Built For Good
Cairn Homes plc | Annual Report 2023
At Cairn, it’s not what we build, it’s why we build.
It’s about putting down a marker that
will stand for generations to come.
Creating new communities of connection and
belonging for an Ireland where people can thrive.
Reshaping, redefining, reinvigorating our place in the world.
Building for people, progress, and potential.
Because when Cairn build, it’s
Built For Good
02
Cairn Homes plc | Annual Report 2023Cairn Homes plc | Annual Report 2023
Introduction
01
INTRODUCTION
03 2023 Highlights
04 Housing Supply in Ireland
06
STRATEGIC REPORT
08 Built For Good
10 At a Glance
12 Chairman’s Statement
14 Chief Executive Officer’s Statement
16 Market Overview
20 Business Model
22 Our Strategy
32 Chief Financial Officer’s Statement
34 Task Force on Climate-Related Financial Disclosures
40 Risk Report
51 Going Concern and Viability Statement
52
CORPORATE GOVERNANCE
54 Governance at a glance
55 Board of Directors
57 Senior Leadership Team
58 Corporate Governance Report
64 Audit & Risk Committee Report
68 Nomination Committee Report
74 Directors’ Remuneration Report
98 Directors’ Report
102
FINANCIAL STATEMENTS
104 Statement of Directors’ Responsibilities in Respect of
the Annual Report and the Financial Statements
105 Independent Auditor’s Report
112 Consolidated Statement of Profit or Loss and Other
Comprehensive Income
113 Consolidated Statement of Financial Position
115 Consolidated Statement of Changes in Equity
117 Consolidated Statement of Cash Flows
118 Notes to the Consolidated Financial Statements
155 Company Statement of Financial Position
157 Company Statement of Changes in Equity
159 Company Statement of Cash Flows
161 Notes to the Company Financial Statements
“Our commitment is
to build homes that
have been thoughtfully
designed, are sustainable
and in the best locations.”
JOHN REYNOLDS
CHAIRMAN
Our purpose is to
build sustainable
communities where
people can thrive.
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Cairn Homes plc | Annual Report 2023
2023 Financial Highlights 2023 Non-Financial Highlights
REVENUE
+8.0%
2023: €666.8m
2022: €617.4m
OPERATING PROFIT
+10.1%
2023: €113.4m
2022: €103.0m
NET DEBT
-€1.0m
2023: €148.3m
2022: €149.3m
BASIC EPS/DPS*
+1.2/0.2 cent
2023: 12.7c / 6.3c
2022: 11.5c / 6.1c
SALES COMPLETIONS
+14%
2023: 1,741
2022: 1,526
GROSS MARGIN
+40bps
2023: 22.1%
2022: 21.7%
GROSS PROFIT
+13.4 m
2023: €147.6m
2022: €134.2m
OPERATING MARGIN
+30bps
2023: 17.0%
2022: 16.7%
ROE**
+0.5%
2023: 11.3%
2022:10.8%
In 2023 we delivered our strongest ever financial and operational performance,
building a record number of new homes and confirming our position as a long-
term, sustainable and profitable business.
Our established operating platform allows us to deliver
at industry leading pace, scale and value for money.
* Earnings per Share (“EPS”) is defined as profit attributable to owners of the Company divided by the weighted average number of ordinary
shares for the period. Calculated as €85.4m / 673.8m shares (2022: €81.0m / 703.0m shares).
Dividend per Share (“DPS”) is defined as the sum of interim dividend paid plus final dividend proposed for a financial year. Calculated as 3.1 cent
interim dividend paid plus 3.2 cent final dividend proposed (2022: 3.0 cent interim dividend plus 3.1 cent final dividend).
** Return on Equity (“ROE”) is defined as profit after tax divided by total equity at year end. Calculated as €85.4m / €757.2m (2022: €81.0m / €751.8m)
Leading sustainably
Retained our CDP A- rating,
co-founded Ireland’s
Supply Chain Sustainability
School and committed to
Net Zero by 2050.
PLEASE REFER TO OUR
2023 SUSTAINABILITY
REPORT FOR FURTHER
INFORMATION
ON ALL OF THESE
INITIATIVES AND MORE
p23 and p30
A trusted partner
Continued our delivery of
Social & Affordable high
quality scaled apartment
developments to State
supported counterparties.
READ MORE
p22
Passive House
Commenced construction
at our first Passive House
598 apartment
development at Piper’s
Square, Charlestown.
READ MORE
p29
2023 Operational Highlights
Active sites in 2023
20
nationwide as we
continue to expand our
regional footprint
Record sales levels
throughout the year
2,800+
new homes sale agreed
Energy efficient
homes
1,741
A2 rated (Building Energy
Rating “BER”) sales
completions
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Cairn Homes plc | Annual Report 2023
Supporting
Ireland’s growing
economy
Ireland has one of the strongest
performing economies in Europe. This
economic success depends on
attracting the right workers to the right
places to meet employer demand.
Ireland’s continued competitiveness
depends on housing supply keeping
pace with demand, with 70% of Irish
CEOs identifying housing availability as
a challenge. The delivery of new housing
is critical to the continued growth of
the Irish economy.
A sector
with impact
Homebuilding has an economic
impact far beyond the new homes
built in a given year. The building and
construction sector employed over
160,000 people in 2023, an increase of
over 10,000 since 2019. As well as direct
employment the sector contributes to
education and upskilling through nearly
5,000 apprenticeships and spin-off jobs in
the communities it operates in.
READ MORE ONLINE
Housing Supply in Ireland
What does a
sustainable
residential
sector deliver
to Ireland?
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Supporting
decarbonisation
Ireland aims to achieve a 51% reduction in
greenhouse gas emissions by 2030, with
households responsible for more than 10%
of all emissions. All new homes in Ireland are
A2 energy rated achieving Nearly Zero Energy
Building (NZEB) standards. Efficient new homes
help reduce household emissions, emitting
70% less carbon dioxide than a home built
under 2005 standards. Please refer to page 14
of our 2023 Sustainability Report for further
detail on our decarbonisation roadmap.
Quality of life
A sector that delivers quality new
housing allows families and individuals
to put down roots and enjoy a high
quality of life. In Ireland, there has been
an 82% increase in 25-29 year olds living
with their parents since 2013 and many
current renters desire security of tenure
in their homes. By building higher
quality and secure-tenure homes,
homebuilders improve living standards
and wellbeing across Irish society.
Housing across
all tenures
Housing is a pressing need across all
areas of Irish society. In 2023, 36% of
private renters were at risk of poverty
after paying their housing costs.
A sustainable residential construction
sector is one that is able to work at
pace and scale with State supported
counterparties to deliver Social &
Affordable housing that meet
society’s needs.
161k
construction industry jobs in
Q4 2023
€11bn
construction industry Gross
Value Added (“GVA”) in 2023
32,695
new homes built in 2023
Sources: CSO.
IN NUMBERS
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Cairn Homes plc | Annual Report 2023
Cairn is a home and community builder, leading the
market in creating sustainable foundations upon
which Ireland can thrive. Our objective is to deliver
sustainable new homes to a broadening customer
base. This is done at industry leading pace and scale
whilst building communities that serve our country’s
present and future needs.
Strategic Report
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
PLACEMAKING, ARCHERS WOOD
A space that can attract people of all ages is a place where a
community can truly thrive. The public park in Archers Wood
is a superb example of this and has proven to be a great asset
to both residents and local visitors, integrating Archers Wood
into the wider community in a very short space of time.
STRATEGIC REPORT
08 Built For Good
10 At a Glance
12 Chairman’s Statement
14 Chief Executive Officer’s Statement
16 Market Overview
20 Business Model
22 Our Strategy
32 Chief Financial Officer’s Statement
34 Task Force on Climate-Related
Financial Disclosures
40 Risk Report
51 Going Concern and Viability Statement
08
Cairn Homes plc | Annual Report 2023
Built For Good
in action
At Cairn, it’s not about what we
build, it’s about why we build.
Protecting and enhancing natural habitats
Cairn is the industry leader in environmental and habitat protection
initiatives. Our Biodiversity Net Gain targets are tied to our remuneration
targets, a bold commitment and a first in the industry in Ireland. Our focus
on planting thousands of native trees and metres of hedgerows, wetland
protection, and bird, insect and mammal friendly design make the spaces
we create not just great for biodiversity but are also linked to quality of life
and health outcomes for people living in the location.
53,000
trees planted to date
Thriving communities of connection
Our dedication to community building will see us expand our focus from
a local level in 2023 to a national level in 2024, with the continuation of our
award-winning community building Home Together initiative and our
exciting partnership with the Community Games, a national organisation
that sees over 160,000 young people and 10,000 volunteers from 430
towns across Ireland participate.
Over €5 million
contributed to community projects to date
It’s about putting down a marker that will stand for generations
to come. Creating new communities of connection and
belonging, building towards an Ireland where everyone can
thrive. Our vision includes people, progress and prosperity
for all. Because when we build, it’s Built For Good.
Creating jobs and training a new generation
From primary schools through to transition year, mentoring programmes,
intern and graduate programmes, and our engagement with third level
institutions, we are inspiring and helping to develop the future of our
industry. 2023 saw us launch the Cairn Apprenticeship Academy and
become founding partners of the Sustainability Supply Chain School
demonstrating real leadership and commitment to the future of our
sector.
€10 million
will be invested over five years in our Apprentice Academy
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Building responsibly
We build safely, sustainably and responsibly. Health and safety is our
number one priority, recognised in 2023 with an AA Safe-T Cert Rating and
ISO 45001 Accreditation. Our health and safety team is supported by 38
mental health first aiders. Our long-term sustainability agenda and
rigorous measurement and reporting has resulted in us being awarded an
A- Rating from the Carbon Disclosure Project (“CDP”) again this year. We
have also integrated stringent responsible sourcing of materials into all of
our tendering processes, please refer to page 28 for further detail on our
Responsible Sourcing Approach.
Innovation that yields real results
Our unique end to end operating platform allows us to introduce and
pioneer significant innovations in construction methods and the use of
materials throughout the value chain. Integrated Building Information
Modeling (“BIM”) and shared technical libraries, offsite prefabrication and
modular manufacturing have yielded huge efficiencies and programmatic
gains. We are the first company in Ireland to use technologies such as soil
stabilisation and prefabricated modular party walls saving thousands of
tonnes of CO
2
emissions and providing significant programmatic gains.
A-
Carbon Disclosure Project rating in 2023
11.5 weeks
faster on apartment build programmes than large main contractors
(Source: Building Control Management System (“BCMS”) commencement
notices)
Infrastructure that unlocks great locations
Significant contribution to vital infrastructural projects – bridges, roads
and traffic improvements, cycle routes, schools, créches and parks across
all of our developments. These investments and partnerships not only
unlock delivery of thousands of new homes but also improve everyone’s
quality of life.
c. €20 million
contributed to date to infrastructural projects in Seven Mills
Find out more about the positive impact
we are proud to have on Irish society at
cairnhomes.com/our-impact
Total: 35 sites
High capacity public
transport routes
Coastal commuter train
Rapid city
train red line
Rapid city
train green line
Commuter rail
M1
N11
N81
N7
M50
M4
M3
M2
M50
Meath
Wicklow
Kildare
Dublin
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Cairn Homes plc | Annual Report 2023
Strategically
located and low
cost landbank
We have a landbank of c.16,300 units
(across 35 sites nationwide) located in
areas with excellent public transport
and infrastructure links, allowing
communities to thrive.
At a Glance
Our portfolio
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
2015 2016 2017 2018 2019 2020 2021 2022 2023
500
400
300
200
100
0
€’m # Units
25,000
20,000
15,000
10,000
5,000
0
SOME KEY DEVELOPMENTSLANDBANK
Sorrell Wood (Wicklow)
Situated in Blessington Demesne, this
development will provide 485 new
homes to first time buyers, with our first
phase of 94 new homes nearly complete.
Seven Mills (Dublin 22)
We received planning permission for the next
three phases of our 5,500 unit development,
during 2023, bringing the total number of
units with full planning permission to 1,894.
We expect to deliver over 250 new private
homes in 2024.
Charlestown (Dublin 11)
As our first Passive House development,
Piper’s Square will deliver 598 of the most
sustainable Social & Affordable apartments
in the Irish market. These ultra low and
efficient energy apartments will have a 55%
lower heat demand than nZEB compliant
apartments.
Archers Wood (Wicklow)
This mixed tenure development delivered
427 new homes set against a backdrop of 4.5
hectares of active open space with 3,000 sqm
of native wildflower meadows. This thriving
community highlights our success in building
places where people love to live.
Bayly (Cork)
Located in Douglas, one of Cork’s most
sought-after locations, this development will
deliver over 470 new homes by 2025. Bayly
exemplifies our environmentally responsible
building practices, featuring open play spaces
and landscaped parkland.
Nyne Park (Kilkenny)
We delivered 40 new homes in 2023 and
expect to welcome over 70 new families in
2024. As our first development in Kilkenny,
Nyne Park will deliver over 700 A2-rated new
homes, the majority of which qualify for the
First Home and Help to Buy schemes.
PLOT COST
Housing (c.11,500)
€24k
Average
€37k
Apartments (c.4,800)
€66k
Acquisitions in Period (€’m)
Cumulative Units Acquired
c.16,300 Unit Landbank – Balance Sheet Value €609m
Total landbank
c.16,300 units
In planning SDZ (effective full
planning permission)
Full planning
permission
Residentially
zoned
Subject
to zoning
21% 24% 39% 14% 2%
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Cairn Homes plc | Annual Report 2023Cairn Homes plc | Annual Report 2023
Chairman’s Statement
“Our commitment is to
build homes that are
thoughtfully designed
and Built for Good.”
JOHN REYNOLDS
CHAIRMAN OF THE BOARD
Year in Review
2023 has been another year of strong performance for
Cairn. Despite certain macroeconomic headwinds in
recent years, as well as continued cost of living
challenges and inflationary pressures, we have once
again exceeded expectations across key financial and
operational metrics. The strong operational and
financial performance of the business during 2023
demonstrates the strength and resilience of our
long-term operating model, balance sheet efficiency,
and the high calibre and experience of our
management team. Building on the positive outlook of
the Irish economy and supportive Government
housing policies designed to address housing
shortages across the country, the demand for our
homes has continued to grow, with a record forward
order book of 2,350 new homes as at 31 December
2023. With 1,741 sales completions, our revenue grew
to €666.8 million and our operating profit for the year
was €113.4 million.
Shareholder Returns
The Board maintains a disciplined approach to capital
allocation, balanced by an emphasis on reinvestment
as a means to grow our business and satisfy housing
demand. At the same time, supported by strong
financial performance, we remain focused on
providing reliable returns to our shareholders by
sustaining a progressive annual dividend, at between
40%-50% of profit after tax. In October 2023, we paid
an interim dividend of 3.1 cent per ordinary share. We
are proposing a final dividend for 2023 of 3.2 cent per
ordinary share, subject to shareholder approval at our
2024 AGM, resulting in a total proposed dividend of 6.3
cent per ordinary share, a 0.2 cent increase over 2022.
As part of the ongoing capital returns programme, we
also completed €42.7 million of our current €75 million
share buyback programme during 2023.
Built for Good
Our focus at Cairn is to build homes and communities
that will stand for generations and be a place where
people can thrive. The maturity and scale of our
end-to-end operating platform, our innovative and
sustainable construction model, and our in-house
expertise have allowed us to build homes that have
been thoughtfully designed, are sustainable and will
last long into the future.
As one of Ireland’s leading home and community
builders, Cairn has delivered over 7,500 high quality,
A-rated new homes in Ireland, with more than 20,000
people now living in a Cairn built neighbourhood. As
we continue to grow and evolve, we aspire to continue
to contribute to society and address the housing needs
of Ireland’s growing population. This purpose and
vision is strongly underpinned by a clear set of values
and a unique culture, which serve as the compass that
guides how we do business and interact with all
stakeholders.
Stakeholder Engagement
As a Board we recognise that in order to achieve our
purpose, we must consider the views of all our
stakeholders, supporting effective decision-making
and our ability to create value.
I am pleased to present the annual report for the year ended 31 December
2023. In addition to providing insights into our performance in 2023, this
report details how our business is positioned to continue our exciting
growth trajectory while maintaining the flexibility to respond to any
future challenges and deliver significant value for our shareholders.
13
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Our employees are what makes Cairn successful. Our
ambitious growth agenda is fundamentally
underpinned by their hard work and determination.
Orla O’Gorman, the Non-Executive Director
responsible for workforce engagement, continued to
provide a valuable channel for the Board to hear
employee views in 2023. Orla held regular meetings
with employees at all levels of the organisation, across
our sites and our central office and provided valuable
input into our deliberations regarding culture,
sustainability, our people strategy and insights against
the backdrop of cost-of-living challenges. Further
details on our employee engagement activities during
2023 are contained with the Nomination Committee
Report, on pages 68 to 73.
Since IPO, we have built a deep pool of trusted
subcontractors and suppliers. Each of our top 20
subcontractors have now worked across an average of
20 of our developments. These partnerships have
provided continuity and supported us in delivering
productivity improvements and efficiencies, while also
mitigating against build cost inflation. Over the past
year, we continued to roll out our approach to
responsible sourcing, initiated in 2022, with a view to
enhancing our suppliers’ approach to ethical, social and
environmental issues in tandem with our sustainability
objectives. The work of our employees and our
relationships with suppliers allows us to serve a
growing and diverse pool of customers. In line with our
purpose of building homes and long-lasting
communities, our commitment to customers does
not end at the point of sale. Our efforts to improve
their experience resulted in us engaging with our
customers as a community, through initiatives such as
“Home Together”, which has been expanded into a
three-year programme. We are extremely pleased by
the results of our community survey, with 85% of
participants reporting a high level of trust between
neighbours and an increased sense of belonging within
their communities.
Shareholder Engagement
The Board recognises the importance of constructive
dialogue with our investors, and we remain open to all
feedback, which forms material aspects of Board
discussions and deliberations. During the past year,
alongside the Remuneration Committee Chair, I met
with shareholders representing approximately 80% of
our shareholder register to discuss revisions to our
approach to the CEO’s remuneration framework.
Following extensive engagement with shareholders,
the final terms of the Stretch CEO LTIP were altered
substantively and approved at Cairn’s Extraordinary
General Meeting held in August 2023. As Chair, and as a
Board, we consider regular and meaningful
engagement with shareholders to be a cornerstone of
strong corporate governance. We will continue to
develop two-way channels of engagement and
communication to further foster mutual
understanding of expectations on strategy,
governance and other issues.
Board Governance
In October, we announced the CFO Shane Doherty’s
decision to step down from his role. On behalf of the
Board, I would like to thank Shane for all his hard work
and dedication to Cairn. During his tenure, Shane
played a pivotal role further enhancing the finance
function, cultivated and developed key relationships
with our stakeholders and further drove our
sustainability agenda to ensure it is integrated into
every aspect of the business. Shane will remain
available to the business to ensure a smooth transition
process to his successor. In February 2024, following an
extensive recruitment process Richard Ball was
appointed as the Company’s incoming CFO, joining in
April 2024.
In addition to the change in CFO, there will also be
certain changes to the Board’s Non-Executive
composition during 2024. As announced in January,
Alan McIntosh stepped down from the Board, having
served more than eight years, initially as an Executive
Director and then as a Non-Executive Director. Having
co-founded the business, throughout his tenure in
both roles, Alan played a pivotal role in the success of
Cairn and ensuring we are positioned strategically to
address our market demands. As disclosed at the same
time, Gary Britton informed the Board of his intention
to step down as a Non-Executive Director at the end of
2024, having served on the Board since IPO in 2015. We
will continue to rely on Gary’s expertise and experience
over the coming months until the end of his tenure.
Over the course of 2024, and as part of our continuous
review of Board composition and refreshment, we will
evaluate potential additions to the Board to ensure its
composition reflects the evolution of the business and
our strategy.
Further detail regarding the changes made to our
Board and Board Committees can be found in the
Nomination Committee Report, from page 68.
Sustainability and industry leadership
Our sustainability strategy is fundamentally aligned
with our purpose of developing a new, more
sustainable way to deliver housing in Ireland, towards a
future where everyone can thrive. In fulfilling that
purpose, we recognise the impact our activities have
on the environment, and we continue to take strides
to reduce our carbon footprint while enhancing the
biodiversity on our sites. We were proud to announce
that Cairn’s scope 1, 2 and 3 targets were validated by
the Science Based Target Initiative (“SBTi”) in 2023, a
significant milestone for the business. As part of those
commitments, we are proud to have commenced
construction of our first large scale Passive House
apartment scheme in Charlestown comprising 598
units, in addition to the commencement of our second
ultra-low energy Passive House apartment scheme at
Seven Mills, in 2024.
IN NUMBERS
6.3c
2023 full year dividend
(3.1c interim and 3.2c final proposed dividend)
€315m+
shareholder returns since 2019
Looking forward
While there continues to be a number of challenges
facing markets and economies the positive outlook for
the Irish economy and low unemployment levels
position Cairn to play a central role in continuing to
increase housing supply across Ireland.
We are excited to enter a new year as a stronger and
more ambitious Cairn. With the strong long-term
fundamentals of our industry and the shortage of high
quality, energy efficient and affordable homes across
the country, we are confident that we will continue to
achieve high levels of financial performance, while
retaining the flexibility to respond to market
opportunities as they emerge and play a key role in
addressing the challenges facing the housing market in
Ireland.
On behalf of the Board, I would like to thank our
colleagues, subcontractors and supply chain partners
for their continuous hard work and commitment
during the past year.
JOHN REYNOLDS
CHAIRMAN
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Cairn Homes plc | Annual Report 2023Cairn Homes plc | Annual Report 2023
Chief Executive Officer’s Statement
The true strength of our scaled operating platform
came to the fore in 2023, delivering significant growth
and record housing output. This impressive
performance reflects the continued reinvestment we
have made in our business, delivering growth across all
of our key operational and financial performance
metrics.
We are committed to delivering high-quality homes at
industry leading pace that will help to address Ireland’s
housing needs. We have a unique competitive
advantage with our low-cost landbank, scaled
operating platform, apartment delivery expertise and
forward order book which will continue to generate
value for shareholders that is aligned with positive
societal outcomes for Ireland.
2023 in Review
The continued successful execution of our strategy
was clearly demonstrated by our new home delivery
in 2023. We significantly increased our output, by 14%,
delivering 1,741 sales completions. We are proud to be
producing this volume of high quality, energy efficient
A-rated homes to our customers. Our exceptional
financial and operational performance, while operating
in a country with strong macroeconomic growth and
supportive Government housing policies, will allow us
to continue to invest and grow our business and
deliver much needed new homes into the future.
Importantly, our homebuilding output is faster than the
industry average. This construction efficiency, coupled
with our scaled operating platform and balance sheet
strength will allow us to continue to drive strong and
consistent margins at competitive price points. This
clear market advantage is also underpinned by the
2023 was a year where we firmly established our scaled platform which
is driving momentum into 2024.
“Our investment
in quality and
sustainability is
at the heart of
everything we do.”
MICHAEL STANLEY
CEO
15
Strategic Report Corporate Governance Financial Statements
Cairn Homes plc | Annual Report 2023
exceptional demand for our new homes, illustrated by
our forward order book and our attractive pricing.
A tangible example of this can be seen at Seven Mills,
which we commenced in January 2023 and which
represents our largest development to date. We will
invest over €2 billion in constructing this new town
over the coming years, delivering 5,500 sustainable
new homes, including high-quality houses,
apartments, and duplexes. Seven Mills will be delivered
to the highest sustainability standards and our
ambition is to deliver Ireland’s first Biodiversity Net
Gain town. This development, which is exceptionally
located, along with our other active developments and
pipeline, will support our growth, deliver on our
ambition of building communities that meet Ireland’s
present and future housing needs, and create
long-term value for shareholders.
Irish Economy & Market Backdrop
While many other European countries continue to face
headwinds, economic indicators for Ireland remain
positive, with our economy continuing to experience
growth. However, while the economy continues to
perform, there remains a chronic undersupply of
housing, which is failing to keep pace with our growing
population and high employment levels. Against the
backdrop of strong demand for new homes, Irish
household balance sheets are among the healthiest in
Europe and deposit levels continue to rise. Additionally,
the Irish government continues to correctly prioritise
new home supply across all tenures through Housing
for All and is investing €5 billion in capital funding in 2024
to meet its housing targets. We are proud to play an
increasingly influential role in tackling Ireland’s housing
crisis across all tenures. We are committed to working
constructively alongside all key stakeholders to ensure
that we continue to deliver new homes at pace, scale
and value for money across Ireland. Ireland’s economic
attractiveness remains linked to our ability to meet this
pent-up demand for housing. We are excited by the
opportunity to play a role in achieving those aims.
Sustainability – ‘Built for Good’
Our ambition is not just to build homes, it is to create
sustainable communities of the highest quality homes
delivered to the highest sustainability standards. To
achieve this, we have embedded sustainability
strategies and initiatives across our day-to-day
operations, ensuring that they are central to our
long-term growth strategy. We have made significant
progress across a number of our sustainability targets,
including reductions across our scope 1,2 and 3
emission targets, which were externally verified by the
SBTi during 2023. Decarbonising our value chain is a
core focus for our business and, together with our
stakeholders will support a reduction in our embodied
and operational carbon.
We also made significant progress on our
decarbonisation journey through building Passive
House apartment schemes, a transition which will
begin with our delivery of 598 new passive apartments
at our Piper’s Square development in Charlestown in
Dublin. Upon completion, it will be one of the most
sustainable scaled apartment developments ever built
in Ireland, materially reducing our scope 3 carbon
emissions, whilst also providing significant cost savings
for occupiers when it comes to energy bills, (c.€33,000
lifetime saving per apartment (undiscounted)). As we
continue to refine the technology, the benefits of
Passive House buildings will be rolled out across future
apartment schemes. To this end, the second phase of
our Seven Mills development will deliver 594 Passive
House standard apartments. This is a true example of
where sustainability, positive societal impact and value
creation are inextricably linked.
Our People
I am fortunate to work with so many great people at
Cairn. Our people are at the heart of everything we do,
and they are the key differentiator for our business,
with their diligence, hard work and dedication driving
our strong performance and growth. We are
committed to continuing to invest and develop our
people, ensuring that Cairn’s strong culture and values
remain central to how we operate, which will underpin
our future growth.
My co-founder Alan McIntosh made the decision to
step down as a Non-Executive Director in January
2024. Alan has played a pivotal role in creating and
supporting the development of one of Ireland’s leading
homebuilders. I want to extend my sincere thanks to
Alan for the support he has given to both Cairn and
myself over the last number of years.
I would also like to express my gratitude to our
outgoing CFO, Shane Doherty, for his contribution and
commitment over the last four years. Shane has played
an important role in our growth and success during his
tenure, helping position the business to deliver on the
next stage of our journey. On behalf of everyone at
Cairn, I wish Shane well in his future endeavours. I also
look forward to welcoming Richard Ball, who will join
the business in mid-April 2024 as CFO, having worked
in the property industry for almost 20 years.
Outlook for 2024
The outlook for our business is extremely positive.
Our established delivery platform will enable us to
continue to increase our annual volumes, generate
sustainable profits to support our continued growth
and allow us to make a significant contribution
towards Ireland’s housing needs into the future.
Having delivered 1,741 sales completions in 2023,
we will continue to leverage our mature platform and
established supply chain partnerships to grow our
output to c.2,200 sales completions in 2024, an expected
26% increase in delivery. We have consistently increased
our new home delivery at a faster pace than the wider
industry – our expected 26% growth in delivery in 2024,
compares to a Housing For All target growth of 15%.
Notwithstanding the delivery of 32,695 new home
completions in 2023, the highest since 2008, the Housing
Commission estimates that c.42,000 – 62,000 new home
completions per annum will be required in the long-term
to address the historical undersupply in the Irish housing
market. As one of Ireland’s largest homebuilders, we will
continue to play a leading role in driving new home
supply across Ireland over the coming years.
MICHAEL STANLEY
CEO
16
Cairn Homes plc | Annual Report 2023
Market Overview
Strong public finances
Ireland’s public finances remain in good health, with
record levels of tax collected in 2023. Income tax
receipts were €32.9 billion in the year (+7.1%), reflecting
both employment and wage growth in the economy,
with wages growing by 4.6% year on year in 2023.
Corporation tax receipts have also performed strongly
with an overall tax take of €23.8 billion (+5.3%). Ireland
is one of only two countries in the Euro Area projected
by the IMF to have recorded a Government surplus in
2023, with a further surplus expected in 2024. These
surpluses have allowed the Government to dedicate
over €4 billion to the new Future Ireland Fund and €2
billion to a separate infrastructure, climate and nature
fund. These funds will help to ensure that investment
in much needed infrastructure, including projects that
support housing can be maintained over the coming
years. (Source: CSO, Dept of Finance, IMF)
Modified Domestic Demand (“MDD”), an indicator
that best captures the performance of the domestic
Irish economy and excludes some of the effect
of multinational activity, grew in real terms by 0.5% in
2023. MDD is forecast by the ESRI to grow by 2.0% in
2024, ahead of the Euro Area average GDP growth of
0.8% forecast by the European Commission. (Source:
CSO, ESRI, AMECO)
The continued strong performance of the Irish
economy is reflected in a labour market that is close to
full employment. At the end of 2023, there were 2.71
million people in employment and unemployment
stood at 4.2%. This increase in employment, with an
additional 90,000 people in employment (+3.4% on
2022) reflects broad participation and opportunities
for work in the Irish economy (Source: CSO).
Ireland entered 2024 in a strong economic position, following a period of
sustained real growth in the domestic economy. This continued growth,
supported by record levels of employment and consumer spending, is set
to underpin sustained demand for housing which has been structurally
undersupplied for over a decade.
Solid economic
fundamentals
driving demand
17
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
2.5
1.0
1.5
0.5
0
2.0
Ireland
(MDD)
% growth
United
States
Euro
Area
United
Kingdom
2.8m
2.7m
2.6m
2.5m
2.4m
2.3m
2.2m
2.1m
2.0m
2018
Q4
2019
Q4
2020
Q4
2021
Q4
2022
Q4
2023
Q4
2.71m
People in employment
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
New homes needed
Housing
Comm.
(2023)
Dept. of
Housing
(2022)
ESRI
(2020)
2023
Completions
Economic backdrop
* m = million
(Source: CSO)(Source: European Commission, CBI, ERSI, IMF)
COMPLETIONS
32,695
New homes completed in 2023.
Up 10% on 2022. (Source: CSO)
COMMENCEMENTS
32,801
New homes commenced in 2023.
Up 21% on 2022. (Source: CSO)
APARTMENTS
11,642
New apartments completed in 2023.
Up 28% on 2022. (Source: CSO)
POPULATION GROWTH
97,600
Ireland’s population grew by 1.9% annually
between 2022 and 2023. (Source: CSO)
HELP TO BUY SCHEME
23,750
Applications for the Help to Buy Scheme.
(Source: Revenue)
FTB MORTGAGE APPROVALS
€8.8bn
Total FTB Mortgage Approvals in 2023.
Up 16% on 2022. (Source: BPFI)
RECORD EMPLOYMENT
2.71m
Number of people in employment in Q4 2023. The
highest level on record. (Source: CSO)
2024 FORECAST GROWTH RECORD EMPLOYMENT SUPPLY STILL BELOW FORECAST
ANNUAL STRUCTURAL DEMAND
HEALTHY PUBLIC FINANCES
€8.4 bn
Government Surplus forecast for 2024.
(Source: Dept. of Finance)
2024 FORECAST GROWTH
2.0%
The ESRI’s forecast for Modified Domestic Demand
(MDD) growth. (Source: ESRI)
Supportive demographics
After Census 2022 recorded the highest population in over
170 years, Ireland’s population reached 5.28 million in
2023, driven by net inward migration of nearly 80,000
people, the highest level in 15 years. Ireland had the
second youngest population in the EU in 2022 with a
median age of 38.8. Our demographics underpin the
strong structural demand for housing in Ireland which will
continue into the future. (Source: CSO, Eurostat)
32,695 new homes were completed in Ireland in 2023, a
10% increase on 2022, reflective of strong demand and a
supportive policy environment. The Housing Commission,
established under the Programme for Government,
believes Ireland requires between 42,000 and 62,000 new
homes every year until 2050 to meet the structural
demand for housing, necessitated by population growth
and inward migration. (Source: CSO)
FTBs driving mortgage demand
The European Central Bank’s main refinancing rate rose by
200 basis points in 2023 to a record high of 4.5%. As a result,
the average interest rate on new mortgages increased to
4.19% in December 2023 from 2.76% in December 2022.
Despite this, mortgage demand amongst first-time buyers
(“FTBs”) remained very strong in 2023, with 8,606 FTB
mortgage drawdowns for new homes in 2023, valued at
€2.7 billion, up 4% in volume and 12.8% in value year-on-
year. Green mortgages allow buyers of new homes to offset
some of these recent interest rate increases. Discounts of
over 100 basis points are available for new homes with a
Building Energy Rating (“BER”) of B2 or higher, for which all
new Cairn starter homes are eligible. FTBs were also helped
by the relaxation of the Central Bank of Ireland’s
Macroprudential Rules (“MPRs”) in January 2023, which
now allow this cohort to borrow up to 4 times their annual
single or combined income. Ireland’s retail banks remain in a
healthy position to meet this demand for mortgages, with
the two largest banks both having Core Tier 1 capital ratios
of over 14%. (Source: Central Bank of Ireland, BPFI).
Irish households retained their healthy balance sheets
into 2024. Household deposits stood at €153 billion at
the end of 2023, having grown by €42 billion since 2019,
over €4 billion of which was added during 2023.
(Source: Central Bank of Ireland)
18
Cairn Homes plc | Annual Report 2023
18
50,000
40,000
30,000
20,000
10,000
0
53% Growth
Target
2023 – 2030
32,695
c.50,000
Market Overview continued
Supportive environment for increased housing output
New home completions
New and enhanced policy supports for
delivering new homes
As one of the main political and societal priorities for
the Irish Government over the years, the lack of
housing has been identified as a key risk to Ireland’s
economic success. In 2023, the Government
announced a number of new initiatives to support the
delivery of new homes under the flagship Housing for
All plan, adding €1 billion in capital funding to the €4
billion that had already been committed for 2023. This
reflects the scale of the Government investment and
reform needed to deliver on Ireland’s housing need
across all tenures, with a target of delivering nearly
10,000 social and 6,000 affordable new homes
annually to 2030. (Source: Department of Housing,
Local Government and Heritage)
2018 2019 2020 2021 2022 2023
2024
Target
2030
Structural
Demand
State
Capital
Funding
€1.9bn €2.3bn €2.6bn €3.1bn €4.1bn €5.0bn €5.1bn
Govt surpluses
of €38bn forecast
2024 to 2026
Initiatives
Introduced
LDA Established,
first full year
of HTB Relief
HBFI
launches
HTB Relief
Enhanced
Housing for All
launched,
CREL announced
First Home Scheme,
Croí Cónaithe
Levy Rebates,
Cost Rental supports
Planning Bill,
NPF Review,
Project Tosaigh II
Initiatives to
support delivery
across all tenures
19
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Ambitious Housing for All targets to 2030
2024 CAPITAL BUDGET
€5.0bn
SOCIAL AND AFFORDABLE
HOMES DELIVERED BY 2030
144,000
STATE FUNDING UNDER
COST RENTAL EQUITY LOAN
55%
HOUSING COMMISSION ANNUAL
HOUSING DEMAND ESTIMATE
42-62k
First Home shared equity scheme
One of the key pillars of Housing for All’s support for
home-ownership in the private market is the First
Home scheme, which launched in July 2022 and
continued to ramp up during 2023. There has been
significant interest to date in the scheme, with nearly
3,200 approvals and 1,255 drawdowns since it began.
The State takes an equity share of up to 30% in new
homes (or 20% with Help to Buy) in order to help FTBs
bridge the gap between their deposit and the price of a
new home. The regional price caps for this scheme
increased by €25,000 on 1 January 2023, to a
maximum of €475,000 in Dublin. Further increases in
the price caps were also announced during 2023, with a
€50,000 increase for Meath bringing the cap to
€425,000 from July and a €25,000 increase for Galway,
Limerick, Clare, Laois and Waterford taking effect in
January 2024. (Source: First Home Scheme)
Help to Buy
The Help to Buy (“HTB”) scheme is a further incentive
for FTBs looking to buy their first home. The scheme
allows first time buyers to claim an income tax rebate
of up to €30,000 for the purchase of a new eligible
home costing less than €500,000. Budget 2024
confirmed that HTB will continue until the end of 2025
at its current level. A record 23,750 Help to Buy
applications were submitted in 2023, up 30% on 2022
– reflecting strong demand among FTBs and the
importance of these support schemes. (Source:
Revenue)
Development levy waiver scheme
Levies paid by developers to Local Authorities (average
c. €10,000 per new home) and connection fees paid to
Ireland’s water utility provider, Uisce Éireann (c. €5,000)
have been temporarily waived. This scheme, is open to
units commenced between 24 April 2023 and
completed by 31 December 2025.
Supporting cost rental development
The Government announced two new schemes to
support the development of new cost-rental units
during 2023. State funding under the Cost-Rental
Equity Loan (“CREL”) scheme has been increased from
45% to a maximum of 55% of the cost of units acquired
by approved housing bodies (“AHBs”) for affordable
rental. Under ‘Accelerated CREL’ AHBs are enabled to
drawdown funds ahead of completion to support the
forward-funding of projects. The €750 million Secure
Tenancy Affordable Rental (“STAR”) scheme aims to
deliver 4,000 cost rental units in high demand urban
areas. Under this scheme, private developers together
with AHBs can apply to provide cost-rental homes,
with the State making an equity investment of up to
€200,000 per new home, provided they retain a
cost-rental status for 50 years.
Planning reform
The Government approved the new Planning and
Development Bill which aims to make the Irish
planning system clearer and more efficient to ensure
that housing and infrastructure can be more easily
delivered. Cairn supports the need for a more effective
planning system, however it is not anticipated that this
legislation will impact planning decisions before 2025
and questions remain about the overall impact of the
legislation.
As well as reform of planning legislation, the
Government is undertaking a review of the National
Planning Framework (“NPF”), the overarching policy
document that directs spatial planning in Ireland. This
review will take into account new evidence, including
the results of Census 2022 in shaping forecasts of
structural housing demand that feed into local
authorities’ housing delivery targets. This will help
ensure that the planning system properly reflects the
reality of Ireland’s long-term structural housing need.
Cairn will engage with the NPF Review consultation in
the coming months, to help ensure that the plans
facilitate homebuilders to meet Ireland’s housing need
over the coming years.
Record Help to Buy applications
25,000
20,000
15,000
10,000
5,000
0
202320222021202020192018
# of applications
Surge in First Home shared equity drawdowns
600
500
400
300
200
100
0
2023 Q42023 Q42023 Q22023 Q12022
# of drawdowns
(Source: Revenue, First Home Scheme)
20
Cairn Homes plc | Annual Report 2023
STAGE #1
Land acquisition
Our strategy centres on
identifying sites that
are complementary to
our existing landbank
and that represent
value accretive
opportunities, located
in areas with excellent
public transport and
infrastructure links.
STAGE #2
Planning
We lead and manage
the design and
submission of
new development
designs and planning
applications to ensure
key stakeholder
objectives are achieved,
whilst maximising the
commercial outcome
in a timely manner.
STAGE #3
Pre-construction
Our established
capability allows
us to mobilise pre-
construction and
design during the
planning process,
thereby enabling us to
start on site as soon as
we receive planning
grants.
Business Model
Adding value
at every step
Our end-to-end scaled operating
platform allows us to control our
entire product lifecycle, meaning
we create value at every stage. At
Cairn, delivering value and quality
to all of our stakeholders is at the
centre of everything we do.
21
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
STAGE #5
Construction
Our expanding
operating and delivery
platform allows us to
deliver award winning
developments and
value for money.
As Ireland’s largest
self-build apartment
developer, we leverage
our proven apartment
delivery capability to
deliver energy efficient
apartments at pace and
scale.
STAGE #6
Sales
Our commitment
to understanding
our customers and
their needs begins at
land acquisition and
remains at the core of
our entire business
model. Our dedication
to customer insights
and feedback, at all
stages, allows us to be
a partner of choice and
deliver new homes
that exceed the diverse
expectations of our
customers.
STAGE #7
Customer Care
Customer experience
is at the centre of the
Cairn home buying
process. Our dedicated
aftercare team
work with all of our
customers to ensure
the highest possible
levels of aftercare.
STAGE #4
Commercial
Our commercial team
deliver value through
close governance
of design efficiency,
strong engagement
with our supply
chain, competitive
procurement
and robust cost
management, all
underpinned by
comprehensive
analytical processes.
STAGE #8
Added Value
Value added over
60+ years as further
decarbonisation takes
place, with an A-rated
Cairn new home
becoming more
energy efficient as
time goes on. Our
transition into Passive
House apartments will
bring this to the next
level.
22
Cairn Homes plc | Annual Report 2023
Progress and Achievements in 2023
• Developed the Cairn Apprenticeship Academy,
to which we will contribute €10 million over
the next five years which will help enhance the
long-term health and viability of the Irish
construction sector.
• Included in Ireland’s Top 20 Best Large
Workplaces in 2023 and designated, for the
second year in a row, as a Great Place to Work.
• Awarded Silver from the Irish Centre for
Diversity.
• Partnered with TU Dublin to support them
over the next 10 years in the development of
their Design and Construct Centre.
Progress and Achievements in 2023
• 1,741 sales completions to a diverse customer
pool. Cairn has delivered over 7,500 new
homes to the Irish market since 2015 with over
20,000 people now living in a Cairn home.
• Agreement and approval reached for our first
three forward fund transactions with a number
of State supported counterparties, expected to
close in 2024.
• Over 80% of our starter homes in 2023 were
available to our customers at prices which are
below State support pricing caps.
• Maintained our market leading levels of
customer care, finishing, landscaping and
commitment to community care which have
become synonymous with Cairn.
Priorities for 2024
• Continue to connect, develop and inspire our
people through ongoing investment in their
personal and professional development.
• Expansion of and increased investment in our
graduate programme with the aim of trebling
our graduate intake in 2024.
• Having been announced as the title sponsor of
Ireland’s Community Games in January 2024,
we will invest €3 million over four years,
supporting over 160,000 children who
participate annually in these games.
Priorities for 2024
• Continue to build relationships with our entire
customer base so as to develop long-term
sustainable partnerships.
• Further expand our aftercare to our
commercial and State supported counterparty
customers, using learnings from our private
customer base.
• Build on the success of our mixed tenure
developments, such as Archers Wood, to
continue to deliver to all of our customers
across all tenures.
Creating long-term sustainable value for our stakeholders
Cairn is a home and community builder, leading the market in creating sustainable
foundations upon which Ireland can thrive. Our strategy is designed to support our
purpose – building communities that serve our country’s present and future needs.
Our Strategy
READ MORE
p24
READ MORE
p26
People Customers
We are committed to driving employee engagement to deliver a high-performance
culture in a rewarding working environment where we harness insights and knowledge
from our talented team.
With a focus on meeting the diverse needs of a rapidly expanding customer
base, we are dedicated to providing high-quality new homes to a broad mix
of private individuals, state agencies and institutional buyers.
FIND OUT MORE ABOUT OUR STRATEGY
AND OUR MATERIAL TOPICS
Sustainability Report 2023
23
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Progress and Achievements in 2023
• Retained the highest possible Safe-T Cert
Grade A.
• Reduced our Accident Frequency Rate by 16%
and our Lost Time Incident Rate by 19%.
• Commenced over 2,100 new homes (26%
increase on 2022) across 20 active sites
nationwide.
• Established a dedicated Innovation Team,
which project manages our Strategic
Innovation Evaluation Framework.
• Launched our Group Procurement function to
leverage our scale and facilitate more effective
and efficient procurement.
Progress and Achievements in 2023
• Commenced construction on our first 598 unit
Passive House apartment scheme at Piper’s
Square, Charlestown.
• SBTi validated our scope 1, 2 and 3
decarbonisation targets.
