Q2 2026 Cairn Homes PLC Earnings Call

September 2, 2026

Operator: The Cairn Homes 2026 Interim Results Analyst and Investor Call, which will be hosted by Michael Stanley, Chief Executive Officer, and Richard Ball, Chief Financial Officer. After the presentation, there will be a moderated Q&A session where we welcome questions from anybody on the line. Participants can verbally ask questions by slowly pressing star 11 on your telephone. You will then hear an automated message advising your hand is raised. Please note that today's call is being recorded. I would now like to hand the conference over to your speaker today, Michael Stanley, Chief Executive Officer. Please go ahead.

Speaker #2: The Cairn Homes 2026 interim results analyst and investor call, which will be hosted by Michael Stanley, Chief Executive Officer, and Richard Ball, Chief Financial Officer.

Speaker #2: After the presentation, there will be a moderated Q&A session where we welcome questions from anybody on the line. Participants can verbally ask questions by slowly pressing star 1-1 on your telephone.

Speaker #2: You will then hear an automated message advising that your hand is raised. Please note that today's call is being recorded. I would now like to hand the conference over to your speaker today, Michael Stanley, Chief Executive Officer.

Speaker #2: Please go ahead.

Speaker #3: Thank you. Good morning, everybody. Thank you for joining us for our 2026 interim results and outlook. I'm delighted to be here with Richard Ball, our CFO, and Ava Malloy, our Head of Investor Relations.

Michael Stanley: Thank you. Good morning, everybody. Thank you for joining us for our 2026 interim results and outlook. I am delighted to be here with Richard Ball, our CFO, and Ailbhe Molloy, our Head of Investor Relations. We have spent over 10 years building Cairn Homes to our current position. The results today show the fruits of our investments and reflect the hard work and ambition of the Cairn team. We are delivering new homes more efficiently. We are better utilizing our own resources, and this is clearly reflected in today's upgraded order book guidance. H1 revenues have grown by 60% year on year, while operating expense growth was just 7%. In our presentation today, Richard and I will outline the reducing capital intensity of our business and how this will deliver strong cash flows and increasing returns for this year and beyond. Let us turn to our interim results.

Speaker #3: We've spent over 10 years building Cairn Homes to our current position. The results today show the fruits of our investment and reflect the hard work and ambition of the current team.

Speaker #3: We are delivering new homes more efficiently. We're better utilizing our own resources, and this is clearly reflected in today's upgraded auto-week guidance. K1 revenues have grown by 60% year-on-year, while operating expense growth was just 7%.

Speaker #3: In our presentation today, Richard and I will outline the reducing capital intensity of our business and how this will deliver strong cash flows and increasing returns for this year and beyond.

Speaker #3: So let's turn to our interim results. We'll start on slide 4, where we've highlighted some of our key trading KPIs. For the first half of 2026, revenue came in at $455 million, up 60% from H1 last year.

Michael Stanley: We will start on slide 4, where we have highlighted some of our key trading KPIs from the H1 of 2026. Revenue for the H1 came in at EUR 455 million, up 60% from H1 last year. 1,139 homes were sold, also circa 60% more than last year. We sold new homes to our widening range of customers across 19 developments in the urban and suburban areas of Dublin, the Greater Dublin area, Cork, and Galway City. Looking forward, our current order book has grown to over 5,000 new homes, an increase of over 900 units year on year with a value of nearly EUR 1.9 billion. We have very strong visibility for our future growth. Our ASP for the period, as you can see, remains stable at EUR 393,000, up just 1.6%. This is despite build cost inflation, which is currently running at about 2.5%.

Speaker #3: 1,139 homes were sold, also 60%—circa 60%—more than last year. We sold new homes to our widening range of customers across 19 developments.

Speaker #3: In the urban and suburban areas of Dublin, the Greater Dublin Area, Cork, and Galway City. Looking forward, our current order book has grown to over 5,000 new homes.

Speaker #3: An increase of over 900 units year-on-year, with a value of nearly $1.9 billion. We have very strong visibility for our future growth.

Speaker #3: Our AFP for the period, as you can see, remains stable at $393,000, up just 1.6%. This is despite bill cost inflation, which is currently running at about 2.5%.

Speaker #3: In an inflationary environment, we have controlled AFP growth while increasing sales and improving our operating profit by 75% to just under $75 million. Our operating margin for the first half grew to 16.4%.

Michael Stanley: In an inflationary environment, we have controlled ASP growth while increasing sales and improving our operating profit by 75% to just under EUR 75 million. Our operating margin for the H1 grew to 16.4%. Cairn is a trusted brand, and more home buyers are choosing our well-located, competitively priced homes. This is clearly evidenced in our weekly private sales rate of 3.7 new homes for active sales development. EPS was 9.3 cent, up 82% year on year, reflecting strong earnings growth and improved operational leverage. Moving to slide 5, which covers some additional financial highlights, shareholder returns, and our improved guidance for 2026. Net debt is reduced significantly year on year, falling from EUR 307 million to about EUR 194 million, and operating cash flow was EUR 22.4 million, which is an improvement of over EUR 140 million year on year. This is a material shift.

Speaker #3: Cairn is a trusted brand, and more home buyers are choosing our well-located, competitively priced homes. This is clearly evidenced in our weekly private sales rate of 3.7 new homes per active sales development.

Speaker #3: EPS was $9.30, up 82% year on year, reflecting strong earnings growth and improved operational leverage. Moving to slide 5, which covers some additional financial highlights, shareholder returns, and our improved guidance for 2026.

Speaker #3: Net debt has reduced significantly year on year, falling from $307 million to about $194 million. The operating cash flow was $22.4 million, which is an improvement of over $140 million year on year.

Speaker #3: This is a material shift. The increased net investments in WIP and land that we have made over the past number of years, particularly in 2025, are now unwinding as Cairn scales.

Michael Stanley: The increased net investments in WIP and land that we have made over the past number of years, particularly in 2025, is now unwinding as Cairn scales. I will talk to you later about our forward-looking land replacement strategy, including more detail on our increasing low cost strategic land bank and our improving WIP turn. Our net assets have grown by close to EUR 100 million to EUR 863 million. We are also today increasing our interim dividend by 10% to 4.5 cent per share, and we are announcing a new EUR 50 million share buyback program starting today. These both signal the strong cash generation and financial flexibility we have to reward our shareholders. As outlined on this slide, we are also today upgrading our full year 2026 guidance. Moving to slide 6 now on our sales pricing and product mix.

Speaker #3: Coach, I'll tell you later about our forward-looking land replacement strategy, including more detail on our increasingly low cost, our increasing low cost strategic land bank, and our improving WIP turn.

Speaker #3: Our net assets have grown by close to $100 million to $863 million. We are also today increasing our interim dividend by 10% to $4.50 per share.

Speaker #3: And we are announcing a new $50 million share buyback program starting today. These both signal the strong cash generation and financial flexibility we have to reward our shareholders.

Speaker #3: And, as outlined on this slide, we are also today upgrading our full-year 2026 guidance. Moving to slide 6 now, and our sales, pricing, and product mix.

Speaker #3: The table on the left clearly illustrates the consistency of our ASPs since 2024. While our house prices have grown by a little over 4%, our apartment and duplex pricing has remained flat.

