTLOOK

The demand for new homes in Ireland is at its strongest level since we started business and with the Irish economy continuing to rebound and grow, we remain positive and ambitious for our future growth prospects.

CAIRN HOMES PLC

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE HALF-YEARLY FINANCIAL REPORT

For the six month period ended 30 June 2021

The Directors are responsible for preparing the half-yearly financial report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 ("the Transparency Directive"), and the Transparency Rules of the Central Bank of Ireland.

In preparing the condensed set of financial statements included within the half-yearly financial report, the Directors are required to:

-   prepare and present the condensed set of financial statements in accordance with IAS 34 Interim Financial Reporting as adopted by the EU, the Transparency Directive, and the Transparency Rules of the Central Bank of Ireland;

-     ensure the condensed set of financial statements has adequate disclosures;

-     select and apply appropriate accounting policies; and

-     make accounting estimates that are reasonable in the circumstances.

The Directors are responsible for designing, implementing and maintaining such internal controls as they determine are necessary to enable the preparation of the condensed set of financial statements that is free from material misstatement whether due to fraud or error.

We confirm that to the best of our knowledge:

(1)   the condensed set of consolidated financial statements included within the half-yearly financial report of Cairn Homes plc ("the Company") for the six months ended 30 June 2021 ("the interim financial information") which comprises the condensed consolidated statement of profit or loss and other 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, have been presented and prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU, the Transparency Directive, and the Transparency Rules of the Central Bank of Ireland.

(2)   The interim financial information presented, as required by the Transparency Directive, includes:

a.     an indication of important events that have occurred during the first 6 months of the financial year, and their impact on the condensed set of consolidated financial statements;

b.     a description of the principal risks and uncertainties for the remaining 6 months of the financial year;

c.     related party transactions that have taken place in the first 6 months of the current financial year and that have materially affected the financial position or the performance of the enterprise during that period; and

d.     any changes in the related party transactions described in the last annual report that could have a material effect on the financial position or performance of the enterprise in the first 6 months of the current financial year.

On behalf of the Board

Michael Stanley                                                                         Shane Doherty

Chief Executive Officer                                                             Chief Financial Officer