• Retained our CDP A- rating.
• Awarded three ISO certifications:
– 9001 Management;
– 14001 Environmental; and
– 45001 Health & Safety.
• Commenced construction at our Seven Mills
development in Clonburris which we are
targeting to be Ireland’s first Biodiversity Net
Gain town.
Priorities for 2024
• Continued focus on Health & Safety initiatives.
• Innovation will be central to our construction
activities in 2024 as we continue our
digitalisation strategy to include the adoption
of technology to support our growing supply
chain and procurement requirements.
• Leveraging our new Group Procurement
function to further embed the use of
framework agreements.
• Commence the development of our second
scaled Passive House apartment scheme at the
608 unit second phase of our Seven Mills
development.
Priorities for 2024
• Preparation for upcoming reporting
requirements under the EU’s Corporate
Sustainability Reporting Directive.
• Publish our Climate Transition Plan, having
committed in 2023 to achieving Net Zero
by 2050.
• Support and develop the Supply Chain
Sustainability School, which we were a
founding partner of in late 2023.
READ MORE
p28
READ MORE
p30
Construction Sustainable communities
We design and build high quality, well-located, energy efficient
A-rated homes that people love living in now and into the future.
We are committed to building homes
in sustainable communities where
people can thrive.
24
Cairn Homes plc | Annual Report 2023
Strategy Overview
Employee Engagement & Satisfaction
We are committed to driving employee engagement
that will deliver a high-performance culture. In 2023 we
focused on embedding our employee value
proposition – to connect, develop and inspire – into all
stages of the employee life cycle. The success of this
strategy was evidenced throughout 2023 as we were
recognised by a number of external bodies, with
awards including:
• The Irish Centre for Diversity Silver award; and
• designated by Great Place To Work Ireland as a Top
20 Best Large Workplace and, for the second
consecutive year, as a Great Place To Work.
These accreditations validate the initiatives and work
which the Company is implementing around our
culture, employee offering and benefits. Our reward
and benefits portfolio remains a key strength in
attracting and retaining employees, with continued
benchmarking ensuring we provide the best reward
and support to our employees. In 2023, we introduced
a targeted one-off €3,500 cost-of-living allowance to
support all employees below senior management
level.
Invest in Our People Development
We expanded the scope of our top talent development
in 2023 to include senior managers, in addition to our
mentorship cohort. This allows us to leverage
our top talent from all parts of the business to support
Cairn in achieving its long-term and sustainable
growth. We ran a number of masterclasses throughout
the year, focusing on key management skills such as
delegation and performance conversations, reaching
95% of our people managers. Our employee and
engagement scores improved again during the year.
We achieved an eNPS (employee Net Promoter Score)
of 42 (on a scale of -100 to +100).
In November 2023, we announced the establishment
of the Cairn Apprenticeship Scheme which will see us
contribute €10 million over the next five years. The
Apprenticeship Scheme will help to enhance the
long-term health and viability of the construction
sector in Ireland, by ensuring future pipelines of staff
and addressing the significant skill shortage in the
industry.
Please refer to page 38 of our 2023 Sustainability
Report for further detail.
People
PILLAR 1
Cairn is committed to continuing to invest in our employee value
proposition – to connect, develop and inspire our workforce. In 2023, we
invested heavily in supporting growth and building internal talent through
development programs, functional support and employee training
25
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
LOW RES IMAGE
– MR
We will continue to invest in our people whilst
extending our capacity and capability as we
continue to grow at pace and scale.
The expansion of our graduate programme
will be a primary focus of 2024, with a target of
trebling the size of our new graduate intake
who will be supported through a tailored
development pathway.
We will focus on building our talent
pipelines and supporting existing talent
as we continue our mentorship and senior
manager programmes .
Continued commitment to our Equality,
Diversity and Inclusion (“E,D&I”) agenda will
be at the forefront of our people strategy in
2024 as we look to develop a diverse and
multi-cultural workforce. 93% of our
employees opined in our 2023 E,D&I survey
that Cairn is an inclusive workplace, a result we
are extremely proud of. Please refer to page 34
of our 2023 Sustainability Report for further
detail on our E,D&I agenda.
PRIORITIES FOR 2024
Apprenticeship
Scheme
Increasing the number of construction apprentices
across the residential sector has been identified by
Government as an important component of delivering
its Housing for All strategy. As an industry leader
Cairn is committed to working with the Government
to tackle the challenges being experienced in
housing supply.
The Apprenticeship Scheme will provide supports to
incentivise new entrants into the construction
Industry, be they school leavers or workers who would
like to re-skill. These supports will also be open to
existing apprentices who are currently working with a
Cairn subcontractor. The Scheme will also deliver a
range of tutoring and educational programmes and
provide targeted financial supports to enable
apprentices to embark on their construction careers.
We will explore learning opportunities to support
on-site training, with the potential to launch “learning
zones”. Additionally, we will engage with schools and
other education institutions to increase participation
and highlight the exciting opportunities on offer in a
construction career.
Please refer to page 38 in our 2023 Sustainability
Report for further detail on our Apprenticeship
Scheme.
We will develop the Cairn
Apprenticeship scheme, in
which we will invest €10
million over the next five years.
The Cairn Apprenticeship
Scheme will help to enhance
the long-term health and
viability of the construction
sector in Ireland, by ensuring
future pipelines of staff and
addressing the significant
skill shortage in the industry.
Through a multi-faceted
approach, the scheme will
implement initiatives at both
a macro level for apprentices
across Ireland and at a more
local level working with our
existing supply chain.
Case study
26
Cairn Homes plc | Annual Report 2023
Strategy Overview continued
2023 saw us work in close partnership with our private,
State and institutional customer base, as we delivered
1,741 sales completions, a 14% increase on 2022.
The demand for new homes in Ireland remains
exceptionally strong across all tenures and product
types, and we had our strongest sales period to date,
with 2,800 new homes agreed for sale in 2023. Over
80% of Cairn’s starter homes are available to our
customers at prices which are below State support
pricing caps. This allows more of our prospective
customers to qualify for the State’s impactful initiatives
including Help to Buy (income tax rebate of the lower
of €30,000 or 10% of the purchase price of a new
home) and the First Home shared equity scheme
(funding for up to 30% of a property purchase price or
self-build cost). Our mature business platform and low
land cost allow the delivery of competitively priced
homes for FTBs in locations of proven demand.
Construction of homes for FTBs is a core market for us.
In 2023 we delivered over 500 new starter homes at
average competitive market prices of just under
€400,000 (inc. VAT).
2023 was the first year where all of our new private
homeowners had access to our online Customer
Portal. This portal contains helpful guides to their new
Customers
PILLAR 2
Cairn has a proven track record in the Irish new homes market in delivering award-
winning schemes to a broad customer base. Our new home commencements
continue to focus on our core starter homes market and our scaled apartment
developments.
homes and acts as a method of communication to the
Cairn aftercare team. To further develop the portal, in
2023 we introduced a field service app to our site
teams, facilitating real time updates on any issues,
thereby increasing the timeliness and detail of
response to any customer issues.
We are proud to have maintained the levels of
customer care, landscaping and commitment to
community building for which Cairn has become
synonymous with as we continue to grow at pace
and scale.
27
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
1.5km
of greenway (Three Trouts Way)
developed by Cairn, connecting
Delgany and Greystones
This 427 new home development comprises 245
houses, 94 apartments and 88 duplexes,
delivering a well-balanced tenure mix creating an
inclusive and sustainable new neighbourhood at
scale.
Our focus on mixed tenure developments allows
us to execute our sales strategies accordingly. In
working closely in partnership with local councils,
AHBs and State supported counterparties we
believe Archers Wood represents a best-in-class
example of how to effectively address the
housing shortage in Ireland in a sustainable way
that doesn’t compromise on quality.
The accessibility of facilities within a development
is integral to nurturing a vibrant community.
Archers Wood includes a crèche to support young
families and sports facilities like tennis and
basketball courts, as well as a football pitch and
communal features that can be enjoyed by all
residents that help to create a sense of place and
belonging. Additionally, the provision of
playgrounds ensures a family-friendly
environment, encouraging leisure activities for
residents of all ages. Archers Wood also features
4.5 hectares of active open space, 10,000 trees
planted and 3,000 sqm of native wildflower
meadow aligning with our biodiversity and
decarbonisation strategies.
Archers Wood demonstrates the power of
inclusive design in construction and urban
planning. Our development exemplifies how a
diverse range of customers can live harmoniously
within a single community. By integrating various
housing options and amenities, we’ve succeeded
in creating a vibrant, inclusive neighbourhood
that caters to the needs and aspirations of all our
residents.
Our approach not only promotes social
integration and helps to provide new homes at
scale but also contributes to the creation of a
thriving and cohesive community.
Archers Wood
Mi xed Tenu re
Archers Wood in Delgany is
an example of how a mixed
tenure development can thrive
and reflects our commitment
to creating inclusive
neighbourhoods that cater to
diverse private customers and
State supported counterparties.
Case study
82%
of Cairn customers rated their experience of buying
a Cairn house as 4* (out of 5) or above
67%
of private customers engaged with our aftercare team
through our new online Customer Portal
IN NUMBERS
A focus in 2024 and beyond is to introduce
data and insights from our mature private
customer satisfaction framework into our
growing commercial and State supported
counterparty customer base to optimise our
customer experience. Our fully integrated
customer relationship management system
and field service app will allow us to
continuously learn and improve on every
point of the customer journey from enquiry
through to aftercare.
Our customer strategy is to continue to build
on our current partnerships and to explore
new opportunities with our customer base,
with Seven Mills being our most ambitious
project and one with massive potential to
reimagine how a sustainable town can be
built.
PRIORITIES FOR 2024
28
Cairn Homes plc | Annual Report 2023
Operating Platform
We continued to invest in our operational and delivery
platform, commencing over 2,100 new homes in 2023,
a 26% increase from 2022. Our sustainable and growing
profitability is supporting significant investment in our
construction activities. Construction work in progress
(“WIP”) investment of €439.9 million in 2023 drove
activity across 20 sites nationwide, underpinning our
growth into 2024.
Health & Safety
Our number one priority at Cairn has always been
operating and maintaining safe environments for our
employees, subcontractors, suppliers, customers and
the communities in which we live and work. The
Company continued to invest heavily in health and
safety during 2023 and retained our externally
accredited Safe-T Cert Grade A. In the context of a year
where hours worked increased by 15% and Cairn
commenced four new sites and six new phases on
existing developments, our Accident Frequency Rate
decreased by 16% and our Lost Time Incident Rate
reduced by 19%. We were extremely proud to be
awarded ISO accreditation in Health & Safety (45001)
during the year, evidence of maintaining the highest
industry standards of heath and safety across our
business. Please refer to pages 26 and 27 in our 2023
Sustainability Report for further detail on our Health
and Safety agenda.
Quality
As part of our value creation strategy, we consistently
look to innovate and improve our construction
management and methodologies. In 2023 we
developed a detailed quality framework with
integrated Live Power Business Intelligence (“BI”)
Dashboards. This real time reporting mechanism tracks
quality performance per unit and per project, allowing
us to establish detailed benchmarking and scoring
across all Cairn developments.
With a live portfolio of multiple sites varying in size and
scale, we have established clear quality benchmarks to
ensure the highest standards are held throughout our
business that exceed customer expectations. Our
database records live performance statistics on site
quality, aftercare, and customer care enabling us to be
market leaders at all stages of the development cycle.
Construction
PILLAR 3
Our proven operating platform, established subcontractor base, supply chain and
pipeline of active and future developments ensures we will continue to deliver new
homes at pace, scale and value for money.
Strategy Overview continued
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Standardisation
We enhanced our Cairn Design Platform with the
launch of our Cairn Technical Design Library. This
repository of knowledge is issued to our consultants,
and provides them with extensive industry knowledge
and preferred methods of Cairn design, specification,
and process allowing us to eliminate design variations
and inefficiencies, meaning we can deliver more
efficiently and effectively for our customers.
In 2023, we launched our Standardisation Tool
Kit. This detailed design system is centred around
creating substantial efficiencies in the design
procurement and construction process. Using
prescribed design information to minimise repetitive
work, we have created a formulaic information
template, so our external consultants produce
technical information fully in line with our
requirements – a step-by-step system to produce a
Cairn home.
Customer feedback is a key driver of our standardisation
agenda, particularly on large multi family unit projects to
ensure that facility management, long-term maintenance
and quality are consistent for our customers.
Procurement Efficiencies
To support our scaling business, we launched our
Group Procurement function in 2023 enabling more
effective and efficient procurement across our growing
pipeline of projects.
Increased design standardisation throughout the
year enabled Group Procurement to enhance
our multi-project orders and enter into strategic
Framework Agreements across key product categories
which will further strengthen our supply chain
relationships, add value, provide delivery certainty and
de-risk our pipeline. Standardisation Kits are directly
linked to our Group Procurement systems to ensure that
similar products are coded identically on all projects,
further unlocking the potential for scaled benefits.
Supporting Our Industry
In 2023, we launched the Cairn Apprenticeship Academy,
which will see us invest €10 million over the next five
years. The Academy will help to enhance the long-term
health and viability of the construction sector in
Ireland, by addressing future skills in the industry.
We commenced a programme of work on Responsible
Sourcing designed to ensure our supply chain
partnerships support the delivery of our sustainability
objectives. Following extensive engagement with our
Subcontractors we have further developed our
Responsible Sourcing programme, clarifying our
expectations, timelines and supports available. To this
end we are proud to be a Founding Partner of the
Supply Chain Sustainability School Ireland (“SCSS”) –
the next step in our commitment to ensuring we bring
our supply chain partners with us on our sustainability
journey, by providing them with free learning
resources. Please refer to page 28 for further detail on
both our Responsible Sourcing approach and the SCSS.
Leading on
Decarbonisation
In 2023, we launched our first 598 unit Passive
House apartment scheme at Piper’s Square,
Charlestown, which will be one of the most
sustainable scaled apartment developments in
Ireland. As a Passive House development, Piper’s
Square will reduce Cairn’s scope 3 emissions by an
estimated 9,500 tonnes of carbon, compared to
standard building regulations, equivalent to 5% of
our entire 2019 baseline footprint.
We will use our leading position in the Irish
construction industry to show that this world-
class building standard is achievable using existing
supply chains and can become the standard,
accelerating decarbonisation across our sector.
Please refer to page 16 of our 2023 Sustainability
Report for further detail.
Case study
Delivery of New Homes
We will continue to invest in our delivery platform
as we target the delivery of 2,200 sales completions
across all tenures in 2024. We have up to nine new
sites and new phases across five of our existing
large-scale, multi-year developments planned,
underpinning our commitment to increased output
and continuing growth. As Ireland’s largest self-build
apartment developer we will continue the
construction of c. 2,000 apartments in 2024.
Innovation
We are committed to continuous improvement
and intend to drive further operational delivery
excellence and stakeholder value creation through
our innovation framework in 2024.
Building on the ways of working firmly established
in 2023, we are currently assessing in excess of
50 innovation solutions which are centred around
themes of sustainability, value improvements,
digital construction, productivity improvements
and modern methods of construction, two
examples of which are:
a) Timber Frames (Houses): changes to our core
timber frame detail, developed with our
industry partners, which will drive value and
lower our carbon output; and
b) Concrete Frames (Apartments):
implementation of established focus design
efforts to reduce the concrete and carbon used
in our apartment developments. This will be
based on post occupancy structural
measurement of our built portfolio and
precision standardised designs.
Supply Chain Engagement
We will continue our digitalisation strategy to
include the adoption of technology to support
our growing supply chain and procurement
requirements with additional focus on data
analysis, reporting, capacity planning, category
management and opportunity and risk appraisals.
Supporting our innovation agenda, our supply chain
partners will participate in our open innovation
assessment process, where all new products and
systems are evaluated, developed and assessed
prior to use on site.
Through the SCSS we will provide standardised
education and training to our supply chain through
webinars, e-learning modules and workshops
across 17 sustainability topics.
PRIORITIES FOR 2024
30
Cairn Homes plc | Annual Report 2023
Strategy Overview continued
Our Home Together initiative was introduced in 2021
as a comprehensive three-year programme that
focuses on building thriving communities where
people love to live. This year Archers Wood joined the
growing list of Cairn developments to participate in
this programme, with a total of seven developments
now participating.
We proudly supported grassroots community
organisations across Ireland, through sponsorships
and contributions in 2023. Our beneficiaries include
local sports clubs, schools, and charitable
organisations, furthering our commitment to
sustainable community building. Our partnership with
Children’s Books Ireland, themed “Building
Communities” through promoting reading, has
continued. Together, we co-curate reading lists for
primary school children and have gifted numerous
books to schools throughout Ireland.
We successfully applied for nine new grants of
planning permission during 2023, obtaining
permissions for over 2,350 new homes.
Cairn recognises that communities thrive not just
within the walls of homes but in the spaces between
them. Our placemaking framework places a strong
emphasis on providing amenities that encourage
community bonding, relaxation, and interaction, while
also attracting the wider local community. This
commitment is evidenced throughout our
communities though greenways, parks, pitches, tennis
and basketball courts with our development in
Graydon (Newcastle) being shortlisted for the
Placemaking Initiative of the Year at the 2023 National
Property Awards. We completed a series of significant
placemaking and amenity projects, including parks
with state-of-the-art sporting facilities in both
Graydon and Archers Wood, where the beautiful Three
Trouts Way features a raised board walk over a
wildlife-rich forest and wetlands habitat linking
Delgany to Greystones.
Sustainable
communities
PILLAR 4
In 2023, we continued our commitment to creating vibrant and cohesive communities
through our Home Together initiative. By facilitating engaging activities like coffee
mornings, street feasts, and the establishment of neighbourhood network teams, we have
successfully helped to foster a sense of community within our residential developments.
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Home
Toget her
Our initial pilot projects have now entered their
third year, with the Home Together team
transitioning from a hands-on role to an advisory
and supportive one, empowering residents to
steer future actions according to their own
community requirements.
Throughout the year, noteworthy activities
included yard sales, street feasts, outdoor
cinema nights, coffee mornings, allotment
planning and plotting, community library design
workshops, cocktail demonstrations, and balcony
planting workshops, in addition to festive events
like Halloween and Christmas socials. These
activities not only fostered community cohesion
but also encouraged sustainable practices and
resource sharing.
An essential aspect of the Home Together initiative is
continuous engagement with residents. They actively
participated in surveys, both online and through
door-to-door visits, conducted by the Home Together
team and key community leaders. Co-creation
presentations and workshops provided opportunities
for residents to influence the direction of their
developments. End-of-year surveys were conducted
for participants from the first, second, and third years,
yielding valuable feedback and insights.
In 2023, the Home Together initiative reached a pivotal
stage in its evolution, enabling residents to become
the architects of their community’s future. Through
community-led activities, sustained engagement, and
knowledge sharing, the program has not only nurtured
a sense of togetherness but has also contributed to
sustainable and thriving living environments. The
journey from pilot projects to a mature, self-sustaining
program is a testament to the power of community-
driven initiatives and the positive impact they can have
on our quality of life.
Please refer to page 30 of our 2023 Sustainability
Report for further detail on Our Home Together
Initiative.
In 2023, our Home Together
initiative reached a significant
milestone, advancing to a
stage where the majority of
community activities were
driven by residents and tailored
to the specific character
and demographics of the
participating developments.
Case study
In early 2024, we were announced as the title
sponsor of the Cairn Community Games. This
immersive sponsorship will allow us to
expand our community activities beyond our
developments, reaching out to every
community in Ireland.
The Community Games, an independent
voluntary organisation, operates in local
communities across Ireland, offering children
and young people aged 6 to 16 the chance to
cultivate active and healthy lifestyles in a
secure environment. This is achieved through
their engagement in a diverse range of sports
and cultural activities, fostering community
spirit and cooperation. We wholeheartedly
share the belief that every young person
should have the opportunity to participate in
sports and the arts within their local
community, nurturing an understanding of
the joy that comes from being active and
healthy.
Additionally, our commitment to the Home
Together initiative continues in 2024, with
a series of development graduations as
developments complete the three-year
programme and the empowerment of the
initiative to operate autonomously. We will
provide ongoing support through Community
Engagement packs and guides, along with an
online resource that compiles the knowledge
and insights accumulated throughout the
project to date. This resource will serve as a
roadmap for future residents, ensuring that
the Home Together initiative thrives and
enriches our communities for years to come.
PRIORITIES FOR 2024
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Cairn Homes plc | Annual Report 2023
Chief Financial Officer’s Statement
Revenue
The Group continued its strong growth trajectory in
2023, achieving yet another record trading year with
1,741 closed sales, an increase from 1,526 closed sales
in 2022. The Group’s revenues amounted to €666.8
million, up from €617.4 million in 2022. Of this, €649.9
million came from residential closed sales, compared
to €610.8 million in 2022, while development site and
other sales contributed €16.9 million, up from €6.5
million in 2022.
Gross Profit and Operating Profit
The gross profit for the year amounted to €147.6 million,
up from €134.2 million in 2022, resulting in a gross
margin of 22.1%, compared to 21.7% in 2022. The
increase in gross margin was due to product mix, supply
chain and construction efficiencies. However, the
impact of build cost inflation partially offset these gains.
The operating profit for the year was €113.4 million, up
from €103 million in 2022, resulting in an operating
margin of 17.0%, compared to 16.7% in 2022. Operating
expenses amounted to €34.2 million, up from €31.2
million in 2022, reflecting ongoing reinvestment in the
business to support our growth objectives. With the
challenges that the increased cost of living had on our
employees, we continued to invest in our employee
value proposition, including providing a targeted
one-off €3,500 cost of living allowance to support all
employees below senior management level.
Profit after Tax and Earnings per Share
The finance costs for the year amounted to €14.1
million, up from €9.6 million in 2022. As the business
continued to grow and expand, there was an increase
in working capital investment throughout the year.
This resulted in higher average drawings with an
increase in variable borrowing costs during the year
due to the higher interest rate environment, compared
to 2022.
Profit after tax was €85.4 million (2022: €81.0 million),
equating to basic earnings per share of 12.7 cent (2022:
11.5 cent).
Balance Sheet Efficiency
Total assets were €1,039.9 million at 31 December
2023 (2022: €1,025.3 million), with net assets of €757.2
million at that date (2022: €751.8 million). With €85.4
million profit after tax, we delivered a return on equity
(“ROE”)
1
of 11.3% compared to 10.8% in the prior year.
Our balance sheet included inventories at
31 December 2023 of €943.4 million (31 December
2022: €967.3 million), comprising land held for
development of €609.2 million (31 December 2022:
€628.3 million) and construction work in progress
(“WIP”) of €334.3 million (31 December 2022: €339.0
million). The decrease in land by €19.1 million was
primarily due to the release of costs associated with
1,741 closed sales and land disposals, totalling €77.1
million, offset by land acquisitions during the year of
€57.9 million. The decrease in WIP by €3.4 million was
primarily due to the release of costs associated with
1,741 closed sales, totalling €443.3 million, offset by an
investment of €439.9 million in WIP during the year.
As at 31 December 2023, the Group had available
liquidity, including cash and undrawn facilities, of
€200.6 million, compared to €199.2 million as at
31 December, 2022. The net debt of €148.3 million
2
was similar to the net debt of €149.3 million in the
prior year. Net debt to inventories (at cost) was just
15.7%
3
(2022: 15.4%), reflective of our lowly leveraged
balance sheet.
“2023 saw the Group
continue its strong growth
trajectory, achieving yet
another record trading year
with 1,741 sales completions,
an increase from 1,526 sales
completions in 2022.”
SHANE DOHERTY
CHIEF FINANCIAL OFFICER
1 Return on Equity (“ROE”) is defined as profit after tax divided
by total equity at year end. Calculated as €85.4m / €757.2m
(2022: €81.0m / €751.8m).
2 Consists of loans and borrowings €173.8 million less cash and
cash equivalents of €25.6 million (2022: loans and borrowings of
€171.0 million less cash and cash equivalents of €21.7 million).
3 Represents net debt of €148.3 million as a percentage of
€943.4 million inventories (2022: net debt of €149.3 million as a
percentage of €967.3 million inventories).
33
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Cash Flow
The operating cash flow for the year was €164.9
million, which includes €107.0 million in net cash from
operating activities and €57.9 million invested in
strategic land acquisitions. In 2022, the operating cash
flow was €125.9 million, which included €93.9 million
in net cash from operating activities and €32.1 million
invested in strategic land acquisitions. The operating
cash flow for the second half of 2023 was €194.8
million, compared to €129.6 million in H2 2022. We
also returned €42.7 million to shareholders through
our share buyback programme and a further €41.9
million through ordinary dividends during the year.
Capital Allocation
We take a disciplined approach to capital allocation,
balanced between ongoing investment in growing our
business and shareholder returns, and remain
committed to distributing surplus cash flow and
capital to shareholders. Cairn also continues to explore
specific returns accretive market opportunities which
may result in increased profitability and enhanced
shareholder returns in the medium-term, subject to
meeting and exceeding our internal returns hurdles.
The Company is in a period of significant cash
generation which supports our growth and capital
allocation strategy. We expect to deliver a 15% ROE in
2024 which is a critical KPI for our scaling business.
During 2023, we paid €41.9 million to shareholders in
dividends and the Board has proposed a final dividend
of 3.2 cent per ordinary share which, when combined
with the interim dividend of 3.1 cent per ordinary
share, will represent a total dividend for the financial
year to 31 December 2023 of 6.3 cent per ordinary
share. We also completed €42.7 million of our current
€75.0 million share buyback programme during 2023
with 38.7 million shares repurchased at an average
purchase price of €1.10, and subsequently cancelled.
Looking forward to 2024, Cairn will continue to pay a
progressive interim and final dividend and will provide
further updates on our capital allocation plans as the
year progresses.
Operating Review
The Company delivered 1,741 sales completions in
2023 across 20 residential developments (2022: 1,526
sales completions across 17 residential developments).
Build cost inflation (“BCI”) continued to moderate
throughout the second half of 2023, in line with our
expectations, to less than €10,000 per new home built
or c.4% of hard build costs (2022: €20,000 and 8%).
Materials including concrete (5% government concrete
levy introduced in September 2023) and masonry
(concrete levy equates to c.3.5% on masonry bricks)
increased in cost throughout 2023, with pressure on
labour rates and other materials (including insulation)
moderating throughout the year. With twelve new site
commencements since the start of 2022 and over
4,000 people (including direct employees,
subcontractors and other sector professionals) working
across our active sites on a daily basis, we continue to
leverage our scaled platform and deep supply chain to
manage the ongoing inflationary environment.
The demand for new homes in Ireland remains
exceptionally strong across all tenures and product
types. Cairn had our strongest period to date for sales
agreed in 2023, with 2,800 units agreed for sale.
Demand for our product has continued in the early
months of 2024 with successful private launches across
starter homes in Sorrell Wood (Blessington) and
Parkleigh (Seven Mills), continuing the sales momentum
from Q4 2023 into the 2024 spring selling season.
The Company’s sustainable and growing profitability is
supporting significant investment in our construction
activities. Our record WIP spend of €439.9 million in
2023 drove activity across 20 sites nationwide and
underpins our growth into 2024. We successfully
applied for nine new grants of planning permission
during 2023, obtaining permissions for over 2,350 new
homes. All of our forecasted 2,200 sales completions in
2024 have full planning permission. Cairn currently has
planning applications across all planning systems
including the single-step Strategic Housing
Development (“SHD”), the fast-track Strategic
Development Zone (“SDZ”) and the Large Scale
Residential Development (“LRD”).
Cairn commenced construction on four new sites in
2023, including the first phase of 569 new homes at
our landmark mixed-tenure Seven Mills development
at Clonburris (Dublin 22), in addition to new
developments at Sorrell Wood (Blessington), Pipers
Square (Charlestown) and Bayly (Douglas, Cork). We
also commenced new phases of housing and scaled
apartment developments at six of our existing
developments including Parkside (Balgriffin), Nyne
Park (Kilkenny), Castletroy (Limerick), Mercer Vale
(Cherrywood), Swanbrook (Navan) and Citywest
(Dublin 24).
Outlook
We continue to look forward with confidence. Our
business will continue to grow and play a significant
role in delivering scaled housing solutions to meet the
demand for new homes in Ireland across all tenures.
We will continue to reinvest in our business to support
this sustainable growth whilst also delivering
meaningful capital returns to our shareholders.
Finally, I would like to take this opportunity to wish
Michael, my Board colleagues and all of the Cairn team
the very best wishes for the future. I informed the
Board of my intention to step down from my role of
Chief Financial Officer in October 2023. While I will stay
on with Cairn until the third quarter of 2024 to ensure
an orderly transition of duties to my successor, Richard
Ball, I will not be seeking re-election to the Board of
Directors at the forthcoming AGM on 10 May 2024. I
am very grateful to have had the opportunity to serve
as Chief Financial Officer at Cairn and work closely with
such talented people throughout the business. Cairn
has an exciting long-term outlook, and I am very proud
of the significant progress that we have made during
my time with the business.
REVENUE
€666.8m 2022: €617.4m
GROSS MARGIN
22.1% 2022: 21.7%
OPERATING PROFIT
€113.4m 2022: €103.0m
EARNINGS PER SHARE (BASIC)
12.7 cents 2022: 11.5 cents
DIVIDENDS PER SHARE
6.3 cents 2022: 6.1 cents
LAND & WIP
€943.4m 2022: €967.3m
NET DEBT
€148.3m 2022: €149.3m
TOTAL EQUITY
€757.2m 2022: €751.8m
ROE
11.3% 2022: 10.8%
34
Cairn Homes plc | Annual Report 2023Cairn Homes plc | Annual Report 2023
Task Force on Climate-Related
Financial Disclosures
The Board is ultimately responsible for sustainability
at Cairn while the Executive Directors maintain
full strategic and operational oversight of the
sustainability agenda. This agenda incorporates
our response to the transition risks associated
with the shift to a lower carbon economy, and the
physical risks it faces in respect of climate change.
Strategy Channel
At each Board meeting (approximately seven per
year), progress towards our strategic objectives is
discussed, together with factors that are affecting
or may affect those objectives and our strategy.
Climate-related issues are a key lever in our
strategic objectives and, consequently, form an
integral part not only of the strategic reporting
cycle, but also the annual strategic review.
Risk Management Channel
The Audit & Risk Committee maintains oversight of
the risk register, monitors our response to risk and
has identified the impacts of climate change as a
principal risk. The risk management framework
supports and promotes the identification and
management of climate-related issues on a
business wide basis, managed through our
embedded risk management process. This is
reflected in the inclusion of sustainability within
our Long-Term Incentive Plan (“LTIP”), which in turn
is underpinned by sustainability metrics
incorporated into our remuneration frameworks
(approved by the Remuneration Committee),
ensuring that targets and objectives of employees,
including Executive Directors, and the business, are
aligned.
Task Force
on Climate-
Related
Financial
Disclosures
(“TCFD”)
Risks and opportunities posed by climate
change that have the potential to generate
substantive changes in operations, revenue,
or expenditure, including:
i. a description of the risk or opportunity
and its classification as either physical,
regulatory, or other;
ii. a description of the impact associated
with the risk or opportunity;
iii. the financial implications of the risk or
opportunity before action is taken;
iv. the methods used to manage the risk
or opportunity; and
v. the costs of actions taken to manage
the risk or opportunity.
Governance
The Chief Executive Officer retains responsibility
for defining the strategic direction of the business
and Cairn’s climate-related performance.
Operationally, our Senior Leadership Team,
supported by Cairn’s Head of Sustainable
Construction, Sustainability Team and the
Innovation forum, direct the management of
climate-related risks and opportunities.
Separately, the Chief Financial Officer is
responsible for ensuring the financial impacts
of climate-related issues are fully understood
and reflected in Company budgets.
All employees at Cairn, regardless of seniority,
are responsible for supporting the delivery of
goals and objectives, identifying and managing
risks, and promoting the Company values.
Through our People Strategy, the Chief People
Officer ensures that climate-related issues, and
our response to them, are both communicated
and incorporated into employees’ annual
objectives and associated incentives. The Chief
People Officer is also responsible for ensuring the
Company’s resources and capabilities match its
climate-related responses.
Our disclosure is in line with latest TCFD guidance,
recommendations, and publications. We will
continue to enhance our TCFD disclosure in
line with latest guidance and supplement
our responses.
35
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Our risk management framework, which identifies
climate-related issues as a principal risk and
uncertainty, considers all risks based on three horizons.
The climate-related risks and opportunities presented
here were identified through our climate-related
scenario analysis.
FURTHER DETAIL ON THIS ANALYSIS CAN BE FOUND
IN OUR 2023 SUSTAINABILITY REPORT
Strategy
Risk Time Horizon Explained
Here and now
Risks to the immediate term
(one year or less) goals and objectives
of the business
Medium-term
Risks with a horizon of between
1 year and 4 years
Long-term
Risks with a horizon of more
than 4 years
Climate-related risks are categorised
into: ‘transitional risks’, being the risks
related to the transition to a lower
carbon economy and ‘physical risks’
being risks arising from the physical
effects of climate change.
TCFD RISK/
OPPORTUNITY
TYPE
DESCRIPTION
T I M E
HORIZON
RESPONSE
Transitional
Risk
Technology There is a risk that Cairn may be unable to transition to low
carbon products at the pace needed. For example, there are
often public/local authority obstacles to using reused
materials within Cairn sites. Where these obstacles are
overcome, there may be issues with securing a reliable
supply of those materials on a large scale. Some targets for
reduction would require timber frame in apartments, which
is not normal practice in Ireland. There is also a consideration
that financiers may not lend to potential customers if units
are not built to certain specifications e.g. no brick and clad.
Long-
Term
Our Technical team continues to
review low carbon products, systems
and processes for our housetypes.
We are members of the Irish Green
Building Council and actively
participate in the Healthy Homes
Ireland Forum with the aim of
delivering greener healthier homes.
Transitional
Risk
Emerging
Regulation
Future regulation may lead to restrictions on what Cairn
is able to build, increased costs, or longer build times.
For example, carbon pricing may lead to an increase in
material costs as manufacturers face higher input costs.
Energy efficiency requirements may increase costs and
reduce build options. An increasing focus on retrofitting
existing homes and quotas on new builds in Net Zero
scenarios for Ireland may limit capacity for new build.
Broader planning conditions are expected to include
greater environmental mitigation, specifically related
to biodiversity and climate resilience.
Medium-
Term
We submitted a Science Based Target
in line with a 1.5°C pathway in
December 2022, which was verified in
September 2023 by the Science Based
Targets Initiative (“SBTi”). In December
2023 we committed to the SBTi Net
Zero standard. These commitments
guide our internal strategy towards
the same goals as national and EU
regulation to keep in line with the
Paris Agreement and mitigate risk
from emerging regulation.
Transitional
Opportunities
Products
and Services
Scenarios to keep in line with national climate reduction
targets show all new builds should be A rated and have heat
pumps as a heating source. This demand may come from
any or all parts of our customer base including individual
homebuyers and institutional buyers, particularly
Government agencies.
Medium-
Term
All of our new houses have heat pumps
by default and all of our homes have a
BER rating of A3 or above. We are
currently planning our first passive
house development to further reduce
energy demand in the homes we build.
Climate-related Risks and Opportunities
36
Cairn Homes plc | Annual Report 2023
Task Force on Climate-Related
Financial Disclosures continued
Risk Time Horizon Explained
Here and now
Risks to the immediate term
(one year or less) goals and objectives
of the business
Medium-term
Risks with a horizon of between
1 year and 4 years
Long-term
Risks with a horizon of more
than 4 years
Climate-related risks are categorised
into ‘transitional risks’, being the risks
related to the transition to a lower
carbon economy and ‘physical risks’
being risks arising from the physical
effects of climate change.
Climate-related Risks and Opportunities
Strategy continued
TCFD RISK/
OPPORTUNITY
TYPE
DESCRIPTION
T I M E
HORIZON
RESPONSE
Physical Risk
Chronic Physical There is expected to be an increase in temperatures overall in
Ireland, and in extreme scenarios increased heatwaves.
Homes sold by Cairn need to be able to withstand these
rising temperatures and not overheat and conversely, must
also account for increasing rainfall intensity. An increase in
dry periods may also lead to increased dust levels on site.
Excess dust exiting the site can result in a work stoppage, or
site closure by the Environmental Protection Agency, County
Councils or the Health & Safety Authority. A decrease in rain
in the summer may also lead to stress on water systems.
Increased rainfall may require changes to construction
practices and methods to ensure output can be maintained
without impacting on safety or quality.
Long-
Term
Our Technical, Construction and
Environmental teams are analysing
the impact of shifts in climate patterns
such as prolonged increasing
temperatures on our house types.
As an ongoing project they are
assessing mitigating overheating in
our homes through altering our home
designs. We closely monitor weather
forecasts to ensure worker safety,
and make preparations or adjust
build schedules where needed.
Remediations are designed on a
site by site basis, informed by a pre-
commencement risk assessment and
responsive mitigation plan.
Physical Risk
Acute Physical Rising sea levels and increased rainfall in winter are expected to
lead to a higher risk of flooding in Ireland. This may pose an
issue for Cairn if potential customers face challenges when
looking for mortgage approval or home insurance due to
changing flood plains. For example, where homes are built on
areas that were not deemed to be flood plains during
development but are expected to become floodplains in the
future in a >3°C scenario.
Long-
Term
The impacts of severe weather events and
extreme conditions are actively
monitored and evaluated by the Group’s
Technical, Construction and
Environmental teams on a site-by-site
basis with remediations developed to
respond to site specific risk and mitigate
the cost impact. Flood risk assessments
are a key part of our land appraisals.
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Cairn Homes plc | Annual Report 2023
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Cairn Homes plc | Annual Report 2023
Scenario Analysis
In 2022, we undertook a more detailed scenario
analysis than we had completed previously,
constructing a bespoke scenario relevant to our
industry. Quantitative measures have been used to
assess climate related risk and opportunities impacts.
However, the assessment of risk impact is still ongoing
while we refine this process, and will be revisited in
2024 in line with our risk assessment cycle.
We reviewed two climate related scenarios during our
most recent assessment to identify climate related
risks and opportunities. The first scenario was a
transitional scenario in line with a 1.5
0
C world which
included inputs from Ireland’s Climate Action Plan 2021,
International Energy Authority (IEA) Net Zero by 2050
Scenario, the London Energy Transformation Initiative
(LETI) and the Irish Green Building Council (IGBC).
The second scenario was a transitional scenario in line
with a >3
0
C world and based on climate modelling
from EPA Ireland. This showed Ireland’s climate from
2041-2060 modelled with the IPCC Representative
Concentration Pathway (RCP) 8.5 scenario.
This climate related scenario analysis helped to identify
material risks and opportunities, as well as inform
Cairn’s strategy for managing these risks.
Where possible, we have estimated the potential
financial impact of climate related risks and
opportunities. The transitional and physical climate
risks and opportunities of our strategy directly
influence our financial planning through three
key processes:
1. Risks and opportunities influence financial planning
through ongoing cost benefit analysis of new
technologies and options for more sustainable
construction or green building. The known and
material environmental benefits of new
technologies are noted and addressed in a
qualitative manner in this analysis while financial
impacts on costs and revenues are recorded in
monetary terms.
2. Project-level financial appraisal that accounts for
the additional costs associated with mitigating
known risks as well as savings or increased revenue
associated with climate opportunities. This
includes a tender assessment for each element
procured. Cost of all known inputs then form the
budget for the project.
3. Strategic cost planning for the business as a whole
is undertaken annually and is based on projections
of costs and revenues for future developments and
operations including those associated with climate
risks and opportunities. This process covers an
eight-year time horizon.
Impact on Business Strategy of Risks
and Opportunities
We recognise that climate change represents a
principal risk and uncertainty to our strategic intent.
Consequently, our process for identifying and
reviewing that strategic intent incorporates a
comprehensive analysis and understanding of the
climate-related risks and opportunities presented by
Our Purpose and Our Vision.
This informs our strategy and goals creating a positive
feedback process in which climate-related risks and
opportunities play a fundamental role in defining
strategy, with goals and objectives to mitigate or
capitalise on opportunities having budgeted cost and
margin impacts.
38
Cairn Homes plc | Annual Report 2023Cairn Homes plc | Annual Report 2023
Task Force on Climate-Related
Financial Disclosures continued
Strategy continued
Following our commitment to the Science-Based
Targets Initiative for our scope 1, 2 and 3 emissions, our
targets were approved and validated in September
2023 and we are aligned to 1.5°C.
While completing this process we modelled various
reduction targets on current and future developments.
This exercise has allowed us to understand the
potential changes that will be required operationally
from the business and the resulting outcomes. We
have linked our carbon reduction commitments to a
The purpose of the risk management process is to: help
define strategies, including controls, to mitigate risks,
or capitalise on the opportunities they may present;
establish a process to consider risks and opportunities
in the context of Cairn’s risk appetite; and ensure risks,
mitigating controls and responsibilities for managing
risk and opportunities are recorded and monitored.
Risk management is an important tool and we take a
business-wide approach, allowing us to consider the
potential impact and opportunity presented by all
types of risk affecting our business, including
climate-related risks. When considering climate-
related risks, we seek to identify and consider all
material existing and emerging factors relevant to our
core activities:
• Policy Risks: how Government policy in respect
of climate may impact on our business model,
for example through planning policies or
economic policies
• Brand Risks: how our brand is impacted by
our response to climate-related risk, for
example if our developments do not meet
customer requirements
• Economic Risks: how climate-led factors impact
economic conditions, such as increases in supply
chain costs
• Development Risks: how climate-related issues
impact on our ability to deliver developments,
including through local development plans
• Compliance Risks: such as how the Company
complies with regulatory constraints on what and
how we build.
sustainability linked loan to ensure action. This
includes, but is not limited to, key Scope 1,2 and 3
emission reduction targets which must be achieved
and independently verified each year.
We further demonstrated our dedication to reducing
future carbon emissions by committing to the SBTi Net
Zero Standard in December 2023. This commitment
will further influence and inform our strategy as we
look to move towards a net-zero carbon future.
Risk Management and Identification
Our risk management framework assesses climate-
related risks and opportunities, through engagement
at all levels of the business to ensure comprehensive
identification and evaluation. We consider the
likelihood of the risk occurring, and then the impact of
the risk should it occur (having regard to controls we
have already effectively implemented). This
assessment supports decisions on how we apply
Cairn’s risk appetite to each risk and informs the
materiality of the risk (or associated opportunity).
39
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Managing Climate-Related Risk
Our approach to the assessment of risk is consistently
applied based on the probability of the risk arising, and
the consequences of the risk (which includes a
materiality assessment based on a range of financial
and non-financial factors). Our response to the risk is
then dependent on the overall risk rating (low,
medium, high, or extreme) and the Company’s
appetite for the risk.
Identifying and proactively responding to the
challenges of climate change is core to our purpose and
strategy. This means that as part of our overall risk
management process, we proactively identify and
manage risks associated with climate change in a way
that ensures we can continue to deliver on our vision.
Metrics and Targets
For the 2023 reporting period we are disclosing the
metrics to assess and manage climate related risks and
opportunities.
As a homebuilder, we operate in an energy intensive
industry. Emissions are the key driver of global
temperature rise and result in many of the regulatory
changes we are now faced with. Measuring our carbon
emissions allows us to gain a full and thorough
understanding of the emissions we produce directly
and indirectly. Our Scope 1 and 2 emissions are
reported under GRI 305-1 and GRI 305-2. Our Scope 3
emissions are reported under GRI 305-3.
Further detail on the suite of metrics and targets we
report on from a sustainability perspective are detailed
within our 2023 Sustainability Report.