Michael Stanley: The table on the left clearly illustrates the consistency of our ASPs since 2024. While our house prices have grown by a little over 4%, our apartment and duplex pricing has remained flat. We are now also delivering homes across a much broader land bank, with 30 selling sites in the full year 2026. As well as launching new phases of our existing large developments during the year, we are also bringing 13 brand new schemes to the market in 2026. Overall, the number of houses we are delivering is growing, and we will continue to do so over the next 12 months as we prioritize increased delivery of owner-occupier homes, the majority of which will be for our first-time buyers. Moving on to slide 7. We have outlined our growing realizable market. More buyers are choosing our homes, and our market share is increasing.

Speaker #3: We are now also delivering homes across a much broader land bank, with 30 selling sites in the full year 2026. As well as launching new phases of our existing large developments during the year, we are also bringing 13 brand new schemes to the market in 2026.

Speaker #3: Overall, the number of houses we are delivering is growing, and we will continue to do so over the next 12 months as we prioritize increased delivery of owner-occupier homes.

Speaker #3: The majority of which will be for our first-time buyers. Moving on to slide 7, we've outlined our growing realizable market. More buyers are choosing our homes, and our market share is increasing.

Speaker #3: We deliver industry-leading quality and affordability, with a growing brand affinity. We are unique in our delivery of large, well-located, mixed-tenure developments, situated near multimodal transport links.

Michael Stanley: We do deliver industry-leading quality and affordability with a growing brand affinity. We are unique in our delivery of large, well located, mixed tenure developments situated near multi-modal transport links. A wide range of unit typologies, together with the multiple tenures our homes are designed for, significantly broadens our realizable market. We are a committed partner of The Housing Agency in Ireland in making the recently introduced Croí Cónaithe city scheme a success. This is a targeted initiative which is unique to the Irish market, and along with recent VAT reductions on apartments and changes to design guidelines to improve density, this clearly illustrates the government's intent in ensuring that apartments play an increasingly important role in meeting future housing needs. Combined with this significant buyer support, our own low-cost apartment delivery model opens up the possibility of ownership in our cities to an expanding cohort of new customers.

Speaker #3: A wide range of unit typologies, together with the multiple tenures our homes are designed for, significantly broadens our realizable market. We are a committed partner of the housing agency in Ireland in making the recently introduced Creek Cone as CD scheme a success.

Speaker #3: This is a targeted initiative, which is unique to the Irish market. And along with recent VAT reductions on apartments and changes to design guidelines to improve density, this clearly illustrates the government's intent in ensuring that apartments play an increasingly important role in meeting future housing needs.

Speaker #3: Combined with this significant buyer support, our own low-cost apartment delivery model opens up the possibility of ownership in our cities to an expanding cohort of new customers.

Speaker #3: We've included some feedback in the center of the slide from one of our recent Creek Cone launches on the edge of Dublin City, and this highlights some of the benefits of apartment ownership in urban locations, including that 70% of our new apartment owners will be moving from private rental.

Michael Stanley: We have included some feedback in the center of the slide from one of our recent pre-corner launches on the edge of Dublin City. This highlights some of the benefits of apartment ownership in urban locations, including that 70% of our new apartment owners will be moving from private renting. 65% will take public transport to work, and 45% work in the center of Dublin City. On the right-hand side, we call out a very important underpin to realizable demand. Over the next five years, we are targeting that circa 60% of our owner-occupier's homes will be priced below the government price caps of the First Home Scheme and Help to Buy scheme. These two critical supports for our first-time buyers have been extended, and we will continue to ensure that the majority of the increasing number of starter homes we deliver will qualify. Slide 8 illustrates Ireland's strong economic performance.

Speaker #3: Sixty-five percent will take public transport to work, and forty-five percent work in the center of Dublin city. On the right-hand side, we call out a very important underpin to realizable demand.

Speaker #3: Over the next five years, we are targeting that approximately 60% of our owner-occupiers' homes will be priced below the government price caps of the First Home and Help to Buy schemes.

Speaker #3: These two critical supports for our first-time buyers have been extended, and we will continue to ensure that the majority of the increasing number of starter homes we deliver will qualify.

Speaker #3: Slide 8 illustrates Ireland's strong economic performance. The macro backdrop for housing is certainly supportive. As you know, Ireland is one of the fastest-growing economies in Europe over a multi-year period.

Michael Stanley: The macro backdrop for housing is certainly supportive. As you know, Ireland is one of the fastest-growing economies in Europe over a multi-year period. We have transitioned to a leader in housing delivery investment. Domestic economic indicators remain supportive. Demand continues to be underpinned by a strong economy, population growth, and changing demographics. Our government has the fiscal capacity to continue to invest in housing delivery into the future. They have committed EUR 36 billion in housing and investment infrastructure to 2030 alone. On a per capita basis, this level of investment is now the highest in Europe and approximately three times the EU-27 average. Employment, incomes, and mortgage availability continue to support housing need. Population growth and falling household size are also increasing long-term housing requirements, and these trends are informing our own design and delivery strategy.

Speaker #3: And we have transitioned to a leader in housing delivery investment. Domestic economic indicators remain supportive. Demand continues to be underpinned by a strong economy, population growth, and changing demographics.

Speaker #3: Our government has the fiscal capacity to continue to invest in housing delivery into the future. They have committed €36 billion to housing and infrastructure investment to 2030 alone.

Speaker #3: On a per capita basis, this level of investment is now the highest in Europe and approximately three times the EU27 average. Employment, incomes, and mortgage availability continue to support housing need.

Speaker #3: Population growth and falling household size are also increasing long-term housing requirements, and these trends are informing our own design and delivery strategy. Now, moving to slide 9, where Ireland's supportive policy environment is unlocking supply.

Michael Stanley: I now move to slide 9, where Ireland's supportive policy environment is unlocking supply. Key challenges remain, but there are clear signs that wider policy measures are beginning to address some of the key constraints on housing delivery. Planning reforms are helping reduce delays and improve certainty. As I mentioned earlier, policy and funding interventions are improving apartment activation rates, as you can see on the slide. Infrastructure investment is increasingly focused on unlocking housing delivery at scale. Over the past two years, government policy has evolved from planning-led housing policy to an increasingly infrastructure-led and aligned delivery model. Water, transport, energy, site servicing are now more widely recognized as prerequisites to achieving housing need. A really good example is illustrated on the map shown here on the right-hand side of the slide.

Speaker #3: Key challenges remain, but there are clear signs that wider policy measures are beginning to address some of the key constraints on housing delivery. Planning reforms are helping reduce delays and improve certainty.

Speaker #3: And as I mentioned earlier, policy and funding interventions are improving apartment activation rates, as you can see on the slide. Infrastructure investment is increasingly focused on unlocking housing delivery at scale.

Speaker #3: Over the past two years, government policy has evolved from planning-led housing policy to an increasingly infrastructure-led and aligned delivery model. Water, transport, energy, and site servicing are now more widely recognized as prerequisites to achieving housing need.

Speaker #3: A really good example is illustrated on the map shown here on the right-hand side of the slide. The Housing Activation Office, recently formed, allocated close to €1 billion of new infrastructure funding to speed up the activation of 86 large housing developments across Ireland.

