Abbey drops as Ireland and Prague drag on profits

The property developer Abbey has reported profits up for the 12 months to the end of April but is warning margins will remain under pressure.

Profits before tax for the full year were €12.1m against €11.5m in the previous year. After a tax charge of €3.2m the group made a profit of €8.9m reflecting earnings per share of 39.94 cents.

Abbey's operating profits during the year were €9.1m against profits of €9.4m in the previous year. The result includes an impairment charge of €1.3m related to the difficult Irish market.

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The housebuilding business (turnover €57.8m) is doing reasonably well in the UK, completing 255 sales out of a group total of 310. The problems for the firm are in Ireland and the Czech Republic.

In Ireland, Abbey says it has managed to clear a lot of its inventory, amidst the devastation wrought by the property bubble collapsing. Land and work in progress now represent less than €5.4m.

The Czech Republic saw just 18 sales in the course of the year and is described as "struggling", with rising planning and legal costs pushing the operation there into a loss.

In both Ireland and Prague Abbey is being forced to rent some of its properties to generate cash flow.

In its outlook statement, Abbey says it expects: "significant growth in turnover in the UK" but this is "unlikely to be matched by a similar increase in profits as margins are traded to secure some sales growth."

The final dividend has been announced at 5 cents per share.

The downbeat update saw Abbey shares drop 1.6% by 10:15.

BS