Our Performance
KPI CODE 2023 2022 2021
Gross direct (Scope 1)
GHG emissions
GRI305-1 793 tCO
2
e 1,777 tCO
2
e 1,522 tCO
2
e
Gross market-based
energy indirect
(Scope 2) GHG
emissions
GRI305-2 241 tCO
2
e 299 tCO
2
e 695 tCO
2
e
Gross other indirect
(Scope 3) GHG
emissions by
category (including
embodied carbon)
GRI305-3 259,137 tCO
2
e
(1.60 per
square metre)
237,132 tCO
2
e
(1.59 per
square metre)
177,138 tCO
2
e
(1.49 per
square metre)
Total energy
consumption within
the organisation
GRI302-1 13,050,001 kWh 10,647,906 kWh 10,211,304 kWh
Total weight of waste
generated including
breakdown by
disposal route
306-3,
306-4
12,207 tonnes
3.6% sent to
landfill (443t)
96.4% recycled or
recovered
(1,869t recycled
and 9,895t
recovered)
12,810 tonnes
3.9% sent to
landfill (495t)
96% recycled or
recovered
(1,096t recycled
and 11,219t
recovered)
6,810.7 tonnes
4.0% sent to
landfill (272t)
96% recycled
or recovered
(538t recycled and
6,001t recovered)
Percentage of sites
with biodiversity
impact assessments
Industry 100% of our
developments
meet this standard
100% of our
developments
meet this standard
100% of our
developments
meet this standard
Measurable Impact
This year we solidified our commitments to change for
the better at Cairn and lead the way for our industry by:
• Becoming Ireland’s first large scale developer to
adopt Passive House principles at scale, thereby
mitigating climate change by dramatically reducing
the amount of energy and by default carbon
required to heat our homes
• Continuing our support for Business in the
Community Ireland’s Low Carbon Pledge, showing
leadership by achieving validation of our Science
Based Targets in September 2023
• Submitting our commitment to Net Zero by 2050
with SBTi.
We have taken our commitments further by
incorporating sustainability into our remuneration
frameworks. This demonstrates the importance we
place on accountability for our sustainability
commitments. We have:
• incorporated environmental metrics on
biodiversity net gain into our long-term
incentive plan;
• incorporated environmental metrics on climate
related targets into our short-term incentive plan; and
• incorporated social metrics, including our customer
and people framework with a health and safety
underpin, into our short-term incentive plan.
All metrics and targets are reported in line with
appropriate standards including SASB, GRI, EPRA
and DEFRA. We have reduced our Scope 1 and 2 GHG
emissions by 59%, and our Scope 3 GHG emissions by
8%, from our 2019 baseline. To ensure we report
accurately and transparently, we are continuously
developing and improving our processes for non-
financial data collection and reporting.
Following improvements made during 2023 in both
areas, and at the recommendation of our external
advisors who assist us in the data collection and
reporting landscape, we restated our 2022 disclosure
made under GRI 305-3 to ensure we continue to follow
best practice and guidance.
40
Cairn Homes plc | Annual Report 2023
40
Identification
of risks
Alignment
of risks
Assessment of
risks
Informing
strategy
Managing
risk
Risk Report
Employing
dynamic risk
management
to support our
developing
business
As the overall environment
in which we operate changes,
the effective identification and
management of the risks and
opportunities this presents to
Cairn’s strategic objectives is of
increasing importance to our
success. Understanding and
addressing risk remains central
to the successful delivery of our
strategy – so we continue to
challenge and develop our risk
management processes and
controls so they remain dynamic,
insightful and meaningful.
Risk Governance The Risk Management Process
Board of Directors
The Board has overall responsibility for ensuring the level of risk to
which Cairn is exposed is appropriate to its objectives and risk profile;
it is also responsible for setting the risk appetite and overseeing the
effectiveness of the process for identifying,
assessing and managing risk.
Audit & Risk Committee (“ARC”)
The ARC monitors the effectiveness of Cairn’s risk management
framework and its implementation, on behalf of the Board, and
maintains oversight of the Group’s risk register. This includes
ensuring the Group’s principal risks and uncertainties are identified,
assessed and controlled, and that the potential impact of risks on the
Group’s strategy are mitigated. The ARC receives a comprehensive
risk report from management at each of its meetings, where it also
reviews and considers the Group’s risk register.
The risk management framework operated by Cairn is intended to
ensure the effective identification and management of risk, in
accordance with Cairn’s overall risk appetite, its strategic objectives,
and accepted risk management standards. This framework is
established throughout Cairn’s process delivery teams and facilitates
comprehensive risk identification, an upward reporting of risks and
opportunities, and an effective approval and oversight of mitigation
plans by management and the Senior Leadership Team. As part of
this framework, the Senior Leadership Team determines the strategic
approach to risk, establishes our structure for risk management, and
ensures the most significant risks for the business are identified,
understood, and effectively managed.
Facilitated by professional risk advisers, all levels of the business
support risk identification and evaluation. This includes process
delivery teams, who are tasked with identifying risks that could
impact strategic goals and operational activities. The Senior
Leadership Team actively engages in this process and meets
formally throughout the year to review risks identified by
functional management, augment those risks with risks identified
by the Senior Leadership Team, and ensure new and emerging risks
are identified and managed.
Once a risk is identified, it is aligned to a principal risk area to validate
the risk and help identify emerging principal risks and uncertainties.
We also align our risks to macro-risk factors, such as inflation. These
are risks we cannot control, but which give rise to a range of specific
consequences that we can anticipate in the context of the
macro-risk and then specifically manage.
Our assessment of risk first requires us to consider how likely it is the
risk will occur, and then the impact of the risk on Cairn should it occur
(having regard to controls we have already effectively implemented).
This assessment supports decisions on how we apply Cairn’s risk
appetite to each risk.
The risk management process, and the risks it identifies, is
fundamental to the development of Cairn’s strategy, the ongoing
monitoring of that strategy, and its persistent review. The risks
associated with the Group’s business are deeply understood by
management and the opportunities they present are reflected in how
Cairn has developed and grown its business. In turn, the process of
developing the Group’s strategy informs how the management of
risks, and opportunities, should be adjusted to ensure success.
Our risk management framework requires our risks to be actively
managed in line with our risk appetite. All risks are assigned to risk
owners, who are responsible for ensuring the risk is appropriately
managed. Supported by a comprehensive risk register, plans for
managing risks are monitored for implementation and progress by
the Senior Leadership Team. The management of Cairn’s principal risks
is overseen by the Audit & Risk Committee on behalf of the Board.
Cairn’s risk management process is designed to integrate effectively into Cairn’s process
delivery systems, ensuring risk can be identified wherever it arises, and then managed
accordingly. The process is supported by expertise and resources that ensure it is optimised
to Cairn’s strategic, operational, and financial objectives, and applied in a consistent way.
Ensuring our risk management process remains meaningful, relevant and effective is a critical
element of the overall management of Cairn’s business. Consequently, the risk management
process, and the fundamental assumptions on which it is based, is subject to persistent,
rigorous review with the goal of ensuring it remains capable of meeting its objectives.
RISK FRAMEWORK
RISK STRATEGY
Senior
Leadership
Team
Identify
principal risks
—
Approve
mitigation plans
Management
Identify
risks
—
Define
mitigation plans
Process
Delivery
Teams
Identify
risks
—
Implement
mitigation plans
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Strategic Report Corporate Governance Financial Statements
8
7
6
5
4
3
1
2
Principal Risks and Uncertainties
Risk Management in Action
As Cairn continues to increase the rate at which it delivers homes, maintaining a
supply chain that can meet Cairn’s demands whilst ensuring consistent quality and
sustainability is critical to ensuring we can meet the commitments we make to all
our stakeholders. This means any limits on the availability of skilled labour and
expertise within the Irish construction sector could become a challenge for Cairn and
the wider industry.
Because of this, focussing on the workforce who build our homes has been a central
building block of our scaled platform. This informs an approach designed to ensure
the risks associated with potential labour constraints are mitigated and our
objectives can always be met.
Developing a skills base
There is a significant reliance on a skilled and available workforce for the construction
of our homes. Whilst this workforce has increased by nearly 20,000 since 2019, the
demand for new housing will call for its continued increase for the foreseeable
future. As Ireland’s leading homebuilder, Cairn has an important role to play in
encouraging young people to join the construction sector, in all disciplines. Our
commitment to growing participation in construction has included developing the
Cairn Apprenticeship Academy. Cairn has committed €10 million in funding over the
next five years and the Academy aims to support the long-term health and viability
of the Irish construction sector by addressing future skills requirements. It will
provide a suite of supports to incentivise new entrants into the construction
industry, whether they be school leavers or workers seeking a career change.
To complement the expansion of our graduate program, we have also grown our
transition year programme (with a particular focus on encouraging women to our
sector), and have partnered with “Inspiring the Future Ireland” to demonstrate the
career possibilities in construction.
We also work hard to challenge the perception of the construction industry’s safety
standards. The health and wellbeing of all our employees and subcontractors is a
number one priority for all of us at Cairn. Despite a significant increase in the hours
worked on our sites, we have retained the highest possible Safe T Cert rating (AA5)
and achieved a reduction in Accident Frequency Rates (AFR) and Lost Time Incidents
(LTI). We were also awarded ISO accreditation in Health & Safety (45001) during
the year.
These are just some of the initiatives we have developed to help ensure young talent
is encouraged into the construction sector for its long-term sustainability.
Cairn’s risk management process has identified eight principal risks. These are risks that, should they arise, could have a material
impact on the Group’s ability to meet its strategic and financial objectives.
These risks are described in further detail on pages 42 to 50 but are summarised below, together with a risk heat map showing
each principal risk’s likelihood and impact weighting.
Principal Risks
1
Economic
Economic conditions, including mortgage
availability and affordability, adversely affects
house prices and sales rates.
2
Policy
Local and national policy or regulation in
respect of residential property development
adversely impacts Cairn.
3
Brand
Brand reputation is damaged through Cairn’s
failures or the failures of its supply chain.
4
Financial
Cairn substantively fails to meet financial
targets or obligations, suffers unexpected
financial loss, or misstates its financial
position.
5
Development
Developments fail to meet the operational or
financial targets set for them.
6
Compliance
Cairn fails to meets its legal and regulatory
obligations (such as health & safety or data
protection).
7
People
Cairn fails to recruit, engage, and retain the
right employees, in the right positions, to
deliver its strategy.
8
Climate
Cairn fails to anticipate and address the
strategic, market, regulatory, and operational
impacts of climate change.
Rare Unlikely Possible Likely Almost
Certain
Insignificant Minor Moderate Major Catastrophic
Consequences/Impact of Event
Probability
42
Cairn Homes plc | Annual Report 2023
Risk Report continued
Principal Risk:
Economic
Economic conditions, including
mortgage availability and
affordability, adversely affects
house prices and sales rates.
Risk landscape
Despite some macroeconomic headwinds,
the Irish domestic economy is expected to
grow again in 2024, supported by a stable, low
unemployment rate and strong consumer
spending. Demand for new homes is set to
continue, buoyed by a population that
continues to grow at a rate exceeding the EU
average, with an expected demand of at least
42,000 homes per annum over the long term.
In addition to demand from mortgage-backed
first time buyers (supported by the First
Home shared equity scheme and Help to
Buy), ambitious Housing for All targets
propose 144,000 new build Social and
Affordable homes by 2030. These targets are
supported by €21 billion in committed capital
funding between 2022- 2025.
Appetite
Economic conditions and other macro factors
that affect house prices and sales rates are
monitored and Cairn will make adjustments
to its strategic plans to ensure the adverse
impacts of changing economic conditions are
minimised.
Risk factor
Cairn’s product mix is impacted by specific
economic/policy factors. This could impact
the saleability of current or planned schemes
and/or limit the scope for future schemes.
Risk factor
Economic factors, including inflation, rising
interest rates, adverse mortgage conditions,
or falling employment, create uncertainty in
the demand for residential housing.
Risk factor
Land value reductions adversely impact
the Group’s balance sheet and its current
land cost advantage in respect of planned
developments.
Response
Cairn continues to actively manage its developments
to match the demand for its broad product offering
from its private, State and institutional customer
base. By maintaining our flexibility and building
homes that can meet the requirements of private,
State and institutional buyers, we ensure our new
homes appeal to all customer types and in particular,
where there is realisable demand. It has also allowed
us to quickly adapt to changing market conditions
with both existing stock and planned developments.
Response
The potential impact of current and future economic
factors is a key driver of Cairn’s strategy, as well as how
it strategically and proactively pivots between its
broad buyer pool in delivering on its growth agenda.
This is based on Cairn’s deep understanding of the
Irish market and the factors that influence it. Cairn
persistently monitors the economic landscape and
responses from policy makers and other key
stakeholders such as the Central Bank of Ireland,
mortgage market participants and our private, State
and institutional customer base.
Response
The Group actively manages the utilisation of its
landbank and associated carrying value to ensure that
at all times the landbank does not exceed the
requirements of its development strategy, and the
value does not expose the Group to carrying value
risks.
Risk trend
Cairn’s broad product mix mitigates
against the risk of it being exposed to
specific economic or policy factors
impacting any particular market.
Risk trend
Despite the increases in interest rates
witnessed since mid-2022, demand for
housing in Ireland remains strong with
mortgage availability supporting all private
buyers. There is also strong demand from
State-supported agencies for scaled social
and affordable new homes. Irish economic
growth slowed somewhat in 2023, albeit our
economy is still expanding and the markets
are pricing in interest rate cuts in 2024.
Risk trend
Cairn’s development land values, held at cost
on its balance sheet, continue to be
supported by the demand for development
land, in particular, land with the benefit of full
planning permission, and for new homes
across all tenures.
Strategic priority: Strategic priority: Strategic priority:
Risk owner:
Director of Business Development
Risk owner:
Chief Financial Officer
Risk owner:
Chief Financial Officer
Risk trend key:
Risk increased
Risk decreased
Risk unchanged
People
Sustainable
communities
Construction
Customers
Strategy key:
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Principal Risk:
Policy
Local and National policy or
regulation in respect of residential
property development adversely
impacts the Group.
Risk landscape
The Irish Government is seeking to adopt new
legislation in 2024 to ensure the planning
process is more efficient and certain. However,
it is not anticipated this will impact planning
decisions before 2025, with questions
remaining as to how impactful changes in
planning legislation will be more broadly. The
National Planning Framework (“NPF”) will be
reviewed in 2024, which provides a positive
opportunity to revise underlying
development need assumptions, which in
turn could have a favourable impact on
County Development Plans. In the meantime,
An Bord Pleanála, Ireland’s planning appeal
body, has been reconstituted to facilitate
consistent decision making, although there
remains significant delays in its processing of
appeals.
Appetite:
Cairn will always adhere to policy and
regulation, but as a national housebuilder it
will seek to positively address, as well as
ensure it is always prepared for, policy and
regulatory change.
Risk factor
Planning applications, including existing
Strategic Housing Developments (“SHDs”)
and Large-scale Residential Developments
(“LRDs”) can be adversely affected by
planning delays, objections, appeals or
judicial reviews. This can lead to delayed
starts on sites and the potential for increased
development costs.
Risk factor
Changes to zoning and planning policy
as part of revised County Development
Plans (“CDPs”) reduce or impact the ability
to develop Cairn’s landbank in the current
expected timelines.
Risk factor
Housing policy changes impact Cairn’s
fundamental business model.
Response
The Group operates a rigorous process for identifying
and evaluating planning risks associated with a
development at the earliest possible stages of its
design to ensure planning potential is maximised,
whilst planning and community concerns are
effectively addressed.
To help achieve this, Cairn is proactive in its
engagement with all stakeholders to identify
concerns and issues at the earliest possible stage and
so mitigate against the possibility of delays or
refusals.
Response
Cairn actively engaged in the 2023 CDPs review
process across a number of local authorities and also
engaged in the first revision of the NPF.
A limited number of development opportunities had
and have the potential to be adversely impacted by
revised Local Area Plans (“LAPs”). For these affected
developments, Cairn challenged the CDPs adopted
both directly and indirectly.
Response
First time buyers, other private buyers including
trade-up/down buyers and State-supported agencies
remain Cairn’s core market.
In addition to ensuring its developments directly
address the current demands of these buyers, the
Group actively engages with key stakeholders to
ensure it understands likely future requirements and
constraints so these can be reflected in future
developments.
Risk trend
The LRD process has now replaced SHDs, but
not all of the risks associated with SHDs, such
as the scope for judicial reviews, have been
eliminated. Whilst Cairn has experienced
limited adverse planning decisions, this is not
indicative of a worsening risk trend.
Risk trend
Addressing any adverse CDPs and the
impacts these have remains a priority for
Cairn in 2024. In the meantime, it is expected
that the First Revision of the NPF will increase
housing targets for local authorities,
facilitating planning policy that can meet
forecast demand.
Risk trend
The State continues to support the
development of new turnkey social and
affordable homes as a key component of its
housing strategy. The State’s investment in
social and affordable homes in collaboration
with the private sector is likely to continue.
Strategic priority:
Strategic priority:
Strategic priority:
Risk owner:
Director of Commercial and Procurement
Risk owner:
Director of Commercial and Procurement
Risk owner:
Director of Business Development
Risk trend key:
Risk increased
Risk decreased
Risk unchanged
People
Sustainable
communities
Construction
Customers
Strategy key:
44
Cairn Homes plc | Annual Report 2023
Risk Report continued
Principal Risk:
Brand
Brand reputation is damaged
through Cairn’s failures or the
failures of its supply chain.
Risk landscape
As the target market for the homes Cairn
builds expands, the focus on the quality of
those homes increases. Cairn always seeks to
meet the highest expectations of its home
buyers, addressing not just the finished
product, but also the quality and sustainability
of its materials, and the means by which our
developments are built. Cairn continues to
invest in its quality management and
procurement systems, and in 2023 attained
ISO 9001 (Quality Management System)
accreditation. We also have a dedicated
Customer Care Portal and team, to capture
any aftercare issues arising and ensuring we
track, monitor and close any issues raised in a
timely manner.
Cairn’s risk appetite for this principal risk has
been updated to reflect its expanded market.
Appetite
Cairn has a limited appetite for risks that may
adversely affects its brand, its ability to
engage with key stakeholders or markets, or
sell its homes. It manages these risks
accordingly.
Risk factor
A failure in the quality of designs, materials,
supplies and construction can have an
adverse impact on the Cairn brand and the
strength of its position in the market.
Risk factor
Failures in the supply chain lead to Cairn not
meeting its commitments relating to respect
for human rights and labour standards.
Response
The continued improvement of the Group’s quality
management systems remains a priority, with the
attainment in 2023 of ISO 9001 (Quality
Management System) accreditation. Work has
continued to integrate construction activity, supply
chain quality management and customer care
experience to facilitate the identification of issues,
early remediation of those issues and preventative
action.
Supply chain standards are maintained through
rigorous materials and supplier qualification and
quality verification processes.
Response
The Group’s Anti-Slavery Policy imposes a
procurement process that allows it to evaluate
slavery risks associated with individual contractors
and ensure they can meet Cairn’s standards.
Cairn is a Founding Partner of the Supply Chain
Sustainability School Ireland, allowing Cairn to
monitor contractor education in key areas relating to
sustainability, including anti-slavery.
Risk trend
Identifying, preventing, and managing issues
that could affect the quality of its homes
remains a core aspect of Cairn’s
commitments and strategy.
Risk trend
The Group continues its efforts to improve
processes to ensure its commitments are
consistently met.
Strategic priority:
Strategic priority:
Risk owner:
Director of Construction and Operations
Risk owner:
Director of Commercial and Procurement
Risk trend key:
Risk increased
Risk decreased
Risk unchanged
People
Sustainable
communities
Construction
Customers
Strategy key:
45
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Principal Risk:
Financial
Cairn substantively fails to meet
financial targets or obligations,
suffers unexpected financial loss,
or misstates its financial position.
Risk landscape
A higher interest rate environment can
increase the cost of the €200 million variable
element of Cairn’s €350 million committed
debt facilities. Ensuring Cairn’s committed
debt facilities are optimally structured helps
us to achieve our strategic objectives. The
Group’s sustainability-linked syndicate
facilities are committed until June 2027, which
reinforces the strength of our asset-backed
balance sheet and underpins our ongoing
liquidity management, both of which mitigate
the risks associated with the current
economic climate.
Appetite:
Cairn has no appetite for a failure of this nature
and implements controls to ensure financial
risk is identified and controlled.
Risk factor
The credit and funding arrangements of
the Group do not meet Cairn’s strategic
or operating needs or prevailing trading
conditions.
Risk factor
The liquidity and working capital demands of
the Group may not always be aligned with the
nature of the ongoing and up-front investment
required and the timing of revenue receipts
from sales. This becomes increasingly relevant
as the business continues to scale beyond
annual volumes of 2,000 units.
Risk factor
A failure of internal financial controls could
lead to potential financial misstatement,
impairment, undetected fraud, or financial
loss.
Response
The Group’s credit facilities, which were negotiated
and renewed for five years in June 2022 on terms that
were deemed favourable and without adverse
conditionality, are expected to continue to match
Cairn’s requirements and projected performance.
Response
Cairn has an overall committed debt facility of €350
million, which provides substantial liquidity for the
business, in particular through its €200 million
revolving credit facilities.
Cashflow and forecasting is managed and refreshed
on a regular and disciplined basis, with regular
stress-testing of cashflow forecasts, allowing Cairn to
proactively monitor and control its cash flows.
Response
A robust financial controls framework continues to be
maintained by the Group. The framework is overseen
by the Audit & Risk Committee of the Board and is
subject to regular audit (internal and external), which
supports an ongoing programme of feedback, review,
and improvement.
Risk trend
Cairn’s strong financial and operational
performance continues to adhere to the
terms and conditions of its credit facilities,
and thus positions it favourably to secure a
future refinance on similar terms.
Risk trend
Cairn has significantly increased investment
in construction work-in-progress and is
committed to distributing surplus capital,
after investing in our business, to
shareholders, while continuing to meet its
monthly expenses . Sufficient liquidity
buffers are consistently maintained by
matching inflows from contracted sales with
all outflows.
Risk trend
The Group continues to review and refine its
financial controls in particular as the business
continues to grow and expand.
Strategic priority:
Strategic priority:
Strategic priority:
Risk owner:
Chief Financial Officer
Risk owner:
Chief Financial Officer
Risk owner:
Chief Financial Officer
Risk trend key:
Risk increased
Risk decreased
Risk unchanged
People
Sustainable
communities
Construction
Customers
Strategy key:
46
Cairn Homes plc | Annual Report 2023
Risk Report continued
Principal Risk:
Development
Developments fail to meet the
operational or financial targets
set for them.
Risk landscape
In the context of Cairn’s growth agenda,
continuing supply chain concerns and build
cost inflation have the potential to exacerbate
the risk to Cairn’s margins and productivity
levels. To address this, Cairn has continued to
invest significantly in its supply chain and
procurement, enabling it to leverage its
growing scale and build strong and valuable
relationships with its supply chain partners.
Appetite
There is inherent risk associated with the
planning, delivery and sale of any
development. Cairn is willing to accept levels
of financial or operational risk that are
consistent with the planned outcomes of its
developments, but will always seek to
minimise those risks accordingly.
Risk factor
Failure to meet development milestones
and schedules, and/or release developments
to the market in line with the Group’s
commitments, can adversely affect
development costs, the ability to meet
development targets, and the maintenance of
appropriate levels of cashflow and liquidity.
Risk factor
Availability of materials and supplies,
or supply chain disruption, causes
development delays or an unexpected
increase in development costs.
Risk factor
Build cost inflation (including materials,
supplies and labour cost) adversely impact
the Group’s margins and profitability.
Response
Supported by Cairn’s “Gateway Process”, the Group
has developed a scalable integrated methodology to
ensure development launches, construction
scheduling and supply chain capacity management
are fully aligned.
As part of the maintenance of Cairn’s core capabilities,
construction planning and delivery is subject to
rigorous controls, oversight and process
improvement. This is supported by innovative use of
technology and systems, as well as off-site
manufacturing and modern methods of
construction, to ensure committed construction
completion dates are achieved.
Response
An effective supply chain is fundamental to the
Group’s ability to meet its development targets.
Our supply chain is actively managed on a strategic
and tactical basis by the Group’s commercial function,
which adopts best industry practices to ensure
materials and supplies are always available. This
includes developing supply chain partnerships
focussed on advancing productivity, efficiencies, and
product development.
Response
Monitoring and anticipating cost trends, then
implementing best practice cost management and
procurement strategies, is the responsibility of the
Group commercial function.
Category cost management is a fundamental aspect
of this activity. This ensures procurement decisions
are informed, effective and proactive.
Operating efficiencies are actively identified to reduce
unmitigated costs in product utilisation, logistics and
construction activity.
Risk trend
The expected continued expansion of Cairn’s
operations means this will remain a dynamic
risk. Consequently, Cairn’s development
processes will continue to be rigorously
reviewed to establish opportunities for
improvement and any relevant mitigants.
Risk trend
A continued reduction in overall demand in
other markets has eased supply chain
pressures. However, as the housebuilding
sector in Ireland continues to grow in
response to demand, it is anticipated
competition for labour and materials will
intensify.
Risk trend
Build cost inflation continues albeit it has
moderated significantly, but with price
volatility in specific materials, such as
concrete, insulation and masonry still
evident, Cairn will continue its close
management of all input costs and continue
to drive for additional productivity gains.
Strategic priority:
Strategic priority:
Strategic priority:
Risk owner:
Director of Construction and Operations
Risk owner:
Director of Commercial and Procurement
Risk owner:
Director of Commercial and Procurement
Risk trend key:
Risk increased
Risk decreased
Risk unchanged
People
Sustainable
communities
Construction
Customers
Strategy key:
47
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Principal Risk:
Development
(continued)
Developments fail to meet the
operational or financial targets
set for them.
Risk factor
Delivering an increasing number of
developments to a consistent quality
and costs standard, requires greater
standardisation of product and delivery.
Risk factor
Utility companies (water, drainage, electricity)
are unable to provide sufficient connections,
supply, or capacity for proposed developments.
Response
Cairn’s plans are dependent on the Group’s ability to
ensure consistency and deliverability at scale through
standardised and repeatable design.
The Group continues to invest in innovation and
improve its design and development processes and
standards so they can respond effectively to the
ambitions of the Group and market demand. The
delivery of these designs and standards is supported
by Cairn’s “Gateway Process” and established delivery
methodologies.
Response
Positive engagement with utility providers is a
continuous process to ensure awareness of Cairn’s
current and future requirements and the effective
identification and management of specific supply risks.
The operational risk process facilitates the management
of development-specific utility risks, which are mitigated
through alternative supply solutions and the dynamic
management of construction planning schedules.
Risk trend
The Group’s design and development
standards are embedded in Cairn’s activities.
As Cairn scales, these standards will continue
to be tested, reviewed, and modified on a
regular basis.
Risk trend
As residential development activity continues to
grow in Ireland, the constraints on utility supply
are expected to be exacerbated. However, Cairn
engages proactively with all utility providers to
ensure current and future requirements are
understood, and supply risks are identified and
managed. Development specific risks are
managed through alternative supply solutions,
ensuring construction schedules anticipate
expected connection lead times.
Strategic priority: Strategic priority:
Risk owner:
Director of Construction and Operations
Risk owner:
Director of Construction and Operations
Risk trend key:
Risk increased
Risk decreased
Risk unchanged
People
Sustainable
communities
Construction
Customers
Strategy key:
48
Cairn Homes plc | Annual Report 2023
Risk Report continued
Principal Risk:
Compliance
Cairn fails to meet its legal and
regulatory obligations (such as
health & safety or data protection).
Risk landscape
Cairn’s commitment to its people, its values,
and the sustainability of our business and the
communities we help build, is reflected in the
management of the safety of our employees,
subcontractors, suppliers, and customers as a
number one priority. Consequently, Cairn’s
health and safety agenda is committed to
ensuring a rigorous and disciplined approach
to the management and mitigation of health
and safety risks. Our approach to increasing
expectations associated with emerging laws
and regulations, and higher corporate
standards, is to embrace and manage these
expectations for the benefit of all our
stakeholders.
Appetite
Cairn has no appetite for failures that give rise
to injury or loss of life. Cairn will manage legal
and regulatory risks in a manner that is
consistent with best practice.
Risk factor
A failure by the Group to meet the
requirements of health & safety legislation or
best practice, giving rise to death or personal
injury in the workplace for which Cairn is
responsible.
Risk factor
A failure of the business to meet its data
protection obligations arising under Irish
and EU data protection laws.
Risk factor
A failure or loss of any of the Group’s key
systems or corporate data as a consequence
of a successful cyber attack.
Response
The Group’s health & safety system and supporting
framework aligns with ISO 45001 (Occupational
Health, Safety and Welfare Management) and
exceeds the legal standards that apply to our
activities.
The Board oversee health & safety performance
whilst the Senior Leadership Team ensures the
Group’s approach to health & safety risks remains
robust and effective in the context of scaling
operations.
Response
An accountability framework managed by the
Company Secretary supported by an independent
Data Protection Officer supports the processing of
personal data in accordance with data protection
laws.
The framework is periodically assessed against
established standards.
Response
The Group invests significantly in technical and
organisational measures to protect its systems and
data from external and internal cyber threats and
associated risks.
The effectiveness of these measures is tested and
reviewed periodically to ensure they adequately
address current risk trends and emerging
vulnerabilities.
Risk trend
Maintaining, delivering and constantly
improving the Group’s health & safety
system remains central to our activities, and
further embedding this into our ways of
working and broader culture, is a constant
area of focus.
Risk trend
Data protection and privacy regulation
remains a business risk. The accountability
framework is actively managed and an
ongoing improvement plan is in place.
Risk trend
Cyber risks generally, and their associated
threats, are increasing in frequency,
sophistication, and potential impact, driven
by macro-events and geopolitics.
Strategic priority:
Strategic priority:
Strategic priority:
Risk owner:
Director of Commercial and Procurement
Risk owner:
Company Secretary
Risk owner:
Chief Financial Officer
Risk trend key:
Risk increased
Risk decreased
Risk unchanged
People
Sustainable
communities
Construction
Customers
Strategy key:
49
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Principal Risk:
People
Cairn fails to recruit, engage, and
retain the right employees, in
the right positions, to deliver its
strategy.
Risk landscape
Attracting, recruiting and retaining the right
people to support Cairn’s objectives continue
to be made difficult by the shortage of talent
with the requisite skills and experience in
certain professions necessary for our business.
However, Cairn is an employer of choice in the
industry, and the Group’s people strategy
directly addresses our people-related risks.
Appetite:
Cairn’s appetite for people risk is limited with a
view to ensuring that the overall strategy can
be delivered by the wider Cairn team.
Risk factor
A lack of skilled and/or professionally
qualified entrants to the construction
industry creates a shortage of skills available
in the supply chain which are required to
facilitate Cairn’s development plans, scaling
goals and succession planning strategies.
Risk factor
The Group fails to retain top talent and
build from within, and/or acquire top talent,
reducing its ability to meet its goals and
objectives, and/or maintain a pool of talent
to meet its succession plans.
Risk factor
The Group’s people engagement fails
to engender or facilitate the optimal
performance of its employees, so that people
performance does not match its potential.
Response
As demonstrated by the launch of the Cairn
Apprenticeship Academy, Cairn actively collaborates
with its supply chain to increase the availability of
skilled construction workers and help ensure they can
effectively provide their services to the Group to the
standards it demands. Cairn also promotes
participation in the industry through a variety of
programmes, including its graduate and intern
programmes.
Response
The success of Cairn, the promotion of the Cairn
brand, and its competitive remuneration strategy
supports retention and has increased its profile
amongst recruits. Recruitment is supported by the
deployment of a wide range of targeted recruiting
tools and strategies.
A focus on graduate recruitment and apprenticeships,
with an accompanying learning and development
scheme, also facilitates the development of a talent
pipeline.
Response
Reflecting the importance of its people to Cairn’s
success, the Group has adopted a wide-ranging
People Strategy to ensure optimal performance.
As well as competitive remuneration and reward
policies, initiatives include wellbeing, supportive
learning and development, and clear progression
pathways.
Risk trend
As Cairn scales, and housebuilding in Ireland
continues to grow, it is expected that certain
current skills shortages will be exacerbated.
Cairn has anticipated the consequent
shortfall between demand and these
capacity constraints, and through its
relationship with the supply chain, is well
placed to manage this risk.
Risk trend
It is anticipated that competition for
candidates for operational and professional
roles will intensify in 2024.
Risk trend
The Group’s people strategy continues to be
successful in delivering effective employee
engagement, helping underpin Cairn’s
continued success.
Strategic priority:
Strategic priority:
Strategic priority:
Risk owner:
Chief People Officer
Risk owner:
Chief People Officer
Risk owner:
Chief People Officer
Risk trend key:
Risk increased
Risk decreased
Risk unchanged
People
Sustainable
communities
Construction
Customers
Strategy key:
50
Cairn Homes plc | Annual Report 2023
Risk Report continued
Risk trend key:
Risk increased
Risk decreased
Risk unchanged
People
Sustainable
communities
Construction
Customers
Strategy key:
Principal Risk:
Climate
Cairn fails to anticipate the
strategic, market, regulatory, and
operational impacts of climate
change.
Risk landscape
In 2023, the continuing impact of climate
change saw a growing occurrence of the
physical risks associated with climate change,
brought about by increasing temperatures
and periods of more extreme weather. Cairn
continues to invest in limiting its impact on
the environment and responding to the
impact of climate change on Cairn’s business
model and strategy, be they from transitional
risks or physical risks. Further details of our
climate transition plan are included in our
2023 Sustainability Report.
Appetite
Identifying and proactively responding to the
challenges of climate change is core to Cairn’s
purpose and strategy. Cairn will proactively
identify and manage risks associated with
climate change in a way that ensures it can
continue to deliver on its mission.
Risk factor
Cairn fails to reduce the negative impacts of
construction on the environment, increasing
the relative environmental impacts of Cairn’s
developments and reducing demand for its
homes.
Risk factor
Planning approvals for developments require
a greater number of environmental-related
planning conditions to ensure climate-
related targets can be met, impacting on
development costs and development times.
Response
To ensure Cairn is able to address its environmental
and sustainability targets, Cairn has completed an
assessment of how it addresses key issues including
climate action, biodiversity and responsible sourcing
and procurement. Using this assessment, Cairn has
implemented, and continues to develop, ways to
reduce its environmental impacts.
As set out in its Climate-Related Financial Disclosures
on pages 34 to 39, Cairn has submitted targets for
reducing its scope 1, 2 and 3 GHG emissions, taken
action to reduce those emissions and identified
strategic priorities for continued progress.
Response
Responding to environmental factors and Cairn’s
sustainability targets are keyelements of each stage
of Cairn’s planning and construction process.
Environmental-related planning conditions are
expected, and are managed as an integral part of the
development process.
Risk trend
Cairn is committed to reducing the impact of
its construction activities on the
environment, and meeting its emission
reduction targets is a strategic priority.
Risk trend
Environmental related planning conditions
are increasingly a core aspect of planning
approvals received by Cairn.
Strategic priority:
Strategic priority:
Risk owner:
Director of Construction and Operations
Risk owner:
Director of Commercial and Procurement
51
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Going Concern and Viability Statement
Going Concern
The Group entered 2024 in a very strong position
having delivered its best ever financial and operational
performance in 2023. Following 1,741 sales
completions in 2023, the Group started 2024 with a
multi-year forward sales pipeline of 2,350 new homes
with a net sales value of over €900 million, of which
1,600 new homes are expected to close in 2024 (both
turnkey and equivalent units). The Group has a
long-term and sustainable growth strategy that
focuses on minimising financial risk and maintaining
financial flexibility. The business has strong liquidity, a
significant investment in construction work-in-
progress underpinned by a significant forward order
book, a robust balance sheet and committed, lowly
leveraged debt facilities.
In order to mitigate against any liquidity risk, the Group
applies a prudent cash management policy ensuring
its production activities in the near and medium-term
are focused towards forward sold inventories,
including scaled apartment developments with
multi-year delivery timelines, and inventories which
will continue to be attractive to its broad buyer pool.
New home commencements continued to focus on
our core starter homes market at lower average selling
prices and large apartment developments for
State-supported counterparties, including forward
fund transactions.
The Group has a total committed debt facility of €350
million, of which €277.5 million is a syndicate facility
comprising a Sustainability Linked term loan and
revolving credit facility with Allied Irish Banks, Bank of
Ireland and Barclays Bank Ireland, maturing in June
2027. Four sustainability performance targets underpin
these green facilities which are linked directly to key
elements of our sustainability strategy including
decarbonisation, biodiversity and people.
Net debt was €148.3 million as at 31 December 2023
(31 December 2022: €149.3 million). The Company had
available liquidity (cash and undrawn facilities) at
31 December 2023 of €200.6 million (31 December
2022: €199.2 million), including €25.6 million of cash
(31 December 2022: €21.7 million). The Group had
forecast year-end net debt to be broadly in line with
net debt as at 31 December 2022.
The Group invested €439.9 million in its construction
activities during 2023, including commencing
construction on four new sites and new phases across
six of its existing large-scale, multi-year, developments.
Both gross and operating margins strengthened in
2023, resulting in an increase in underlying profitability
when compared to the prior year. The Group is also
encouraged by the level of underlying demand for new
homes in the market as evidenced by the size of its
forward sales pipeline, with strong demand continuing
into the early months of 2024. Enquiry lists across all of
our active selling sites remain high with particularly
strong interest in our starter home developments. The
Group’s closed and forward sales pipeline increased to
2,473 new homes with a net sales value of €946
million as at 28 February 2024.
The Directors have carried out a robust assessment of
the principal risks facing the Group and have
considered the impact of these risks on the going
concern of the business. In making this assessment,
consideration has been given to the uncertainty
inherent in financial forecasting including future
market conditions for construction costs and sales
prices. Where appropriate, severe but plausible
downside-sensitivities have been applied to the key
factors affecting the future financial performance of
the Group.
Having considered the Group’s forecasts and outlook
including the strength of its forward order book, the
Directors have a reasonable expectation that the
Group has adequate resources to continue in
operational existence for the foreseeable future.
Accordingly, they are satisfied that it is appropriate to
continue to adopt the going concern basis in preparing
these consolidated financial statements.
Viability Statement
In accordance with the UK Corporate Governance Code
Provision 31, the Directors have assessed the
prospects of the business and its ability to meet its
liabilities as they fall due over the medium term. The
Directors have concluded that three years is an
appropriate period for assessment as this constitutes
the Group’s rolling strategic planning horizon.
The Group has developed a financial model as part of
our three-year plan, which is updated at least annually
and is regularly tested and assessed by the Board.
Progress against the three-year plan is regularly
reviewed by the Board through presentations from
senior management on the performance of the
business.
The Group’s Principal Risks and Uncertainties aggregate
the risks identified, as well as the mitigation plans
implemented as part of this process. They include the
risks that may have short-term impacts as well as
those which may threaten the long-term viability of
the Group. The Directors have made a robust
assessment of the potential impact that these risks
may have on the Group’s business model, future
performance, solvency and liquidity.
The three-year plan has been tested for a range of
scenarios which assess the potential impact of severe
but plausible downside-sensitivities to the long-term
viability of the Group. These scenarios included the
stress testing of the Group’s business model assuming
that a combination of events result in a continued
reduction in sales over the three-year period from 2024
to 2026, with a deterioration in employment levels and
consumer confidence, coupled with a reduced bank
risk appetite, leading to a material reduction in credit
availability in the mortgage market in addition to
reduced demand for scaled apartment developments
from State-supported agencies. In assessing these
severe downside scenarios, it is assumed that there is a
considerable slowdown in construction and sales
activities including a sudden decline in demand
compared to the Group’s forecasts, leading to reduced
sales volumes and a reduction in sales prices, followed
by a gradual recovery. In these scenarios, the Directors
assumed they would take appropriate actions to
ensure that the overall financial risk was minimised
through this cycle, including:
• reducing capital returns to shareholders;
• disposing of non-core sites;
• reducing planned construction work-in-progress
spend: and,
• deferring or not proceeding with planned site
acquisitions and commencements.
Having reviewed the three-year plan and considered
the above stress testing, the Directors confirm that
they have a reasonable expectation that the Group will
continue to operate and meet its liabilities as they fall
due over the three-year period from 2024 to 2026.
52
Cairn Homes plc | Annual Report 2023
The Board recognises its role in establishing
the purpose and values of our Company and
embedding these throughout the organisation.
From workforce engagement to our sustainability
strategy and ongoing Board reorganisations,
2023 has been a busy year.
Corporate Governance
53
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
THREE TROUT, ARCHERS WOOD
Archers Wood is located next to the Three Trout Stream, a nature
corridor that leads into the Glen of the Downs, a Natura 2000 site. This
is an important area for plant and insect life, a complicated jigsaw of
nature that is essential for the health and wellbeing of the planet and
the environment.
CORPORATE GOVERNANCE
54 Governance at a glance
55 Board of Directors
57 Senior Leadership Team
58 Corporate Governance Report
64 Audit & Risk Committee Report
68 Nomination Committee Report
74 Directors’ Remuneration Report
98 Directors’ Report
54
Cairn Homes plc | Annual Report 2023
54
Governance
at a glance
Governance at a Glance
“The Board is collectively responsible
for promoting the long-term,
sustainable success of the Group,
generating profits for shareholders
and contributing to wider society.”
READ MORE
p58
“This year the Nomination
Committee focussed on Board
refreshment, the CFO recruitment
process and our continued efforts on
workforce engagement.”
READ MORE
p68
“We continue to monitor the integrity
of the Group’s financial statements
and announcements relating to the
Group’s performance.”
READ MORE
p64
Audit & Risk
Committee Report
“We engaged extensively with our
shareholders during 2023 in relation
to both the introduction of the
Stretch CEO LTIP and changes to our
2024 Remuneration Policy.”
READ MORE
p74
Directors’
Remuneration Report
Corporate
Governance Report
Nomination
Committee Report
8
Board Meetings
7
Audit & Risk
Committee Meetings
4
Nomination
Committee Meetings
7
Remuneration
Committee Meetings
55
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
John Reynolds (65)
Chairman
Appointed: 28 April 2015
Skills and experience:
John Reynolds was previously Chief Executive
Officer of KBC Bank Ireland plc (2009 to 2013)
and President of the Irish Banking Federation
(2012 to 2013), during which time he was also
aboard member of the European Banking
Federation. John is a Chartered Director, an
Economics graduate of Trinity College Dublin,
and holds a Masters degree in Banking and
Finance from UCD.
Other current appointments:
President of the Institute of Directors Ireland,
Non-Executive Director of Computershare
Investor Services (Ireland) Limited and the
National Concert Hall and Senior Advisor in
Alantra Credit Portfolio Advisors. John is also a
Patron of Chapter Zero Ireland, an entity
promoting Board engagement with climate
change risk. John was also formerly a
Non-Executive Director of Business in the
Community Ireland.
Michael Stanley (58)
Chief Executive Officer (CEO)
Appointed: 12 November 2014
Skills and experience:
Michael Stanley co-founded Cairn Homes plc
and was appointed CEO prior to the IPO in
June 2015. Michael has a strong pedigree in
residential development and the broader
property industry. He was previously CEO of
Stanley Holdings, a large Irish homebuilder
and real estate investment company. Michael
also has extensive experience in the
packaging, energy, agritech and healthcare
sectors.
Other current appointments:
Board Member of IBEC Ireland.
Julie Sinnamon (65)
Non-Executive Director
Appointed: 15 September 2021
Skills and experience:
Julie Sinnamon brings deep experience in
assisting Irish businesses to grow and scale
having had a highly successful career at
Enterprise Ireland where she held a number of
senior roles including the position of CEO from
2013 until her retirement in 2021. Julie is a
business graduate of the University of Ulster,
holds a Master’s in International Business from
Fordham University, USA and is a graduate of
the Stanford Executive Programme, USA.
Other current appointments:
Chair of European Movement Ireland, Director
of PwC Ireland Public Interest Body, Apc Ltd,
Insurance Ireland, The Agricultural Trust
andThe Young Scientist & Technology
Exhibition. Julie is also Chair of the
Implementation Oversight Group for the
Commission on the Defence Forces, a
member of the External Oversight Body of the
Defence Forces and a member of the Irish
Government’s Climate Change Advisory
Council.
Committee Membership:
Chair of the Nomination Committee
(from 25 January 2024) and member of
the Audit & Risk Committee.