Michael Stanley: The Housing Activation Office, recently formed, allocated close to EUR 1 billion of new infrastructure funding to speed up the activation of 86 large housing developments across Ireland. Seven of our own planned developments will benefit from this funding and speed up our own delivery timelines. On slide 10, we have outlined some of our current key sustainability highlights. We continue to be a leader in sustainable construction. Our commitment to sustainability is delivering clear results. Some highlights from H1 are outlined on the slide here. Nearly 5,500 people are now employed across Cairn sites. This is supported by a growing apprenticeship academy of nearly 350 active or qualified apprentices. We recognize the importance of a diverse workforce and continue to prioritize our own diversity. We are immensely proud of our talented team. It is important to us that when we deliver homes, we create thriving communities.

Speaker #3: Seven of our own planned developments will benefit from this funding and speed up our own delivery timelines. On slide 10, we've outlined some of our current key sustainability highlights.

Speaker #3: We continue to be a leader in sustainable construction. Our commitment to sustainability is delivering clear results. Some highlights from H1 are outlined on the slide here.

Speaker #3: Nearly 5,500 people are now employed across Cairn sites, and this is supported by a growing apprenticeship academy of nearly 350 active or qualified apprentices.

Speaker #3: We recognize the importance of a diverse workforce and continue to prioritize our own diversity. We are immensely proud of our talented team. It's important to us that, when we deliver homes, we create thriving communities.

Speaker #3: Our focus on placemaking is evident in our Homes Together and Cairn Community Games initiatives. Now we look at our continued investment in innovation on slide 11.

Michael Stanley: Our focus on place-making is evident in our Homes Together and Cairn Community Games initiatives. Now we look at our continued investment in innovation on slide 11. Our investment in innovation is centered on improving affordability and access to housing for our customers. Along with our design and supply chain partners, we work to understand our customers and markets and how they will evolve. On the right-hand side, you see a selection of images of our newly opened innovation hub and our training rig. Based in Seven Mills, our innovation hub provides a home for collaborative innovation, allowing us to harness our subcontractors and partners and their know-how, the knowledge within our growing Irish, UK, and expanding European supply chain, our design partners and professionals, and also to explore new ways to leverage AI and digital design technologies. Moving to slide 12.

Speaker #3: Our investment in innovation is centered on improving affordability and access to housing for our customers. Along with our design and supply chain partners, we work to understand our customers and markets, and how they will evolve.

Speaker #3: On the right-hand side, you see a selection of images of our newly opened innovation hub and our training rig. Based in Seven Mills, our innovation hub provides a home for collaborative innovation, allowing us to harness our subcontractors and partners and their know-how.

Speaker #3: The knowledge within our growing Irish, UK, and expanding European supply chain, our design partners and professionals, and also to explore new ways to leverage AI and digital design technologies.

Speaker #3: Moving to slide 12, I'd like to spend a little bit of time here as we illustrate how the capital intensity of our business is reducing.

Michael Stanley: I'd like to spend a little bit of time here as we illustrate how capital intensity of our business is reducing while still driving significant growth and ROE progression. We have built a differentiated land acquisition capability. We source large-scale sites, typically from 500 units in locations with enabling infrastructure. We have built relations with landowners who see us as a partner of choice. Today, we now own a land bank of 18,000 units across 38 sites. Most importantly, these are at an average plot cost of EUR 37,000. We have now added a capitalized strategic land bank of circa 2,750 units, and we have an additional strategic pipeline of 6,500 units. Our deal structures within this strategic pipeline have evolved and include low-cost land options, deferred considerations, contracts conditional on zoning and planning, and joint ventures.

Speaker #3: While still driving significant growth and/or progression, we have built a differentiated land acquisition capability. We source large-scale sites, typically around 500 units, in locations with enabling infrastructure.

Speaker #3: We've built relationships with landowners who see us as a partner of choice. Today, we own a land bank of 18,000 units across 38 sites.

Speaker #3: Most importantly, these are at an average plot cost of €37,000. We've now added a capital-lite strategic land bank of circa 2,750 units, and we have an additional strategic pipeline of 6,500 units.

Speaker #3: Our deal structures within this strategic pipeline have evolved and include low-cost land options, deferred considerations, contracts conditional on zoning and planning, and joint ventures.

Speaker #3: Our return is also improving, and with investment is partially recovered through forward funds as we build some of our larger apartment developments for our state partners.

Michael Stanley: Our WIP turn is also improving, and WIP investment is partially recovered through forward funds as we build some of our larger apartment developments for our state partners. Our brand scale and multi-year order book also de-risk our capital investment. All of this contributes to our unique ability to recycle and replace our invested capital at pace. The returns accretive growth that we are delivering is demonstrated today and our upgraded to full year 2026 ROE guidance of circa 17%. I am going to hand you over to Richie, who will bring you through our financials for the period.

Speaker #3: Our brand scale and multi-year order book also de-risk our capital investment. All of this contributes to our unique ability to recycle and replace our invested capital at pace.

Speaker #3: The return to creative growth that we are delivering is demonstrated today in our upgraded full-year '26 ROE guidance of circa 17%. I'm going to hand you over to Richie, who will bring you through our financials for the period.

Speaker #2: Thank you, Michael. And good morning, everyone. Our business today is in a strong financial position, and we have great confidence in our future. This underpins our increased guidance for 2026 and the increase in our interim dividend by 10% to 4.5 cents.

Richard Ball: Thank you, Michael, and good morning, everyone. Our business today is in a strong financial position, and we have great confidence in our future. This underpins our increased guidance for 2026, an increase in our interim dividend by 10% to 4.5 cents, and the announcement of a new EUR 50 million share buyback, which will commence today. As you can see on slide 14, we have delivered a record for a task with growth across every major earnings measure. Revenue increased 6% to EUR 455.5 million, driven by 1,139 closings, up 61% year on year. Gross profit rose 54% to EUR 96.9 million, with gross margin of 21.3%. We have built the platform to support a much larger business. With overheads up only 7% in H1, operating profit grew 75% to EUR 74.8 million. Operating margin increased to 16.4%, highlighting our operational leverage.

Speaker #2: And the enhancement of a new 50 million share buyback, which will commence today. As you can see on slide 14, we've delivered a record first half.

Speaker #2: With growth across every major earnings measure. Revenue increased 6%, to €1,139 million, with closings up 61% year on year. Gross profit rose 54% to €96.9 million, with a gross margin of 21.3%.

Speaker #2: We have built the platform to support a much larger business. With overheads of only 7% in H1, operating profit grew 75% to €74.8 million.

Speaker #2: And operating margin increased to 16.4%, highlighting our operational leverage. Profit after tax rose 84% to €58.4 million, driving an 82% increase in our earnings per share to 9.3 cent.

Richard Ball: Profit after tax rose 84% to EUR 58.4 million, driving an 82% increase in our earnings per share to 9.3 cents. Net asset value increased 13% to EUR 860.3 million, or EUR 1.37 per share. We also declared an interim dividend of 4.5 cent per share, which will be payable on 2 November. Moving to slide 15 and our revenue and sales performance KPIs. Our sales pipeline provides strong visibility over both near-term delivery and the recovery of capital invested and work in progress. The total closed and forward sales pipeline stands at 5,020 units, with net revenue of EUR 1.9 billion, up 23% year on year. Of these, 3,881 units worth EUR 1.44 billion in net revenue are in the order book for the remainder of 2026 through to 2028. That depth of demand is important as we scale output.