Board of Directors
Shane Doherty (49)
Chief Financial Officer (CFO)
Appointed: 13 April 2020
Skills and experience:
Shane Doherty was previously Group CFO
at Morgan McKinley Ltd, an international
professional staffing and resourcing solutions
business. Prior to that, he was Group CFO
at green energy developer, Gaelectric
Holdings Ltd, European Finance Director
at Paddy Power Group plc and Head of
PaddyPower.com. Prior to his time at Paddy
Power, he worked in various senior finance
leadership roles in Eircom Group plc.
Other current appointments:
None.
56
Cairn Homes plc | Annual Report 2023
Board of Directors continued
Orla O’Gorman (51)
Non-Executive Director
Appointed: 10 November 2021
Skills and experience:
Orla O’Gorman spent seven years
at theIrish Stock Exchange (“ISE”), whereshe
was Head of Equity. She was centrally involved
in the sale of the ISE to Euronext in 2018 and,
following that transaction, was appointed as
Head ofListing for UK and Ireland. Prior
tojoining the ISE, Orla founded OR Associates,
and previously held senior management
positions at Eurologic Systems, ABN AMRO
and PwC. Orlaisaqualified accountant,
holdsaBachelor of Commerce from University
College Dublin and aMaster of Accounting
from UCD SmurfitSchool.
Other current appointments:
Non-Executive Director of Mincon Group plc
and Bons Secours Hospital System CLG.
Member of Elkstone Ventures Advisory Board,
Scale Ireland Steering Group, Chartered
Accountants Ireland Ethics and Governance
Committee and Sustainability Expert Working
Group.
Committee Membership:
Director responsible for Workforce
Engagement and member of the Audit & Risk
Committee and the Nomination Committee.
Giles Davies (55)
Non-Executive Director
Appointed: 28 April 2015
Skills and experience:
Giles Davies qualified as a Chartered
Accountant with PwC in London and spent
five years in management consultancy in
London and New York. He went on to
establish Conservation Capital, a leading
international practice in the emerging field of
conservation enterprise, ESG and related
investment financing. He previously served as
non-executive chairman of Wilderness
Scotland and Capital Management &
Investment plc, and as a non-executive
director of Algeco Scotsman Group.
Other current appointments:
None.
Committee Membership:
Director responsible for Sustainability &
Environmental Impact and member
of the Nomination Committee and the
Remuneration Committee.
Linda Hickey (62)
Non-Executive Director
Appointed: 12 April 2019
Skills and experience:
Linda Hickey was previously Head of
Corporate Broking at Goodbody Stockbrokers,
where she worked for fifteen years, and where
she advised clients on a range of capital
markets and corporate governance matters.
Prior to this, Linda worked at both NCB
Stockbrokers in Dublin and Merrill Lynch in
New York. Linda also has a degree in Business
Studies from Trinity College Dublin. Linda was
also formerly Chair of the Irish Blood
Transfusion Service.
Other current appointments:
Non-Executive Director at Kingspan Group plc
and Greencore Group plc; Member of Quanta
Capital Advisory Board and Member of the
Investment Committee of the Irish Strategic
Investment Fund.
Committee Membership:
Senior Independent Director (from 25 January
2024), Chair of Remuneration Committee and
member of Audit & Risk Committee.
Gary Britton (69)
Non-Executive Director
Appointed: 28 April 2015
Skills and experience:
Gary Britton was previously a partner in
KPMG where he served in a number of senior
positions, including the firm’s Board, the
Remuneration and Risk Committees and as
head of its Audit Practice. Gary was formerly
a non-executive director of the Irish Stock
Exchange plc and KBC Bank Ireland plc. Gary is
a fellow of Chartered Accountants Ireland and
amember of the Institute of Directors
inIreland.
Other current appointments:
Chairman of Origin Enterprises plc.
Committee Membership:
Audit & Risk Committee Chair and
member of Remuneration Committee.
57
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Senior Leadership Team
Maura Winston
Chief People Officer
Maura joined Cairn in June 2019. Formerly
Director of Innovation and Change at Federal
Court of Australia, Maura spent 10 years with
Accenture specialising in Organisational
Development.
Fergus McMahon
Director of Commercial
& Procurement
Fergus joined Cairn in April 2016. Previously
Cairn Group Managing Surveyor responsible
for our team of quantity surveyors. Formerly
an Associate Director of McInerney
HomesLtd.
Gerald Hoare
Director of Business Development
Ger joined Cairn in June 2017. Previously Group
Pre-Construction Manager and also Student
Accommodation portfolio Delivery Lead.
Formerly worked with leading Main
Contractors in the UK specialising in residential
developments.
Stephen Kane
Director of Corporate Finance
& Investor Relations
Stephen joined Cairn in October 2023.
Previously Director of Corporate Finance in
Goodbody Stockbrokers. Prior to this, Stephen
worked in investment banking in London.
James Benson
Director of Strategic Delivery
& Policy
James joined Cairn in August 2022 from the
Irish House Builders’ Association (“IHBA”)
where he was Director of Housing, Planning
and Development. James is a qualified
engineer and quantity surveyor.
Declan Murray
Head of Finance & Treasury
Declan joined Cairn in February 2016.
Previously Director, Structured Solutions at
Royal Bank of Scotland plc. Formerly held
management positions in two domestic
banks.
Gavin Whelan
Director of Construction
& Operations
Gavin joined Cairn in January 2021. Previously
Managing Director and founder of Bailey
Brothers Construction Management Services.
Gavin also held senior roles in Skanska and
Laing O’Rourke. Most notably Gavin acted as
Construction Delivery Lead on the £1.7bn
mixed use Battersea Power Station
redevelopment.
Tara Grimley
Company Secretary &
Head of Sustainability
Tara joined Cairn in March 2018. Previously
Deputy Company Secretary & Head of Group
Integration at UDG Healthcare plc. Member of
the Chartered Governance Institute.
Michael Stanley
Chief Executive Officer (CEO)
FOR FULL BIOGRAPHY, SEE PAGE 55
Shane Doherty
Chief Financial Officer (CFO)
FOR FULL BIOGRAPHY, SEE PAGE 55
58
Cairn Homes plc | Annual Report 2023
The strength of our
governance framework
has continued to support
our strong financial
performance during
the past year.
Corporate Governance Report
This report sets out how the Board operates and how
it oversees management and operations at Cairn. In
the year under review, Cairn reported against the
provisions of the UK Corporate Governance Code and
the Irish Corporate Governance Annex (together “the
Code”) and this report sets out how we have applied
the principles and provisions of the Code. During 2023,
the Board confirms that the Company complied with
the provisions of the Code save for Provision 38
of the UK Corporate Governance Code relating to
alignment of Executive Director pension contributions
with the workforce. The Remuneration Committee
has significantly reduced Executive Director pension
contributions from 25% to 10% of base salary over the
past few years and believe 10% to be the appropriate
contribution rate for Executive Directors going
forward. Further details are contained within the
Directors’ Remuneration Report.
As an increasingly mature and sustainable business, we
are proud of our ability to continue to deliver homes at
scale, supported by a strong macroeconomic backdrop
in Ireland. Our success depends on our commitment to
high standards of corporate governance, which
underpins our strategic decisions and our ability to
create value for stakeholders. It drives ethical
behaviours, informs sound decision making, enables the
effective running of our business and, ultimately, builds
trust internally and externally across stakeholders.
At the heart of good governance is culture and
purpose. It is the Board’s responsibility to establish the
purpose and values of our Company and monitor the
effectiveness of our culture. As set out in our previous
reports, our purpose, vision, values and culture define
us and ensure we are in a position to build for good. In
order to achieve those aims, and create the best
outcomes for our customers, we strive to ensure
colleagues feel valued, respected and recognised, feel
empowered in their role and have a positive impact on
our stakeholders.
Dear Shareholder,
Against a number of headwinds over the past three
years, our continued emphasis on strong corporate
governance has provided the platform for the business
to focus on strategic clarity, operational discipline,
and the development of our employees. The strength
of our leadership and the breadth of skills and
experience on our Board enables us to make sound
and balanced decisions for the long-term benefit
of our shareholders and stakeholders.
JOHN REYNOLDS
CHAIRMAN OF THE BOARD
59
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Board and Leadership Team Changes
A core role of any Board is succession planning. In
October 2023, we announced the CFO’s decision to
step down from his role, with him set to depart in the
third quarter of 2024. We would like to thank Shane for
all his hard work and dedication to Cairn. Since joining
the business, he has played an important role in
enhancing the effectiveness of the finance function,
strengthened relationships with Cairn’s key
shareholders and banking partners as part of Cairn’s
refinancing strategy, and improved reporting to the
Board across a range of material financial topics.
Following a comprehensive recruitment process, led
by the Nomination Committee and including advice
from external consultants Korn Ferry, on 13 February
2024, we announced the appointment of Richard Ball
as Shane’s replacement as CFO. The Board is delighted
to have attracted a high calibre candidate with
extensive experience in the Irish property market. As a
Board, we have the utmost confidence that Richard’s
highly relevant experience will support our continued
growth and scaling over the years ahead.
Richard will join the Company as CFO on 10 April 2024
and be appointed to the Board as an Executive
Director, subject to shareholder approval, following the
Annual General Meeting (“AGM”) in May. Shane will not
seek re-election at the upcoming AGM and will leave
the Company in the third quarter of this year, following
an orderly transition of responsibilities to the new CFO.
At Board level, a number of changes are expected to
take place over the next two years. As we approach our
ninth anniversary since listing, the Board is cognisant
that a number of its members will have served on the
Board since IPO. As a Board, we look at Board
refreshment and tenure holistically, seeking to balance
continuity and knowledge of the business, with the
benefits of the appointment of new Directors, a
balance which seeks to ensure optimal discussions and
decision-making at Board level. In line with those aims,
the Board has consistently been refreshed over the
period since listing and the Nomination Committee
has developed a plan for further orderly refreshment
of the Board over the period ahead to ensure we
continue to benefit from the in-depth knowledge of
longer-serving Directors, while the appointment of any
new Directors will foster the generation of new ideas
and challenge. Further detail regarding the changes
made to our Board can be found in the Nomination
Committee Report.
Board Evaluation and Effectiveness
During 2023, the Board carried out an internal
evaluation, designed to evaluate the continued
effectiveness of the Board, its Committees and its
Directors. The evaluation was conducted in the form of
an anonymous survey, where Board members
answered questions and provided comments on the
role and responsibilities of the Board, its composition
and effectiveness. The key findings from this
evaluation were related to Cairn’s employee
engagement efforts, diversity, equality and inclusion
policies, board training and development, and our
approach to sustainability.
The findings of the evaluation were positive and
provided meaningful insights into the workings of the
Board, with each of the Board and its sub-Committees
deemed to be operating to a high standard. There was
noteworthy progress on hearing the employee voice at
Board level, led by the Workforce Engagement Director
and supported by the Chief People Officer, the clear
benefits that have resulted from greater diversity at
Board level, and the continued improvement in the
performance of the investor relations team in ensuring
shareholder feedback was effectively communicated
to the Board. In terms of action areas for 2024, there
will be a continued focus on Board development and
training, particularly around the evolution of
sustainability, in line with the clear commitments and
efforts of the Senior Leadership Team.
Board and Committee Fees
During the past year, the Board conducted a review of
the fees for Non-Executive Directors. The review was
designed to ensure that the fees paid to Directors were
reflective of the increased time commitments for each
Director and the associated roles they undertake at
Board and Committee level. The review of fees was the
first since 2018, incorporated external guidance such as
that of the Investment Association’s principles of
Remuneration and employed external data as a
reference point.
Over the past five years, the responsibilities and time
commitments of Directors has increased significantly,
particularly as a result of the expansion of the level of
oversight required to carry out their duties effectively,
including in regard to workforce engagement,
sustainability, shareholder engagement and increasing
demands on their time. Following the review, the
Board approved an increase in the fees paid for
Directors and the Chair, as well as those applicable to
Directors in certain Committee roles and those with
additional responsibilities related to sustainability and
workforce engagement. As a Board, we are satisfied
that these increases are fully aligned with the time
commitments expected of Directors and are in the
best interests of the Company and its stakeholders.
The updated fees are effective from 1 January 2024
and have been set out in full in the Remuneration
Committee Report.
Employee Engagement
The work carried out by Orla O’Gorman in her capacity
as Non-Executive Director with responsibility for
workforce engagement continued to provide a
valuable forum for the Board to hear employee views
in 2023. Orla held several meetings with employees at
all levels of the organisation, across functions and with
a mix of tenures, to ensure a comprehensive level of
feedback was provided. The importance of employee
engagement has increased recently, particularly
against the backdrop of cost-of-living challenges for
our colleagues, and the initiatives we have taken in
response were appreciated by employees. Employees
have welcomed the opportunity to meet with a
Non-Executive Director and appreciated the value of
the roundtable discussions, which presented an
opportunity to share information directly to Board
members. Further details on Orla’s activities during
2023 are set out in the Nomination Committee Report.
Sustainability
Our commitment is to build homes that are
thoughtfully designed and built for good, and our
sustainability agenda is woven into every aspect of our
business and culture. During 2023, we continued to put
words into action. We are proud that our Scope 1, 2
and 3 Greenhouse Gas (GHG) emission targets were
validated by the Science Based Target Initiative (“SBTi”),
a significant milestone for the business, while we also
received our ISO 14001 certification for Environmental
Management. As a business though, we have
consistently recognised that a reduction of GHG
emissions is only one part of mitigating climate
change. Conserving and restoring natural spaces, and
the biodiversity they contain, is equally essential for
limiting emissions and adapting to climate impacts. In
2023, 100% of Cairn’s sites were subject to biodiversity
net gain assessments, demonstrating our dual
commitments to environment protection. We are
extremely proud of our work in Clonburris and our
commitment to delivering a biodiversity net gain
town. Our efforts to develop Passive Apartment
Schemes, such as our development in Charlestown, is
another example of our commitment to decarbonising
the built environment.
Outside of environmental efforts, we were delighted
to be one of the founding members of the Supply
Chain Sustainability School in Ireland and be placed in
the top 20 of Best Workplaces in Ireland in the Large
Category, while maintaining our Great Place to Work
Certification for 2023, reflecting our efforts across the
broad spectrum of sustainability considerations.
60
Cairn Homes plc | Annual Report 2023
Corporate Governance Report continued
During the year, and particularly as we continue
preparations for reporting against the EU’s CSRD and
taxonomy requirements, the Board received regular
updates on the work undertaken across our
sustainability initiatives, increasing engagement on an
important issue for the business. As part of our efforts
to further strengthen the responsibility and
governance frameworks around sustainability at Cairn,
Giles Davies will become the Non-Executive Director
with formal responsibility for oversight of
sustainability at Board-level.
Board Leadership and Company Purpose
Role of the Board
The Board is collectively responsible for promoting the
long-term sustainable success of the Group, generating
value for shareholders as a whole and contributing to
wider society by fulfilling its purpose. In exercising this
responsibility, the Board takes into account all relevant
stakeholders including customers, employees,
suppliers, shareholders, regulators and government
and the effect of the activities of the Group on the
environment. The Board provides effective leadership
by setting the strategic priorities of the Group and
overseeing management’s execution of the strategy in
a way that enables sustainable long-term growth,
while maintaining a balanced approach to risk within a
framework of prudent and effective controls.
Our Purpose
Our purpose is building homes and creating
communities where people can thrive, and our
sustainability priorities help us to achieve this purpose in
a tangible way. Developing a business based on strong,
sustainable foundations, and where our employees
have the opportunity to achieve their full potential,
provides the platform for our continued success. We
recognise that this success is dependent upon strong
engagement with, and delivery for, all our stakeholders.
Our Values
The Board and Senior Leadership Team aim to ensure
that our values are lived within the business and
integrated into decision making at all levels. Where
behaviour is not aligned with these values, the Board
and Senior Leadership Team seek to ensure that
appropriate action is taken.
Agile & Innovative
We are creative and open to new ideas, ready to
implement change when required. We are prepared
and able to adapt to changing market conditions and
customer requirements.
Honest & Straight Talking
Maintaining an open and transparent dialogue. Saying
what needs to be said and not just what people want
to hear. Being open and transparent, means that we
can get to a better solution quicker.
Collaboration
Collaboration is at the core of our homebuilding.
Projects involve hundreds of people from varied
disciplines and professions working together to
achieve a clear common goal – to build great homes.
Commercially Minded
Being sector aware. Knowing the customer. Seeking
value and making savings. As well as building great and
competitively priced new homes, we are building
sustainable long-term value for our stakeholders.
Committed & Engaged
We are all in. We will be there to deliver on stakeholder
needs throughout their journey with us, sharing our
knowledge, our insights and our expertise to guide,
support and reassure.
Division of Responsibilities
Roles and Responsibilities
The Board has a formal schedule of matters reserved
for its decision which includes the approval of
significant acquisitions or disposals, significant capital
expenditures, financial statements and budgets, risk
management processes and the Principal Risks &
Uncertainties, and, the approval of the Terms of
Reference for each of the Committees of the Board.
Certain governance responsibilities have been
delegated by the Board to Board Committees, to
ensure that there is independent oversight of internal
control and risk management and to assist the Board
with carrying out its responsibilities. Three
Committees have been established which are the
Audit & Risk Committee, the Nomination Committee
and the Remuneration Committee. Each of the Board
Committees are comprised of independent Non-
Executive Directors. Each individual Committee’s Chair
reports to the Board on matters discussed at
Committee meetings and highlights any significant
issue that requires Board attention. The roles of
Chairman and Chief Executive Officer are set out in
writing, clearly defined and approved by the Board.
Day-to-day management responsibility rests with the
Senior Leadership Team, the members of which are
listed on page 57.
Chairman
John Reynolds
Responsible for leadership of the Board and ensuring
effectiveness in all aspects of its role. He is responsible
for setting the Board’s agenda and ensuring adequate
time is available for discussion of all agenda items,
including strategic issues. He is responsible for
encouraging and facilitating active engagement by and
between all Directors, drawing on their skills,
knowledge and experience. He was independent
when appointed to the role in 2015.
Chief Executive Officer
Michael Stanley
Specific responsibility for recommending the Group’s
strategy to the Board and for delivering the strategy
once approved. In undertaking such responsibilities,
the Chief Executive Officer takes advice from, and is
provided with support by, his Senior Leadership Team
and all Board colleagues.
Attendance Table
Director
No. of Meetings
Held/Attended Board Tenure
John Reynolds (Chairman) 8/8 9 years
Gary Britton 8/8 9 years
Giles Davies 8/8 9 years
Shane Doherty 8/8 4 years
Linda Hickey 8/8 5 years
Alan McIntosh 8/8 9 years
Orla O’Gorman 8/8 2 years
Julie Sinnamon 8/8 2 years
Michael Stanley 8/8 9 years
61
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Together with the Chief Financial Officer, the Chief
Executive Officer monitors the Group’s operating and
financial results and directs the day-to-day business of
the Group. The Chief Executive Officer is also
responsible for recruitment, leadership and
development of the Group’s Senior Leadership Team
below Board level.
Senior Independent Director
Giles Davies
During 2023, Giles Davies was the Senior Independent
Non-Executive Director. He acted as a sounding board
for the Chairman and as an intermediary for the other
Directors when necessary. During the first quarter of
2024, the Company announced that Linda Hickey
would succeed Giles Davies as the Senior Independent
Director.
Linda is available to address shareholders’ concerns
that have not been resolved through the normal
channels of communication with the Chairman, Chief
Executive Officer or Chief Financial Officer. She is
responsible for evaluating the performance of the
Chairman in consultation with the other Non-
Executive Directors.
Non-Executive Directors
The Non-Executive Directors provide an external
perspective, sound judgement and objectivity to the
Board’s deliberations and decision making. With their
diverse range of skills and expertise, they support and
constructively challenge the Executive Directors and
monitor and scrutinise the Group’s performance
against agreed goals and objectives. The Non-
Executive Directors are also responsible for
determining appropriate levels of executive
remuneration, appointing and removing Executive
Directors, and succession planning through their
membership of the Remuneration and Nomination
Committees. The Non-Executive Directors together
with the Chairman meet regularly without any
Executive Directors being present.
Company Secretary
Tara Grimley
Supports and works closely with the Chairman, the
Chief Executive Officer and the Chairs of the Board
Committees in setting agendas for meetings of the
Board and its Committees.
She supports accurate, timely and clear information
flows to and from the Board and the Board
Committees, and between Directors and senior
management. In addition, she supports the Chairman
in designing and delivering Directors’ induction
programmes and the Board and Committee
performance evaluations. She also advises the Board
on corporate governance matters and Board
procedures and is responsible for administering the
Share Dealing Code and General Meetings.
Conflicts of Interest
The Board reviews potential conflicts of interest as a
standing agenda item at each Board meeting. Directors
have continuing obligations to update the Board on
any changes to these conflicts.
Induction and Training
An induction procedure for new Board members was
established in early 2019 which was further enhanced in
2021 as we inducted two new members to the Board.
Board members engage with senior management on a
regular basis to assist and enhance their understanding
of the business. The Board considers on an ongoing
basis the need for additional training in respect of any
matters relevant to the development and operation of
the Board or any of its Committees.
D&O Insurance
The Company maintains appropriate Directors’ and
Officers’ liability insurance cover in respect of legal
action against Directors, the level of which is reviewed
annually. Subject to the provisions of, and so far as may
be permitted by the Companies Act 2014 and the
Company’s Constitution, every Director, Secretary or
other officer of the Company is entitled to be
indemnified by the Company against all costs, charges,
losses, expenses and liabilities incurred by them in the
execution and discharge of their duties.
Board Meetings in 2023
The Board meets regularly and would typically hold seven
scheduled meetings during the year, including a strategy
day. The Board met eight times for Board meetings during
2023. Generally, each formal Board meeting follows a
carefully tailored agenda agreed in advance by the
Chairman, Chief Executive Officer, Chief Financial Officer
and Company Secretary. A typical meeting will comprise
reports on current trading and financial performance
from the Chief Executive Officer and Chief Financial
Officer, sustainability, risk, governance, health & safety
and investor relations updates and “deep dives” into
areas of particular strategic importance.
Commitment and External Appointments
As part of the Board evaluation process, the Board has
considered the individual Directors’ attendance, their
contribution, and their external appointments, and is
satisfied that each of the Directors is able to allocate
sufficient time to the Group to discharge his or her
responsibilities effectively. As evidenced by the
attendance table on page 60, the Directors have
maintained the ability to devote sufficient time to their
roles and the Company. Contracts and letters of
appointment with Directors are made available at the
Annual General Meeting or upon request.
Executive Directors are permitted to take up
non-executive positions on the boards of other listed
companies so long as this is not deemed to interfere
with the business of the Group. Executive Directors’
appointments to such positions are subject to the
approval of the Board which considers, amongst other
things, the time commitment required. In line with the
Code, Non-Executive Directors are also encouraged to
seek Board approval prior to taking on any additional
external appointments.
Directors’ Terms of Appointment
The Executive Directors have service agreements with
the Company which have notice periods of 12 months
or less. The Non-Executive Directors have Letters of
Appointment which set out their terms of
appointment. The initial period of appointment is
three years, and any term renewal is subject to the
approval of the Board and appointments are
terminable on one month’s notice. Under the
Company’s Constitution, one third of all Directors must
retire by rotation at each Annual General Meeting and
may seek re-election. However, in keeping with best
corporate governance practice, the Board has decided
that all Directors will seek re-election annually.
Accordingly, all Directors will retire at the Annual
General Meeting on 10 May 2024 and, being eligible,
each will offer themselves for re-election, with the
exception of Shane Doherty who announced his
intention to resign in October 2023. The Board is
satisfied that the Company benefits greatly from the
services of all Directors and accordingly, the Board
recommends the re-election of all of the Directors.
Information and Support
All members of the Board are supplied with
appropriate, clear and accurate information in a timely
manner covering matters which are to be considered
at forthcoming Board or Committee meetings. The
papers for each meeting are made available via an
electronic Board portal along with a wealth of
supporting and reference material. Should Directors
judge it necessary to seek independent legal advice
about the performance of their duties with the Group,
they are entitled to do so at the Group’s expense.
Directors also have access to the advice and services of
the Company Secretary, who is responsible for advising
the Board on all governance matters and ensuring that
Board procedures are complied with. The appointment
and removal of the Company Secretary is a matter
requiring Board approval.
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Corporate Governance Report continued
Independence
As is done annually, the independence of the
Non-Executive Directors was reviewed during 2023. In
doing so, the Board considered factors such as length
of tenure and relationships or circumstances that are
likely to affect, or appear to affect, the Directors’
judgement, in determining whether they remain
independent. Following this year’s review, all of the
Non-Executive Directors are considered independent
in character and judgement and are free from any
business or other relationships that could materially
affect the exercise of their judgement, with the
exception of Alan McIntosh, who had formerly been an
Executive Director between 2015 and 2018. Alan
McIntosh has since retired from the Board, in January
2024. The Chairman of the Board was deemed
independent on appointment.
In assessing the independence of Linda Hickey, the
Board had due regard for her position on the Board of
Kingspan Group plc (“Kingspan”), one of the
Company’s suppliers. The Board concluded that
Ms Hickey was fully independent having taken into
consideration the total value of purchases from
Kingspan during 2023. The procurement of products
purchased from Kingspan remain subject to the
Company’s strict procurement procedures and were
not material for a business of Kingspan’s size.
In assessing the independence of Gary Britton and
Giles Davies, the Board had due regard for the fact that
their tenure on the Board would reach nine years
during 2024. The Board was satisfied that both Gary
and Giles continue to be fully independent,
underpinned by their continued contributions and
challenge and Board and Committee meetings. As
announced in January 2024, Gary Britton informed the
Board of his intention to step down as a Non-Executive
Director at the end of 2024.
Board Appointment Process
When making Board appointments, the Nomination
Committee reviews and approves an outline brief and
role specification and appoints an external search
consultancy for the assignment. The Chairman of the
Board (except in relation to his own succession)
alongside representation from the Nomination
Committee, the Chief Executive Officer, Chief People
Officer and Company Secretary, meet to discuss the
specification and search parameters, as well as the
Group’s need for enhancing diversity. An external
search consultancy is appointed and prepares an initial
long list of candidates from which the Nomination
Committee assembles a shortlist. Interviews are held
with the Chairman, Chief Executive Officer and a
selection of Non-Executive Directors, supported by
the Chief People Officer.
The Nomination Committee then makes a
recommendation to the Board for its consideration.
Following Board approval, the appointment is
announced in line with requirements of the rules
applying to public companies.
Diversity and Inclusion
In 2019, the Board adopted a formal Diversity and
Equality Policy applicable to the Company, which is
available on our website. The Board and management
continue to recognise the benefits of diversity and the
recommendations of the Hampton-Alexander and
Parker reviews, and recognise the clear benefits of
increasing diversity at all levels of the organisation.
At 31 December 2023, female employees made up
25% of our total workforce, while 25% of the Senior
Leadership Team (excluding Executive Directors) were
female. Many of the Company’s employee base are
also from varying backgrounds of nationality, ethnicity,
and religion. In response to the embedding of the
Parker Review in market practice, the Board is
reviewing succession planning and recruitment policies
to ensure an appropriate focus on ethnicity. Further
details on diversity within the Company can be found
in our separate, standalone 2023 Sustainability Report.
Audit, Risk and Internal Controls
Internal Control
The Board has overall responsibility for the Company’s
system of internal control, for reviewing its
effectiveness and for confirming that there is an
ongoing process in place for identifying, evaluating and
managing the significant risks facing the Company. The
process was in place throughout the year under review
and up to the date of approval of the Annual Report
and Financial Statements. The Board has reviewed the
effectiveness of the Company’s risk management and
internal control systems, with the assistance of the
Audit & Risk Committee. Effective risk management is
critical to the achievement of the Company’s strategic
objectives. Risk management controls are in place
across the business. The Company’s risk framework
continues to evolve, and the Company will continue to
monitor and improve its risk management framework.
Further details are available in the Risk Report on pages
40 to 50.
The Company has documented its financial policies,
processes and controls which will be reviewed and
updated on an ongoing basis. The key elements of the
system of internal control include the following:
• clearly defined organisation structure and lines of
authority;
• company policies for financial reporting, treasury
management, information technology and security
and project appraisal;
• annual budgets and business plans; and
• monitoring performance against budget.
The preparation and issuance of financial reports is
managed by the finance function. The financial
reporting process is controlled using the Company’s
accounting policies and reporting system. The financial
information is reviewed by the Chief Financial Officer
and the Chief Executive Officer. The interim and
preliminary results and the Annual Report and Financial
Statements are reviewed by the Audit & Risk Committee
who recommend their approval to the Board.
Risk Management
The Company considers risk management to be of
paramount importance. The Board, together with
Senior Leadership Team, deals with risk management
on behalf of the Company as part of its regular
monitoring of the business. The Board and the Audit &
Risk Committee have put in place procedures designed
to ensure that all applicable risks pertaining to the
Company can be identified, monitored and managed
at all times. Further information on the principal risks
applicable to the Company is given in the Risk Report
on pages 40 to 50.
Financial Risk Management
The financial risk management objectives and
policies of the Company are set out in Note 29
to the consolidated financial statements.
Health and Safety Policy
It is the policy of the Company and its subsidiaries to
comply with the following legislation as a minimum
standard for all work activities:
• Safety, Health and Welfare at Work Act, 2005;
• the Safety, Health and Welfare at Work (General
Application) Regulations, 2007 – 2016;
• the Safety Health and Welfare at Work
(Construction) Regulations, 2013 and all
amendments to date; and
• all codes of practice applicable to the work
undertaken by the Company or its subsidiaries.
In complying with the statutory requirements and
implementing our safety management system the
Company ensures, so far as reasonably practicable, the
safety, health and welfare of all employees whilst at
work and provides such information, training and
supervision as is required for this purpose. It is the
policy of the Company to protect, so far as is
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reasonably practicable, persons not employed by the
Group who may be affected by our activities.
It is the policy of the Company to ensure that adequate
consultation takes place between management,
employees, contractors and others on all health and
safety related matters and employees are encouraged
to notify management of identified hazards in the
workplace. All employees have the responsibility to
co-operate with supervisors and management to
achieve a healthy and safe workplace and to take
reasonable care of themselves and others.
The Health and Safety Policy is available at all work
locations for consultation and review by all employees.
The Policy is kept up-to-date and amended as
necessary to meet changes in the nature and size of
the business. The Policy is communicated to
employees at the commencement of their
employment and on an annual basis thereafter as the
safety statement review is carried out.
The Company continues to strive to work for the
ongoing integration of health and safety into all of its
activities, with the objective of retaining high
standards of health and safety performance. The
Company seeks the full co-operation of all concerned
in the carrying through of its commitment. Health and
safety has also been integrated into the remuneration
arrangements for the Executive Directors, with pay
opportunity reduced in the event of unsatisfactory
Health and Safety performance.
General Meetings
The Company holds a general meeting each year as its
Annual General Meeting in addition to any other
meeting in that year. Not more than 15 months shall
elapse between the date of one Annual General
Meeting and that of the next. The Board is responsible
for the convening of general meetings.
The 2024 Annual General Meeting of the Company is
scheduled to be held at The Merrion Hotel, Merrion
Street Upper, Dublin 2, D02KF79 at 12 noon on 10 May
2024. The 2023 Annual Report and 2024 Notice of the
Annual General Meeting will be circulated at least 20
working days prior to the meeting and will be available
to download from the Company’s website. The Notice
contains a description of the business to be transacted
at the Annual General Meeting. The Chairman, Chief
Executive Officer, Chief Financial Officer and Non-
Executive Directors will be available at the Annual
General Meeting to answer shareholder questions.
Every shareholder has the right to attend and vote at
the Annual General Meeting and to ask questions
related to the items on the agenda of the Annual
General Meeting.
Voting Rights
(a) Votes of Members: Votes may be given either
personally or by proxy. Subject to any rights or
restrictions for the time being attached to any class
or classes of shares, on a show of hands every
member present in person and every proxy shall
have one vote, so, however, that no individual shall
have more than one vote, and on a poll every
member shall have one vote for every share
carrying voting rights of which he/she/it is the
holder. The Chairman shall be entitled to a casting
vote where there is an equality of votes.
(b) Resolutions: Resolutions are categorised as either
ordinary or special resolutions. The essential
difference between an ordinary resolution and a
special resolution is that a bare majority of more
than 50% of the votes cast by members voting on
the relevant resolution is required for the passing of
an ordinary resolution, whereas a qualified majority
of 75% or more of the votes cast by members
voting on the relevant resolution is required in
order to pass a special resolution. Matters requiring
a special resolution include for example:
• altering the Objects of the Company;
• altering the Constitution of the Company; and
• approving a change of the Company’s name.
Communication with Shareholders
The Company attaches considerable importance to
shareholder communication. There is regular dialogue
with institutional shareholders, including detailed
presentations and roadshows after the announcement
of interim and preliminary results. The Executive
Directors meet with institutional investors during the
year and participate in broker/investor conferences.
The Chairman has overall responsibility for ensuring
that the views of our shareholders are communicated
to the Board. Contact with major shareholders is
principally maintained by the Executive Directors. The
Executive Directors also report regularly to the Board
on their engagement with shareholders. The Board
also regularly receives analysts’ reports on the
Company. The Company’s website www.cairnhomes.
com provides the full text of all announcements
including the interim and preliminary results and
investor presentations.
Other
The Company discloses information to the market as
required by the Listing Rules of Euronext Dublin and
the Listing Rules of the London Stock Exchange and
Financial Conduct Authority, including inter alia:
• periodic financial information such as interim and
preliminary results;
• price-sensitive information, which for example,
might be a significant change in the Company’s
financial position or outlook, unless there is a
reason not to disclose such information (e.g.,
prejudicing commercial negotiations);
• information regarding major developments in the
Company’s activities;
• information regarding dividend decisions;
• any changes to the Board once a decision has been
made, and
• information in relation to any significant changes
notified to the Company of shares held by a
substantial shareholder.
The Company will make an announcement if it has
reason to believe that a leak may have occurred about
any ongoing negotiations of a price-sensitive nature.
Any decisions by the Board which might influence the
share price must be announced as soon as possible
and in any event before the start of trading the next
day. Information relayed at a shareholders’ meeting,
which could be price-sensitive, must be announced no
later than the time the information is delivered at the
meeting. In relation to any uncertainty regarding the
communication of a particular matter, advice will be
sought from the Company’s sponsors and/or legal
advisor(s).
Remuneration
Details on the Company’s compliance with the
provisions of the UK Corporate Governance Code in
relation to remuneration are set out in the Directors’
Remuneration Report.
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Committee Member Meeting Attendance Committee Tenure
Gary Britton (Chair) 7/7 9 years
Linda Hickey 7/7 5 years
Orla O’Gorman 7/7 2 years
Julie Sinnamon 7/7 2 years
Dear Shareholder,
This report describes how the Audit & Risk Committee
(the “Committee”) has fulfilled its responsibilities
during the year under its Terms of Reference and under
the relevant requirements of the UK Corporate
Governance Code and Irish Corporate Governance
Annex (together “the Code”).
The Committee is satisfied that its role and authority
include those matters envisaged by the UK Corporate
Governance Code that should fall within its remit and that
the Board has delegated authority to the Committee
to address those tasks for which it has responsibility.
Audit & Risk Committee Report
Committee Membership
The Committee currently comprises four Non-
Executive Directors. All members of the Committee
are determined by the Board to be independent
Non-Executive Directors in accordance with provision
24 of the UK Corporate Governance Code with several
members deemed to have recent and relevant
financial experience. The biographical details on pages
55 and 56 demonstrate that members of the
Committee have a wide range of financial, capital
markets, commercial and business experience relevant
to the sector in which the Group operates.
The Committee met seven times during the year and
the attendance of each member is laid out in the table
above. Meetings are attended by members of the
Committee and others being principally the Chairman,
the Company Secretary, the Chief Financial Officer,
representatives from the finance function, the Director
of Commercial and Procurement, the Health & Safety
Manager, our Risk Management Consultant, and
representatives of the External Auditor as well as the
outsourced Internal Audit function who also attend by
invitation. Other members of management may be
invited to attend to provide insight or expertise in
relation to specific matters.
Gary Britton
CHAIR OF THE AUDIT
& RISK COMMITTEE
We continue to advise
the Board on whether the
Annual Report and Financial
Statements, taken as a
whole, are fair, balanced
and understandable.
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The Committee also met privately with the External
Auditor and representatives of the outsourced Internal
Audit function without management present at least
once during the year.
The Chair of the Committee reports to the Board
following each meeting, on the work of the Committee
and on its findings and recommendations.
Key Duties
• monitoring the integrity of the Group’s financial
statements and announcements relating to the
Group’s performance;
• advising the Board on whether the Annual Report
and Financial Statements, taken as a whole, are fair,
balanced and understandable, and whether it
provides the information necessary for
shareholders to assess the Group’s performance,
business model and strategy;
• monitoring the effectiveness of the external audit
process and making recommendations to the
Board in relation to the appointment, re-
appointment and remuneration of the External
Auditor;
• overseeing the relationship between the Group
and the External Auditor including the terms of
engagement and the scope of audit;
• reviewing the scope, resourcing, findings and
effectiveness of the Internal Audit function;
• monitoring and reviewing the overall effectiveness
of the Group’s risk management systems, and
overseeing its strategic response to risk, in
particular, the principal and emerging risks to its
strategic objectives;
• reviewing the adequacy and effectiveness of the
Group’s systems and controls for risks associated
with health & safety, bribery and fraud, and the use
of personal data; and
• reporting to the Board on how the Committee has
discharged its responsibilities.
Key Areas of Activity During 2023
A summary of the key activities of the Committee
during the year is set out below:
Financial Reporting
The Committee reviewed the draft trading updates,
draft preliminary results, draft annual report and draft
interim results before recommending their approval to
the Board. The Committee considered the
appropriateness of the relevant accounting policies and
significant judgements and key estimates adopted in
the preparation of the financial statements. The
Committee also considered the views of the External
Auditors in making these assessments. The significant
issues in relation to the financial statements considered
by the Committee and how these were addressed are
set out on pages 66 and 67. The Committee also
reviewed the observations on internal control prepared
by the External Auditor as part of the audit process.
In accordance with the reporting requirements of the
Code, the Committee confirms to the Board that, in
our view, the Annual Report, taken as a whole is fair,
balanced and understandable, and provides the
information necessary for shareholders to assess the
Group’s position and performance, business model
and strategy.
Risk Management and Internal Control
Responsibility for monitoring the effectiveness of the
Group’s system of risk management and internal
control is delegated to the Committee by the Board.
The Committee is satisfied with the procedures
established for identifying, assessing and managing
key risks, and will continue to evaluate those
procedures against best practice for the industry.
Further information on the Group’s risk management
process is outlined in the Risk Report on pages 40 to 50.
Following the revisions of the UK Corporate Governance
Code, the Committee will, over the course of 2024,
review its processes and approach in maintaining and
reporting on the effectiveness of its risk management
and internal control frameworks to ensure continued
alignment with the principles of the Code from
1 January 2025.
Health & Safety and Data Protection
The Committee met with the Group’s Health & Safety
Manager and Director of Commercial and Procurement
on six occasions during the year. These meetings
included reviewing key health and safety statistics,
monitoring resourcing requirements for the function,
reviewing the findings and recommendations from
four targeted audits (conducted during the year by an
independent, specialist external audit firm), and
overseeing the achievement of key objectives during
2023 which were set at the beginning of the year. The
Chairman of the Committee also frequently engaged
with the Health & Safety Manager outside of meetings.
The Committee has engaged with the Company
Secretary who has overall responsibility for the Group’s
lawful use of personal data in accordance with Irish and
European data protection laws, including Regulation
(EU) 2016/679 (the General Data Protection Regulation
“GDPR”). The Group has designated an independent
Data Protection Officer who has access to the
Committee, advises the Company Secretary and
carries out the tasks mandated by the GDPR.
Throughout 2023, the Committee continued to
monitor the progress and effectiveness of the Group’s
data protection programme, consistent with the data
protection risks faced by the Group.
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Audit & Risk Committee Report continued
Going Concern, Viability and Directors’
Compliance Statements
The Committee reviewed the draft Going Concern
Statement, Viability Statement and Directors’
Compliance Statement prior to recommending them
to the Board for its review and approval. The Going
Concern Statement and the Viability Statement are
on page 51. The Directors’ Compliance Statement is
included in the Directors’ Report on page 100.
Internal Audit
The Group’s Internal Audit function is outsourced,
however the Committee continues to maintain
oversight of and responsibility for the function’s
effectiveness on an annual basis. The Internal Audit
function completed four Internal Audit reviews during
the year; (1) Purchase Ledger and Duplicate Payments;
(2) Cyber Security; (3) Procurement and Subcontractor
Management; and (4) HR Compliance Review. The
Committee considered reports and updates from the
Internal Audit function for each of these reviews which
summarised the work undertaken, findings,
recommendations and management responses to
audits conducted during the year. A register is
maintained internally which monitors progress against
any recommended process and control enhancements
to ensure that they are implemented appropriately
and in a timely and controlled manner.
The Committee considered and approved the
programme of work to be undertaken by the Internal
Audit function in 2023 and the planned programme of
work for 2024. The Committee also met with the
members of the Internal Audit function privately
without management present.
External Auditor
Our External Auditor, KPMG, was appointed in 2015.
The Group is currently in the process of tendering for
audit services for the year ended 31 December 2025
onwards, in light of the EU Audit Regulation
requirements on auditor rotation and will complete
that process during 2024. KPMG will continue as
auditor for the year ended 31 December 2024.
The Committee reviewed the External Auditor’s overall
audit plan for the 2023 audit and approved the
remuneration and terms of engagement of the
External Auditor. The Committee also considered
the quality and effectiveness of the external audit
process and the independence and objectivity
of the External Auditor.
In order to ensure the independence of the External
Auditor, the Committee received confirmation from
the External Auditors that they are independent of the
Group under the requirements of the Irish Auditing &
Accounting Supervisory Authority (“IAASA”) Ethical
Standard for Auditors (Ireland). The External Auditors
also confirmed that they were not aware of any
relationships between the firm and the Group or
between the firm and persons in financial reporting
oversight roles in the Group that may affect its
independence. The Committee considered and was
satisfied that the relationships between the External
Auditor and the Group including those relating to the
provision of non-audit services did not impair the
External Auditor’s judgement or independence.
Non-Audit Services
The Committee reviews the engagement of the
External Auditor to provide non-audit services on an
ongoing basis and in line with our non-audit services
policy. In considering any proposal for the provision of
non-audit services by the External Auditor, the
Committee considered several matters including:
• threats to independence and objectivity resulting
from the provision of such services and any
safeguards in place to eliminate or reduce these
threats to a level where they would not
compromise the External Auditor’s integrity and
objectivity;
• the nature of the non-audit services;
• whether the skills and experience of the external
audit firm make it the most suitable supplier of the
non-audit services;
• the fees incurred, or to be incurred, for non-audit
services both for individual services and in
aggregate, relative to the audit fee; and
• any relevant legislation.
The External Auditor will not be engaged for any
non-audit services without the approval of the
Committee. The External Auditor is precluded from
providing certain services under Regulation (EU)
No 537/2014 or from providing any non-audit
services that have the potential to compromise its
independence or judgement.
Details of the audit and non-audit services provided by
the External Auditor for 2023 and their related fees are
disclosed in Note 9 to the consolidated financial
statements. The Committee has undertaken a review
of non-audit services provided during 2023 and is
satisfied that these services were efficiently provided
by the External Auditor with the benefit of their
knowledge of the business and did not prejudice their
independence or objectivity.
In line with EU audit regulations, the Group’s non-audit
fees for 2023 were less than 70% of the average of the
audit fees over the previous three-year period.
Confidential Reporting and
Anti-Bribery & Corruption
The Group’s Confidential Reporting and Anti-Bribery &
Corruption Policies were reviewed during the year. The
policies are published on the Group’s website and
intranet, and employees are required to confirm they
have read them. The Committee continues to monitor
and review any breaches to these policies.
The Company also launched its Confidential Reporting
platform to employees during the year and any reports
raised using this platform are communicated to the
Committee.
Estimates and Judgements
The Committee reviewed in detail the areas of
significant judgement, complexity and estimation in
connection with the financial statements for 2023. The
Committee considered a report from the External
Auditors on the audit work undertaken and
conclusions reached as set out in their audit report on
pages 105 to 111. The Committee also had an in-depth
discussion on these matters with the External
Auditors. These significant areas were the carrying
value of inventories and profit recognition.
Carrying Value of Inventories
and Profit Recognition
As the business continues to expand its construction
activities, the Group has been investing capital in
developing its landbank and construction work in
progress. As a result, the carrying value of inventories is
a crucial area for management and audit judgement. In
2023, the Group conducted a detailed annual
impairment test with input from relevant internal and
external stakeholders to ensure that the investment in
development land and related construction work in
progress was not impaired. The annual impairment
test examined the performance of each site
individually to determine its net realisable value,
including an assessment of the number of units that
could be achieved on each site and a full evaluation of
the likely sales prices of those units, which were then
compared to actual sales prices achieved to date.
All costs related to individual sites are regularly
evaluated and updated based on new information and
actual experience. If the net realisable value of a site is
found to be lower than its cost, it is considered
impaired, and its value is written down to its net
realisable value. This process is subject to review by
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management and is thoroughly tested during the
annual audit process.
The annual impairment test did not show any evidence
of impairment on a site by site basis.
The Group calculates its gross profit for each sale by
considering the specific unit sold and its associated
total cost. Since the construction cost of a site can span
multiple reporting periods, determining the cost of
sale for each unit sold relies on current cost forecasts
and anticipated profit margins for the entire project.
There is a possibility that some or all of the
assumptions used in these forecasts may be incorrect,
which could affect the carrying value of inventories or
the amount of profit recognised. To manage this risk,
the Group regularly updates its site profitability
forecasts and makes any necessary adjustments in the
appropriate reporting period.
The Committee considered the evidence from
impairment reviews and profit forecasting models
across the various sites and discussed the results with
management and is satisfied with the carrying values
of inventories (development land and construction
work in progress) and with the methodology for the
release of costs on the sale of individual units.
As Chair of the Committee, I engaged with the
Company Secretary, the Chief Financial Officer,
representatives from the finance function and health
and safety function, the Internal Audit function, the
Risk Management Consultant, and the External Auditor
in preparation for each Committee meeting. I also
attend the Annual General Meeting and am available
to respond to any questions that shareholders may
have concerning the activities of the Committee.
GARY BRITTON
CHAIR OF THE AUDIT & RISK COMMITTEE
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Ensuring effective
succession planning
and optimal Board
composition.
Role of the Committee
The Committee is responsible for Board recruitment and conducts regular assessments of the Board’s
composition against the Company’s strategic priorities and the main trends and factors affecting the long-term
success and future viability of the Company. The Committee’s key objective is to ensure that the Board comprises
individuals with the necessary skills, knowledge, experience and diversity to ensure that the Board is effective in
discharging its responsibilities.
Nomination Committee Report
Key Activities for the Nomination
Committee in 2023
• Considered the composition of the Board and
Committees and the succession of Non-Executive
Directors and the skills, knowledge, experience,
diversity and attributes required of current and
future Non-Executive Directors. In considering
Board succession, the Committee considered the
length of tenure of the Non-Executive Directors
and the importance of the progressive refreshing of
Board membership.
• Oversight of the succession plans in place for the
Senior Leadership Team, with consideration of the
Group’s talent development programmes and the
requirements to build technical and leadership
capability. While we have robust processes in place
that allow for planned and unplanned departures,
the Committee spent time discussing the
departure of the CFO and plans for appointing his
replacement.
• Ownership of the internal Board evaluation process
and discussion of the feedback, observations and
recommendations from the review of the Board
and Committees, including the action plan for
approval by the Board.
• Reviewed the Board Diversity Policy to ensure it
remained aligned with the market best practice.
Continued application of the Board Diversity Policy
and initiatives, and reviewed progress made
against the agreed objectives set out in the Board
Diversity Policy.
• Incorporated feedback from the Board’s workforce
engagement outreaches, which provides
important insight into employees’ expectations
and needs. Feedback was considered in
determining Cairn’s most appropriate approach in
supporting employees during the ongoing
cost-of-living crisis, in the refinement of employee
development programs and to update
organisational structures, both in the office and
across our construction sites, with a view to
enhancing employees’ experience of working at
Cairn, a topic of great importance for the Board.
Dear Shareholder,
I am pleased to present the Nomination Committee
(“the Committee”) report on the work carried out
during 2023. The Committee supports the Board with
the review of its structure, size and composition with a
view to ensuring that Board composition includes the
most appropriate balance of skills, experiences, and
diversity of thought to effectively oversee and support
the long-term development of the business. As
announced in January 2024, I stepped down as Chair of
the Nomination Committee, and was replaced by Julie
Sinnamon. I will remain as a member of the Committee
and will support Julie as she transitions to the position
of Chair.
GILES DAVIES
FORMER CHAIR OF THE
NOMINATION COMMITTEE
Committee Member Meeting Attendance Committee Tenure
Giles Davies (Chair) 4/4 9 years
Orla O’Gorman 4/4 2 years
Julie Sinnamon 4/4 2 years
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Board & Committee Changes
The continued reorganisation and orderly succession
of the Board has been a focus of the Committee during
2023 and the early part of 2024. In evaluating Board
composition and plans for new appointments, the
Committee assesses the balance of skills, knowledge,
tenure and experience, against Cairn’s long-term
strategy, with consideration of the operating context
of the business. While not exhaustive, the skills matrix
set out on page 70 details certain of the attributes the
Committee looks at when evaluating Board
composition and appointments. While there were no
changes to the Board during 2023, in January 2024,
Alan McIntosh stepped down from the Board while
Gary Britton announced his intention to step down at
the end of the year. The changes are set out in full later
in this report and over the course of 2024, the
Committee will consider appointments to the Board to
ensure its composition continues to align with the
development of strategy and provides the appropriate
oversight.
The Committee also continued to enhance its
succession planning for senior management during the
past year, which was brought further into focus by
Shane Doherty communicating his intention to step
down from the Board in October 2023 after serving
more than four years in his role. Following the
announcement of Shane’s departure, the Board, led by
the Committee and supported by external advisors,
immediately commenced a recruitment process for his
replacement. That comprehensive process resulted in
the appointment of Richard Ball, who brings a wealth of
relevant experience to the business and the Board. As
announced in February 2024, Richard will join Cairn on
10 April and, subject to shareholder approval, will join
the Board as an Executive Director following the 2024
AGM. While Shane will step down from the Board at the
2024 AGM, as part of ensuring an effective transition of
responsibilities to his successor, he will stay on to
support Richard until the third quarter of 2024.
All members of the Committee are independent
Non-Executive Directors. Members of the Senior
Leadership Team, primarily the Chief People Officer,
and the Board Chairman John Reynolds, are invited to
attend meetings. The Company Secretary Tara Grimley
also acts as Secretary to the Committee. The Committee
met four times during the year and after each meeting,
the Board was apprised of key issues discussed during our
meetings.
At the 2024 AGM, the Chairman of the Board John
Reynolds and myself, will each have served on the
Board since our IPO in 2015. The Committee reviews
Board composition holistically, seeking to balance the
benefits of the experience and continuity of longer-
serving Directors with periodic additions to the Board,
and as such, does not take a rigid approach to tenure.
The Committee considers this approach as the best
means of promoting effective dialogue and decision-
making at Board and Committee level.
While the UK Code is somewhat more prescriptive in
its guidance on the tenure of the Chairman of the
Board, having reviewed its current composition
including the recently announced Board and
Committee changes, as well as our succession plans
over the coming 12 months, the Committee and the
Board agreed that the current Chairman, John
Reynolds, should remain in position for the year ahead
and will re-seek election at the Annual General Meeting
for an additional year. Moreover, considering the
outcomes of the internal Board evaluation facilitated
by the Company Secretary, the Committee in
particular, concluded that the Board is satisfied with
the guidance and leadership provided by the
Chairman. The Board highlighted his ability to
effectively challenge executive management in a
manner that fosters constructive and meaningful
debate. During his time at the helm of the Board, Cairn
has achieved record levels of performance, built new
partnerships, and he has steered the business through
a global pandemic and more recently, cost-of-living
challenges. The Committee was also conscious of the
level of change at Board level over the course of 2024
and the important role the Chairman will play in
ensuring the orderly transition to a new CFO. Having
considered each of these factors, and the most
effective means of developing a succession plan for the
Chair in the period ahead, the Committee and the
Board are satisfied that it is in the best interests of the
Company and shareholders for John Reynolds to
continue in the position of Chairman.
As the Committee continues its search for the
appointment of new Non-Executive Directors, it has
implemented certain changes to ensure that the Board
and its Committees continue to operate at a high
standard, particularly in the context of significant
reorganisation and change.
Following Gary Britton’s decision to step down,
effective from the end of 2024, Orla O’Gorman will
assume the role of Chair of the Audit & Risk Committee
upon his retirement. Moreover, as sustainability is
further integrated into Cairn’s strategy, and in response
to evolving regulatory and reporting requirements,
coupled with the growing expectation for engagement
on these matters, the Committee and the Board have
approved the creation of a specific Board role for a
Non-Executive Director with Responsibility for
Sustainability and Environmental Impact. I will assume
this role and in order to ensure I can dedicate the
necessary time required to fulfil this role, I have
stepped down from the role of Senior Independent
Director of the Board and as Chair of this Committee. I
am succeeded by Linda Hickey, who has been
appointed Senior Independent Director of the Board,
and Julie Sinnamon, who has taken over as Chair of the
Nomination Committee.
Succession, talent capability and development
The Senior Leadership Team plays a central role in
delivering Cairn’s strategy, the ongoing development of
our talent pipeline and in fostering the culture and
values required to continue to deliver on our strategy.
The Committee consistently reviews its approach to
executive management development and succession
planning, over the short, medium, and longer term. The
aim of these reviews is to ensure the Company is in a
strong position in the event of any planned or
unplanned departures, including ensuring that senior
executives and wider employees are receiving the
appropriate training and development opportunities in
line with the challenges and opportunities of the
business. Succession for senior leadership roles, and our
strategy to support talent development by building
capability for the future, is overseen by the Committee
with support from the Chief People Officer, with formal
updates considered at least once a year. On succession,
at least annually, the Committee reviews the existing
internal pipeline of candidates for immediate and
medium- to longer-term movement into key leadership
and functional roles. This is subject to routine challenge
to ensure understanding of the breadth of internal
potential and experience represented by external talent
pools. The Committee is also regularly apprised on how
talent is benchmarking externally, and on specific
initiatives to encourage more gender and ethnic
diversity into senior leadership talent pipelines.
70
Cairn Homes plc | Annual Report 2023
Nomination Committee Report continued
Board Diversity, Skills and Expertise
The topic of diversity, equality and inclusion remains a
key priority for Cairn across all levels of the business.
The Committee is of the view that diversity and
inclusion are key drivers of business success, as they
promote balanced decision-making, with
consideration of the wider strategy of the business and
its impact on stakeholders. All Board appointments are
made on an objective and shared understanding of
merit, in line with required competencies relevant to
the Company as identified by the Committee, and
consistent with the Board’s Diversity Policy. We are
also conscious that diversity extends beyond gender
and ethnicity to include age, disability, cognitive
behaviour among other characteristics that
significantly enrich Board-level deliberations.
The Committee will continue to identify suitable
candidates based on merit against objective criteria
and with due regard for the benefits of diversity on the
Board including social and ethnic background,
cognitive and personal strengths as well as diversity
of gender.
We are pleased to report that at the end of 2023,
women represented 33% of Board members, in line
with the recommendations of the Balance for Better
Business Review and, following changes to the Board
announced in January 2024, this number increased to
37.5%. As things stand, 25% of the Senior Leadership
Team (excluding Executive Directors) are women. The
Committee is aware of the 30% target set by Balance
for Better Business and over the course of 2024, as part
of wider succession plans for senior positions, the
Committee – together with input from the Chief
People Officer – intends to attempt to meet this
requirement.
7
7
5
5
4
4
Leadership, Strategy & Commercial
Financial & Risk Management
Policy & Government Engagement
Sustainability
Capital Markets
Industry Relevant Background
Despite the differences in demographics in Ireland
compared to the UK, where ethnic representation of
the board has been achieved at the majority of FTSE
350 companies, the Committee is also aware of the
importance of widening considerations around
diversity and is seeking ways to promote greater
ethnic diversity at the Board and throughout the
organisation. Reflecting on the evolution of our
customer base in recent years, there has been a
growing emphasis on the importance of improving
ethnic diversity on the Board. To successfully achieve
our mission of creating thriving communities, the
Board and the Committee are mindful of the
significance in ensuring that ethnic and cultural
diversity is also reflected at the highest level of the
organisation. While we have not set formal targets in
this regard, the Committee will continue to take steps
to ensure that such considerations are integrated into
succession plan and recruitment efforts.
71
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
35 26
37.5 %62.5% 25%75%
34
Diversity Representation
The following tables set out the information required
to be disclosed under Listing Rule 9.8.6R(10) as set out
in Annex 2 to UK LR 9, as of 31 December, 2023. For the
purposes of these tables, Executive management is as
defined as being the Senior Leadership Team or the
most senior executive or managerial body below the
Board (or where there is no such formal committee or
body, the most senior level of managers reporting to
the chief executive), including the Company Secretary
but excluding administrative and support staff.
For Cairn, this is the Senior Leadership Team.
As set out previously in this report, following the
changes announced to the Board of Directors in
January 2024, 37.5% of the Board is now represented
by women. The Committee is aware of the UK listing
rules expectations for greater ethnic diversity on
Boards and in senior positions. While the Company has
not met the expectation of the listing rules at the date
of the publication of this report, it notes that Cairn’s
operations are solely focused in Ireland, where the
demographics are different to the UK’s.
Nonetheless, as we continue to develop succession
plans for senior management and the Board, the
Committee will continue to emphasise the benefits of
diversity beyond gender to include ethnicity in
recruitment and candidate identification processes.
The Committee has a diverse range of skills and
backgrounds, and it keeps its own and the Board’s
membership under review. As we become increasingly
aware of the impact of our business strategy on both
the environment and the communities in which we
operate, ensuring that the skills, experience and
knowledge of individuals reflect the changing
demands of the business has become a fundamental
requirement to operate.
Name Role
Independence
Classification Tenure Gender
Michael Stanley CEO No 9 M
Shane Doherty CFO No 4 M
John Reynolds Chairman N/A (Yes - on
appointment) 9 M
Giles Davies Senior Independent Director Yes 9 M
Alan McIntosh Non-Executive Director No 9 M
Gary Britton Non-Executive Director Yes 9 M
Julie Sinnamon Non-Executive Director Yes 2 F
Linda Hickey Non-Executive Director Yes 5 F
Orla O'Gorman Non-Executive Director Yes 2 F
62.50% 6.4 33.3%
Board Composition at 31 December 2023
Board Composition from 25 January 2024
Name Role
Independence
Classification Tenure Gender
Michael Stanley CEO No 9 M
Shane Doherty CFO No 4 M
John Reynolds Chairman N/A - on
appointment 9 M
Gary Britton Non-Executive Director Yes 9 M
Linda Hickey Senior Independent Director Yes 5 F
Giles Davies Non-Executive Director Yes 9 M
Julie Sinnamon Non-Executive Director Yes 2 F
Orla O'Gorman Non-Executive Director Yes 2 F
71.4% 6.1 37.5%
INDEPENDENCE
62.5%
71%
AVERAGE NED TENURE
6.4 years
6.1 years
At 31 December 2023 From 25 January 2024
Number of
Board Members
Number in
Leadership Team
% of Board % of Leadership Team
Number of senior
positions on the Board
GENDER DIVERSITY FROM
25 JANUARY 2024
Male Female
Chairman, SID, CEO, CFO, Committee Chairs
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Cairn Homes plc | Annual Report 2023
Employee Engagement
We are proud of how committed Cairn’s employees are
to the long-term success of the business and we
regularly seek feedback from engagement with
employees. The direct link between the Board and the
employee voice through the Workforce Engagement
Director Orla O’Gorman, provides an enhanced and
interactive understanding of employee sentiment.
Each year, the programme of work of Cairn’s Workforce
Engagement Director is set out with the support of our
Chief People Officer, Maura Winston. The Board is
regularly updated on the welfare of employees,
employee initiatives which include learning and
development programmes, and the detailed results of
the employee engagement survey that is conducted
on an annual basis. While we are fully aware that these
surveys do not represent a full engagement strategy,
they provide key insights into employee satisfaction
and are part of the Committee and the Board’s tools in
monitoring culture. The success of this role is measured
in action, where the employee voice is consistently
represented in these engagements and provides
important views and insights into colleagues’ opinions
and difficulties that feature and contribute to Board
and executive management discussions.
The Workforce Engagement Director uses the outputs
of this survey to conduct engagement directly with
employees focusing on what we do well and where we
could improve across a number of key areas. Over the
last year, Orla carried out meetings with teams in the
Kilkenny and Blessington sites as well as in our Central
Office. We were pleased with the results of this
assessment, where participants showed a strong sense
of belonging and alignment with the Cairn culture, a
topic that is of significant importance to Cairn. While
employees in the assessment noted that Cairn was
their employer of choice, they also provided some
insights into areas of improvement for the business
focussed on the three key areas of Team, Career
Development and Socially Responsible Business.
Nomination Committee Report continued
Strengths
• Strong team and
culture
• Strong
organisational
structure with
clearly defined
roles and leads
• Good
collaboration and
supportive work
environment
Areas of
Improvement
• Create
opportunities for
Central Office
teams to visit site
locations once a
year
• Improved
communications
for new joiners
and promotions
Team
Strengths
• Strong culture of
innovation
• Supportive
environment to
learn and develop
on the job
• Focus on
retaining culture
as the business
grows
Areas for
Improvement
• Recognition for
achievements of
different teams
• Ensure sufficient
time and
resources are
allocated to
onboard new
employees
Career
Development
Strengths
• Good
remuneration
package and
employee
benefits
• Employees feel
valued and
appreciate the
health and
wellbeing
initiatives
Areas for
Improvement
• Improved
communication
regarding people
changes and
strategic priorities
• More show and
tell to highlight all
initiatives offered
Socially
Responsible
Business
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
350+
employees completed engagement surveys
informing focus areas for the Workforce
Engagement Director
↓
3
site visits
Kilkenny, Blessington & Cairn’s Central Office
↓
18
participants in small bespoke roundtable
discussions (including four female and fourteen
male employees, across a mix of tenures) to
complete a deeper dive into the feedback
WORKFORCE ENGAGEMENT
IN NUMBERS
74
Cairn Homes plc | Annual Report 2023
Developing a
remuneration framework
that continues to support
the creation of value.
Directors’ Remuneration Report
Performance for the year
under review
As detailed throughout the Annual Report, Cairn
delivered another year of strong performance, where
the business achieved record housing output,
combined with strong earnings and a disciplined
approach to balance sheet management. The business
has also continued to place a focus on value creation,
with management driving progress towards our stated
ambition of 15% Return on Equity (“ROE”) in 2024. We
are also pleased with how cash generative the business
remains, with €85m returned to shareholders through
share repurchase programmes and total dividend
payments of 6.3c per share (FY2023 interim and final
dividends). Our financial performance has been
matched by continued progress against our key
stakeholder and sustainability measures.
Remuneration Outcomes
The Executive Directors were awarded a bonus
at 99% of maximum. The annual bonus award is
determined based on performance against a broad
range of financial, ESG/sustainability and personal
and strategic performance targets, each of which is
designed to incentivise the delivery of our strategy.
The Committee is satisfied that this outcome reflects
another year of exceptional performance against the
measures employed under the bonus scheme and
across financial indicators generally. Further details
of performance under the bonus plan are set out on
pages 85 to 87.
Awards under the long-term incentive plan will vest at
99% of total opportunity for the CEO and CFO, which
the Committee believes is an accurate reflection of the
strength of Company performance, both financially
and on the stakeholder measures employed for the
2021 award, over the three-year vesting period.
Towards the end of 2023, it was agreed that an
inflationary increase of 5% in base salary would be
applied to all employees who joined the business
before 30 June 2023, effective from 1 January 2024.
Neither of the Executive Directors have been awarded
the inflationary increase, reflecting our commitment
not to increase the CEO’s salary following the approval
of the Stretch CEO LTIP and in the case of the CFO, that
he had announced his intention to resign from his role.
Cost of Living & Employee Engagement
As a Committee, we have remained mindful of the
inflationary environment and associated cost-of-living
challenges facing Cairn’s employees. While the
strength of our underlying performance has meant we
are in a healthy position and have continued to grow
our workforce, we have taken active steps to support
employees during the past year. As detailed previously,
an inflationary increase of 5% has been awarded to all
employees (excluding Executive Directors) from
1 January 2024, and we also distributed two €500 gift
cards to all employees, in January and November 2023,
with employees below a certain base salary threshold
also receiving a once-off payment of €3,500.
In addition, we continued to provide a “Money
Management” webinar to all employees and the
extension of healthcare cover to family members
remained in place throughout 2023. Alongside these
initiatives, employees have remained eligible to
participate in the Approved Profit-Sharing Scheme
(“APSS”), which was established in 2023 and allows
employees to invest part of their annual bonus, plus
salary, in Company shares in a tax-efficient manner,
and in line with the Company’s approach to
remuneration. The Committee is fundamentally aware
of its responsibility to review workforce remuneration
and ensure a level of understanding amongst the
workforce on how executive remuneration aligns with
wider company pay strategies. Throughout 2023, the
Committee received regular updates from the Chief
People Officer on manager/employee check-in where
annual bonus and LTIP metrics and targets were
communicated, relevant benchmarking and overall
Company remuneration strategies were discussed and
Dear Shareholder,
I am pleased to introduce, on behalf of my colleagues
on the Remuneration Committee (the Committee) and
the Board, the Remuneration Report to shareholders,
which is split into three sections: this introductory
overview, the remuneration policy which will be put to
shareholders at the 2024 AGM, and the Annual Report
on Remuneration, which contains disclosure on how
Cairn’s current policy was implemented during 2023
and details on how the proposed policy will be
implemented in the year ahead.
LINDA HICKEY
CHAIR OF THE
REMUNERATION COMMITTEE
75
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
the annual performance management cycle was
completed. The Workforce Engagement Director, Orla
O’Gorman also shared her findings with the
Committee from her most recent meetings with the
wider workforce, which is set out in further detail in the
Nomination Committee report on pages 68 to 73, and
highlighted employee’s appreciation of the cost-of-
living vouchers and other financial supports in 2023.
We appreciate that employees communicated that
they felt “they were being looked after and valued.”
The Committee also ensures management continue to
inform employees of the associated metrics and
targets that are set at the beginning of each year under
the Annual Bonus and LTIP.
We will continue to focus on the experience of our
employees and any external challenges facing them
throughout 2024.
Remuneration Philosophy
As a Committee and a Board, we have been
transparent on the remuneration philosophy Cairn has
developed, which we consider to be fundamentally
aligned with the performance-orientated culture of
the business. We have consistently sought to set
modest (or below market) levels of fixed pay, which
are supplemented with ‘at-risk’ variable pay to
incentivise superior performance. While, at times,
Cairn’s approach to remuneration has deviated from
standard market practice, we are charged with taking
decisions and structuring remuneration that is
fundamentally aligned with the culture and objectives
of the business over the long-term. We are confident
we have continued to do so, and believe our
remuneration philosophy, for Executives and
throughout the business, will continue to drive
superior performance and maximise long-term value
for our shareholders and stakeholders.
Shareholder Engagement and
the Stretch CEO LTIP
The retention and motivation of the CEO was a key
priority for the Committee in 2023. Since our listing
in 2015, our CEO Michael Stanley, has been the driving
force in the creation and growth of our business, based
on his deep understanding of the industry and insight
into Cairn and its long-term strategy and values. As
part of the focus on ensuring the remuneration
framework was aligned to our ambitious growth plans
over the long-term, we developed the Stretch CEO LTIP.
Prior to finalising the terms of the award, having
engaged with shareholders representing over 80% of
the Company’s issued share capital, the Committee
made substantive changes to its structure and the
targets employed under each of the measures. As
disclosed at the time of its approval by shareholders,
there will be no changes to the CEO’s salary or bonus or
Year Round Engagement
December 2022
- March 2023
May
2023
June
2023
June 2023
- July 2023
July
2023
August
2023
September 2023
– October 2023
November 2023
– January 2024
February
2024
Actions
Letter sent out to
shareholders
representing 80% of
issued share capital
(“ISC”) offering
meetings and an
opportunity to
provide feedback
in written form
AGM and proxy
voting related
engagement
Initial letter sent to
shareholders
representing 80% of ISC
detailing proposed
changes to CEO
remuneration
Ongoing engagement
with shareholders
to incorporate
feedback and finalise
the terms of the
Stretch CEO LTIP
Letter sent out to
wider shareholder
base and proxy
advisors ahead of the
EGM, detailing the
changes made in
response to
shareholder feedback
Shareholder
engagement
at the EGM
Letter issued to
shareholders
representing 80% of
ISC offering further
engagement on
approach to
remuneration
Shareholder letter
detailing updates to
the 2024
Remuneration Policy
and offering
shareholders the
opportunity to
provide feedback
Update on the
engagement with
shareholders
published on
Company website
Nature of engagement and topics of discussion
AGM resolutions,
including Board
elections,
remuneration and
share capital
management
Voting intentions
and general
enquiries around
the AGM
Committee’s approach
to remuneration for the
CEO and alignment with
strategy. Shareholder
expectations on
remuneration and
feedback on the
proposed Stretch
CEO LTIP
Following initial
feedback from
shareholders,
discussion on
Committee’s changes
to the proposed
approach, including
targets and timeline
Written follow ups
from shareholders
regarding final
changes
Voting intentions and
general enquiries
around the EGM
The Committee’s
response to
opposition at the
EGM in August and
future changes to the
Company’s
remuneration policy
Details of the
proposed
amendments to the
remuneration policy,
including reduction in
pension and increase
in deferral
arrangements
76
Cairn Homes plc | Annual Report 2023
Directors’ Remuneration Report continued
LTIP opportunity during the four year performance
period that applies to the Stretch CEO LTIP. Although
the proposal was approved with significant
shareholder support, the Committee acknowledges
that approximately 32% of shareholders opposed the
plan’s approval. Based on the feedback from our
extensive shareholder engagement efforts before and
since that meeting, we identified the primary issues
raised by certain shareholders as relating to the plan’s
one-off nature, the absence of a TSR metric and the
appropriateness of the targets chosen. While the
Committee and Board considered alternative
approaches in developing the plan, such as increasing
salary and regular incentive opportunities in line with
market rates, we remain firm in our conviction that the
revised LTIP was the most appropriate means of
aligning the CEO’s interests with the delivery of
strategy and shareholder interests. In contrast to
increases in fixed remuneration, payouts will only be
released if truly demanding targets are achieved over
the long-term, ensuring continued creation of value for
stakeholders.
Following the voting outcome at the EGM, the
Committee again wrote to shareholders to offer
further engagement, with a particular focus on those
who had opposed the plan, while also detailing the
proposed changes to the Remuneration Policy to be
put to shareholders at the 2024 AGM. It was clear from
those engagements that shareholders had no further
specific feedback on the plan’s terms and the
Committee is satisfied that there is a clear
understanding of our aims in designing the plan and
the value that will be created in the event of the
achievement of targets. In line with the provisions of
the UK Code, we also provided an update on
engagement within six months of the vote result.
Departure of the Incumbent CFO
Cairn’s CFO, Shane Doherty, announced his decision to
step down from his role in October 2023. As
announced at the time, in confirming his departure,
Shane agreed to stay on past the expiration of his
statutory notice period, which the Committee and the
Board felt was important as a means of ensuring an
orderly transition of responsibility to his successor and
continuing to support the current management team
while that recruitment process was carried out.
Having worked the entire year, Shane was entitled to
receive his 2023 annual bonus award in full and any
entitlement for a bonus in 2024 will be pro-rated to his
final departure date, subject to the achievement of
performance targets. Given that Shane will cease to be
an employee during 2024, the Committee agreed to
waive the deferral requirements that would have
applied to his 2023 bonus.
In recognition of his strong performance and, more
importantly, his commitment to Cairn by agreeing to
stay beyond his contractual notice period of six
months, the Committee has determined that Shane
will be treated as a good leaver under the LTIP, in line
with the rules approved by shareholders in 2017.
As a Committee, we are grateful for Shane’s
commitment to the business beyond his notice period,
to the third quarter of 2024, which will play an
important role in the effective transition of
responsibilities to the incoming CFO Richard Ball,
during 2024. All outstanding awards granted to him
under the LTIP, namely those awarded in 2022 and
2023, will remain subject to performance and will be
reduced pro-rata to reflect his final departure date in
2024. Post-employment shareholding obligations, to
retain 100% of salary in shares for one year and 50% of
salary for two years, will continue to apply.
Remuneration Arrangements for New CFO
The Remuneration Committee considered the
remuneration arrangements for Richard Ball prior to
the announcement of his appointment in February
2024. In line with best practice, Richard will be paid in
accordance with our Remuneration Policy. Richard will
begin his employment as CFO on 10 April and, subject
to shareholder approval at the AGM in May, will be
appointed to the Board as an Executive Director. Upon
appointment, Richard’s remuneration arrangements
will be:
• a base salary of €375,000 per annum;
• a bonus opportunity of up to 115% of base salary,
of which 33% will be paid in shares deferred for two
years;
• in his first year of participation, he will receive an
LTIP award of 200% of base salary, to reflect awards
forfeited at his previous employer. The calculation
of this award was made taking into account the
form of the award forfeited, the proportion of
performance period served and the value forfeited;
• from 2025, his award levels will revert to the normal
maximum under the LTIP, being 150% of base salary;
• he will be entitled to pension contributions of 10%
of salary per annum;
• he will receive standard benefits, which are not
materially different in nature or value relative to the
incumbent Chief Financial Officer;
• he will be required to build a shareholding in the
Company of 100% of salary within 5 years of
appointment; and,
• he will have a six month notice period.
The remuneration arrangements for the new CFO are
entirely aligned with the existing and proposed
remuneration policies and the Committee is fully
satisfied that they were no more than necessary to
secure a candidate of such high calibre at an important
juncture for the business.
Changes to the Remuneration Policy
As Cairn continues to scale and meet strong demand in
the Irish market, the Committee is satisfied that our
approach to remuneration remains aligned with the
delivery of our strategy, supporting the Company in its
aim of building for good.
Following on from our commitment in last year’s
annual report, Executive Directors’ pension
contributions have been capped at 10% of base salary
from January 2024. In addition, and in an effort to drive
further alignment with shareholder interests, bonus
awards will be subject to increased deferral
arrangements, whereby 33% of any payouts will be
delivered in equity following a two-year deferral
period. This change increases deferral requirements
from the current arrangements, whereby only the
portion of bonus paid above 125% of salary would be
subject to deferral.
In addition to the changes to the Policy above, the
Committee has revised certain aspects of the
weightings under the annual bonus plan. While the
Committee retains discretion to alter the measures
and weightings applicable to incentive plans under the
policy, for 2024, the weighting of financial measures
under the annual bonus plan will be increased to 70%,
with non-financial measures – comprising a
combination of ESG and personal measures –
weighted at 30%. The reduction in the weighting of the
personal and strategic measures is reflective of the
maturity of our business, with 90% of measures now
subject to quantifiable financial or ESG measures.
Under the LTIP, financial measures will remain
weighted at 80%, with an ESG measure, currently
biodiversity focussed, weighted at 20%. In recent years,
we have successfully integrated material
Sustainability/ESG metrics into our incentive
arrangements, in recognition of the importance of
those areas to our ability to create value for
stakeholders over the long-term. As we further
develop our sustainability strategy, the Committee is
reviewing the appropriateness of introducing
emissions reduction targets in the LTIP particularly
in light of the recent validation of our emissions
reductions targets by the SBTi. As we further develop
our sustainability strategy, we have continued to focus
on ensuring our incentive framework aligns with our
medium and long-term targets. In 2023, we received
validation of our scope 1, 2 and 3 targets from the SBTi,
and launched our first passive housing apartment
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Strategic Report Corporate Governance Financial Statements
scheme, which will play a central role in our efforts to
achieve our ambitious decarbonisation targets. In
recognition of the importance of Cairn’s
decarbonisation strategy, the Committee has decided
to include an “Energy efficiency/Passive Housing”
metric in the 2024 LTIP, which will operate alongside
the biodiversity metric, introduced in 2022, with a
weighting of 10% for each measure.
The additional award for the CEO, granted in October
under the Stretch CEO LTIP, operates separately to the
Remuneration Policy. The 2024 Remuneration Policy
being put to shareholders at the upcoming AGM will
thus be subject to limited updates, primarily to ensure
continued alignment with market practice and
shareholder expectations. The full Policy detail is
included later in this report.
Chairman Fees
The Committee also reviewed the fees paid to the
Chairman of the Board. The fee for the Chairman was
last reviewed in 2017 and there has been a clear
increase in the time commitment involved in his role,
including in relation to Board effectiveness,
shareholder and stakeholder engagement and
sustainability. Following a review of the time
commitments, and having employed external data as
a reference point, the Chairman’s fee was increased by
20%, from €150,000 p.a. to €180,000 p.a. The
Committee is satisfied this revised fee accurately
reflects the increase in his role and responsibilities and
remains reasonable relative to market rates.
Conclusion
2023 was another year of strong performance for the
Company. The Board and the Committee are confident
that the Company’s incentive arrangements and
reward structures have played a key role in
contributing to the strength of our performance over
the past four years, aligned with our performance
orientated culture and the delivery of the long-term
strategic objectives of our business.
Throughout 2023, we engaged extensively with our
shareholders, to ensure that our decisions are clearly
understood and, where appropriate, the input of
shareholders is integrated into our remuneration
framework and associated reporting. We are confident
that the latest evolution of our remuneration policy,
and the decisions made around incentives during 2023,
will continue to support the generation of value for
stakeholders in the periods ahead.
On behalf of the Committee, I would like to thank
shareholders, employees, and our other stakeholders
for their continued support during 2023.
LINDA HICKEY
CHAIR OF THE REMUNERATION
COMMITTEE
Role of the Remuneration Committee
The Committee’s role is to determine and agree the
Remuneration Policy for Executive Directors and
senior management and to monitor and report on it.
The Committee’s responsibilities, delegated
by the Board as set out in its Terms of Reference, are to:
• determine the remuneration packages of the
Chairman, Chief Executive Officer and Chief
Financial Officer and oversee the remuneration
structures for other senior managers, including
salary, annual incentive, pension contributions and
compensation payments, and oversee any major
changes in employees benefits structures
throughout the Company;
• nominate Executive Directors and management for
inclusion in the LTIP, to grant awards under the LTIP,
to determine whether the criteria for the vesting of
awards have been met and to make any necessary
amendments to the rules of the LTIP;
• ensure that contractual terms on termination or
redundancy, and any payments made, are fair to
the individual and the Company;
• be exclusively responsible for establishing the
selection criteria, selecting, appointing and setting
the Terms of Reference for any consultants who
advise the Committee; and
• obtain up to date information about remuneration
in other companies of comparable scale and
complexity.
Key Responsibilities and Activities in 2023
An overview of the Committee’s activities during 2023
is outlined below:
• reviewed annual performance of the Executive
Directors.
• determined fixed and variable remuneration for
Executive Directors and senior management.
• designed the Stretch CEO LTIP in conjunction with
external advisors and engaged extensively with
shareholders to ensure its success at EGM.
• set 2023 LTIP and Annual Bonus targets.
• determined performance outcomes for the 2021
LTIP award.
• assessed efficacy and stretch of LTIP targets
through all cycles ensuring the 2023 LTIP awards
were linked to succession planning.
• reviewed and made progress against the
remuneration strategy agreed to execute the
Remuneration Policy.
• developed the Remuneration Policy to be tabled at
the AGM in May 2024.
• determined the exit arrangements for the exiting
CFO.
• determined the remuneration arrangements for
the incoming CFO.
• worked with the Committee’s consultants during
2023 to ensure rigour of Committee analysis and
decisions as well as reviewing remuneration trends,
extensive benchmarking reports and reviews of
evolving market practices.
• considered and approved the Directors’
Remuneration Report and remuneration disclosure
requirements.
• reviewed and approved its annual agenda and
Terms of Reference.
Committee Membership
The Committee currently consists of three Non-
Executive Directors whose collective role includes
ensuring that the Group’s remuneration arrangements
are aligned with the Group’s strategic priorities. The
Terms of Reference of the Committee include the
determination of the remuneration packages for
Executive Directors, the Company Secretary and other
members of the senior management team. The
Chairman and the Executive Directors determine the
fees for the Non-Executive Directors. The Terms of
Reference for the Committee are reviewed annually,
are updated as appropriate and are available on the
Group’s website, www.cairnhomes.com.
The Company Secretary acts as Secretary to the
Committee. During the year, the Chairman of the
Board, the Chief Executive Officer, Chief Financial
Officer and the Chief People Officer attended meetings
on an ad hoc basis at the invitation of the Committee
and provided information and support as requested.
No individual was present when their own
remuneration was being discussed.
The below table sets out the Committee membership including their attendance and tenure:
Committee Member Meeting Attendance Committee Tenure
Linda Hickey (Chair) 7/7 5 years
Gary Britton 7/7 9 years
Giles Davies 7/7 9 years
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Directors’ Remuneration Report continued
Remuneration Policy
Remuneration Philosophy
The Company’s proposed 2024 Remuneration Policy is set out on pages 79 to 83, reflecting evolving market practice, strategy and shareholder feedback. Through the implementation of the Remuneration Policy, the Board seeks to
align the interests of Executive Directors and other senior management with those of shareholders, within the framework set out in the UK Corporate Governance Code.
Central to this Policy is the Company’s commitment to long-term, performance-based incentivisation and the encouragement of share ownership, both of which are aligned to embedding an ‘ownership mindset’ within the
Company’s performance orientated culture.
The primary objective of the Policy is to promote the long-term success of the business by ensuring remuneration reflects business performance and personal contribution to the delivery of the Company’s strategy in a way which
creates long-term shareholder value. Through the operation of the Policy, the Committee seeks to ensure that:
• the Company will attract, motivate and retain individuals of the highest calibre;
• executive Directors and senior management are rewarded in a fair and balanced way which promotes the long-term success of the Company;
• executive Directors and senior management receive a level of remuneration that is appropriate to their scale of responsibility and individual performance;
• the overall approach to remuneration has regard to the sector and geography within which the Company operates and the markets from which it draws its Executive Directors and senior management; and
• risk is properly considered in setting the Policy and in determining remuneration packages.
The elements of the remuneration package for the Executive Directors and other senior management are annual salary, retirement benefits and allowances, annual performance-related incentives and participation in an LTIP, which
promotes the creation of sustainable shareholder value.
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Strategic Report Corporate Governance Financial Statements
2024 Remuneration Policy
The key elements of remuneration for Executive Directors and other senior management under the Remuneration Policy are set out in the table below.
Element of Remuneration Approach Maximum Opportunity Changes to the Existing Policy
Salary
To attract and retain high
performing talent required to
deliver the business strategy,
providing core reward for the
role.
Salaries are reviewed annually. The factors taken into account in the review include:
• role and experience;
• company performance;
• personal performance; and
• benchmarking against an appropriate comparator group.
When setting Executive Director salaries, account is taken of movements in salaries generally
across the Company.
Any annual salary increases will be considered
in the context of market median levels, any
changes to the scope and responsibilities of the
role and to reflect wider considerations of
performance and increases in pay for the wider
workforce.
Annual Incentives
To incentivise and reward the
delivery of near-term business
targets and objectives.
Bonus Deferral
Annual Incentives payments to Executive Directors and other senior management are based on
a mix of financial and non-financial measures. The measures, their weighting and the objectives
are reviewed on an annual basis.
The Committee can apply appropriate discretion in specific circumstances in respect of
determining the incentive payment to be awarded.
Malus and clawback provisions apply based on the Malus and Clawback Policy.
33% of any bonus awarded to Executive Directors is deferred into shares for a period of two years.
The maximum award as a percentage of base
salary for the Executive Directors is 150%.
Increase in deferral arrangements. All bonuses
subject to deferral of one-third of awards for
two years.
Long-Term Incentive Plan
(“LTIP”)
To reward and retain Executive
Directors and senior
management over the longer
term and align the interests of
management and shareholders
through incentivising the
delivery of strategy.
The LTIP provides for annual awards of Performance Shares. It is the Committee’s intention that the
primary long-term incentive vehicle will be made through regular awards of Performance Shares.
Performance Share awards vest based on the achievement of three-year financial and non-
financial performance measures. The Committee will consider the appropriate measures and
targets for each cycle depending on strategic priorities at that time. Awards made to the
Executive Directors are subject also to an additional two-year hold period after vesting.
Dividend equivalents may be awarded in respect of the awards that vest.
Malus and clawback provisions apply based on the Malus and Clawback Policy.
Under normal circumstances, the maximum
annual award of Performance Shares is up to
150% of base salary.
In exceptional circumstances, such as
recruitment, awards of up to 200% of salary
can be made.
No more than 5% of the issued ordinary share
capital may be issued or reserved for issuance
under the LTIP over any ten-year period.
Retirement Benefits
To attract and retain talent by
enabling long term pension
saving.
Executive Directors and senior management participate in a defined contribution pension
scheme or receive cash in lieu of a pension. The pension scheme gives the Company full
discretion to pay appropriate contribution levels. The Committee takes account of market and
benchmarking data for pension contributions for each employee group.
For Executive Directors, the pension
contribution is set at a maximum of 10% of
salary.
Reduction in maximum pension entitlement
to 10% of base salary.
Allowances
To provide market competitive
benefits consistent with role.
The main benefits are health insurance cover and a car allowance. Other benefits can include
subscriptions, health screenings and participation in “Save as You Earn” plans.
Maximum levels have not been set as
payments depend on the individual’s
circumstances and may be subject to change
periodically.
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Directors’ Remuneration Report continued
Remuneration Policy continued
Notes to the Policy Table
The Committee may make minor amendments to the Policy set out above (for regulatory, exchange control, tax or administrative purposes or to take account of a change in legislation) without obtaining shareholder approval for
that amendment. The rules of the incentive plans permit the substitution or variance of performance conditions to produce a fairer measure of performance as a result of unforeseen circumstances or transactions and include
discretions for upwards adjustment to the number of shares to be realised in the event of a takeover, scheme of arrangement or voluntary winding up. Non-significant changes to the performance metrics may be made by use of
discretion under the LTIP rules.
The Committee reserves the right to make remuneration payments and payments for loss of office (including exercising any discretions available to it in connection with such payments) that are not in line with the policy table set
out above where the terms of the payment were agreed: (i) before the Policy came into effect; or (ii) at a time when the relevant individual was not a Director of the Company and, in the opinion of the Committee, the payment was
not in consideration for the individual becoming a Director of the Company.
Performance measures for the annual bonus scheme and the LTIP are selected to focus the Executive Directors on strategic financial and operational priorities, both short-term and those related to long-term sustainable
performance, providing alignment with shareholder interests. Targets for each performance measure are then set by the Committee in light of strategic objectives over the short-term for the annual bonus scheme and over at least a
three-year performance period for the LTIP. In setting targets, the Committee takes into account a number of reference points including our three-year plan and the external market.
Malus and Clawback Policy
Incentive payments made to the Executive Directors and other senior management may be subject to clawback for a period of three years from date of payment in certain circumstances including:
• a material restatement of the Company’s audited financial statements;
• business or reputational damage to the Company or a subsidiary arising from a criminal offence, serious misconduct or gross negligence by the individual; or
• a material breach of applicable health and safety regulations by the individual.
The rules of the LTIP provide for discretion to the Committee to reduce or impose further conditions on awards prior, or subsequent, to vesting in the circumstances outlined above. Malus conditions will also apply to any unvested
LTIP awards and will be applicable for the same circumstances.
Fees Operation Maximum Opportunity
The fees paid to Non-Executive Directors reflect their experience and
ability and the time demands of their Board and Board Committee duties.