Speaker #2: Net asset value increased 13% to €860.3 million, or €1.37 per share. We also declared an interim dividend of 4.5 cent per share, which will be payable on the 2nd of November.

Speaker #2: Moving to slide 15 and our revenue and sales performance KPIs. Our sales pipeline provides strong visibility over both near-term delivery and the recovery of capital invested in work in progress.

Speaker #2: The total closed forward sales pipeline stands at 5,020 units, with net revenue of €1.9 billion, up 23% year on year. Of these, 3,881 units worth €1.44 billion in net revenue are in the order book for the remainder of 2026 through to 2028.

Speaker #2: That depth of demand is important as we scale output. Over the last 12 months, closing increased by €48 million to €483 million, while the value of forward sales increased by €174 million to €1.44 billion.

Richard Ball: Over the last 12 months, closing WIP increased EUR 48 million to EUR 483 million, while the value of forward sales increased EUR 174 million to EUR 1.44 billion, giving three times coverage. We have exceptional visibility. Our investment is supported by a strong and growing forward order book, giving us confidence in the timing and quality of future cash conversion. Next to our balance sheet on slide 16, the key point is that our balance sheet remains asset backed and is conservatively leveraged. At the 30th of June, land held for development was EUR 693.3 million, and construction work in progress was EUR 482.9 million. Net assets increased EUR 24 million to EUR 860.3 million as we continue to strengthen our equity base.

Speaker #2: Giving three times coverage, we have exceptional visibility. Our investment is supported by a strong and growing forward order book, giving us confidence in the timing and quality of future cash conversion.

Speaker #2: And next to our balance sheets on slide 16. The key point is that our balance sheet remains asset-backed and is conservatively leveraged. At the same time, it gives us the capacity to support our growth ambitions into 2027 and beyond.

Speaker #2: As of June 30th, land held for development was €693.3 million, and construction work in progress was €482.9 million. Net assets increased by €24 million to €860.3 million, as we continue to strengthen our equity base.

Speaker #2: At the end of H1, and given our strong H1 cash flow performance, debt to gross asset value was 18.6%, tracking below our year-end target of circa 20%.

Richard Ball: At the end of H1, and given our strong H1 cash flow performance, debt to gross asset value was 18.6%, tracking below our year-end target of circa 20%. We continue to have significant funding capacity, with EUR 500 million of committed debt facilities and no maturities until June 2029, following our recent EUR 42.5 million low note refinancing. Overall, the balance sheet gives us the capacity to fund disciplined growth while also allowing us to accelerate returning capital to shareholders. Moving to slide 17, this slide shows the investment in scale is translating to a stronger cash generation as expected. EBITDA increased 68% year on year to EUR 78.6 million. After a net EUR 69.1 million investment in work in progress, we generated EUR 22.4 million of operating cash flow in the first half. That compares with a net flow of EUR 118.6 million last year, an improvement of EUR 141 million.

Speaker #2: We continue to have significant funding capacity, with €500 million of committed debt facilities and no maturities until June 2029, following our recent €42.5 million low-note refinancing.

Speaker #2: Overall, the balance sheet gives us the capacity to fund disciplined growth, while also allowing us to accelerate returning capital to shareholders. Moving to slide 17, this slide shows that investment in scale is translating to stronger cash generation, as expected.

Speaker #2: EBITDA increased 68% year on year to €78.6 million. After a net €69.1 million investment in work in progress, we generated €22.4 million of operating cash flow in the first half.

Speaker #2: That compares with a net flow of €118.6 million last year, an improvement of €141 million. We returned €36.8 million to shareholders through dividends during the period.

Richard Ball: We returned EUR 36.8 million to shareholders through dividends during the period. Even after returning significant capital to shareholders, net debt reduced by EUR 112.9 million year on year to EUR 194.5 million, highlighting our improved capital efficiency. On slide 18, we outline how we deploy capital with a clear objective: Grow the business, preserve financial strength, and increase shareholder value. To fund our future growth, we are recycling our capital with greater efficiency. More than 90% of additional WIP spend is targeted to be recovered within 12 months, while our target recovery period for net land investment is three to four years. Our track record of value creation is clear. ROE has increased from 5.7% in FY 2021 to a targeted 17% in FY 2026, delivering returns that are roughly three times higher than FY 2021. We have a strong balance sheet that provides resilience.

Speaker #2: Even after returning significant capital to shareholders, net debt reduced by €112.9 million year-on-year to €194.5 million, highlighting our improved capital efficiency. On slide 18, we outline how we deploy capital with a clear objective.

Speaker #2: Grow the business, preserve financial strength, and increase shareholder value. To fund our future growth, we are recycling our capital with greater efficiency. More than 90% of additional WIP spend is targeted to be recovered within 12 months.

Speaker #2: While our target recovery period for net land investment is three to four years, our track record of value creation is clear. We have increased from 5.7% in FY21 to a targeted 17% in FY26.

Speaker #2: We are delivering returns that are roughly three times higher than in FY21. We have a strong balance sheet that provides resilience. We intend to maintain low leverage, with year-end debt to gross asset value of approximately 20%.

Richard Ball: We intend to maintain low leverage with year-end debt to gross asset value of approximately 20%. That is consistent with the 17.8% at the end of 2025. Lastly, we are returning surplus capital. We remain committed to progressive ordinary dividends, as evidenced by our 10% growth in our interim dividend announced today, supplemented by additional returns through share buybacks after funding growth. Our priorities are clear: Grow efficiently through disciplined capital allocation and operational leverage. Maintain resilience with a strong balance sheet and financial flexibility. Increase shareholder value through value creation and capital returns. I will now hand you back over to Michael to bring you through our raised guidance.

Speaker #2: That is consistent with the 17.8% at the end of 2025. Lastly, we are returning surplus capital. We remain committed to progressive ordinary dividends, as evidenced by our 10% growth in the interim dividend announced today, supplemented by additional returns through share buybacks after funding growth.

Speaker #2: Our priorities are clear: grow efficiently through disciplined capital allocation and operational leverage; maintain resilience with a strong balance sheet and financial flexibility; and increase shareholder value through value creation and capital returns.

Speaker #2: I will now hand you back over to Michael, who will take you through our raised guidance.

Speaker #1: Thank you, Richie.

Michael Stanley: Thank you, Richie. Let's finish up on slide 20 and talk about our outlook. Demand is real and sustained. Our platform is built to deliver whilst maintaining the quality and placemaking that we've earned a reputation for. We've great visibility through our record order book into 2028. We're investing in our platform, our people, our systems, our innovation, and our communities. We want to make ourselves even more efficient and drive long-term sustainable growth. We are generating increased cash flow, as Richie talked about, to fund this growth and reward shareholders simultaneously. We are strategically positioned in our market to service the housing needs Ireland faces. Finally, to wrap up, we are pleased today to be upgrading full year 2026 guidance on key financial metrics. Revenue to circa EUR 1.08 billion, operating profit to circa EUR 185 million, and ROE from 16.5% to 17%.

Speaker #3: Let's finish up on slide 20 and talk about our outlook. Demand is real and sustained. Our platform is built to deliver, while maintaining the quality and placemaking that we've earned a reputation for.

Speaker #3: We have great visibility through our record order book into 2028. We're investing in our platform, our people, our systems, our innovation, and our communities. And we want to make ourselves even more efficient.

Speaker #3: And drive long-term sustainable growth. We are generating increased cash flow, as Richie talked about, to fund this growth and reward shareholders simultaneously. And we are strategically positioned in our market to service the housing needs of our faces.

Speaker #3: And finally, to wrap up, we are pleased today to be upgrading full-year 2026 guidance on key financial metrics: revenue to circa €1.08 billion, operating profit to circa €185 million, and ROE from 16.5% to 17%.

Speaker #3: Thank you for your time today. I am now going to hand you back to Madelina for questions from people on the call. Thank you.

Michael Stanley: Thank you for your time today. I'm now going to hand you back to Madalina for questions from people on the call. Thank you.

Speaker #4: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced.

Operator: Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. One moment for our first question. This one comes from the line of Shane Carberry from Goodbody. Please go ahead.

Speaker #4: To withdraw your question, please press star 1 and then 1 again. One moment for our first question. This one comes from the line of Shane Carberry from Goodbody.

Speaker #4: Please go ahead.

Speaker #2: Thank you very much, and well done, guys, on what is a really great set of H1 results. Let me see if I may. All good.

Shane Carberry: Thank you very much, and well done, guys, on what a really great set of H1 results.

Michael Stanley: Hi, Shane. How's it going?

Shane Carberry: All good. Thanks, Michael.

Speaker #2: Thanks, Michael.

Speaker #3: Yeah, thank you. And Shane, before we start, I just want to say we're joined here today by our new Director of Finance and Treasury, Elena Brine.

Michael Stanley: Yeah. Thank you.

Shane Carberry: Two for me.

Michael Stanley: Shane, before we start, I just want to say we are joined here today by our new Director of Finance and Treasury, Elaine O'Brien, helping us out for the first time on our results. The great Declan Murray, who needs no introduction, told me yesterday this is his 21st results with Cairn. Welcome, Elaine and Dec.

Speaker #3: Help us out for the first time in our results, and the great Declan Murray—who needs no introduction—who told me yesterday this is his 21st results with Cairn.

Speaker #3: So, welcome, Elena and Dec. Thanks, Michael.

Elaine O'Brien: Thank you.

Richard Ball: Thanks, Michael.

Declan Murray: Thanks, Michael.

Speaker #2: Go ahead, Shane. Brilliant. Thanks, all. First question, I guess, just in terms of the capital allocation story, and slide 12 is really helpful in that facet.

Michael Stanley: Go ahead, Shane.

Shane Carberry: Brilliant. Thanks, all. First question, I guess, just in terms of the capital allocation story, and slide 12 is really helpful in that facet. Just, I guess, digging a bit deeper into capital allocation priorities from here. Obviously, there is this drive to reduce the capital intensity. How should we think about priorities in 2027 when I think about excess capital returns versus investment in the land bank? Is it more land bank investment being through these kind of capital light strategic land bank sort of models, is how I should be thinking about and that will help us frame the kind of capital allocation story for the business through the next 18 months or so? The second one, I guess, look, there is going to be a lot of policy discussion in the lead-up to the budget.

Speaker #2: Just, I guess, digging a bit deeper into kind of capital allocation priorities from here. Obviously, there's this drive to reduce the capital intensity. How should we think about priorities in 2027 when I think about excess capital returns versus investment in the Land Bank?

Speaker #2: Is it more Land Bank investment being made through these kind of capital life strategic Land Bank sort of models—is that how I should be thinking about it?

Speaker #2: And that'll help us frame the kind of capital allocation story for the business through the next 18 months or so. And then the second one, I guess—look, there's going to be a lot of policy discussion in the lead-up to the budgets.

Speaker #2: In particular, I wanted to dig a little bit deeper on Creek Ona. It seems to be working pretty well. Is it genuinely unlocking new apartment schemes that might not have otherwise been viable?

Shane Carberry: In particular, I wanted to dig a little bit deeper on Croí Cónaithe. It seems to be working pretty well. Is it genuinely unlocking new apartment schemes that might not have otherwise been viable? Do you think it becomes a bigger function of the market going forward?

Speaker #2: And do you think it becomes a bigger function of the market going forward?

Speaker #3: Yeah, I suppose. Starting there, it has to be. If you look at the government's target—it's sort of 50,000 units a year—to achieve that, we have to be delivering about 25,000 apartments a year.

Michael Stanley: Well, I suppose, starting there, it has to be. If you look at the government's target in the sort of 50,000 units a year, to achieve that, we have to be delivering about 25,000 apartments a year. We are kind of hovering around a run rate of between 9 and 12. So the number of apartments has to more than double over the next number of years, Shane. A lot of those apartments are for affordable rental, supported by increased delivery through the approved housing bodies, the Land Development Agency, and they have a very important role. But I think this government is really intent on increasing home ownership across the full spectrum of housing typologies, and particularly apartments. So Croí Cónaithe is unique to Ireland.

Speaker #3: We're kind of hovering around our own rate of between 9 and 12. So the number of apartments has to more than double over the next number of years, Shane.

Speaker #3: A lot of those apartments are for affordable rental, supported by increased delivery through the affordable housing associations and the Land Development Agency, and they have a very important role.

Speaker #3: But this government is really intent on increasing homeownership across the full spectrum of housing typologies, and particularly apartments. So, Creek Ona is unique to Ireland.

Michael Stanley: It is an incredibly impactful initiative, we believe, and it is working because it moves people from homes that they rent, apartments that they rent, often costing EUR 2,000 to EUR 2,500 per month. You will see some information in the appendix of our presentation today, which show that with support and at the price points we are delivering these apartments at, Shane, people can own apartments for as little as EUR 800, EUR 900 a month mortgage. So incredibly impactful. We are massively supportive of it. The scheme that we talked about in the customer feedback is the largest so far delivered under Croí Cónaithe. We are delivering well in excess of 200 units, actually in 7 mills. Our first launch of plan of those apartments, we had inquiries from over 4,000 people.

Speaker #3: It's an incredibly impactful initiative, we believe, and it is working because it moves people from homes that they rent to apartments that they rent, often costing 2 to 2 and a half thousand euros per month.

Speaker #3: And you'll see some information in the appendix of the of our presentation today, which show that with support and at the price points we're delivering these apartments at, Shane, people can own apartments for as little of as little as 8, 900 euros a month mortgage.

Speaker #3: So incredibly impactful. We're massively supportive of this. The scheme that we talked about and the customer feedback is the largest so far delivered under Creacon.

Speaker #3: We're delivering well in excess of 200 units, actually, in seven mills. And our first launch of plan of those apartments, we'd inquiries from over 4,000 people.

Speaker #3: So, young people in Ireland are really keen on this initiative, and they're really keen to live close to where they work and close to the city center.

Michael Stanley: Young people in Ireland are really keen on this initiative, and they are really keen to live close to where they work and close to city center. Rich, anything to add on the capital allocation piece around that sort of growth of our capital light strategy? It is just really for us, a central way for us to think about increasing our capacity and land bank.