A basic fee is paid for Board Membership. Additional fees are payable to the
Chairman, Chair of the Board Committees, the Director responsible for
Workforce Engagement, the Director responsible for Sustainability and
Environmental Impact and the Senior Independent Director.
Additional fees may be paid for membership of a Board Committee.
The remuneration of the Chairman is determined by the Remuneration
Committee for approval by the Board.
The remuneration of the other Non-Executive Directors is determined by
the Chairman and the Chief Executive Officer for approval by the Board.
The fees are reviewed from time to time, taking account of any changes in
responsibilities and market practice.
No prescribed maximum annual increase but benchmarking and market
practice will determine any change in fees.
Non-Executive Directors do not participate in the Company’s Annual
Bonus Plan or LTIP, and do not receive any retirement benefits from the
Company.
Non-Executive Directors Letters of Appointment
Non-Executive Directors have Letters of Appointment which set out their duties and responsibilities. The appointments are for three-year terms but are terminable on one month’s notice by the Board.
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Policy on External Board Appointments
Executive Directors may accept external Non-Executive Directorships with the prior approval of the Board. The fees received for such roles may be retained by the Executive Directors. The Board recognises the benefits that such
appointments can bring both to the Company and to the Executive Director in terms of broadening their knowledge and experience.
Share Ownership Guidelines
To encourage general share ownership and ensure alignment of Executive Directors interests with those of shareholders, the Committee has adopted guidelines for Executive Directors to retain substantial long-term share
ownership. Under the policy Executive Directors are required to hold shares equivalent to 100% of base salary.
In normal circumstances, the CEO is required to hold shares equivalent to 300% of base salary while his direct reports are required to hold 100% of base salary, calculated by reference to the value of their shares on the acquisition date.
As part of the terms of the Stretch CEO LTIP, the CEO has agreed to hold at least 25% of his existing shareholding (being 5.5 million shares at the time of approval of the plan) for the six-year period under which the plan is in operation.
Executive Directors and other senior management will be required to hold 50% of any vested LTIP shares until the applicable ownership level is achieved. The guidelines also specify that Executive Directors should, over a period of
five years from the date of appointment, build up and retain a shareholding in the Company equal to 100% of base salary. On termination of employment, a departing Executive Director will be required to hold shares valued at 100%
of base salary for one year after departure, reducing to 50% of salary two years after they exit.
Differences in Pay Policy for Employees and Executive Directors
The principles applied to the remuneration of Executive Directors are essentially the same as those throughout the Company. The difference between pay for Executive Directors and other employees is that for Executive Directors
the variable pay element forms a greater proportion of the overall package and the total remuneration opportunity is higher to reflect the increased responsibility of the role.
While the Committee’s specific oversight of individual remuneration packages extends only to the Executive Directors and a number of senior management, it aims to create a broad policy framework to be applied by management to
employees throughout the Company, through its oversight of remuneration structures for senior management and of any major changes in employee benefits structures throughout the Company. Alignment is delivered by ensuring that
senior management and Executive Directors participate in the same bonus and incentive schemes as far as possible, with similar performance measures and targets.
Remuneration Policy for Recruitment of New Executive Directors
In determining the remuneration package for new Executive Directors, the Committee will be guided by the principle of offering such remuneration as is required to attract, retain and motivate a candidate with the particular skills
and experience required for a role. The Remuneration Committee will generally set a remuneration package which is in accordance with the terms of the approved Remuneration Policy in force at the time of the appointment, though
the Committee may make payments outside of the Policy if required in the particular circumstances and if in the best interests of the Company and its shareholders. Where an individual forfeits outstanding incentive awards with a
previous employer, the Committee may offer compensatory awards to facilitate recruitment. These awards would be in such form as the Committee considers appropriate, taking into account all relevant factors including the form,
expected value, anticipated vesting and timing of the forfeited awards. The value of any compensatory awards would be no higher, in the opinion of the Committee, than the value forfeited.
For an internal appointment, any variable pay element awarded in respect of the prior role and any other ongoing remuneration obligations existing prior to the appointment will be honoured.
Service Contracts
The service agreements of the Executive Directors are rolling contracts which were entered into on the dates shown in the table below.
Name Contract Effective Date
Notice Period
(Director)
Notice Period
(Company)
Michael Stanley 9 June 2015 12 months 12 months
Shane Doherty 14 April 2020 6 months 6 months
Richard Ball, incoming CFO, will join the business on 10 April 2024 and will have a six month notice period.
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Directors’ Remuneration Report continued
Remuneration Policy continued
Policy for “Leavers”
On termination of an Executive Director’s contract, the Committee’s objective is to agree an outcome which is in the best interests of the Company and its shareholders, taking into account the specific circumstances and
performance of the individual, as well as any relevant contractual obligations and incentive plan rules. The provisions for “leavers” in respect of each of the elements of remuneration are as follows:
Salary and Benefits
Payments are made in respect of annual salary and benefits for the relevant notice period. The notice period for the Chief Executive Officer is 12 months and for other Executive Directors the notice period is a maximum of 12
months. In all cases, the notice period applies to both the Company and the individual.
Annual Bonus
The Committee can apply appropriate discretion in respect of determining the annual incentives, if any, to be awarded based on actual achieved performance and the period of employment during the financial year. The Committee’s
consideration will include the individual’s performance and contribution in the year in which they leave as well as the basis on which they are leaving the Company.
LTIP
The Committee would normally exercise its discretion when dealing with a participant who ceases to be an employee by reason of certain exceptional circumstances e.g., death, injury or disability, redundancy, retirement or any
other exceptional circumstances. In such circumstances, any shares that have not already vested on the participant’s cessation date would be eligible for vesting on the normal vesting date or other date determined by the
Committee. The number of shares vesting would be determined by the Committee, although the default position would be to pro-rate for the proportion of the vesting period elapsed at cessation and to continue to apply the
performance conditions.
A post-employment shareholding requirement will apply to Executive Directors who will be required to hold shares valued at 100% of base salary for one year after departure, reducing to 50% of salary two years after they exit. In the
event that a participant ceases to be an employee by reason of a termination for serious misconduct, share awards held by the participant, whether or not vested, would lapse immediately on the service of notice of such termination,
unless the Committee in its sole discretion determines otherwise.
In the event that a participant resigns voluntarily, the Committee will consider their contribution to the business in determining if good leaver status would be awarded for unvested awards. Each circumstance will be determined on a
case-by-case basis and the Committee will exercise its discretion in the best interests of the Company and shareholders.
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Strategic Report Corporate Governance Financial Statements
Remuneration Outcomes in Different Performance Scenarios
2023 was another year of strong performance for the Company. The Board and the Committee are confident that the Company’s incentive arrangements and reward structures have played a key role in contributing to the strength of
our performance over the past four years, aligned with our performance orientated culture and the delivery of the long-term strategic objectives of our business.
The total remuneration opportunity for Executive Directors is strongly performance based and weighted to the long term. The charts below illustrate the total potential remuneration of Executive Directors under four assumed
performance scenarios:
Chief Executive Officer Chief Financial Officer
€2,500,000
€2,000,000
€1,500,000
€1,000,000
€500,000
0
€3,500,000
Minimum On Target Maximum Max+50%
Pay
at risk
€487,500
€487,500
€487,500
€487,500
€478,125
€1,275,000
€1,593,750
100%
50%
28%
23%
50%
72%
77%
€2,500,000
€2,000,000
€1,500,000
€1,000,000
€500,000
0
€3,500,000
Pay
at risk
Minimum On Target Maximum Max+50%
€427,500
€427,500
€427,500
€427,500
€421,875
€1,125,000
€1,406,250
100%
50%
28%
23%
50%
72%
77%
Minimum: Includes fixed pay only (salary, pension and benefits). There is no annual bonus payment and no vesting under the LTIP.
On Target: Fixed pay plus target bonus payout of 75% of base salary and 25% payout under the LTIP.
Max: Fixed pay plus full bonus payout of 150% of base salary and full LTIP payout of 150% of base salary.
Max+50%: Same as Max but also includes the impact of a 50% share price appreciation on the LTIP payout.
The Stretch CEO LTIP, approved by shareholders at an EGM on 31 August 2023, operates outside of the Remuneration Policy (which will be put to shareholder vote at the AGM on 10 May 2024) and the Company’s Long Term Incentive
Plan (approved by shareholders at the 2017 AGM) and has thus been excluded from the above scenarios.
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Cairn Homes plc | Annual Report 2023
Remuneration at a Glance
The purpose of this section is to provide an overview of the Group’s performance in 2023 as well as the remuneration of our Executive Directors during the year and for the year ahead.
Directors’ Remuneration Report continued
Annual Report on Remuneration
Fixed Pay
BASE SALARY
€425,000 €375,000
(CEO) (CFO)
PENSION CONTRIBUTIONS
12.5% of base salary
BENEFITS
Health insurance and car allowance
Long Term Incentive Plan
2023 LTIP GRANT
€637,500 €562,500
(CEO) (CFO)
PERFORMANCE CONDITIONS
Measures Weighting Threshold Max
Cumulative Basic EPS 60% 0.38c 0.40c
ROE (in FY2025) 20% 12% 15%
ESG: Biodiversity
1
20% 40% 50%
2023
Annual Bonus
2023 ANNUAL BONUS EARNED
€631,125 €556,875
(CEO) (CFO)
1. Units commencing on Biodiversity Net Gain sites as a % of all units commencing. 2. With a Health & Safety underpin 3. Bonus deferral arrangements were not applied to the incumbent CFO as he is exiting the business during 2024 4. Targets will be disclosed in April at time of grant
2023 ANNUAL BONUS OUTCOME
Measure Weighting Outcome
EBIT 60% 60%
Stakeholder: People &
Customer
2
20% 19%
Personal/Strategic 20% 20%
Overall 100% 99%
2023 BONUS DELIVERY
CEO CFO
Vesting Outcome
99% 99%
Total Bonus Earned
€631,125 €556,875
Cash
€422,853 €556,875
Delivered in Shares
€208,272 N/A
3
Fixed Pay
BASE SALARY
€425,000 €375,000
(CEO) (CFO)
PENSION CONTRIBUTIONS
10% of base salary
BENEFITS
Health insurance and car allowance
Long Term Incentive Plan
AWARDS % OF BASE SALARY
150% 20 0%
(CEO) (CFO)
The incoming CFO will receive a joining LTIP award of 200%
of base salary. The incumbent CFO will not be eligible for an
award under the 2024 LTIP as he will be exiting the business in
the third quarter of 2024.
PERFORMANCE CONDITIONS
Measure Weighting Threshold Max
Cumulative Basic EPS 55% 0.51c 0.57c
ROE (in FY2026) 25% 14% 16%
ESG: Biodiversity
1
10% 49% 55%
ESG: Carbon Reduction
/ Passive Housing
4
10% TBC TBC
2024
Annual Bonus
% OF BASE SALARY
150% 150%
(CEO) (CFO – will be pro-rated for time served in 2024)
2024 ANNUAL BONUS FRAMEWORK
Measure Weighting
EBIT 70%
Stakeholder: People & Customer
2
20%
Personal/Strategic 10%
Total 100%
2024 BONUS DEFERRAL
33%
of total bonus paid to be deferred into shares for CEO
and incoming CFO
3
.
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Strategic Report Corporate Governance Financial Statements
IMPLEMENTATION OF THE 2020 REMUNERATION POLICY IN 2023
Single Total Figure of Remuneration
Remuneration Outcomes for Executive Directors for the Year Ended 31 December 2023
The table below sets out the details of the remuneration paid to the Executive Directors for the year ended 31 December 2023, with comparatives for the prior year ended 31 December 2022.
Salary Pension Benefits Total Fixed Annual Bonus LTIP Total Variable Total Pay
Ratio of Fixed
to Variable
Executive Director
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023 2022
Michael Stanley 425 425 53 64 10 21 488 510 631 617 817 – 1,448 617 1,936 1,127 25 / 75 45 / 55
Shane Doherty 375 375 47 56 15 15 437 446 557 417 721 912 1,278 1,329 1,715 1,775 25 / 75 25 / 75
The LTIP values for 2023 represent an estimate of the value of the 2021 awards, which are due to vest in April 2024, and were valued at the average share price for the three months ended 31 December 2023 (€1.20), plus dividend
equivalents. The LTIP values for 2022 represent the final value of the 2020 LTIP awards, which vested in 2023 and included the joining award for the CFO.
Pension
The maximum pension contribution for Cairn’s Executive Directors has been reduced to 10% of salary, effective from 2024. This final adjustment to pension contributions for Cairn’s incumbent Executive Directors was carried out in
line with the wider review of Cairn’s executive remuneration policy and in line with shareholder expectations.
2023 Annual Bonus
The maximum bonus opportunity for 2023 was 150% of salary for the Chief Executive Officer and the Chief Financial Officer. Annual incentives were based on a mix of financial and non-financial objectives. The financial measure
employed was EBIT (60% of maximum), the non-financial stakeholder measures (20% of maximum) related to people and customer metrics with a health and safety underpin, with personal and strategic objectives (20% of maximum)
relating to strategy, land bank, risk, brand, talent development and technology and innovation. There were full pay-outs under each component of the bonus with the exception of the customer metric. The Committee considers the
final 2023 Annual Bonus outcome to be aligned with strong financial performance, continued progress on people and customer measures and the personal contribution of Executive Directors. Further details are set out below:
Measure Weighting
Threshold
(20%) Max (100%)
2023
Performance Payout
Financial EBIT 60% €75m €107m €113m 60%
Non-Financial
Customer Experience (10%)
People Engagement & Development (10%)
(Health & Safety underpin)
20% N/A N/A See overleaf 19%
Personal & Strategic 20% N/A N/A See overleaf 20%
Total 100% 99%
Bonus Deferral
For 2023, 33% of bonus paid to the CEO will be deferred into shares. The following was the resulting breakdown of the payout for 2023:
Name
Maximum Bonus
(% of salary)
Payout
(% of salary)
Actual Bonus
Awarded
Value of Bonus
Paid in Cash
Value of Bonus
Deferred into Shares
Michael Stanley (CEO) 150% 149% €631,125 €422,853 €208,272
As the CFO had announced his intention to step down from his role, the Committee agreed to waive the deferral requirements for his 2023 bonus, resulting in the entire bonus being awarded in cash.
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Cairn Homes plc | Annual Report 2023
The People Engagement and Development and Customer Experience measures, targets and associated performance for 2023 are detailed below:
People Engagement & Development
Pillar Objective Target Performance
Engagement &
Employee Satisfaction
• Measure employee satisfaction through anonymous
engagement survey
• Retain employee Net Promoter Score (“eNPS”) above 28 • eNPS achieved of 42
People Development • Upskill employees through continued career
development and continuous learning
• 75% of people managers to undergo management
development masterclasses
• 84% of people managers underwent a four hour management masterclass to
ensure more consistent management capability across the business
Customer Experience
Pillar Objective Target Performance
Delivery • Measure delivery of product in line with customer
expectations
• 100% of homes delivered in line with customer
expectations
• 100% of homes delivered on target
Experience • Capture experience and insights from customer to
influence future performance
• 75% of customers responding must rate Cairn as 4 or
above on the Likert scale
• 87% of customers rated Cairn as 4 or above
Aftercare • Measure customer care performance against agreed
criteria
• 80% of cases reviewed, triaged and assigned to
Aftercare within 5 days
• 95% of cases to be closed within 30 day SLA
• 82% of cases were reviewed, triaged and assigned to Aftercare within 5 days
• 91% of cases were closed within the 30 day SLA
Health & Safety underpin
The above measures were also subject to a Health & Safety underpin, performance of which was determined by the Audit & Risk Committee and a recommendation on achievement made to the Remuneration Committee. The Audit
& Risk Committee determined that the underpin for 2023 had been successfully met, by reference to the achievement of the 2023 annual objectives which included a review of external audit scores, the rollout of additional training
programmes, an assessment of Health and Safety statistics including accident frequency rates and first aid incidents, and by reference to the Safe T Cert programme rating.
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
During the past year, exemplified by the strong financial performance of the Company, the below personal and strategic measures were achieved:
Chief Executive Officer – Michael Stanley
Area & Weighting Outcome Aims and Measures Performance Review
Strategy &
Leadership (8%)
8% • Define and lead strategy to continue to grow and scale the business
• Identify & influence market opportunities to capture addressable
opportunity across all customer cohorts
• Drive Cairn’s Sustainability Strategy & support framework
implementation
Delivered the refreshed Corporate Strategy and drove strategic change in supply chain and procurement practices
Successfully progressed a number of strategic opportunities with State Partners, whilst also completing several high
profile new scheme launches in our core FTB market and delivering strong sales rates across all selling trade-up/down
schemes
Set our scope 1 -3 carbon reduction targets which were validated by the SBTi and commenced two Passive House
apartment schemes
Landbank &
Portfolio (4%)
4% • Strategic management of existing landbank to balance market
demand, maximise revenue and deliver unit targets
Strategic management of landbank driven by agile decision making and timely purchase of ready-to-go sites maximising
capital allocation
Risk (4%) 4% • Risk balanced approach and best in class governance Agile and effective management and governance when dealing with macroeconomic challenges
Speed of response in dealing with subcontractors, implementing procurement strategies which took advantage and
leveraged strength of partnerships to secure product pipeline and manage costs inflation
Brand (2%) 2% • Exceptional leadership to support corporate reputation, brand and
position within the external market
Successful launch of our “Built for Good” messaging across multiple platforms. Partnered with State-supported and local
authorities to bring over 500 much needed social and affordable homes to market. Quality, customer, community and
value for money from a pricing perspective drove the communication and execution of the 1,700 homes and Built for
Good program
Talent
Management (2%)
2% • Develop leadership team to drive further effectiveness & support
delivery of targets and strengthen future succession
Delivery of a Leadership Development Program including a 360 feedback initiative supported by one-on-one and group
executive coaching
Chief Financial Officer – Shane Doherty
Area & Weighting Outcome Aims and Measures Performance Review
Strategy (4%) 4% • Support the CEO in the definition and leadership of strategy to grow
and scale the business
Led a full corporate strategy refresh under key themes of value creation, capital allocation and driving shareholder
returns
Financial
Frameworks (8%)
8% • Provide the financial frameworks and roadmap to enable all business
leaders to drive towards profit and cash maximisation
• Drive commercial decision making across all functions to align
outcomes/performance with company targets
Real-time modelling of the dynamic and evolving market opportunity across a range of financial and value creation KPIS
including gross margin impact and return on equity
Modelling through challenging trading conditions i.e. delayed closings and potential contingency planning
Risk, Governance
& Reporting (4%)
4% • Ensure excellence in all matters pertaining to the Board, specifically
around reporting, governance and strategy in a PLC environment
Continued provision of clear and robust financial KPIs and strategic insights regarding defence, interest rate
environment, liquidity and closing challenges
Relationship
Management (2%)
2% • Cultivate and develop key relationships with existing shareholders,
banks and the wider Investor community
Communications with key stakeholders now considered to be disciplined, clear and transparent
Sustainability &
Innovation (2%)
2% • Drive Cairn Sustainability Strategy & support framework
implementation
Set our scope 1 – 3 carbon reduction targets and had them validated by the SBTi
Completed our second “audit readiness” assessment as we prepare to report under CSRD
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Cairn Homes plc | Annual Report 2023
Vesting of Long-Term Incentive Plan Awards
Awards granted in 2021 will vest on 4 April 2024 and are related to the three-year performance period ended 31 December 2023. Both the CEO and the CFO received an LTIP award in 2021, which represents the first award made to
the CEO under the LTIP. The value of shares awarded to the CEO in May 2021 was €637,500, or 612,981 shares. The value of shares awarded to the CFO in May 2021 was €562,500, or 540,865 shares. The share price at the date of grant
was €1.04. As at 31 December 2023, the value of the shares that are due to vest to the CEO and CFO, were €801,044 and €706,802 for the CFO, respectively, based on a vesting outcome of 99% and a closing share price of €1.32.
At the time of vesting of all LTIP awards, the Committee reviews the shareholder experience over the performance period in confirming final vesting levels. Having reviewed the share prices at grant, during the performance period,
and at its conclusion in December 2023, the Committee is satisfied that strong performance under each measure had been achieved and remained aligned to the overall stakeholder experience. The performance criteria and resulting
outcomes are detailed below:
Metric Weighting Threshold (25% of vesting) Maximum (100% vesting) Actual Payout
Cumulative Basic EPS 80% 14.2c 23.7c 30.0c 80%
Stakeholder measures
- Customer satisfaction
- Health and safety
20% Performance against the stakeholder measures were based on customer
satisfaction performance.
In order for the stakeholder measure to begin to pay out, a Health &
Safety gateway needed to be achieved. The gateway required a sustained
and strong level of Health & Safety performance over the performance
period which is to be assessed by the Audit & Risk Committee.
Customer satisfaction metrics were met in full (10%) in both the 2021 and 2022
performance years. The performance for 2023 was 9% out of 10%.
A sustained and strong health and safety performance was achieved in each year
by reference to annual objectives, a review of external audit scores and an
assessment of Health and Safety statistics resulting in the underpin being
deemed to have been met.
19% 19%
The 2021 LTIP awards were also eligible for dividend equivalents. The total dividends paid over the performance period 1 January 2021 to 31 December 2023 were 14.66c per share. Each recipient will receive a dividend equivalent
payment following the vesting of the award in April 2024.
Awards Granted During the Past Year
LTIP
On 4 April 2023, the following conditional share awards were granted under the LTIP to Michael Stanley, CEO and Shane Doherty, CFO:
Director
Number of
Shares Granted
Share Price
at Grant
Face Value at
Date of Grant
Michael Stanley (CEO) 615,347 €1.036 €637,500
Shane Doherty (CFO) 542,953 €1.036 €562,500
The vesting of the 2023 LTIP awards will be determined by performance against the following metrics:
Metric Weighting Threshold (25%) Max (100%)
Cumulative Basic EPS 60% 28.4c 40.1c
Return on Equity (“ROE”) 20% 13% 15%
Units Commencing on Biodiversity Net Gain (“BNG”) sites as a % of All Units Commencing 20% 25% 40%
The primary measure for these awards, cumulative EPS over the three-year performance period ending 31 December 2025, provides an easily understandable and transparent framework for all stakeholders and is designed to
motivate participants to deliver Cairn’s strategy over the performance period. The ROE target, a key metric for the business and our shareholders, is calculated based on performance in FY 2025 and will incentivise strong returns on
equity for the three-year period. The Biodiversity measure focuses on a key pillar of our corporate strategy, is a key component of our sustainability agenda and is measured cumulatively over the performance period.
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Stretch CEO LTIP
At the EGM held on 31 August 2023, shareholders approved an additional long term incentive plan, the Stretch CEO LTIP. The plan was designed to ensure that the CEO is not only incentivised to increase business growth through
upscaled new homes delivery resulting in ambitious profitability and return on equity targets, but also to maximise performance and shareholder value throughout the full performance period and beyond it, as shares vest in years
three and four from the original date of grant, with a two-year hold period. The Stretch CEO LTIP is a one-off arrangement granted in two tranches (in 2023 and 2024) to the CEO, relating to two equal numbers of ordinary shares in the
capital of the Company. The 2023 award was made over 3,158,844 shares and will be subject to a three-year performance period (FY2023-FY2025). The 2024 award will be made over an identical number of shares and be subject to a
four-year performance period (FY2023-FY2026) ensuring that the achievement of targets becomes more challenging for the second tranche. As part of the award, the CEO has agreed to hold at least 5.5 million shares (representing
approximately 25% of his existing total shareholding) for the six-year duration of the plan.
No other employee of the Company or any of its subsidiaries will be eligible for an award under the Stretch CEO LTIP. The Stretch CEO LTIP operates outside of the Company’s Remuneration Policy (which is subject to shareholder
approval at the 2024 AGM) and the existing Long Term Incentive Plan (which was approved by shareholders in 2017).
Cessation of Employment
Cessation of employment during the performance period will generally result in the awards lapsing, save for in exceptional circumstances or if the CEO is treated as a “good leaver”. For the purpose of the Plan, the CEO will be deemed
to be a “good leaver” if he ceases to be employed by the Company and its subsidiaries (the Group) for health reasons, redundancy, voluntary severance, the transfer or sale of the entity that employs him or the part of the business in
which he works outside the Group, or any other reasons where the Remuneration Committee determines that exceptional circumstances apply. If the CEO is a good leaver after an award has been granted and prior to the vesting of
the award, the Remuneration Committee will have discretion to allow him to continue to hold any unvested award until it vests or lapses in accordance with the rules of the Plan, subject to the achievement of the established
performance conditions. In normal circumstances, awards will be pro-rated for time served relative to the applicable performance period. The Remuneration Committee has discretion to pro rate the award and to determine the rate
of vesting. If the CEO dies after the grant of an Award and prior to its vesting, the Remuneration Committee has discretion to determine whether the whole or a specified percentage of the award vests.
Malus and Clawback
The Remuneration Committee can recalculate the number of shares comprised in an award under the Stretch CEO LTIP prior to vesting where:
• there is a material misstatement of the Group’s published accounts; or
• any Group company suffers any business or reputational damage arising from a criminal offence, serious misconduct or gross negligence by the CEO: or
• there is material breach of applicable health and safety regulations by the CEO.
Similarly, if any of the above circumstances apply at any time prior to the second anniversary after the date on which an award vests, there may be a claw back of some or all of the shares, or a cash payment, on a basis determined by
the Remuneration Committee in accordance with the rules of the Plan. This two-year period may be extended if the CEO, the Company or any other member of the Group or relevant business unit is under investigation by a
regulatory authority and such investigation is not expected to be concluded by the end of the two-year period.
Stretch CEO LTIP Awards
There are two separate awards under the plan, over an identical number of shares in 2023 and 2024. On 8 September 2023, the following award was made to the CEO under the Stretch CEO LTIP:
Director
Number of
Shares Granted
Share Price
at Grant
Face Value at
Date of Grant
Michael Stanley (CEO) 3,158,845 €1.108 €3,500,000
The 2023 award is subject to a three-year performance period, with the 2024 award subject to a four-year performance period, both assessed off a 2022 baseline which was a record year of performance at the time. Awards will be
subject to an additional two-year holding period, with the release of equity staggered over five to six years from the date of the first award.
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Cairn Homes plc | Annual Report 2023
The vesting under the 2023 award will be determined by performance against the following metrics:
75% of the awards will be tied to the Company’s compound annual growth rate in reported (unadjusted) profit after tax:
Performance Period
Threshold
25% vesting
Stretch*
85% vesting*
Maximum
100% vesting
Profit growth
from base for
maximum payout
3 years
FY 2023 – FY 2025 inclusive 7.5% CAGR 10% CAGR 12.5% CAGR 42%
* Straight-line vesting will apply between threshold and stretch, and stretch and maximum.
The remaining 25% of the award would be based on Return of Equity (“ROE”) performance during the final year of each performance period:
Performance Period
Threshold
25% vesting
Stretch*
85% vesting*
Maximum
100% vesting
3 years
FY 2023 – FY 2025 inclusive 14% 15.5% 17%
* Straight-line vesting will apply between threshold and stretch, and stretch and maximum.
Non-Executive Directors’ Remuneration Details
During January 2024, the fee levels for the Non-Executive Directors were reviewed, to ensure they continued to reflect the demands on the time of Directors and their respective roles. The Remuneration Committee reviewed the fee
of the Chairman, while the Board as a whole reviewed the fees for Non-Executive Directors and those with additional responsibilities. Following a comprehensive review of the time commitments of each Director, and incorporating
external data as a reference point, the following changes to the Non-Executive Directors fees have been implemented for 2024:
2023 Fees 2024 Fees % Change
Chairman 150,000 180,000 20
Base Fee 60,000 70,000 16
Audit & Risk Committee Chair 15,000 15,000 –
Remuneration Committee Chair 12,000 15,000 25
Nomination Committee Chair 12,000 15,000 25
Senior Independent Director 10,000 10,000 –
Director responsible for Workforce Engagement – 10,000 n/a
Director responsible for Sustainability & Environmental Impact – 10,000 n/a
The Board is fully satisfied that the revised fees are reflective of the increased time commitment expected of Directors to fulfil their role since the last review of fees, implemented in 2018. Save for exceptional circumstances, there will
be no further changes to the fees for the lifetime of the proposed Remuneration Policy.
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
The fees paid to Non-Executive Directors in respect of the year ended 31 December 2023, with comparatives for the year ended 31 December 2022, are detailed in the table below:
Base Fee Committee Chair Fee SID Fee Total
2023 2022 2023 2022 2023 2022 2023 2022
John Reynolds 150 150 – – – – 150 150
Gary Britton 60 60 15 15 – – 75 75
Giles Davies 60 60 12 12 10 10 82 82
Linda Hickey 60 60 12 12 – – 72 72
Alan McIntosh 60 60 – – – – 60 60
David O’Beirne* – 23 – – – – – 23
Orla O’Gorman 60 60 – – – – 60 60
Julie Sinnamon 60 60 – – – – 60 60
* David O’Beirne retired from the Board in May 2022.
Payments for Loss of Office
There were no payments for loss of office paid during 2023.
Payments to Former Directors
There were no payments to former Directors during 2023.
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Cairn Homes plc | Annual Report 2023
IMPLEMENTATION OF THE 2024 REMUNERATION POLICY
This section provides an overview of the how the Committee is proposing to implement the Remuneration Policy in 2024.
Base Salary
Base salary will remain unchanged for the Executive Directors. As part of the implementation of the Stretch CEO LTIP, approved at the EGM in August 2023, the Committee detailed its commitment not to adjust the CEO’s fixed pay
during the lifetime of the plan. The Company’s approach to remuneration is built on a commitment to restrained fixed salaries, supplemented with significant “at-risk” variable pay, designed to incentivise superior performance and
alignment with shareholder interests. Following the CFO’s decision to step down from his role at Cairn, no changes to his salary were proposed for 2024.
Executive Director Base Salary
Michael Stanley (Chief Executive Officer) €425,000
Shane Doherty (Chief Financial Officer) €375,000
Pension and Benefits
Effective from 1 January 2024, the Chief Executive Officer and Chief Financial Officer will receive a pension contribution worth 10% of base salary, which is a decrease from 12.5% in 2023. Any future Executive Director’s pension
contributions will be set at the same level.
Annual Bonus
As set out under the proposed policy, the maximum annual bonus opportunity will remain at 150% of base salary. Following the revisions to the Remuneration Policy, 33% of any bonus pay-out will be deferred into shares for a
two-year period. For 2024, the Committee has also made certain adjustments to the weighting of the performance measures under the bonus plan, designed to place a greater emphasis on financial performance, while maintaining a
clear focus on quantifiable stakeholder-related measures. The weighting for the EBIT measure will be increased from 60% to 70% of overall opportunity, with a corresponding decrease in the weighting of personal and strategic
objectives. The annual bonus for 2024 for Executive Directors will be based on the following criteria:
Measure
Percentage of
Max Opportunity
Earnings Before Interest and Tax (“EBIT”) 70%
Stakeholder Measures: Customer & People 20%
Personal and Strategic Objectives 10%
The selection of measures and targets reflects the strategic priorities of the Company. While reduced in weighting, the personal and strategic measures will continue to include areas of strategic importance that may not be linked to a
financial measure but are central to the Company’s long-term performance and provide additional insight into the unique contributions of our executives in driving our strategy.
The bonus plan will continue to include a focus on stakeholder measures through i) Customer satisfaction and ii) People measures, each weighted equally at 10% of the bonus. With the underlying and overarching role of health and
safety considerations across all our operations, the stakeholder measures will continue to be subject to a health and safety underpin. The achievement of the underpin will only be confirmed following a review by the Audit & Risk
Committee based on all key health and safety priorities throughout the year.
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Annual Report on Remuneration continued
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Strategic Report Corporate Governance Financial Statements
Long-Term Incentives
In April 2024, awards will be made at 150% of base salary for the CEO, while the new CFO will receive an award of 200% for his first year of employment, in recognition of awards foregone at his previous employer. Awards will vest
subject to the criteria set out below over a three-year performance period up to 31 December 2026 and will be subject to a two-year holding period following vesting. The majority of vesting will continue to be determined by
Cumulative EPS performance, with ROE weighted at 25% and calculated in the final year of performance, and an ESG component weighted at 20% of the total award. The ESG metric will be split into two equally weighted metrics,
being 10% for biodiversity net gain performance and 10% for carbon reduction/passive housing/energy efficiency performance. The Committee implemented this change in measure to align with the business’ focus on reducing the
carbon footprint of the homes it builds while continuing to protect and restore biodiversity on our sites. Full details of the ESG measures will be detailed on our website.
Measure
Percentage of
Max Opportunity
Threshold
(25%)
Max
(100%)
Cumulative Basic EPS 55% 0.51c 0.57c
Return on Equity (“ROE”) FY 2026 25% 14% 16%
Biodiversity Net Gain as % of units commencing 10% 49% 55%
Passive Housing/Energy Efficiency 10% TBC TBC
Total 100%
Ensuring the appropriateness and stretch of our targets has always been a priority for the Committee, as the business continues to deliver superior and sustainable growth. As set out previously, return on equity is a key metric for the
business, as it is for shareholders’ ability to understand the Company’s financial performance and long-term prospects.
Stretch CEO LTIP
In April 2024, the second and final award of 3,158,845 shares will be awarded to the CEO under the Stretch CEO LTIP. That portion of the award will vest subject to the achievement of the same performance conditions that apply to the
first portion of the awards, with performance assessed over a four-year period. Vesting of 75% of the awards will be tied to the Company’s compound annual growth rate in reported (unadjusted) profit after tax, over the four year
performance period:
Award
Performance period
(base year: FY22) Post vesting holding
Threshold
25% vesting
Stretch
85% vesting*
Maximum
100% vesting
Award 2 4 years ends FY26 2 years 7.5% C AGR 10% CAGR 12.5% CAGR
* Straight-line vesting will apply between threshold and stretch, and stretch and maximum.
The remaining 25% of the award would be based on Return of Equity (ROE) performance during the final year of the four year performance period:
Award Performance period Post vesting holding
Threshold
25% vesting
Stretch
85% vesting*
Maximum
100% vesting
Award 2 4 years ends FY26 2 years 14% 15.5% 17%
* Straight-line vesting will apply between threshold and stretch, and stretch and maximum.
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Cairn Homes plc | Annual Report 2023
Directors’ & Secretary’s Interests in the Long Term Incentive Plan (“LTIP”)
Details of outstanding nil cost share awards granted to the Directors’ and the Company Secretary under the LTIP are set out below:
Number of Shares Under Award
At 1 January
2023
Granted
During the Year
Exercised
During the Year
Lapsed During
the Year
At December
2023
Market Price at
Date of Award €
Market Price at
Date of Vesting € Date of Award Vesting Date
Michael Stanley (Chief Executive Officer)
612,981 – – – 612,981* 1.04 N/A 18.05.21 04.04.24
514,113 – – – 514,113 1.24 N/A 04.04.22 04.04.25
– 615,347 – – 615,347 1.036 N/A 04.04.23 04.04.26
1,127,094 1,742,441
Shane Doherty (Chief Financial Officer)
921,053 – 921,053 – – 0.76 0.99 22.09.20 06.04.23
540,865 – – – 540,865* 1.04 N/A 18.05.21 04.04.24
453,629 – – – 453,629 1.24 N/A 04.04.22 04.04.25
– 542,953 – – 542,953 1.036 N/A 04.04.23 04.04.26
1,915,547 1,537,447
Tara Grimley (Company Secretary)
141,612 – 141,612 – – 0.76 0.99 22.09.20 06.04.23
103,486 – – – 103,486* 1.04 N/A 18.05.21 04.04.24
91,134 – – – 91,134 1.24 N/A 04.04.22 04.04.25
– 119,449 – – 119,449 1.036 N/A 04.04.23 04.04.26
336,232 314,069
* these awards will vest at 99% in April 2024.
As noted on page 89, Michael Stanley also had outstanding nil cost share awards under the Stretch CEO LTIP of 3,158,845 shares at 31 December 2023 (2022: Nil).
Directors’ & Secretary’s Interests in Other Share Plans
Shane Doherty held options at 31 December 2023 to acquire 21,951 shares through the Company’s Save as You Earn (“SAYE”) scheme in April 2024. The SAYE scheme is a Revenue approved savings plan where participants are granted
a right to acquire discounted shares in the Company following a three-year savings period.
Directors’ Remuneration Report continued
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Directors’ & Secretary’s Interests in Ordinary Share Capital
The interests of the Directors’ and Company Secretary who held office at 31 December 2023 in the issued ordinary share capital of the Company are set out in the table below. The interests disclosed below include both direct and
indirect interests in shares.
Director
No. of Ordinary Shares at
31 December 2023
No. of Ordinary Shares at
31 December 2022
John Reynolds (Chairman) 129,174 129,174
Michael Stanley (Chief Executive Officer) 21,746,063 21,644,510
Shane Doherty (Chief Financial Officer) 559,494 –
Gary Britton (Non-Executive Director) 130,000 130,000
Giles Davies (Non-Executive Director) 50,000 50,000
Linda Hickey (Non-Executive Director) 75,000 75,000
Alan McIntosh (Non-Executive Director) 30,641,464 30,641,464
Orla O’Gorman (Non-Executive Director) – –
Julie Sinnamon (Non-Executive Director) – –
Tara Grimley (Company Secretary) 231,721 104,712
All of the interests noted above are beneficially owned.
There were no changes in the above Directors’ and Secretary’s interests between 31 December 2023 and 15 March 2024 with the exception of Alan McIntosh who sold his full shareholding between 1 March and 4 March 2024. The
Company’s Register of Directors’ Interests (which is open to inspection) contains full details of Directors’ shareholdings and other interests. The Company has a policy on dealing in shares that applies to all Directors. Under this policy,
Directors are required to obtain clearance from the Company before dealing in Company shares. Directors are restricted from dealing during designated close periods and at any other time when they are in possession of Inside
Information (as defined by the Market Abuse Regulation). Alan McIntosh was no longer a Director of the Company when he disposed of his shareholding.
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Cairn Homes plc | Annual Report 2023
Change in Remuneration of the Directors Compared to the Average Employee
The table below shows the annual percentage change in remuneration paid to the Executive and Non-Executive Directors in comparison to the average overall percentage change for employees (excluding Executive Directors) across
the Group (on a full-time equivalent basis) over the past seven years.
Director
2017
v 2016
2018
v 2017
2019
v 2018
2020
v 2019
2021
v 2020
2022
v 2021
2023
v 2022
2023
€’000
John Reynolds (Chairman) 25% 20% 0% 0% 0% 0% 0% 150
Michael Stanley (Chief Executive Officer) -14% 15% 5% -46% 119% -1% 72% 1,936
Shane Doherty (Chief Financial Officer)
(1)
– – – N/A 72% 103% -3% 1,715
Andrew Bernhardt (Former Non-Executive Director)
(2)
18% 15% 0% 0% 0% -100% N/A –
Gary Britton (Non-Executive Director) 8% 7% 0% 0% 0% 0% 0% 75
Giles Davies (Non-Executive Director) 18% 15% 0% 0% 0% 0% 0% 82
Linda Hickey (Non-Executive Director)
(3)
– – N/A 47% 0% 0% 0% 72
Jayne McGivern (Former Non-Executive Director)
(3)
– – N/A 20% -32% -100% N/A –
Alan McIntosh (Non-Executive Director)
(4)
-13% -55% -75% 0% 0% 0% 0% 60
David O’Beirne (Former Non-Executive Director)
(3)
– – N/A 20% 0% -62% -100% –
Orla O’Gorman (Non-Executive Director)
(5)
– – – – 100% 609% 0% 60
Julie Sinnamon (Non-Executive Director)
(5)
– – – – 100% 247% 0% 60
Tim Kenny (Former Finance Director)
(6)
N/A 218% 5% -100% N/A N/A N/A –
Group Performance
Profit Before Tax 312% 530% 56% -75% 240% 86% 6% 99,423
Average Remuneration on a full-time equivalent basis of employees
Employees of the Group -5% -2% 15% 2% 2% -1% 9% 103
(1) Mr Doherty was appointed as an Executive Director on 13 April 2020.
(2) Mr Bernhardt retired as a Director on 31 December 2021.
(3) Ms Hickey, Ms McGivern and Mr O’Beirne were appointed as Non-Executive Directors on 12 April 2019, 1 March 2019 and 1 March 2019 respectively. Ms McGivern resigned as a Director on 3 September 2021 and David O’Beirne retired in May 2022.
(4) Mr McIntosh stepped down as an Executive Director in August 2018 and retired as a Non-Executive Director on 25 January 2024.
(5) Ms O’Gorman and Ms SInnamon were appointed on 10 November 2021 and 17 September 2021 respectively.
(6) Mr Kenny was appointed as an Executive Director on 22 August 2017 and resigned effective 7 January 2020.
Relative Importance of Spend on Pay
The table below shows total employee remuneration (excluding LTIP awards) and distributions to shareholders, in respect of 2023 and 2022.
2023 2022
Total Employee Remuneration €38.0m €32.6m
Distributions to Shareholders* €84.6m €115.8m
* Dividends and buybacks of own shares in 2022 and 2023.
Directors’ Remuneration Report continued
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Directors’ Shareholding as Percentage of Salary
The table below sets out the percentage of base salary held in shares in the Company by the Executive Directors, as at 31 December 2023, based on the closing share price of €1.32.
Name Base Salary No. of Shares Held
Percentage
of Salary Held
Michael Stanley (Chief Executive Officer) €425,000 21,746,063 6,754%
Shane Doherty (Chief Financial Officer) €375,000 559,494 197%
Statement of Shareholder Voting
The Company is committed to ongoing shareholder dialogue and takes shareholder views into consideration when formulating remuneration policy and practice. The following table sets out the actual votes at the 2023 Annual
General Meeting in respect of the Directors’ Remuneration Report.
Directors’ Remuneration Report For Against Withheld*
Number of Votes 473,069,763 200 1,077,277
Percentage 100% 0% –
* A vote withheld is not a vote in law and is therefore excluded from the calculation of votes for and against the resolution.
Advisors
The Committee relied on ad hoc advisory support during the year from FTI Consulting (“FTI”), engaged by the Company to provide independent advisory corporate governance support to the Board, as well as both the Nomination
and Remuneration Committees. Korn Ferry also assisted the Committee during the year on the design, structure, metrics and targets employed under the Stretch CEO LTIP. The Committee is satisfied that the advice from both FTI
and Korn Ferry was objective and independent and neither firm has any connections with Cairn that may impair their independence.
Additional Interests of Founder Shareholders who are Founder Directors
In addition to the shareholdings noted on page 95, the Founder Directors had the following additional interests.
Founder Directors
No. of
Deferred Shares at
31 December 2023
No. of
Founder Shares at
31 December 2023
No. of
Deferred Shares at
31 December 2022
No. of
Founder Shares at
31 December 2022
Michael Stanley Nil Nil 9,990,000 Nil
Alan McIntosh Nil Nil 9,990,000 9,591,075
Total Nil Nil 19,980,000 9,591,075
On 5 December 2023, the issued founder and deferred shares were cancelled. There was no consideration received in respect of these cancelled shares.
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Directors’ Report
The Directors present their report to the shareholders together with the audited financial statements for the year ended 31 December 2023.
Principal Activities, Business Review and Future Developments
Cairn Homes plc is one of Ireland’s leading homebuilders, constructing high quality new homes with an emphasis on design, innovation and customer service. At 31 December 2023, the Group consisted of the Company, Cairn Homes
plc, and a number of subsidiaries, which are detailed in Note 27 to the consolidated financial statements. Shareholders are referred to the Chairman’s Statement, Chief Executive Officer’s Statement and the Chief Financial Officer’s
Statement which contain a review of operations and the financial performance of the Group for 2023, the outlook for 2024 and the key performance indicators used to assess the performance of the Group. These are deemed to be
incorporated in the Directors’ Report.
Results for the Year
The Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2023 and the Consolidated Statement of Financial Position at that date are set out on pages 112 and 113 respectively.
The Group’s profit for the year ended 31 December 2023 was €85.4 million (2022: €81.0 million).