Speaker #3: Rich, anything to add on the capital allocation piece around that sort of growth of our capital light strategy? It's just really, for us, an essential way to think about increasing our capacity in land bank.

Speaker #2: Yeah, I think. And obviously, look, as Shane would have known, our last announcement of a share buyback was actually back in 2024. And then we made a material net investment into our WIP in '25—about €167 million—which is obviously translating into a very strong cash generation profile for the business.

Richard Ball: Yeah, I think, and obviously, look, as Shane would have known, our last announcement of a share buyback was actually back in 2024, and then we made a material net investment into our WIP in 2025, about EUR 167 million, which is obviously translating into a very strong cash generation profile for the business. Combined with that, and obviously our reduced capital intensity, which is being driven by our land strategy and which we continue to focus on and which we have communicated consistently over the last 12 months, and also just that more efficient WIP turn. The big focus for us is our ROE returns and making sure that our capital investment decisions are accretive to returns to shareholders.

Speaker #2: Combined with that, and obviously our reduced capital intensity—which has been driven by our land strategy, which we continue to focus on and which we have communicated consistently over the last 12 months.

Speaker #2: And also just that more efficient whip turn. But the big focus for us is our ROE returns and making sure that our capital investment decisions are accretive to returns to shareholders.

Speaker #3: Yeah, yeah, the only thing I would add is, look, the land market is probably more active in the last six to twelve months than it’s been for a number of years.

Michael Stanley: Yeah. The only thing I would add is, look, the land market is probably more active in the last 6 to 12 months than it has been for a number of years. That is really positive. That is reflecting on the level of demand that is out there, and how smaller to mid-size builders are starting to expand and scale. That is really, really positive. All of our land is bought off market. Our ability to pivot to strategic land buying is because we are recognized as a very credible partner, and we are probably one of the few people that can go after those really larger sites in urban areas and on those multimodal transport links, and continue to drive value. But we are really happy with our position. Today is the time to have a large land bank, particularly at an average cost of EUR 37,000 per unit, Shane.

Speaker #3: That's really positive. That reflects the level of demand that's out there, and how smaller to midsize builders are starting to expand and scale.

Speaker #3: That's really, really positive. All of our land is bought off market. Our ability to pivot to strategic land buying is because we're recognized as a very credible partner, and we're probably one of the few people that can go after those really larger sites in urban areas and on those multimodal transport links.

Speaker #3: And continue to drive value, but we're really happy with our position. Today is the time to have a large land bank, particularly at an average cost of €37,000 per unit, Shane.

Speaker #2: Makes sense. Thanks, Michael. Thanks, Richard.

Shane Carberry: Makes sense. Thanks, Michael. Thanks, Richard.

Speaker #1: Thank you. We are now going to take our next question, and this one comes from Jonathan, Corporal from Dodge Nomis. Please go ahead.

Operator: Thank you. We are now going to take our next question. This one comes from Jonathan Coubrough from Deutsche Numis. Please go ahead.

Speaker #4: Thanks. Morning, Michael, Rich, Shane. I want to say welcome, Elaine, and it's great to have Declan on. Hope you're doing well.

Jonathan Coubrough: Thanks. Morning, Michael and Richard, and also welcome, Elaine, and it is great to have Declan on. Hope you are doing well.

Speaker #3: Morning, Johnny.

Michael Stanley: Morning, Jonny.

Jonathan Coubrough: First question from me would be a follow-up question on the land buying. You have told us today how your land sourcing is becoming much more capital efficient. How will working capital evolve as the land under option increases? When you think about your net debt target at 20% of GAV, would that change much if payables increased with your land options? The second question would be on the order book of over 5,000 units. Are there any large schemes within that to call out? Does that include units for delivery beyond 2027 at this stage?

Speaker #4: First question for me would be on the follow-up question on the land buying. And you've told us today how your land sourcing is becoming much more capital efficient.

Speaker #4: How will working capital evolve as the land under options increases? And when you think about your net debt target—20% of GAV—would that change much if payables increased with your land options?

Speaker #4: And then the second question would be on the order book at over 5,000 units. Are there any large schemes within that to call out?

Speaker #4: And does that include units for delivery beyond 2027 at this stage?

Speaker #3: On the order book? Yes, it certainly does, into 2028. Obviously, a smaller portion, Johnny. Rich, I'll pass over to you in a second. I suppose, how do we think about land and its relationship to our improving WIP turn, Johnny?

Michael Stanley: On the order book? Yeah, it certainly does into 2028. Obviously, a smaller portion, Jonny. Rich, I will pass over to you in a second. I suppose, how do we think about land and its relationship to our improving WIP turn, Jonny? I suppose put simply, obviously, if you look at Cairn historically, we have had a large wholly owned land bank. It is appropriate as we grow and scale and we become a bit bigger business that we evolve that strategy, and we find lower cost options and a lower cost to our land. It does not mean that we will not acquire sites directly, but more and more of the land will be bought using these mechanisms.

Speaker #3: I suppose, put simply, obviously, if you look at Cairn historically, we've had a large, wholly owned land bank. It's appropriate as we grow and scale.

Speaker #3: And as we've become a bit bigger business, we've evolved that strategy. We find lower-cost options and lower costs to run our land.

Speaker #3: It doesn't mean that we won't acquire sites directly, but more and more of the land will be bought using these mechanisms. And really, what that means is—and I referred to land often that might be bought subject to zoning or planning—the length of time the land spends on our balance sheet to the point at which we can monetize that land and deliver homes has significantly reduced.

Michael Stanley: Really what that means is, and I referred to land often that might be bought subject to zoning or planning, the length of time the land spends on our balance sheet to the point at which we can monetize that land and deliver homes has significantly reduced. So it is a higher WIP speed. It is a better WIP turn for most of our developments because we can de-risk them before we go on site. Also we can enter into joint venture opportunities with existing large landowners that might not want to sell their land, but might want to partner with a company that they trust, to deliver that project over multiple years. Particularly if they know that that land needs to be unlocked through the system.

Speaker #3: So it's a higher whip speed. It's a better whip turn for most of our developments because we can de-risk them before we go on site.

Speaker #3: And also, we can enter into joint venture opportunities with existing large landowners that might not want to sell their land, but might want to partner with a company that they trust to deliver that project over multiple years.

Speaker #3: Particularly if they know that land needs to be unlocked through the system. Cairn are probably recognized as a business that, over 11 years now, have built up the credibility and the relationships to help unlock land.

Michael Stanley: Cairn are probably recognized as a business that over 11 years now have built up the credibility and the relationships to help unlock land. Ireland is a complex market with 31 local authorities. We have a lot of different state entities. Our ability to be able to navigate those, Jonny, I suppose, is important, and I suppose aids that land strategy. On the WIP side also, we talked a little bit about forward funding. It is a massive benefit to our balance sheet, because what it means on a go-forward basis is a significant portion of our WIP is actually paid for on a monthly basis as we build out larger schemes. We will self-fund our own private sales for both houses and apartments, Johnny.

Speaker #3: Ireland's a complex market. We have 31 local authorities. We have a lot of different state entities. And our ability to be able to navigate those, Johnny, I suppose, is important.

Speaker #3: And I suppose it aids that land strategy. On the WIP side also, we talked a little bit about forward funding. So this is a massive benefit to our balance sheet, because what it means on a go-forward basis is a significant portion of our WIP is actually paid for on a monthly basis as we build out larger schemes.

Speaker #3: We will self-fund our own private sales—for both houses and apartments, Johnny. But a lot of the schemes that were on, for estate partners, for AHBs, and the Land Development Agency, and we're on numerous schemes, large apartment schemes.

Michael Stanley: A lot of the schemes that we are on for estate partners, for AHBs and the Land Development Agency, and we are on numerous schemes, large apartment schemes. Today, I think we are building on about 13 or 14 very large apartment developments, and a significant portion of them are funded monthly through a forward funding mechanism. In a lot of cases through that structure, Richie, we also sell down the site to the customer as well. So we are monetizing the land before we even commence construction on the site, and then our WIP is being paid on a monthly basis. Anything to add there, Rich?

Speaker #3: Today, I think we're building on about 13 or 14 very large apartment developments, and a significant portion of them are funded monthly through a forward funding mechanism.

Speaker #3: And in a lot of cases, through that structure, Richie, we also sell down the site to the customer as well. So we're monetizing the land before we even commence construction on the site.

Speaker #3: And then our WHIP is being paid on a monthly basis. Anything to add there, Rich?

Speaker #2: Yeah, just on your land creditors point, Johnny, obviously, look, as we outlined today, our debt to gross asset value is circa 20% for the year-end.

Richard Ball: Yeah. Just on your land creditors point, Johnny, obviously, look, as we outlined today, our debt to gross asset value of circa 20% for the year-end. A lot of those land transactions and those options arrangements that we have, there is obviously certain conditions in there which obviously can be triggered at different points of time with regard to zoning or planning. So yeah, within a period, there may be some additional land acquisitions. But we are really thinking about as we go forward in the next couple of years, we do not see the material net investment back into land that we would have seen over the last 20 to 24 months. I suppose that is the really important point.

Richard Ball: Yeah. Just on your land creditors point, Jonny, obviously, look, as we outlined today, our debt to gross asset value of circa 20% for the year-end. A lot of those land transactions and those options arrangements that we have, there is obviously certain conditions in there which obviously can be triggered at different points of time with regard to zoning or planning. So yeah, within a period, there may be some additional land acquisitions. But we are really thinking about as we go forward in the next couple of years, we do not see the material net investment back into land that we would have seen over the last 20 to 24 months. I suppose that is the really important point.

Speaker #2: A lot of those land transactions and those option arrangements that we have, there's obviously certain conditions in there, which can obviously be triggered at different points in time with regard to zoning or planning.

Speaker #2: So, yeah, within a period, there may be some additional land acquisitions, but as we go forward over the next couple of years, we don't see the material net investment back into land that we would have seen over the last 20 to 24 months.

Speaker #2: And I suppose that's the really important point.

Speaker #3: Yeah, and I suppose it's important to say, in a forward order book, we're not changing our approach to our private market. We only sell private homes that will be ready to occupy within the following three months, up to maybe a maximum of six months—but that's very rare.

Michael Stanley: Yeah. I suppose important to say in a forward order book, we are not changing our approach to our private market. We only sell private homes that will be ready to occupy within the following three, up to maybe a maximum of six months, but very rarely. So we are pleased to say, Johnny, that that forward order book will continue to grow as we work through the autumn selling season. We had a very successful weekend last weekend on a number of launches. It is great to see demand so strong, returning after a great summer. So our order book will continue to grow, and will grow with more of our kind of short term, or should I say near term private sales, between here and probably the end of October and into November.

Speaker #3: So we are pleased to say, Johnny, that the forward order book will continue to grow as we work through the autumn selling season. We had a very successful weekend last weekend with a number of launches.

Speaker #3: It's great to see demand so strong, returning after a great summer. So our order book will continue to grow, and we'll grow with more of our kind of short-term—or should I say near-term—private sales between here and probably the end of October and into November.

Speaker #4: Excellent. Thanks very much.

Jonathan Coubrough: Excellent. Thanks very much.

Speaker #3: Thanks, Johnny.

Michael Stanley: Thanks, Johnny.

Michael Stanley: Thanks, Jonny.

Speaker #1: Thank you. We are now going to take our next question, and this one comes from Colin Sheridan from Davy. Please go ahead.

Operator: Thank you. We are now going to take our next question. This one comes from Colin Sheridan from Davy. Please go ahead.

Speaker #4: Thank you, and good morning, guys. Congrats on the results. I have a couple left, if that’s all right. The first one, just on build costs, if that’s all right.

Colin Sheridan: Thank you, and morning, guys. Congrats on the results. I have a couple left, if that is all right. The first one just on build costs, if that is all right. Something that has been pretty benign given what is going on in energy markets certainly in the year to date, and again, you have reiterated what you said back in July. Maybe talk a little about whether there is any pressures out there in anything particular, anything that might be worrying you at this point in time. The second one, just following up on your comments on the land market, Michael, and clearly you are not playing as much in it, quite as much as you were maybe in the last couple of years.

Speaker #4: I mean, something that's been pretty benign, given what's going on in energy markets—certainly in the year to date. And again, you've reiterated what you said back in July.

Speaker #4: Maybe talk a little bit about whether there are any pressures out there, anything in particular, anything that might be worrying you at this point in time.

Speaker #4: The second one, just following up on your comments on the land market, Michael. I mean, clearly you're not playing in it quite as much as you were maybe in the last couple of years.

Speaker #4: But given your comments on how active the market is itself, pricing-wise, are you seeing anything that looks really attractive, or are there any areas of concern in terms of viability with the activity that's going on?

Colin Sheridan: But given your comments on how active the market is itself, pricing wise, are you seeing anything that looks really attractive or is there any kind of areas of concern there in terms of viability with the activity that is going on? Thanks.

Speaker #4: Thanks.

Speaker #3: Yeah, thanks, Colin. Yeah, look, the land market is more buoyant. Land is— and a very large portion of it is on-market, Colin, because I suppose landowners know that there is more buoyancy and there is more demand.

Michael Stanley: Yeah. Thanks, Colin. Yeah, look, the land market is more buoyant. A very large portion of it is on market, Colin, because I suppose landowners know that there is more buoyancy and there is more demand. Plot costs on average are probably certainly close to double what our existing land bank cost is. There is a lot of activity in land, but we buy off market. We do not need to replace at such a heavy rate because we have been working for a number of years now and talking about those kind of option deals and different ways to replace land more strategically, I suppose, Colin. What is our worry on build cost inflation?

Speaker #3: And plot costs on average are probably, certainly, close to double what our existing land line cost is. There is a lot of activity in land, but we buy off market.

Speaker #3: And we don't need to replace at such a heavy rate because we've been working for a number of years now, and talking about those kind of option deals and different ways to replace land more strategically, I suppose, Colin.

Speaker #3: What's our worry on build cost inflation? I suppose the longer it lasts, Colin, you probably worry a little bit that what our currently kind of more surcharges in the market, more temporary kind of relief and supports for our supply chain, turn into kind of more permanent increases.