Accounting Records
The Directors are responsible for ensuring that adequate accounting records are maintained by the Group as required by Sections 281-285 of the Companies Act, 2014. The Directors believe that they have complied with this
requirement through the employment of suitably qualified accounting personnel and the maintenance of appropriate accounting systems. The accounting records of the Company are maintained at the registered office: 45 Mespil
Road, Dublin 4, D04 W2F1.
Dividends
The Company paid an interim dividend of 3.1 cent per ordinary share on 6 October 2023 to shareholders on the record date of 15 September 2023. The Board have also proposed a final dividend of 3.2 cent per ordinary share for the
year ended 31 December 2023. Subject to shareholder approval at the Company’s Annual General Meeting on 10 May 2024, the proposed final dividend of 3.2 cent per ordinary share will be paid on 17 May 2024 to ordinary
shareholders on the Company’s register at 5.00 p.m. on 26 April 2024.
Directors
The names of the Directors and a biographical note on each appear on pages 55 and 56. In accordance with the provisions contained in the UK Corporate Governance Code (the “Code”), all Directors at that time retired at the Annual
General Meeting of the Company on 11 May 2023 and, being eligible, offered themselves for re-election. Alan McIntosh retired as a Director on 25 January 2024.
Any Director appointed to the Board by the Directors will be subject to election by the shareholders at the first Annual General Meeting held following his/her appointment. Furthermore, under the Company’s Constitution, one third
of all Directors must retire by rotation at each Annual General Meeting and may seek re-election. However, in accordance with the provisions of the Code, the Board has decided that all Directors should retire at the 2024 Annual
General Meeting and offer themselves for re-election, with the exception of Shane Doherty who announced his intention to step down from the Board on 10 October 2023. Richard Ball will also be proposed for election at the
upcoming Annual General Meeting.
Directors’ and Company Secretary’s Interests
Details of the Directors’ and Company Secretary’s share interests and interests in unvested share awards of the Company are set out in the Directors’ Remuneration Report on pages 74 to 97.
Share Dealing
The Company has in place a Share Dealing Code which gives guidance to the Directors and certain employees of the Company to be followed when dealing in the shares of the Company or any other type of securities issued by or
related to the Company. It is designed to ensure that these individuals neither abuse, nor set themselves under suspicion of abusing, information about the Company which is not in the public domain. It is also designed to ensure
compliance with the EU Market Abuse Regulation (596/2014) which came into effect on 3 July 2016. A copy of the Share Dealing Code is available on the Company’s website at www.cairnhomes.com.
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Strategic Report Corporate Governance Financial Statements
Share Capital
The Company has four authorised classes of shares: Ordinary Shares; A Ordinary Shares; Founder Shares and Deferred Shares. As at 31 December 2023 and 12 March 2024, the latest practicable date prior to approval of this report, the
Company had 654,888,041 and 646,047,728 Ordinary Shares in issue respectively, each with a nominal value of €0.001, all of which are of the same class and carry the same rights and obligations. The Company had no other shares in
issue at those dates.
Further information on the Company’s share capital, including the rights attached to different classes of shares, is set out in Note 19 to the consolidated financial statements.
The Company has two long term incentive plans (2017 Long Term Incentive Plan and Stretch CEO LTIP) and a Save As You Earn plan, the details of which are set out in the Directors’ Remuneration Report and Note 20 of the
consolidated financial statements.
Substantial Shareholdings
As at 31 December 2023 and 12 March 2024, the Company had been notified of the following details of interests of over 3% in the ordinary share capital of the Company.
Except as disclosed below, the Company has not been notified as at 12 March 2024, the latest practicable date prior to approval of this report, of any interest of 3% or more in its ordinary share capital, nor is it aware of any person who
directly or indirectly, jointly or severally, exercises or could exercise control over the Company.
Shareholder
Notified Holding
12 March 2024 %
Notified Holding
31 December 2023 %
Fidelity Investments Limited 81,744,977 12.65 71,866,814 10.97
Fidelity Management & Research Company 61,903,708 9.58 64,863,288 9.90
Lansdowne Partners International Ltd 58,015,599 8.98 61,944,022 9.46
The Capital Group Companies, Inc. 28,685,000 4.44 31,452,000 4.80
T. Rowe Price Associates, Inc 28,577,317 4.42 23,376,650 3.57
Ameriprise Financial 25,837,337 4.00 23,579,528 3.60
Eidervale Unlimited Company 24,700,000 3.82 24,700,000 3.77
JP Morgan Asset Management (UK) Limited 23,155,547 3.58 N/A N/A
Blackrock, Inc. 22,110,646 3.42 N/A N/A
Mr. Michael Stanley 21,746,063 3.36 21,746,063 3.32
Mr. Alan & Mrs. Deirdre McIntosh
(1)
Less than 3% Less than 3% 30,641,464 4.68
Total Shares in Issuance 646,047,728 654,888,041
(1) Alan McIntosh (former Non-Executive Director of Cairn), his spouse Deirdre McIntosh and Emerald Everleigh Limited Partnership (the “LP”), are the beneficial owners of the interests described above. The LP is ultimately owned by a discretionary trust (constituted under English
and Welsh law) and Alan McIntosh and Deirdre McIntosh are the beneficiaries of that trust.
Principal Risks and Uncertainties
Under Irish company law, the Group is required to give a description of the Principal Risks and Uncertainties which it faces. These Principal Risks and Uncertainties are set out in the Risk Report on pages 40 to 50 and are deemed to be
incorporated in the Directors’ Report.
Subsidiaries
Information on the Company’s subsidiaries is set out in Note 27 to the consolidated financial statements.
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Directors’ Report continued
Political Contributions
No political contributions were made by the Group during the year that require disclosure in accordance with the Electoral Acts 1997 to 2002 and the Electoral Political Funding Act 2012.
Takeover Regulations 2006
For the purposes of Regulation 21 of Statutory Instrument 255/2006 “European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006”, the details provided on share capital in note 19 to the consolidated
financial statements, substantial shareholdings above, and the disclosures on Directors’ remuneration and interests in the Directors’ Remuneration Report on pages 74 to 97 are deemed to be incorporated in this section
of the Directors’ Report.
Transparency Regulations 2007
For the purposes of information required by Statutory Instrument 277/2007 “Transparency (Directive 2004/109/EC) Regulations 2007” concerning the development and performance of the Group, the following sections of this
Annual Report shall be treated as forming part of this Directors’ Report:
1. The Chairman’s Statement on pages 12 and 13, the Chief Executive Officer’s Statement on pages 14 and 15, and the Chief Financial Officer’s Statement on pages 32 and 33.
2. The Corporate Governance Report on pages 58 to 63.
3. The Principal Risks and Uncertainties on pages 40 to 50.
4. Details of Earnings Per Share in Note 28 of the consolidated financial statements.
5. Details of the Capital Structure of the Company in Note 19 of the consolidated financial statements.
Corporate Governance Regulations
As required by company law, the Directors have prepared a Corporate Governance Report which is set out on pages 58 to 63 and which, for the purposes of Section 1373 of the Companies Act 2014, is deemed to be incorporated in
this part of the Directors’ Report. Details of the capital structure and employee share schemes are included in notes 19 and 20 to the consolidated financial statements respectively.
Directors’ Compliance Statement
The Directors, in accordance with Section 225(2) of the Companies Act 2014, acknowledge that they are responsible for securing the Company’s compliance with certain obligations specified in that section arising from the
Companies Act 2014, the Market Abuse (Directive 2003/6/EC) Regulations 2005, the Prospectus (Directive 2003/71/EC) Regulations 2005, the Transparency (Directive 2004/109/EC) Regulations 2007, and Tax laws (“relevant
obligations”).
The Directors confirm that:
• a compliance policy statement has been drawn up setting out the Group’s policies that in their opinion are appropriate with regard to such compliance;
• appropriate arrangements and structures have been put in place that, in their opinion, are designed to provide reasonable assurance of compliance in all material respects with those relevant obligations; and
• a review has been conducted, during the financial year, of those arrangements and structures.
Going Concern and Longer Term Viability
The Directors’ statements on going concern and longer term viability are included on page 51.
Post Balance Sheet Events
Information in respect of events since the year end is contained in Note 32 to the consolidated financial statements.
Audit & Risk Committee
The Group has an established Audit & Risk Committee comprising of four independent Non-Executive Directors. Details of the Committee and its activities are set out on pages 64 to 67.
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Strategic Report Corporate Governance Financial Statements
Non-Financial Information Statement
The Group aims to comply with the requirements of the Non-Financial Reporting Directive (SI 360/2017) and these requirements are addressed throughout the Strategic Report and Corporate Governance Report. The following
non-financial information constitutes our Non-Financial Information Statement, pursuant to the EU Directive 2014/95/EU and covers the requirements in respect of the environment, people, social and community issues, human
rights, anti-bribery & corruption, and is intended to help stakeholders understand our position on these non-financial matters. Certain of the non-financial information required pursuant to the EU Directive 2014/95/EU is also
provided by reference to the following location:
Non-financial Information Section Pages
Description of our Business Model Business Model 20 and 21
Environmental, Social & Employee Matters 2023 Sustainability Report 2023 Sustainability Report available on our website www.cairnhomes.com
Human Rights, Bribery & Corruption 2023 Sustainability Report 2023 Sustainability Report available on our website www.cairnhomes.com
Our Policies Company Website https://www.cairnhomes.com/about/our-policies/
Principal Risks Risk Report 40 to 50
Non-Financial Key Performance Indicators Our Strategy, TCFD and
2023 Sustainability Report
Pages 22 to 31 and 34 to 39 as well as our 2023 Sustainability Report
Our Annual Report and Sustainability Report collectively contains a range of non-financial information. We have a variety of policies and guidance that support our key outcomes for all our stakeholders. Policies, guidance and
statements of intent are in place to ensure consistent governance and are available to view within our 2023 Sustainability Report and on our website at www.cairnhomes.com.
External Auditor
KPMG, Chartered Accountants, were appointed statutory auditor on 10 June 2015 and pursuant to Section 383(2) of the Companies Act 2014 will continue in office. A resolution authorising the Directors to fix their remuneration will
be proposed at the forthcoming 2024 Annual General Meeting.
Disclosure of Information to the External Auditor
Each of the Directors who held office at the date of approval of the Directors’ Report confirms that:
• so far as they are aware, there is no relevant audit information of which the External Auditor is unaware; and
• they have taken all steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the External Auditor is aware of such information.
Approval of Financial Statements
The Financial Statements were approved by the Board on 15 March 2024.
Signed on behalf of the Board
MICHAEL STANLEY SHANE DOHERTY
DIRECTOR DIRECTOR
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Financial Statements
Strategic Report
103
Corporate Governance Financial Statements
Cairn Homes plc | Annual Report 2023
PASSIVE HOUSING TRIAL
Cairn are developing our first Passive House apartment scheme at
Pipers Square, Charlestown. For us, this initiative delivers two key
benefits; a dramatic reduction in the building’s carbon footprint, and
significant benefits for the building’s owners and residents. When
complete Pipers Square will be Irelands largest passive standard
apartment development.
FINANCIAL STATEMENTS
104 Statement of Directors’ Responsibilities in
respect of the Annual Report and the Financial
Statements
105 Independent Auditor’s Report
112 Consolidated Statement of Profit or Loss and
Other Comprehensive Income
113 Consolidated Statement of Financial Position
115 Consolidated Statement of Changes in Equity
117 Consolidated Statement of Cash Flows
118 Notes to the Consolidated Financial Statements
155 Company Statement of Financial Position
157 Company Statement of Changes in Equity
159 Company Statement of Cash Flows
161 Notes to the Company Financial Statements
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Cairn Homes plc | Annual Report 2023
The Directors are responsible for preparing the Annual Report and the consolidated and company financial statements, in accordance with applicable law and regulations.
Company law requires the Directors to prepare consolidated and company financial statements for each financial year. Under that law, the Directors are required to prepare the consolidated financial statements in accordance with
IFRS as adopted by the European Union and applicable law including Article 4 of the IAS Regulation. The Directors have elected to prepare the company financial statements in accordance with IFRS as adopted by the European Union,
as applied in accordance with the provisions of the Companies Act 2014.
Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Group and Company and of the profit or
loss of the Group for that year. In preparing each of the consolidated and company financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
• assess the Group’s and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Group or Company or to cease operations, or have no realistic alternative but to do so.
The Directors are also required by the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Central Bank of Ireland to include a management report containing a fair review of the business and a
description of the principal risks and uncertainties facing the Group.
The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the assets, liabilities, financial position and profit or loss of the Company, and which enable them to ensure
that the financial statements of the Company comply with the provisions of the Companies Acts 2014. The Directors are also responsible for taking all reasonable steps to ensure such records are kept by the Company’s subsidiaries
which enable them to ensure that the financial statements of the Group comply with the provisions of the Companies Act 2014 and Article 4 of the IAS Regulation. They are also responsible for such internal control as they determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for safeguarding the assets of the Company and the Group, and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are also responsible for preparing a Directors’ Report that complies with the requirements of the Companies Act 2014.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group’s and Company’s website www.cairnhomes.com. Legislation in the Republic of Ireland concerning the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Responsibility Statement as required by the Transparency Directive and UK Corporate Governance Code
Each of the Directors, whose names and functions are listed on pages 55 and 56 of this Annual Report, confirm that, to the best of each person’s knowledge and belief:
• the consolidated financial statements, prepared in accordance with IFRS as adopted by the European Union, and the company financial statements, prepared in accordance with IFRS as adopted by the European Union as applied
in accordance with the provisions of the Companies Act 2014, give a true and fair view of the assets, liabilities and financial position of the Group and Company at 31 December 2023 and of the profit of the Group for the year
then ended;
• the Directors’ Report contained in the Annual Report includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and
uncertainties that they face; and
• the Annual Report and Financial Statements, taken as a whole, provides the information necessary to assess the Group’s position and performance, business model and strategy and is fair, balanced and understandable and
provides the information necessary for shareholders to assess the Company’s position and performance, business model and strategy.
On behalf of the Board
MICHAEL STANLEY SHANE DOHERTY
DIRECTOR DIRECTOR
Statement of Directors’ Responsibilities
In Respect of the Annual Report and the Financial Statements
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Strategic Report Corporate Governance Financial Statements
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Cairn Homes plc (“the Company”) and its consolidated undertakings (“the Group”) for the year ended 31 December 2023 set out on pages 112 to 169, contained within the reporting
package 635400DPX6WP2KKDOA83-2023-12-31-en.zip, which comprise the consolidated statement of profit or loss and other comprehensive income, the consolidated and company statements of financial position, the
consolidated and company statements of changes in equity, the consolidated and company statements of cash flows and related notes, including the summary of material accounting policies set out in note 3 for the Group and note
1 for the Company.
The financial reporting framework that has been applied in their preparation is Irish Law including the Commission Delegated Regulation 2019/815 regarding the single electronic reporting format (ESEF), and International Financial
Reporting Standards (IFRS) as adopted by the European Union and, as regards the Company financial statements, as applied in accordance with the provisions of the Companies Act 2014.
In our opinion:
• the financial statements give a true and fair view of the assets, liabilities and financial position of the Group and Company as at 31 December 2023 and of the Group’s profit for the year then ended;
• the Group consolidated financial statements have been properly prepared in accordance with IFRS as adopted by the European Union;
• the Company financial statements have been properly prepared in accordance with IFRS as adopted by the European Union, as applied in accordance with the provisions of the Companies Act 2014; and
• the Group consolidated financial statements and Company financial statements have been properly prepared in accordance with the requirements of the Companies Act 2014 and, as regards the Group consolidated financial
statements, Article 4 of the IAS Regulation.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section of
our report. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is consistent with our report to the Audit and Risk Committee.
We were appointed as auditor by the Directors on 10 June 2015. The period of total uninterrupted engagement is the nine years ended 31 December 2023. We have fulfilled our ethical responsibilities under, and we remained
independent of the Group in accordance with, ethical requirements applicable in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority (IAASA) as applied to public interest entities.
No non-audit services prohibited by that standard were provided.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. In our evaluation of the directors’ assessment of the
Group’s and Company’s ability to continue to adopt the going concern basis of accounting we considered the inherent risks to the Group’s and Company’s business model and analysed how those risks might affect the Group’s and
Company’s financial resources or ability to continue operations over the going concern period.
The risks that we considered most likely to adversely affect the Group’s and Company’s available financial resources over this period were currently unforeseen factors leading to one or a combination of the following: significant
slowdown in construction activities; material reductions in sales arising from a deterioration in employment levels and consumer confidence; material reduction in credit availability in the mortgage market; and reduced demand for
apartment developments from State-supported agencies.
We evaluated the going concern assessment by carrying out the following procedures among others:
• considering the cash and undrawn bank loan facilities available to the Group and the related covenants in the facility agreement which are currently applicable in the going concern period;
• analysing the base-case scenario cashflow projections prepared by management showing forecast available liquidity and considering the reasonableness of the underlying assumptions; and
• analysing downside scenario cashflow projections prepared by management illustrating the impact of materially reduced sales compared to the base-case scenario and examining the reasonableness of management’s
conclusion that liquidity would be maintained throughout the going concern period in this scenario.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group’s or the Company’s ability to continue
as a going concern for a period of at least twelve months from the date when the financial statements are authorised for issue.
Independent Auditor’s Report
To the members of Cairn Homes plc
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Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
In relation to the Group’s and the Company’s reporting on how they have applied the UK Corporate Governance Code and the Irish Corporate Governance Annex we have nothing material to add or draw attention to in relation to the
directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting.
Detecting irregularities including fraud
We identified the areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements and risks of material misstatement due to fraud, using our understanding of the entity’s
industry, regulatory environment and other external factors and inquiry with the directors. In addition, our risk assessment procedures included:
• Inquiring with the directors and other management as to the Group’s policies and procedures regarding compliance with laws and regulations, identifying, evaluating and accounting for litigation and claims, as well as whether
they have knowledge of non-compliance or instances of litigation or claims.
• Inquiring of directors, the Audit and Risk Committee, and internal audit as to the Group’s policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for “whistleblowing”, as
well as whether they have knowledge of any actual, suspected or alleged fraud.
• Inquiring of directors , the Audit and Risk Committee and internal audit regarding their assessment of the risk that the financial statements may be materially misstated due to irregularities, including fraud.
• Inspecting the Group’s regulatory correspondence.
• Reading Board, Audit and Risk Committee and Remuneration Committee minutes.
• Considering remuneration incentive schemes and performance targets for Directors and other management.
• Performing planning analytical procedures to identify any unusual or unexpected relationships.
We discussed identified laws and regulations, fraud risk factors and the need to remain alert among the audit team.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including companies and financial reporting legislation. We assessed the extent of compliance with these laws and regulations as part of
our procedures on the related financial statement items, including assessing the financial statement disclosures and agreeing them to supporting documentation when necessary.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition
of fines or litigation. We identified the following areas as those most likely to have such an effect: health and safety, employment law, environmental law. Auditing standards limit the required audit procedures to identify non-
compliance with these non-direct laws and regulations to inquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. These limited procedures did not identify actual or suspected
non-compliance.
We assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. As required by auditing standards, we performed procedures to address the risk of
management override of controls and the risk of fraudulent revenue recognition. We identified a fraud risk in relation to the existence of revenue. We also identified a fraud risk relating to the completeness and accuracy of the
allocation of development costs to cost of sales of completed residential units.
Further detail in respect of these fraud risks are set out in the relevant key audit matter disclosures in this report.
In response to the fraud risks, we also performed procedures including:
• Identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation.
• Assessing significant accounting estimates for bias
• Assessing the disclosures in the financial statements
As the Group is regulated, our assessment of risks involved obtaining an understanding of the legal and regulatory framework that the Group operates in and gaining an understanding of the control environment including the
entity’s procedures for complying with regulatory requirements.
Independent Auditor’s Report continued
To the members of Cairn Homes plc
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Strategic Report Corporate Governance Financial Statements
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in
accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently
limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible
for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not
due to fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in
the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In arriving at our audit opinion above, the key audit matters, in decreasing order of audit significance, were as follows (unchanged from 2022):
Group key audit matters
Group: Carrying values of inventories €943.4 million (2022: €967.3 million) and profit recognition
Refer to pages 64 to 67 (Audit and Risk Committee Report), page 123 (accounting policy for inventories) and Note 16 to the consolidated financial statements (financial disclosures – inventories)
The key audit matter
Inventories consist of the costs of land, materials, design and related production and site development costs to date, less amounts recognised as cost of sales on properties which have been sold. The carrying value of development
land and work in progress depends on key assumptions relating to forecast selling prices for houses or apartments, site planning (including planning consent), build costs and other direct cost recoveries, all of which contain an
element of uncertainty.
The Group recognises profit on each sale, based on the particular unit sold, by reference to the overall expected site margin. As site development and the resulting sale of residential units can take place over a number of reporting
periods the determination of profit is dependent on the accuracy of the assumptions used in the forecasts about future selling prices, build costs and other direct costs. There is a risk that one or all of the above assumptions may be
inaccurate with a resulting impact on the carrying value of inventories or the amount of profit recognised.
For the reasons outlined above the engagement team determine this matter to be a key audit matter.
How the matter was addressed in our audit
Our audit procedures included:
a) We documented our understanding of the processes, and tested the design and implementation of relevant controls, over the accuracy and completeness of the input data and assumptions made in the Group’s financial models
which support the carrying value of development land and work in progress, and the allocation of costs to individual residential units.
b) We inspected management’s detailed year-end assessments of the net realisable value of development sites. These calculations were primarily based on residual value calculations whereby the estimated total costs of the
development were deducted from total forecast sales proceeds. We challenged the key data inputs and assumptions in the following ways, among others:
• inspecting forecast residential unit sales prices for consistency with sales prices achieved for similar properties;
• agreeing a sample of forecast costs to supplier agreements or other relevant documentation from third parties and, for sites not yet in development, considering the consistency of estimates for the major cost categories with
the estimates for sites in development;
• evaluating the assumptions in relation to forecast numbers of units to be constructed based on appropriate documentary support;
• enquiring of management as to whether there were any site-specific factors which may indicate that an individual site could be impaired; and
• considering wider market evidence relating to the demand for housing in Ireland which in our judgement was relevant to the key data inputs and assumptions.
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c) For sites in development, we compared actual revenues and costs to estimates to assess whether net realisable values were updated and that the overall expected sales margins were adjusted accordingly. We evaluated the
sensitivity of margins on these sites to changes in sales prices and costs and considered whether this indicated a risk of impairment of the inventories balance.
d) For completed sales in the year, we tested the completeness and accuracy of the release from inventories to cost of sales recorded in the general ledger for consistency with the financial cost models for the relevant sites.
e) For new development land acquisitions in the year, we inspected purchase contracts and other supporting documentation to agree the costs of acquisition, including related direct purchase costs and we agreed amounts paid to
corroborating documentary evidence.
f) We agreed a sample of additions to construction work in progress during the period to invoices/payment certificates and examined whether these additions were construction related and had been appropriately recorded as part
of the costs of the relevant site.
g) We considered the adequacy of the Group’s disclosures regarding the carrying value of development land and work in progress.
We found that the Group had appropriate processes in place to regularly update forecasts of development site profitability to take account of costs incurred, updated forecast costs to complete and estimated sales prices. We found
that the profit margins recognised on sales during the year appropriately reflected the costs attributable to units sold based on the Group’s financial models.
We found that, for sites not yet in development, the assumptions for numbers and mix of units to be built were supported by appropriate documentation, and the estimates of sales prices and costs used in the assessment of the net
realisable value of these sites were reasonable compared to similar sites in development.
Our audit procedures on the key assumptions underpinning the year-end assessments of the net realisable value of development sites, and the related sensitivity analysis, did not identify any misstatements in relation to the Group’s
conclusion that inventories are stated at the lower of cost and net realisable value and therefore are not impaired.
We found that the costs of new development site acquisitions during the year, and of the sample of additions to construction work in progress inspected, were appropriately recorded. We also found that the disclosures in the
financial statements relating to inventories are adequate to provide an understanding of the accounting policy and key assumptions relating to the Group’s inventories and profit recognition.
Group: Revenue recognition €666.8 million (2022: €617.4 million)
Refer to page 122 (accounting policy for revenue) and Note 6 to the consolidated financial statements (financial disclosures – revenue)
The key audit matter
A relatively high proportion of total revenue was recorded in the latter part of the year, which required particular emphasis on the recognition of revenue in the correct accounting period. The fraud risk relates to the existence of
revenue i.e. the risk that sales may have been inappropriately accelerated and recorded in the wrong period.
Also, as well as sales of residential units to private individuals, the Group has other types of contractual arrangements with certain customers for the sale of multiple units, which require particular consideration in relation to the
application of the relevant accounting standard.
For the reasons outlined above the engagement team determine this matter to be a key audit matter.
How the matter was addressed in our audit
Our audit procedures included, among others:
a) We documented our understanding of the processes in relation to revenue recognition. We tested the design and implementation of relevant controls over the existence of revenue for individual and multiple-unit sales, and the
completeness and accuracy of multiple-unit sales.
b) We agreed a sample of sales of residential units and residential sites to signed contracts and cash proceeds and examined whether there was appropriate evidence that control over those properties had transferred to customers
prior to the year-end, and hence that revenue had been recognised in the correct accounting period.
c) We evaluated the approach adopted by management in relation to the timing and amount of revenue to be recognised in accordance with the relevant accounting standard from material contracts with customers for the sale of
multiple units. In this regard, we independently inspected the related contract documentation and considered the appropriate application of the revenue recognition model in the relevant accounting standard, including whether
revenue should be recognised (i) at a point in time or (ii) over time.
Independent Auditor’s Report continued
To the members of Cairn Homes plc
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Strategic Report Corporate Governance Financial Statements
We found that the Group had appropriate processes in place in relation to the recording of revenue.
Appropriate documentary evidence was available for all of the sample of sales of residential units and residential sites that we tested and as a result we found that revenue had been accurately recorded for those sales in the year.
We found that the approach taken in the financial statements by the Group for the recognition of revenue from contracts for the sale of multiple units, whereby the revenue in the year was recognised at a point in time on legal
completion of those particular sales, was consistent with the requirements of the relevant accounting standard.
Company key audit matter
Company: Amounts due from subsidiary undertakings €401.4 million (2022: €487.4 million)
Refer to Note 6 to the Company financial statements (financial disclosures – Amounts due from Subsidiary Undertakings).
Description of the key audit matter
The Company financial statements include material amounts due from subsidiary undertakings. Due to the financial position of the Group, this was not considered to give rise to a significant risk of material misstatement. However, due to
the materiality of the amounts due from subsidiary undertakings in the context of the Company financial statements, this is considered to be the area that had the greatest focus of our overall audit of the Company financial statements.
For the reasons outlined above the engagement team determine this matter to be a key audit matter.
Our audit procedures included among others:
a) We agreed the amounts due from each subsidiary to the counterparty balance as included in the matrix of intercompany balances which eliminate on consolidation.
b) We inspected the financial position of each subsidiary undertaking using our judgement to independently assess recoverability of intercompany balances.
c) We considered the results of management’s assessment of the recoverability of intercompany balances and the rationale for their conclusion that no expected credit loss provision was required.
We found management’s assessment of the carrying value of the amounts due from subsidiary undertakings to be appropriate.
Our application of materiality and an overview of the scope of our audit
The materiality for the consolidated financial statements as a whole was set at €5.0 million (2022: €4.4 million).
This has been calculated with reference to a benchmark of profit before taxation, which is a benchmark typically applied for listed groups which have reached a mature stage. Materiality represents approximately 5.0% (2022: 4.7%) of
this benchmark, which we consider to be one of the principal considerations for members of the Company in assessing the financial performance of the Group. In applying our judgement in determining the percentage to be applied
to the benchmark, the following qualitative factors, had the most significant impact, increasing our assessment of materiality:
• the Group is a well established business in a well established sector of economy; and
• the business is well capitalised and has a relatively low level of borrowings compared to total assets.
Performance materiality for the Group financial statements as a whole was set at €3.75 million (2022: €3.3 million) determined with reference to materiality of which it represents 75% (2022: 75%).
We reported to the Audit and Risk Committee any corrected and uncorrected misstatements we identified through our audit with a value in excess of €0.25 million (2022: €0.22 million), in addition to any other audit misstatements
below that threshold that warranted reporting on qualitative grounds.
Materiality for the Company financial statements as a whole was set at €1.6 million (2022: €1.6 million), determined with reference to a benchmark of total assets, of which it represents 0.36% (2022: 0.30%). Performance materiality
for the Company financial statements as a whole was set at €1.2 million (2022: €1.2 million) determined with reference to materiality of which it represents 75% (2022: 75%).
We used materiality to assist us to determine what risks were significant risks and to determine the audit procedures to be performed including those discussed above.
Our audit was undertaken to the materiality and performance materiality level specified above and was all performed by a single Group engagement team.
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Cairn Homes plc | Annual Report 2023
Other information
The directors are responsible for the other information presented in the Annual Report together with the financial statements. The other information comprises the information included in the Introduction section, Strategic Report
and the Corporate Governance Statement (which includes the directors‘ report).
The financial statements and our auditor’s report thereon do not comprise part of the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit
opinion or, except as explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our
audit knowledge. Based solely on that work we have not identified material misstatements in the other information.
Based solely on our work on the other information undertaken during the course of the audit, we report that:
• we have not identified material misstatements in the directors’ report;
• in our opinion, the information given in the directors’ report is consistent with the financial statements; and
• in our opinion, the directors’ report has been prepared in accordance with the Companies Act 2014.
Corporate governance statement
We have reviewed the directors’ statements in relation to going concern, longer-term viability, and that part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate
Governance Code and the Irish Corporate Governance Annex specified for our review by the Listing Rules of Euronext Dublin and the UK Listing Authority.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained
during the audit:
• directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified;
• directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers and why the period is appropriate;
• directors’ statement on whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities;
• directors’ statement on fair, balanced and understandable and the information necessary for shareholders to assess the Group’s position and performance, business model and strategy;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks and the disclosures in the annual report that describe the principal risks and the procedures in place to identify emerging risks
and explain how they are being managed or mitigated;
• section of the annual report that describes the review of effectiveness of risk management and internal control systems; and;
• section describing the work of the Audit and Risk Committee.
The Listing Rules of Euronext Dublin also requires us to review certain elements of disclosures in the report to shareholders by the Remuneration Committee of the Board of Directors. We have nothing to report in this regard.
In addition as required by the Companies Act 2014, we report, in relation to information given in the Corporate Governance Statement and the Directors’ Report, that:
• based on the work undertaken for our audit, in our opinion, the description of the main features of internal control and risk management systems in relation to the financial reporting process, and information relating to voting
rights and other matters required by the European Communities (Takeover Bids (Directive 2004/EC) Regulations 2006) and specified for our consideration, is consistent with the financial statements and has been prepared in
accordance with the Act;
• based on our knowledge and understanding of the Company and its environment obtained in the course of our audit, we have not identified any material misstatements in that information; and
• the directors‘ report contains the information required by the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017.
We also report that, based on work undertaken for our audit, the information required by the Act is contained in the Corporate Governance Statement.
Our opinions on other matters prescribed by the Companies Act 2014 are unmodified
We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
Independent Auditor’s Report continued
To the members of Cairn Homes plc
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Strategic Report Corporate Governance Financial Statements
In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited and the financial statements are in agreement with the accounting records.
We have nothing to report on other matters on which we are required to report by exception
The Companies Act 2014 requires us to report to you if, in our opinion:
• the disclosures of directors’ remuneration and transactions required by Sections 305 to 312 of the Act are not made;
• the Company has not provided the information required by Section 1110N in relation to its remuneration report for the financial year ended 31 December 2022; and
• the Company has not provided the information required by section 5(2) to (7) of the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 for the year
ended 31 December 2022 as required by the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) (amendment) Regulations 2018.
We have nothing to report in this regard.
Respective responsibilities and restrictions on use
Responsibilities of directors for the financial statements
As explained more fully in the directors’ responsibilities statement set out on page 104, the directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; such
internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group’s and Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The risk of not detecting a material
misstatement resulting from fraud or other irregularities is higher than for one resulting from error, as they may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control and may involve
any area of law and regulation and not just those directly affecting the financial statements.
A fuller description of our responsibilities is provided on IAASA’s website at https://iaasa.ie/publications/description-of-the-auditors-responsibilities-for-the-audit-of-the-financial-statements/.
The purpose of our audit work and to whom we owe our responsibilities
Our report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the Company’s members those matters we
are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a
body, for our audit work, for this report, or for the opinions we have formed.
RYAN MCCARTHY
FOR AND ON BEHALF OF
KPMG
CHARTERED ACCOUNTANTS, STATUTORY AUDIT FIRM
1 STOKES PLACE
ST. STEPHEN’S GREEN
DUBLIN 2
15 March 2024
112
Cairn Homes plc | Annual Report 2023
| 2023 | 2022 | ||
| Note | €’000 | €’000 | |
| Continuing operations | |||
Revenue | 6 | ||
Cost of sales | ( | ( | |
Gross profit | |||
Administrative expenses | 7 | ( | ( |
Operating profit | |||
Finance costs | 8 | ( | ( |
Share of profit of equity- accounted investee, net of tax | 15 | ||
Profit before taxation | |||
Tax charge | 10 | ( | ( |
Profit for the year attributable to owners of the Company | |||
| Other comprehensive (loss)/ income | |||
Fair value movement on cashflow hedges | ( | ||
Cashflow hedges reclassified to profit and loss | 14 | ( | |
( | |||
Total comprehensive income for the year attributable to owners of the Company | |||
Basic earnings per share | 28 | ||
Diluted earnings per share | 28 |
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2023
113
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Strategic Report Corporate Governance Financial Statements
| 2023 | 2022 | ||
| Note | €’000 | €’000 | |
| Assets | |||
| Non-current assets | |||
Property, plant and equipment | 11 | ||
Right of use assets | 12 | ||
Intangible assets | 13 | ||
Derivatives | 14 | ||
Equity-accounted investee | 15 | ||
| Current assets | |||
Inventories | 16 | ||
Trade and other receivables | 17 | ||
Current taxation | |||
Cash and cash equivalents | 18 | ||
Total assets | |||
| Equity | |||
Share capital | 19 | ||
Share premium | 19 | ||
Other undenominated capital | 19 | ||
Treasury shares | 20 | ( | |
Share-based payment reserve | 20 | ||
Cashflow hedge reserve | 14 | ||
Retained earnings | |||
Total equity |
Consolidated Statement of Financial Position
At 31 December 2023
114
Cairn Homes plc | Annual Report 2023
Consolidated Statement of Financial Position continued
At 31 December 2023
| 2023 | 2022 | ||
| Note | €’000 | €’000 | |
| Liabilities | |||
| Non-current liabilities | |||
Loans and borrowings | 21 | ||
Lease liabilities | 12 | ||
Deferred taxation | 23 | ||
| Current liabilities | |||
Loans and borrowings | 21 | ||
Lease liabilities | 12 | ||
Trade and other payables | 24 | ||
Current taxation | |||
Total liabilities | |||
Total equity and liabilities |
On behalf of the Board
MICHAEL STANLEY SHANE DOHERTY
DIRECTOR DIRECTOR
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Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
| Attributable to owners of the company | ||||||||||
| Share Capital | ||||||||||
| Other | Share-based | |||||||||
| Ordinary | Deferred | Founder | Share | undenominated | Treasury | payment | Cashflow | Retained | ||
| shares | shares | shares | premium | capital | shares | reserve | hedge reserve | earnings | Total | |
| €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | |
As at 1 January 2023 | ||||||||||
| Total comprehensive income for the year | ||||||||||
Profit for the year | ||||||||||
Fair value movement on cashflow hedges | ( | ( | ||||||||
Cashflow hedges reclassified to profit and loss (Note 14) | ( | ( | ||||||||
( | ||||||||||
| Transactions with owners of the Company | ||||||||||
Purchase of own shares- share buybacks (Note 19) | ( | ( | ||||||||
Cancellation of repurchased shares | ( | ( | ||||||||
Cancellation of founder and deferred shares (Note 20) | ( | ( | ||||||||
Purchase of own shares-held in trust (Note 20) | ( | ( | ||||||||
Equity-settled share-based payments (Note 20) | ||||||||||
Settlement of dividend equivalents (Note 20) | ( | ( | ||||||||
| Shares issued on vesting of share awards and options | ||||||||||
(Note 20) | ||||||||||
| Transfer from share-based payment reserve to retained | ||||||||||
| earnings re vesting or lapsing of share awards and options | ||||||||||
(Note 20) | ( | |||||||||
Dividends paid to shareholders (Note 25) | ( | ( | ||||||||
( | ( | ( | ( | ( | ( | |||||
As at 31 December 2023 | ( |
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
116
Cairn Homes plc | Annual Report 2023
| Attributable to owners of the company | ||||||||||
| Share Capital | ||||||||||
| Other | Share-based | |||||||||
| Ordinary | Deferred | Founder | Share | undenominated | Treasury | payment | Cashflow | Retained | ||
| shares | shares | shares | premium | capital | shares | reserve | hedge reserve | earnings | Total | |
| €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | |
As at 1 January 2022 | ||||||||||
| Total comprehensive income for the year | ||||||||||
Profit for the year | ||||||||||
Fair value movement on cashflow hedges | ||||||||||
Cashflow hedges reclassified to profit and loss | ||||||||||
| Transactions with owners of the Company | ||||||||||
Purchase of own shares – share buybacks (Note 19) | ( | ( | ||||||||
Cancellation of repurchased shares | ( | ( | ||||||||
Equity-settled share-based payments (Note 20) | ||||||||||
Shares issued on vesting of share awards | ||||||||||
| Transfer from share-based payment reserve to retained | ||||||||||
earnings re vesting or lapsing of share awards | ( | |||||||||
| Transfer from share-based payment reserve to retained | ||||||||||
earnings in relation to founder shares (Note 19) | ( | |||||||||
Dividends paid to shareholders (Note 25) | ( | ( | ||||||||
( | ( | ( | ||||||||
As at 31 December 2022 |
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
117
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
| 2023 | 2022 | |
| €’000 | €’000 | |
| Cash flows from operating activities | ||
Profit for the year | ||
| Adjustments for: | ||
Share-based payments expense | ||
Finance costs | ||
Depreciation of property, plant and equipment | ||
Depreciation of right of use assets | ||
Amortisation of intangible assets | ||
Taxation | ||
Decrease/(increase) in inventories | ( | |
(Increase)/decrease in trade and other receivables | ( | |
Increase in trade and other payables | ||
Tax paid | ( | ( |
Net cash from operating activities | ||
| Cash flows from investing activities | ||
Purchases of property, plant and equipment | ( | ( |
Purchases of intangible assets | ( | ( |
Net cash used in investing activities | ( | ( |
| Cash flows from financing activities | ||
Purchase of own shares- share buybacks | ( | ( |
Proceeds from issue of share capital | ||
Settlement of dividend equivalents | ( | |
Purchase of own shares – held in trust | ( | |
Dividends paid | ( | ( |
Proceeds from loans and borrowings net of debt issue costs | ||
Repayment of loans and borrowings | ( | ( |
Repayment of lease liabilities | ( | ( |
Interest and other finance costs paid | ( | ( |
Net cash used in financing activities | ( | ( |
Net increase/(decrease) in cash and cash equivalents in the year | ( | |
Cash and cash equivalents at beginning of the year | ||
Cash and cash equivalents at end of the year |
Consolidated Statement of Cash Flows
For the year ended 31 December 2023
118
Cairn Homes plc | Annual Report 2023
1. Basis of Preparation 119
2. Key Judgements and Estimates 120
3. Material Accounting Policies 121
4. Measurement of Fair Values 127
5. Segmental Information 127
6. Revenue 127
7. Administrative Expenses 128
8. Finance Costs 128
9. Statutory and Other Information 128
10. Taxation 129
11. Property, Plant and Equipment 130
12. Leases 131
13. Intangible Assets 133
14. Derivatives and Cashflow Hedge Reserve 133
15. Equity-Accounted Investee 134
16. Inventories 135
17. Trade and Other Receivables 136
18. Cash and Cash Equivalents 136
19. Share Capital and Share Premium 137
20. Share-Based Payments 138
21. Loans and Borrowings 140
22. Reconciliation of Movement of Liabilities to Cash Flows Arising from Financing Activities 141
23. Deferred Taxation 142
24. Trade and Other Payables 143
25. Dividends 143
26. Related Party Transactions 144
27. Group Entities 144
28. Earnings Per Share 145
29. Financial Instruments and Risk Management 145
30. Other Commitments and Contingent Liabilities 153
31. Profit or Loss of the Parent Company 153
32. Events After the Reporting Period 153
33. Approval of Financial Statements 153
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
119
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
1. Basis of Preparation
120
Cairn Homes plc | Annual Report 2023
1. Basis of Preparation continued
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
121
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
In preparing the financial statements, the Directors have considered the impact of climate change and the Group’s 2023 commitment to the Science Based Targets initiative (SBTi) Net Zero standard as well as any additional costs,
savings and revenues associated with climate risks or opportunities as identified in the Task Force on Climate-Related Financial Disclosures on pages 34 to 39 of the annual report. Costs and revenues associated with climate risks
or opportunities are reflected in the Group’s forecasts used to determine margins on active and non-active developments. There has been no other material impact identified on the financial reporting judgements and estimates
as a result of climate change. In particular, the Directors considered the impact of climate change in respect of the following areas: going concern and viability of the Group over the next three years; cash flow forecasts used in the
impairment assessments of inventories; and carrying value and useful economic lives of property, plant and equipment. Whilst there is currently no expected material medium-term impact on the Group from climate change, the
Directors are aware of the everchanging risks attached to climate change and will regularly assess these risks against judgements and estimates made in preparation of the Group’s financial statements.
3. Material Accounting Policies
The accounting policies set out below have been applied in these financial statements.
122
Cairn Homes plc | Annual Report 2023
3. Material Accounting Policies continued
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
123
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
124
Cairn Homes plc | Annual Report 2023
3. Material Accounting Policies continued
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
125
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
Type | IFRS 9 classification |
| Financial assets | |
Cash and cash equivalents | Amortised cost |
Trade and other receivables | Amortised cost |
Derivatives | Fair value (cash flow |
| hedge accounting) | |
| Financial liabilities | |
Loans and borrowings | Amortised cost |
Trade payables and accruals, including deferred consideration | Amortised cost |
126
Cairn Homes plc | Annual Report 2023
3. Material Accounting Policies continued
(v) Derecognition and modification of financial liabilities continued
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
127
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting year during which the change has occurred.
Further disclosures about the assumptions made in measuring fair values are included in Note 29 Financial Instruments and Risk Management.
5. Segmental Information
Segmental information is presented on the same basis as that used for internal reporting purposes. Operating segments are reported in a manner consistent with the internal reporting provided to the CODM. The CODM has been
identified as the Board of Directors of the Company.