Michael Stanley: I suppose the longer it lasts, Colin, you probably worry a little bit that what are currently kind of more surcharges in the market, more temporary kind of relief and supports for our supply chain turn into kind of more permanent increases. That is certainly a watch-out. So the longer this lasts, Colin, the more uncomfortable I get, I suppose, that some of those costs we are seeing become a little bit more sticky. We are an island economy, so transport costs hit us, and this is mainly a transport type crisis, more so than, let us say, a raw material problem. Frankly, you might remember natural gas really drove up energy costs and particularly manufacturing energy costs. It hit a lot of our materials much harder than this time around, and this is more of a transport cost challenge for us today. So look, we will keep an eye on that, Colin.

Speaker #3: That's certainly something to watch out for. So, the longer this lasts, Colin, the more uncomfortable it becomes, I guess. I suppose that some of those costs we're seeing become a little bit more sticky.

Speaker #3: We're an island economy, so transport costs hit us. And this is mainly a transport-type crisis, more so than, let's say, a raw material problem.

Speaker #3: You might remember natural gas really drove up energy costs, and particularly manufacturing energy costs. Here, a lot of our material is much harder than this time around.

Speaker #3: And this is more of a transport cost challenge for us today. So, look, we'll keep an eye on that, Colin. I mean, how is Cairn better protected today?

Michael Stanley: How is Cairn better protected today? We have probably doubled the amount of materials that we purchase in the last couple of years, Colin. We are sourcing an awful lot more from mainland Europe. That might be higher transport costs, but we can source much better, lower cost materials from Eastern Europe, for example. That is certainly supporting some of the numbers we have been able to come out with today. Yeah, I suppose, the growth, the scale of our business is just helping to mitigate some of that increase of 2.5% we are seeing in build cost, Richie?

Speaker #3: We've probably doubled the amount of materials that we purchase in the last couple of years, Colin. We're sourcing an awful lot more from mainland Europe.

Speaker #3: That might mean higher transport costs, but we can source much better, lower-cost materials from Eastern Europe, for example. And that's certainly supporting some of the numbers we've been able to come out with today.

Speaker #3: And yeah, I suppose the growth and the scale of our business is just helping to mitigate some of that increase of 2.5% we're seeing in build costs.

Speaker #3: Richie?

Speaker #2: Yeah, look, as you mentioned, Colin, we've been very consistent throughout the year with regard to build cost inflation. Obviously, in the last trading updates, we were calling it two and a half percent up to July.

Richard Ball: Yeah. Look, as you mentioned, Colin, we have been very consistent throughout the year with regard to build cost inflation. Obviously, last trading update, we are calling it at 2.5% up to July. But as we look forward, we are happy with that 2.5% for 2026. But obviously as we go forward into 2027, we are not as highly procured as we are for this year, where we are procured nearly 95% for 2026.

Speaker #2: But as we look forward, we're happy with that two and a half percent for '26. But obviously, as we go forward, into 2027, we've only we're not as highly procured as we are for this year where we're procured nearly 95% for '26.

Michael Stanley: About 50% procured for 2027.

Richard Ball: Yeah, for 2027.

Speaker #2: Yeah, 50%.

Speaker #4: That's great. Appreciate it, guys.

Colin Sheridan: That is great. Appreciate it, guys.

Speaker #3: Thanks, Colin.

Michael Stanley: Thanks, Colin.

Speaker #1: Thank you. We are now going to take our next question, and this one comes from Harry Goat from Berenberg. Please go ahead.

Operator: Thank you. We are now going to take our next question. This one comes from Harry Goat from Berenberg. Please go ahead.

Operator: Thank you. We are now going to take our next question. This one comes from Harry Goad from Berenberg. Please go ahead.

Harry Goat: Yeah. Hi, good morning. I have got a question, please, on the return on equity. Obviously, you talked about a new target of 17% today. Then I think just in some of the comments you made, you talked more around initiatives around further capital efficiency and bottom growth and some of the things we are doing in terms of land investment. Is it therefore fair to assume that if you look out over the medium term, that that number can move higher? Or do you feel the 17%, 17.5% is the steady state ROE for the business? Thanks.

Harry Goad: Yeah. Hi, good morning. I have got a question, please, on the return on equity. Obviously, you talked about a new target of 17% today. Then I think just in some of the comments you made, you talked more around initiatives around further capital efficiency and bottom growth and some of the things we are doing in terms of land investment. Is it therefore fair to assume that if you look out over the medium term, that that number can move higher? Or do you feel the 17%, 17.5% is the steady state ROE for the business? Thanks.

Speaker #5: Yeah, I did, morning. I've got a question, please, on the return on equity. And obviously, you talked about a new target of 17% today.

Speaker #5: And then, I think just in some of the comments you made, you talked more around some issues regarding further capital efficiency, volume growth, and some of the things we're doing in terms of land investments.

Speaker #5: Is it therefore sort of fair to assume that if you look out over the medium term, that that number can move higher? Or do you feel the sort of 17, 17 and a half percent is the sort of steady state ROE for the business?

Speaker #5: Thanks.

Michael Stanley: Look, we are really comfortable that our ROE rate is going to be stable. That 17% to 17.5% rate is a good reflection of how efficient we are. At this point in time, Richie, we are comfortable with that guidance.

Speaker #3: Look, we're really comfortable that our ROE rate is going to be stable. And that 17, 17 and a half percent rate is a good reflection of how efficient we are.

Speaker #3: And at this point in time, Richie, we're comfortable with that guidance.

Speaker #2: Yeah, obviously, look, as is what I've seen on the slide, Harry, about our track record and the growth in our ROE over the last number of years.

Richard Ball: Yeah, obviously, look, as you would have seen on the slide, Harry, about our track record and the growth in our ROE over the last number of years, we have obviously clearly called it out. Look, that is a very key performance measure for us. Probably back into what we are seeing even on any new transactions on the land side, that we are doing them on the terms that they are accretive to those returns. But I think the point is that upgrade today from that 16.5% to 17% for FY 2026.

Speaker #2: And we've obviously clearly called it out that that's a very key performance measure for us. And probably back into what we're seeing even on any new transactions on the land side, that we're doing them on the terms that they're accretive to those returns.

Speaker #2: But I think the point is that upgrade today from that 16 and a half 16 and a half percent to 17% for FY26.

Speaker #5: Okay, thank you.

Harry Goat: Okay. Thank you.

Harry Goad: Okay. Thank you.

Speaker #3: Thanks, Harry.

Michael Stanley: Thanks, Harry.

Speaker #1: Thank you. There are no further questions for today. I will now hand the call back to Michael Stanley for closing remarks.

Operator: Thank you. There are no further questions for today. I will now hand the call back to Michael Stanley for closing remarks.

Speaker #3: Thank you. Thank you all for joining us. We look forward to seeing many of you in person over the next week or so. And most importantly, thank you all for your continued support.

Michael Stanley: Thank you. Thank you all for joining us. We look forward to seeing many of you in person over the next week or so. Most importantly, thank you all for your continued support. Chat soon.

Speaker #3: Tchat soon.

Speaker #2: Thank you.

Richard Ball: Thank you.

Speaker #3: Bye-bye.

Michael Stanley: Bye.

Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

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Q2 2026 Cairn Homes PLC Earnings Call

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