Having considered the criteria in IFRS 8 Operating Segments and considering how the Group manages its business and allocates resources, the Group has determined that it has one reportable segment. The Group is managed as a
single business unit, building and property development. As the Group operates in a single geographic market, Ireland, no geographical segmentation is provided.
| 2023 | 2022 | |
| €’000 | €’000 | |
Residential property sales | 649,879 | 610,813 |
Residential site and other sales | 16,902 | 6,407 |
Revenue from contracts with customers | 666,781 | 617,220 |
| Other revenue | ||
Income from property rental | 26 | 137 |
666,807 | 617,357 |
| 2023 | 2022 | |
| €’000 | €’000 | |
| Residential property sales | ||
Houses and duplexes | 382,903 | 342,299 |
Apartments | 266,976 | 268,514 |
649,879 | 610,813 |
128
Cairn Homes plc | Annual Report 2023
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
| 2023 | 2022 | |
| €’000 | €’000 | |
Employee benefits expense (Note 9) | 22,518 | 19,785 |
Other expenses | 11,711 | 11,391 |
34,229 | 31,176 |
| 2023 | 2022 | |
| €’000 | €’000 | |
Interest expense on financial liabilities measured at amortised cost | 13,331 | 8,600 |
Cashflow hedges-reclassified from other comprehensive income | (80) | 70 |
Other finance costs | 661 | 782 |
Interest on lease liabilities (Note 12) | 206 | 193 |
14,118 | 9,645 |
2023 | 2022 | |
Number of employees | 345 | 321 |
| 2023 | 2022 | |
| €’000 | €’000 | |
Wages and salaries | 36,634 | 31,506 |
Social welfare costs | 4,049 | 3,539 |
Pension costs – defined contribution schemes | 1,350 | 1,065 |
Share-based payments charge | 7,075 | 7,004 |
49,108 | 43,114 | |
Amounts capitalised into inventories | (25,987) | (23,070) |
Amounts capitalised into intangibles | (603) | (259) |
Employee benefits expense | 22,518 | 19,785 |
129
Cairn Homes plc | Annual Report 2023
Strategic Report Corporate Governance Financial Statements
| Directors’ remuneration | ||
Salaries, fees and other emoluments | 2,572 | 2,452 |
Pension contributions – defined contribution schemes | 100 | 120 |
Gains on vesting of awards under LTIP scheme | 912 | – |
3,584 | 2,572 |
10. Taxation
| 2023 | 2022 | |
| €’000 | €’000 | |
| Current tax charge for the year | ||
Corporation tax – current year | 13,951 | 13,088 |
Adjustment in respect of prior year | 40 | 23 |
13,991 | 13,111 | |
Deferred tax credit for the year (Note 23) | – | (669) |
Total tax charge | 13,991 | 12,442 |
The tax assessed for the year differs from the standard rate of tax in Ireland. The differences are explained below.
| 2023 | 2022 | |
| €’000 | €’000 | |
Profit before tax | 99,423 | 93,472 |
Tax charge at standard Irish income tax rate of 12.5% | 12,428 | 11,684 |
| Effects of: | ||
Expenses not deductible for tax purposes | 1,523 | 735 |
Adjustment in respect of prior year | 40 | 23 |
Total tax charge | 13,991 | 12,442 |
Global minimum top-up tax
The Group operates in Ireland, which has enacted new legislation to implement the global minimum top-up tax. The Group does not expect to be subject to the top-up tax in relation to its operations in Ireland in the medium term.
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Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
| Leasehold | Motor | Computers & | 2023 | |
| improvements | vehicles | equipment | Total | |
| €’000 | €’000 | €’000 | €’000 | |
| Cost | ||||
At 1 January 2023 | 2,860 | 77 | 6,792 | 9,729 |
Additions | 45 | – | 1,644 | 1,689 |
Disposals | – | (18) | – | (18) |
At 31 December 2023 | 2,905 | 59 | 8,436 | 11,400 |
| Accumulated depreciation | ||||
At 1 January 2023 | (567) | (68) | (3,305) | (3,940) |
Depreciation | (261) | (8) | (1,089) | (1,358) |
Disposals | – | 18 | – | 18 |
At 31 December 2023 | (828) | (58) | (4,394) | (5,280) |
| Net book value | ||||
At 31 December 2023 | 2,077 | 1 | 4,042 | 6,120 |
| Leasehold | Motor | Computers & | 2022 | |
| improvements | vehicles | equipment | Total | |
| €’000 | €’000 | €’000 | €’000 | |
| Cost | ||||
At 1 January 2022 | 483 | 77 | 3,566 | 4,126 |
Additions | 2,377 | – | 3,226 | 5,603 |
At 31 December 2022 | 2,860 | 77 | 6,792 | 9,729 |
| Accumulated depreciation | ||||
At 1 January 2022 | (394) | (49) | (2,518) | (2,961) |
Depreciation | (173) | (19) | (787) | (979) |
At 31 December 2022 | (567) | (68) | (3,305) | (3,940) |
| Net book value | ||||
At 31 December 2022 | 2,293 | 9 | 3,487 | 5,789 |
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Strategic Report Corporate Governance Financial Statements
12. Leases
The Group leases its central support office property and certain motor vehicles. The office lease formed the majority of the right of use assets and lease liabilities balance as at 31 December 2023 and 31 December 2022. The discount
rate attributed to the office lease is 2.6%. Disposals in the year ended 31 December 2023 relate to the previous central support office lease.
The additions during the year ended 31 December 2023 relate to vehicle leases and have various commencement dates throughout the year. The average discount rate associated with these leases is 6.21% which reflects Group’s
incremental borrowing rate at the date of commencement.
| 2023 | 2022 | |
| €’000 | €’000 | |
| Cost | ||
At 1 January | 8,190 | 1,615 |
Additions | 391 | 6,575 |
Disposal | (1,442) | – |
At 31 December | 7,139 | 8,190 |
| Accumulated depreciation | ||
At 1 January | (2,187) | (1,125) |
Disposal | 1,442 | – |
Depreciation | (837) | (1,062) |
At 31 December | (1,582) | (2,187) |
| Net book value | ||
At 31 December | 5,557 | 6,003 |
Lease liabilities
| 2023 | 2022 | |
| €’000 | €’000 | |
| Current liabilities | ||
Repayable within one year | 937 | 761 |
937 | 761 | |
| Non-current liabilities | ||
| Repayable as follows: | ||
Between one and two years | 927 | 806 |
Between two and five years | 2,244 | 2,194 |
Greater than five years | 2,319 | 3,036 |
5,490 | 6,036 | |
Total lease liabilities | 6,427 | 6,797 |
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Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
12. Leases continued
| 2023 | 2022 | |
| €’000 | €’000 | |
At 1 January | 6,797 | 632 |
Additions | 391 | 6,575 |
Interest on lease liabilities (Note 8) | 206 | 193 |
Lease payments | (967) | (603) |
At 31 December | 6,427 | 6,797 |
| Contractual cash flows | ||||||
| 6 months | ||||||
| Total | or less | 6-12 months | 1-2 years | 2-5 years | 5 years + | |
| €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | |
Lease liabilities | (7,170) | (564) | (558) | (1,077) | (2,543) | (2,428) |
| Contractual cash flows | ||||||
| 6 months | ||||||
| Total | or less | 6-12 months | 1-2 years | 2-5 years | 5 years + | |
| €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | |
Lease liabilities | (7,689) | (437) | (505) | (971) | (2,540) | (3,236) |
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| 2023 | 2022 | |
| €’000 | €’000 | |
| Software | ||
| Cost | ||
At 1 January | 4,282 | 2,199 |
Additions | 2,401 | 2,083 |
Disposals | (53) | – |
At 31 December | 6,630 | 4,282 |
| Accumulated amortisation | ||
At 1 January | (1,239) | (765) |
Amortisation | (1,180) | (474) |
At 31 December | (2,419) | (1,239) |
| Net book value | ||
At 31 December | 4,211 | 3,043 |
| 2023 | 2022 | |
| Non-current assets | €’000 | €’000 |
| Derivative financial instruments | ||
Interest rate swaps – cash flow hedges | 436 | 847 |
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Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
| 2023 | 2022 | |
| €’000 | €’000 | |
Opening investment in joint venture | 85 | – |
Group’s share of profits | 152 | 85 |
Closing investment In joint venture | 237 | 85 |
| 2023 | 2022 | |
| €’000 | €’000 | |
| Summarised statement of financial position for Clonburris Infrastructure Limited | ||
Non-current assets | – | – |
Current assets | 1,134 | 573 |
Current liabilities | (839) | (468) |
Non-current liabilities | – | – |
Net assets of Clonburris Infrastructure Limited (100%) | 295 | 105 |
Percentage ownership interest by the Group | 80.57% | 80.57% |
Group share of net assets recognised as investment in joint venture (80.57%) | 237 | 85 |
| Summarised income statement of Clonburris Infrastructure Limited | ||
Revenue | 13,895 | 614 |
Operating expenses | (13,706) | (509) |
Tax | – | – |
Profit for the year (100%) | 189 | 105 |
Group share of profit for year recognised in profit or loss (80.57%) | 152 | 85 |
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| 2023 | 2022 | |
| €’000 | €’000 | |
Land held for development | 609,160 | 628,326 |
Construction work in progress | 334,257 | 339,016 |
943,417 | 967,342 |
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| 2023 | 2022 | |
| €’000 | €’000 | |
Trade receivables | 32,706 | 3,517 |
Prepayments | 1,152 | 1,015 |
Construction bonds | 16,533 | 14,654 |
Other receivables | 3,666 | 1,261 |
54,057 | 20,447 |
18. Cash and Cash Equivalents
| 2023 | 2022 | |
| €’000 | €’000 | |
Cash and cash equivalents | 25,553 | 21,711 |
Cash deposits are made for varying short-term periods depending on the immediate cash requirements of the Group. All deposits can be withdrawn without any changes in value and accordingly the fair value of cash and cash
equivalents is identical to the carrying value.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
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| 2023 | 2022 | |||
Authorised | Number | €’000 | Number | €’000 |
Ordinary Shares of €0.001 each | 1,000,000,000 | 1,000 | 1,000,000,000 | 1,000 |
Founder Shares of €0.001 each | 100,000,000 | 100 | 100,000,000 | 100 |
Deferred Shares of €0.001 each | 120,000,000 | 120 | 120,000,000 | 120 |
A Ordinary Shares of €1.00 each | 20,000 | 20 | 20,000 | 20 |
Total authorised share capital | 1,240 | 1,240 |
| Share | Share | |||
| capital | premium | Total | ||
Issued and fully paid | Number | €’000 | €’000 | €’000 |
| As at 31 December 2023 | ||||
Ordinary Shares of €0.001 each | 654,888,041 | 655 | 201,100 | 201,755 |
Founder Shares of €0.001 each | – | – | – | – |
Deferred Shares of €0.001 each | – | – | – | – |
Total issued and fully paid | 655 | 201,100 | 201,755 |
| Share | Share | |||
| capital | premium | Total | ||
Issued and fully paid | Number | €’000 | €’000 | €’000 |
| As at 31 December 2022 | ||||
Ordinary Shares of €0.001 each | 685,777,452 | 686 | 199,597 | 200,283 |
Founder Shares of €0.001 each | 19,182,149 | 19 | 19 | 38 |
Deferred Shares of €0.001 each | 19,980,000 | 20 | – | 20 |
Total issued and fully paid | 725 | 199,616 | 200,341 |
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19. Share Capital and Share Premium continued
| 2023 | 2022 | |
| Other Undenominated Capital | €’000 | €’000 |
At 1 January | 105 | 40 |
Nominal value of own shares purchased | 39 | 65 |
Cancellation of Deferred and Founder shares | 39 | – |
At 31 December | 183 | 105 |
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
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Strategic Report Corporate Governance Financial Statements
| 2023 | 2022 | |
| €’000 | €’000 | |
Outstanding at beginning of year | 15,776,346 | 10,717,994 |
Forfeited during the year | (856,824) | (354,154) |
Vesting during the year | (5,331,233) | – |
Granted during the year | 6,187,597 | 5,412,506 |
Outstanding at end of year | 15,775,886 | 15,776,346 |
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20. Share-Based Payments continued
Restricted share unit plan
The Group operated a restricted share unit plan, which was approved at the Annual General Meeting on 20 May 2020, under which no remaining conditional awards of shares made to employees remain outstanding as at
31 December 2023 (2022: nil). The Group did not recognise a charge relating to these restricted share units during the year ended 31 December 2023 as the restricted share unit plan is no longer in place (31 December 2022 charge: of
€0.648 million, of which €0.495 million was charged to profit or loss and €0.153 million was included within construction work in progress within inventories).
Other share options
500,000 ordinary share options were issued in the year ended 31 December 2015, to a Director at that time, of which none have been exercised as at 31 December 2023. 200,000 of these share options were exercised in January 2024.
250,000 of these options vested during 2018 and the remaining 250,000 vested during 2019. The exercise price of each ordinary share option is €1.00. At grant date, the fair value of the options that vested during 2018 was calculated
at €0.219 per share while the fair value of options that vested during 2019 was calculated at €0.220 per share. The related charge to profit or loss during the year ended 31 December 2023 was €nil (2022: €nil).
| 2023 | 2022 | |
| €’000 | €’000 | |
| Bank and other loans | ||
| Current liabilities | ||
Repayable within one year | 14,992 | – |
14,992 | – | |
| Non-current liabilities | ||
| Repayable as follows: | ||
Between one and two years | 14,992 | 14,992 |
Between two and five years | 143,844 | 155,999 |
Greater than five years | – | – |
158,836 | 170,991 | |
Total | 173,828 | 170,991 |
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
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22. Reconciliation of Movement of Liabilities to Cash Flows Arising from Financing Activities
| Liabilities | |||||||
| Loans and | Accrued | ||||||
| borrowings | interest and | ||||||
| Revolving | Total (Note | other finance | Lease | ||||
| Term loan | credit facility | Loan notes | 21) | costs | liabilities | Total | |
| €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | |
Balance at 1 January 2023 | 76,019 | 22,500 | 72,472 | 170,991 | 883 | 6,797 | 178,671 |
Cash flows from financing activities | – | – | – | – | – | – | – |
Proceeds from borrowings | – | 317,500 | – | 317,500 | – | – | 317,500 |
Repayment of loans | – | (315,000) | – | (315,000) | – | – | (315,000) |
Interest and other finance costs paid | – | – | – | – | (13,866) | (206) | (14,072) |
Repayment of lease liabilities | – | – | – | – | – | (761) | (761) |
Total changes from financing cash flows | – | 2,500 | – | 2,500 | (13,866) | (967) | (12,333) |
| Other changes | |||||||
Amortisation of borrowing costs | 329 | – | 8 | 337 | – | – | 337 |
Interest and other finance costs for the year | – | – | – | – | 13,655 | 206 | 13,861 |
Recognition of lease liabilities for new leases | – | – | – | – | – | 391 | 391 |
Total other changes | 329 | – | 8 | 337 | 13,655 | 597 | 14,589 |
Balance at 31 December 2023 | 76,348 | 25,000 | 72,480 | 173,828 | 672 | 6,427 | 180,927 |
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22. Reconciliation of Movement of Liabilities to Cash Flows Arising from Financing Activities continued
| Liabilities | |||||||
| Loans and | Accrued | ||||||
| borrowings | interest and | ||||||
| Revolving | Total (Note | other finance | Lease | ||||
| Term loan | credit facility | Loan notes | 21) | costs | liabilities | Total | |
| €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | |
Balance at 1 January 2022 | 77,094 | – | 72,461 | 149,555 | 881 | 632 | 151,068 |
Cash flows from financing activities | – | – | – | – | – | – | – |
Proceeds from borrowings | 75,823 | 278,988 | – | 354,811 | – | – | 354,811 |
Repayment of loans | (77,500) | (256,488) | – | (333,988) | – | – | (333,988) |
Interest and other finance costs paid | – | – | – | – | (8,906) | (193) | (9,099) |
Repayment of lease liabilities | – | – | – | – | – | (410) | (410) |
Total changes from financing cash flows | (1,677) | 22,500 | – | 20,823 | (8,906) | (603) | 11,314 |
| Other changes | |||||||
Amortisation of borrowing costs | 602 | – | 11 | 613 | – | – | 613 |
Interest and other finance costs for the year | – | – | – | – | 8,908 | 193 | 9,101 |
Recognition of lease liabilities for new leases | – | – | – | – | – | 6,575 | 6,575 |
Total other changes | 602 | – | 11 | 613 | 8,908 | 6,768 | 16,289 |
Balance at 31 December 2022 | 76,019 | 22,500 | 72,472 | 170,991 | 883 | 6,797 | 178,671 |
| 2023 | 2022 | |
| Movement in net deferred tax liability: | €’000 | €’000 |
Opening balance | 3,139 | 3,808 |
Credit to profit or loss (Note 10) | – | (669) |
As at year end | 3,139 | 3,139 |
| Deferred tax | Deferred tax | Net deferred | |
| assets | liabilities | tax liability | |
| 2023 | €’000 | €’000 | €’000 |
Opening balance | 476 | (3,615) | (3,139) |
Credit/(charge) to profit or loss | – | – | – |
Closing balance | 476 | (3,615) | (3,139) |
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
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| Deferred tax | Deferred tax | Net deferred | |
| assets | liabilities | tax liability | |
| €’000 | €’000 | €’000 | |
Opening balance | 683 | (4,491) | (3,808) |
Credit/(charge) to profit or loss | (207) | 876 | 669 |
Closing balance | 476 | (3,615) | (3,139) |
| 2023 | 2022 | |
| €’000 | €’000 | |
Trade payables | 22,053 | 17,956 |
Deferred consideration | 11,810 | 10,000 |
Accruals | 35,425 | 43,321 |
VAT liability | 27,977 | 19,721 |
Other creditors | 2,079 | 1,427 |
99,344 | 92,425 |
25. Dividends
Dividends of €41.9 million were paid by the Company during the year (2022: €40.7 million). A dividend of 3.10 cent per ordinary share, totalling €21.2 million, was paid on 16 May 2023 and a dividend of 3.1 0 cent per ordinary share,
totalling €20.7 million, was paid on 6 October 2023. Details of proposed dividends subsequent to the year end are set out in Note 32.
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Cairn Homes plc | Annual Report 2023
| 2023 | 2022 | |
| €’000 | €’000 | |
Short-term employee benefits | 2,572 | 2,452 |
Post-employment benefits (pension contributions – defined contribution schemes) | 100 | 120 |
Share-based payment expense – LTIP/Stretch CEO LTIP | 2,995 | 1,057 |
Total key management personnel compensation | 5,667 | 3,629 |
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
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Strategic Report Corporate Governance Financial Statements
| 2023 | 2022 | |
| €’000 | €’000 | |
Profit for the year attributable to the owners of the Company | 85,432 | 81,030 |
Numerator for basic and diluted earnings per share | 85,432 | 81,030 |
| Number of | Number of | |
| Shares | Shares | |
Weighted average number of ordinary shares for the year (basic) | 673,796,613 | 703,045,720 |
Dilutive effect of options | 41,284 | 31,835 |
Dilutive effect of LTIP awards | 4,738,040 | 7,306,541 |
Denominator for diluted earnings per share | 678,575,937 | 710,384,096 |
| Earnings per share (cent) | ||
– Basic | 12.7 | 11.5 |
– Diluted | 12.6 | 11.4 |
146
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29. Financial Instruments and Risk Management continued
| 2023 | 2022 | |
| €’000 | €’000 | |
Trade and other receivables (excluding prepayments) | 52,905 | 19,432 |
Cash and cash equivalents | 25,553 | 21,711 |
78,458 | 41,143 |
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
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Strategic Report Corporate Governance Financial Statements
| 2023 | 2022 | |
| €’000 | €’000 | |
| Financial liabilities due in less than one year | ||
Trade payables and accruals | 57,478 | 61,277 |
Deferred consideration | 11,810 | 10,000 |
Lease liabilities | 937 | 761 |
Loans and borrowings | 14,992 | – |
85,217 | 72,038 | |
| Financial liabilities due after more than one year | ||
Lease liabilities | 5,490 | 6,036 |
Loans and borrowings | 158,836 | 170,991 |
164,326 | 177,027 | |
Total financial liabilities | 249,543 | 249,065 |
| Available funds: | ||
Cash and cash equivalents | 25,553 | 21,711 |
Revolving credit facilities undrawn | 175,000 | 177,500 |
200,553 | 199,211 |
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29. Financial Instruments and Risk Management continued
| Contractual cash flows | |||||||
| Carrying | 6 months | ||||||
| amount | Total | or less | 6-12 months | 1-2 years | 2-5 years | >5 years | |
| 31 December 2023 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 |
Trade payables and accruals | 57,478 | (57,478) | (57,478) | – | – | – | – |
Deferred consideration | 11,810 | (11,810) | (6,310) | (5,500) | – | – | – |
Lease liabilities | 6,427 | (7,170) | (564) | (558) | (1,077) | (2,543) | (2,428) |
Loans and borrowings | 173,828 | (193,419) | (3,326) | (17,991) | (20,559) | (151,543) | – |
249,543 | (269,877) | (67,678) | (24,049) | (21,636) | (154,086) | (2,428) |
| Contractual cash flows | |||||||
| Carrying | 6 months | ||||||
| amount | Total | or less | 6-12 months | 1-2 years | 2-5 years | >5 years | |
| 31 December 2022 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 |
Trade payables and accruals | 61,277 | (61,277) | (61,277) | – | – | – | – |
Deferred consideration | 10,000 | (10,000) | (10,000) | – | – | – | – |
Lease liabilities | 6,797 | (7,689) | (437) | (505) | (971) | (2,540) | (3,236) |
Loans and borrowings | 170,991 | (197,358) | (3,120) | (3,254) | (21,243) | (169,741) | – |
249,065 | (276,324) | (74,834) | (3,759) | (22,214) | (172,281) | (3,236) |
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
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| 2023 | 2022 | |
| €’000 | €’000 | |
| Interest rate profile of loans and borrowings | ||
Fixed-rate | 130,361 | 130,099 |
Variable-rate | 43,467 | 40,892 |
Loans and borrowings | 173,828 | 170,991 |
| Variable rate instruments | ||
Gross variable rate borrowings | 43,467 | 40,892 |
Impact of interest rate swaps | (18,467) | (18,392) |
25,000 | 22,500 |
Profit or loss | Equity | |||
| 100 bp | 100 bp | 100 bp | 100 bp | |
| increase | decrease | increase | decrease | |
| 31 December 2023 | €’000 | €’000 | €’000 | €’000 |
Variable-rate instruments – borrowings | (1,214) | 1,214 | (1,214) | 1,214 |
Cash flow sensitivity (net) | (1,214) | 1,214 | (1,214) | 1,214 |
Profit or loss | Equity | |||
| 100 bp | 100 bp | 100 bp | 100 bp | |
| increase | decrease | increase | decrease | |
| 31 December 2022 | €’000 | €’000 | €’000 | €’000 |
Variable-rate instruments – borrowings | (978) | 336 | (978) | 336 |
Cash flow sensitivity (net) | (978) | 336 | (978) | 336 |
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29. Financial Instruments and Risk Management continued
| 2023 | 2022 | |
| €’000 | €’000 | |
| Non-current assets – Derivative Financial Instruments | ||
Interest rate swaps – cash flow hedges | 436 | 847 |
| Cash flow | Cash flow | |
| hedge reserve | hedge reserve | |
| 2023 | 2022 | |
| Interest rate swaps | €’000 | €’000 |
Opening balance 1 January | 847 | – |
Change in fair value of hedging instrument recognised in cash flow hedge reserve | (331) | 777 |
Reclassified from cash flow hedge reserve to profit or loss – included in finance cost | (80) | 70 |
Closing balance 31 December | 436 | 847 |
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
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Strategic Report Corporate Governance Financial Statements
Asset/Liability | Carrying value | Level | Method | Assumptions |
Borrowings | Amortised cost | 2 | Discounted Cash Flow | Valuation based on future repayment and interest cashflows discounted at a year-end market interest rate. |
Interest rate swaps | Fair Value | 2 | Discounted Cash Flow | Valuation based on the present value of the estimated future cash flows based on observable yield curves. |
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29. Financial Instruments and Risk Management continued
| 2023 | Fair value | |||
| Carrying value | Level 1 | Level 2 | Level 3 | |
| €’000 | €’000 | €’000 | €’000 | |
| Financial assets measured at fair value | ||||
Derivative interest rate swap | 436 | 436 | ||
| Financial assets measured at amortised cost | ||||
Trade and other receivables (excluding prepayments) | 52,905 | |||
Cash and cash equivalents | 25,553 | |||
| 78,894 | ||||
| Financial liabilities measured at amortised cost | ||||
Trade payables and accruals | 57,478 | |||
Deferred consideration | 11,810 | |||
Loans and borrowings | 173,828 | 168,479 | ||
| 243,116 |
| 2022 | Fair value | |||
| Carrying value | Level 1 | Level 2 | Level 3 | |
| €’000 | €’000 | €’000 | €’000 | |
| Financial assets measured at fair value | ||||
Derivative interest rate swap | 847 | 847 | ||
| Financial assets measured at amortised cost | ||||
Trade and other receivables (excluding prepayments) | 19,432 | |||
Cash and cash equivalents | 21,711 | |||
| 41,143 | ||||
| Financial liabilities measured at amortised cost | ||||
Trade payables and accruals | 61,277 | |||
Deferred consideration | 10,000 | |||
Loans and borrowings | 170,991 | 162,499 | ||
| 242,268 |
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
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Strategic Report Corporate Governance Financial Statements
32. Events After the Reporting Period
From 1 January 2024 to 12 March 2024 the Group has repurchased an additional 9.0 million shares under the share buyback programme (Note 20) at a cost of €13.1 million. In accordance with the share buyback programme, all
repurchased shares are subsequently cancelled.
From 1 January 2024 to 9 January 2024, an additional 749,048 shares were purchased at a cost of €1.0 million in relation to the Stretch CEO LTIP (Note 20).
In January 2024, a former Director exercised 200,000 share options, at an option price of €1 per share (Note 20).
On 28 February 2024, the Company proposed a final 2023 dividend of 3. 2 cent per share subject to shareholder approval at the 2024 AGM on 10 May 2024. Based on the ordinary shares in issue at 12 March 2024, the amount of
dividend proposed is €20.7 million. The proposed final dividend of 3.2 cent per ordinary shares will be paid on 17 May 2024 to ordinary shareholders on the Company’s register on 26 April 2024.
33. Approval of Financial Statements
The financial statements were approved by the Board of Directors on 15 March 2024.
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Company Financial Statements
1. Company Statement of Financial Position 155
2. Company Statement of Changes in Equity 157
3. Company Statement of Cash Flows 159
4. Notes to the Company Financial Statements 161
155
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Strategic Report Corporate Governance Financial Statements
Note
2023
€’000
2022
€’000
Assets
Non-current assets
Property, plant and equipment 2 2,779 2,993
Right of use assets 3 4,953 5,572
Intangible assets 4 4,144 3,043
Investments in subsidiaries 5 26,744 26,744
38,620 38,352
Current assets
Amounts due from subsidiary undertakings 6 401,394 487,400
Trade and other receivables 7 2,562 667
Cash and cash equivalents 340 7,013
404,296 495,080
Total assets 442,916 533,432
Equity
Share capital 8 655 725
Share premium 8 201,100 199,616
Other undenominated capital 183 105
Treasury shares 8 (3,196) –
Share-based payment reserve 9 13,588 11,809
Retained earnings 189,521 287,891
Total equity 401,851 500,146
Company Statement of Financial Position
At 31 December 2023
156
Cairn Homes plc | Annual Report 2023
Note
2023
€’000
2022
€’000
Liabilities
Non-current liabilities
Lease liabilities 3 5,130 5,776
Current liabilities
Trade and other payables 10 35,276 26,934
Lease liabilities 3 659 576
35,935 27,510
Total liabilities 41,065 33,286
Total equity and liabilities 442,916 533,432
On behalf of the Board
MICHAEL STANLEY SHANE DOHERTY
DIRECTOR DIRECTOR
Company Statement of Financial Position continued
At 31 December 2023
157
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Strategic Report Corporate Governance Financial Statements
Share Capital
Ordinary
shares
€’000
Deferred
shares
€’000
Founder
shares
€’000
Share
premium
€’000
Other
undenominated
capital
€’000
Treasury
shares
€’000
Share-based
payment
reserve
€’000
Retained
earnings
€’000 Total €’000
As at 1 January 2023 686 20 19 199,616 105 – 11,809 287,891 500,146
Total comprehensive loss for the year
Loss for the year – – – – – – – (18,614) (18,614)
– – – – – – – (18,614) (18,614)
Transactions with owners of the Company
Purchase of own shares – share buybacks – – – – – (42,697) – – (42,697)
Cancellation of repurchased shares (39) – – – 39 42,697 – (42,697) –
Cancellation of founder and deferred shares – (20) (19) – 39 – – – –
Purchase of own shares – held in trust – – – – – (3,196) – – (3,196)
Equity-settled share-based payments (Note 9) – – – – – – 7,075 – 7,075
Shares issued on vesting of share awards 8 – – 1,484 – – – – 1,492
Settlement of dividend equivalents – – – – – – (459) – (459)
Transfer from share-based payment reserve to retained earnings
re vesting or lapsing of share awards – – – – – – (4,837) 4,837 –
Dividends paid to shareholders (Note 8) – – – – – – – (41,896) (41,896)
(31) (20) (19) 1,484 78 (3,196) 1,779 (79,756) (79,681)
As at 31 December 2023 655 – – 201,100 183 (3,196) 13,588 189,521 401,851
Company Statement of Changes in Equity
For the year ended 31 December 2023
158
Cairn Homes plc | Annual Report 2023
Share Capital
Ordinary
shares
€’000
Deferred
shares
€’000
Founder
shares
€’000
Share
premium
€’000
Other
undenominated
capital
€’000
Treasury
shares
€’000
Share-based
payment
reserve
€’000
Retained
earnings
€’000
Total
€’000
As at 1 January 2022 750 20 19 199,616 40 – 11,795 406,321 618,561
Total comprehensive loss for the year
Loss for the year – – – – – – – (9,583) (9,583)
– – – – – – – (9,583) (9,583)
Transactions with owners of the Company
Purchase of own shares – share buybacks – – – – – (75,143) – – (75,143)
Cancellation of repurchased shares (65) – – – 65 75,143 – (75,143) –
Purchase of own shares – held in trust – – – – – – 7,004 – 7,004
Equity-settled share-based payments (Note 9) 1 – – – – – – – 1
Shares issued on vesting of share awards – – – – – – (1,408) 1,408 –
Transfer from share-based payment reserve to retained earnings
re vesting or lapsing of share awards – – – – – – (5,582) 5,582 –
Dividends paid to shareholders (Note 8) – – – – – – – (40,694) (40,694)
(64) – – – 65 – 14 (108,847) (108,832)
As at 31 December 2022 686 20 19 199,616 105 – 11,809 287,891 500,146
Company Statement of Changes in Equity
For the year ended 31 December 2022
159
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Strategic Report Corporate Governance Financial Statements
2023
€’000
2022
€’000
Cash flows from operating activities
Loss for the year (18,614) (9,583)
Adjustments for:
Share-based payments expense 5,752 5,034
Finance costs 165 174
Depreciation of property, plant and equipment 555 390
Depreciation of right of use assets 619 981
Amortisation of intangible assets 1,164 474
Dividends from subsidiary undertakings – (16,290)
Impairment of investments in subsidiary undertakings – 10,065
(10,359) (8,755)
Decrease in amounts due from group undertakings 86,006 136,167
Increase in trade and other receivables (1,895) (127)
Increase in trade and other payables 9,745 157
Tax paid (28) (18)
Net cash from operating activities 83,469 127,424
Cash flows from investing activities
Loan repayments to subsidiary undertakings – (6,305)
Dividends received from subsidiary undertakings – 6,305
Purchases of property, plant and equipment (341) (2,982)
Purchases of intangible assets (2,317) (2,083)
Net cash used in investing activities (2,658) (5,065)
Company Statement of Cash Flows
For the year ended 31 December 2023
160
Cairn Homes plc | Annual Report 2023
2023
€’000
2022
€’000
Cash flows from financing activities
Proceeds from issue of share capital 1,492 –
Purchase of own shares (42,697) (75,143)
Dividends paid (41,896) (40,694)
Purchase of equity shares held in trust (3,196) –
Settlement of dividend equivalents (459) –
Repayment of lease liabilities (563) (342)
Interest paid (165) (198)
Net cash used in financing activities (87,484) (116,377)
Net (decrease)/ increase in cash and cash equivalents in the year (6,673) 5,982
Cash and cash equivalents at beginning of the year 7,013 1,031
Cash and cash equivalents at end of the year 340 7,013
Company Statement of Cash Flows continued
For the year ended 31 December 2023
161
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Strategic Report Corporate Governance Financial Statements
Notes to the Company Financial Statements
For the year ended 31 December 2023
1. Material Accounting Policies 162
2. Property, Plant and Equipment 163
3. Leases 164
4. Intangible Assets 165
5. Investments in Subsidiaries 166
6. Amounts due from Subsidiary Undertakings 166
7. Trade and Other Receivables 166
8. Share Capital and Share Premium 166
9. Share-Based Payments 166
10. Trade and Other Payables 167
11. Financial Instruments 167
12. Related Party Transactions 169
13. Events after the Reporting Period 169
14. Approval of Financial Statements 169
162
Cairn Homes plc | Annual Report 2023
1. Material Accounting Policies
The individual financial statements of the Company have been prepared in accordance with IFRS as adopted by the EU and as applied in accordance with the Companies Act 2014. As described in Note 31 of the consolidated financial
statements, the Company has availed of the exemption from presenting its individual statement of profit or loss and other comprehensive income. The Company’s loss after tax for the year ended 31 December 2023 is €18.6 million
(2022: loss of €9.6 million).
The significant accounting policies applicable to these individual company financial statements which are not reflected within the accounting policies for the consolidated financial statements are detailed below.
(a) Investments in subsidiaries
Investments in subsidiaries are accounted for in these individual financial statements on the basis of the direct equity interest, rather than on the basis of the reported results and net assets of investees. Investments in subsidiaries
are carried at cost less any impairment.
The recoverable amount of investments in subsidiary undertakings is assessed with regard to the net assets of the subsidiary undertakings. In the prior year an impairment charge arose as a consequence of receipt of dividend
income from a subsidiary undertaking which reduced the subsequent recoverable amount of the investment.
(b) Intra-group guarantees
The Company has given guarantees to third parties in in respect of specific borrowings arising in the ordinary course of business of subsidiaries.
The Company considers these guarantees to be insurance contracts. Following the introduction of IFRS17 Insurance Contracts, the Company has elected to apply IFRS9 Financial Instruments, being eligible, in relation to these intra-
group financial guarantees. The Company has determined that the fair value of its intra-group guarantees at inception was not material to the financial statements based on the estimated difference between the guaranteed and
unguaranteed borrowing rates of the Group. The Company has also considered the expected credit loss arising from intra -group guarantees and determined that these are not material to the financial statements based on the
fact that the main underlying assets (inventories) on which the Group’s borrowings are secured against are primarily held by the subsidiary which has borrowed the debt within the Group structure and whereby the assets of this
subsidiary are substantially greater than the amount borrowed. On this basis, no amounts have been reflected in the financial statements in relation to these intra-group financial guarantees.
Notes to the Company Financial Statements continued
For the year ended 31 December 2023
163
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Strategic Report Corporate Governance Financial Statements
2. Property, Plant and Equipment
Leasehold
improvements
€’000
Computers
& equipment
€’000
2023
Total
€’000
Cost
At 1 January 2023 2,860 1,556 4,416
Additions 47 294 341
At 31 December 2023 2,907 1,850 4,757
Accumulated depreciation
At 1 January 2023 (567) (856) (1,423)
Depreciation (262) (293) (555)
At 31 December 2023 (829) (1,149) (1,978)
Net book value
At 31 December 2023 2,078 701 2,779
Leasehold
improvements
€’000
Computers
& equipment
€’000
2022
Total
€’000
Cost
At 1 January 2022 483 951 1,434
Additions 2,377 605 2,982
At 31 December 2022 2,860 1,556 4,416
Accumulated depreciation
At 1 January 2022 (394) (639) (1,033)
Depreciation (173) (217) (390)
At 31 December 2022 (567) (856) (1,423)
Net book value
At 31 December 2022 2,293 700 2,993
164
Cairn Homes plc | Annual Report 2023
3. Leases
Right of use assets
The Company has a lease liability and a right-of-use-asset in respect of the lease of its central support office property.
The additions during the year ended 31 December 2022 mainly related to a 10-year lease agreement for a new office with a lease commencement date of 01 January 2022. The lease liability and related right-of-use asset were
determined by discounting the lease payments over the term of the lease at a discount rate of 2.6% reflecting the Group’s incremental borrowing rate at the time.
2023
€’000
2022
€’000
Cost
At 1 January 7,635 1,443
Additions – 6,192
Disposal (1,442) –
At 31 December 6,193 7,635
Accumulated depreciation
At 1 January (2,063) (1,082)
Depreciation (619) (981)
Disposal 1,442
At 31 December (1,240) (2,063)
Net book value
At 31 December 4,953 5,572
Lease liabilities
2023
€’000
2022
€’000
Current liabilities
Repayable within one year 659 576
659 576
Non-current liabilities
Repayable as follows:
Between one and two years 676 659
Between two and five years 2,135 2,081
More than five years 2,319 3,036
5,130 5,776
Total lease liabilities 5,789 6,352
Notes to the Company Financial Statements continued
For the year ended 31 December 2023
165
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Strategic Report Corporate Governance Financial Statements
The movements in total lease liabilities during 2023 and 2022 were as follows:
2023
€’000
2022
€’000
At 1 January 6,352 502
Additions – 6,192
Interest on lease liabilities 165 186
Lease payments (728) (528)
At 31 December 5,789 6,352
The undiscounted remaining contractual cash flows at 31 December 2023 were as follows:
Contractual cash flows
As at 31 December 2023
Total
€’000
6 months
or less
€’000
6-12 months
€’000
1-2 years
€’000
2-5 years
€’000
>5 years
€’000
Lease liabilities (6,472) (404) (405) (809) (2,427) (2,427)
The undiscounted remaining contractual cash flows at 31 December 2022 were as follows:
Contractual cash flows
As at 31 December 2022 Total €’000
6 months or
less €’000
6-12 months
€’000
1-2 years
€’000
2-5 years
€’000
>5 years
€’000
Lease liabilities (7,214) (337) (405) (809) (2,427) (3,236)
4. Intangible assets
2023
€’000
2022
€’000
Software
Cost
At 1 January 4,282 2,199
Additions 2,317 2,083
Disposals (52) –
At 31 December 6,547 4,282
Accumulated amortisation
At 1 January (1,239) (765)
Amortisation (1,164) (474)
At 31 December (2,403) (1,239)
Net book value
At 31 December 4,144 3,043
166
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5. Investments in Subsidiaries
Cost
2023
€’000
2022
€’000
At the beginning of the year 26,744 36,809
Impairment charge following receipt of dividends – (10,065)
At the end of the year 26,744 26,744
Details of subsidiary undertakings are given in Note 27 of the consolidated financial statements.
6. Amounts due from Subsidiary Undertakings
2023
€’000
2022
€’000
Amounts due from subsidiary undertakings 401,394 487,400
401,394 487,400
All amounts due from subsidiary undertakings are interest-free and repayable on demand.
The amounts owed by subsidiaries have been reviewed and no credit losses are expected based on the financial position of subsidiaries. In circumstances where a subsidiary had a net liability position at year end management
assessed the future economic benefits expected to be generated by that subsidiary to ensure balances were recoverable.
7. Trade and Other Receivables
2023
€’000
2022
€’000
Other receivables 1,820 –
Prepayments 742 667
2,562 667
8. Share Capital and Share Premium
For further information on Share Capital and Share Premium refer to Note 19 of the consolidated financial statements. For further information on Treasury Shares refer to Note 20 of the consolidated financial statements. For further
information on dividends refer to Note 25 of the consolidated financial statements.
9. Share-Based Payments
For further information on Share-Based Payments refer to Note 20 of the consolidated financial statements.
Notes to the Company Financial Statements continued
For the year ended 31 December 2023
167
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Strategic Report Corporate Governance Financial Statements
10. Trade and Other Payables
2023
€’000
2022
€’000
Trade payables 660 150
Accruals 5,725 6,661
VAT liability 27,977 19,721
Other creditors 914 402
35,276 26,934
11. Financial Instruments
The carrying value of the Company’s financial assets and liabilities, comprising amounts due from and to subsidiary undertakings, cash and cash equivalents, other receivables, trade payables and accruals are a reasonable
approximation of their fair value.
(a) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s amounts due from subsidiary
undertakings and cash and cash equivalents. The carrying amount of financial assets represents the maximum credit exposure.
Exposure to credit risk
Company management, in conjunction with the Board, manages the risk associated with cash and cash equivalents by depositing funds with a number of Irish financial institutions and AAA rated international institutions.
The amounts owed by subsidiaries have been reviewed and no credit losses are expected based on the financial position of subsidiaries. In circumstances where a subsidiary had a net liability position at year end management
assessed the future economic benefits expected to be generated by that subsidiary to ensure balances were recoverable.
The maximum amount of credit exposure is therefore:
2023
€’000
2022
€’000
Amounts due from subsidiary undertakings 401,394 487,400
Other receivables 1,820 –
Cash and cash equivalents 340 7,013
403,554 494,413
Expected credit losses in relation to all financial assets are immaterial.
168
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11. Financial Instruments continued
(b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or other financial assets. The Company’s approach to managing
liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s
reputation.
The Company monitors the level of expected cash inflows on receivables together with expected cash outflows on trade and other payables and commitments. All trade and other payables at 31 December 2023 are considered
current with the expected cash outflow equivalent to their carrying value.
2023
€’000
2022
€’000
Financial liabilities due in less than one year
Trade payables and accruals 6,385 6,811
Lease liabilities 659 576
7,044 7,387
Financial liabilities due after more than one year
Lease liabilities 5,130 5,776
Total financial liabilities 12,174 13,163
Available funds:
Cash and cash equivalents 340 7,013
Revolving credit facilities undrawn 175,000 177,500
175,340 184,513
The Company has access to the Group’s revolving credit facilities (see Note 29 of the consolidated financial statements). As a result the Directors expect that the Company will meet all of its obligations as they fall due on the basis that
there is expected to be sufficient liquidity available to the Company for the period beyond one year from the date of approval of these financial statements.
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted and include contractual interest payments.
Contractual cash flows
31 December 2023
Carrying
amount
€’000
Total
€’000
6 months
or less
€’000
6-12 months
€’000
1-2 years
€’000
2-5 years
€’000
>5 years
€’000
Trade payables and accruals 6,385 (6,385) (6,385) – – – –
Lease liabilities 5,789 (6,472) (405) (404) (809) (2,427) (2,427)
12,174 (12,857) (6,790) (404) (809) (2,427) (2,427)
Notes to the Company Financial Statements continued
For the year ended 31 December 2023
169
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Contractual cash flows
31 December 2022
Carrying
amount
€’000
Total
€’000
6 months
or less
€’000
6-12 months
€’000
1-2 years
€’000
2-5 years
€’000
>5 years
€’000
Trade payables and accruals 6,811 (6,811) (6,811) – – – –
Amounts due to subsidiary undertakings 6,352 (7,214) (337) (405) (809) (2,427) (3,236)
Lease liabilities 13,163 (14,025) (7,148) (405) (809) (2,427) (3,236)
The company is not exposed to significant currency risk or interest rate risk.
Relevant disclosures on Group financial instruments and risk management are given in Note 29 of the consolidated financial statements.
12. Related Party Transactions
Under IAS 24, Related Party Disclosures, the Company has related party relationships with key management and with its subsidiary undertakings (see Note 26 of the consolidated financial statements). During the year the Company
had the following transactions with its subsidiary undertakings:
• Cairn Homes Construction Limited, recharge of costs €1.7 million (2022: €1.5 million).
• Cairn Homes Properties Limited, recharge of costs €13.3 million (2022: €11.5 million).
• Cairn Homes Holdings Limited, dividends received €nil (2022: €6.3 million).
• Balgriffin Investment No. 2 HoldCo DAC, dividends (received via settlement of intercompany loan) €nil (2022: €10.0 million).
For amounts due from subsidiary undertakings please refer to Note 6.
Key management personnel compensation is set out in Note 26 of the consolidated financial statements.
13. Events after the Reporting Period
From 1 January 2024 to 12 March 2024 the Company has repurchased an additional 9.0 million shares under the share buyback programme at a cost of €13.1 million. In accordance with the share buyback programme, all repurchased
shares are subsequently cancelled.
From 1 January 2024 to 9 January 2024, an additional 749,048 shares were purchased by the Company at a cost of €1.0 million in relation to the Stretch CEO LTIP.
In January 2024, a former Director exercised 200,000 share options, at an option price of €1 per share.
On 28 February 2024, the Company proposed a final 2023 dividend of 3.2 cent per share subject to shareholder approval at the 2024 AGM on 10 May 2024. Based on the ordinary shares in issue at 12 March 2024, the amount of
dividend proposed is €20.7 million. The proposed final dividend of 3.2 cent per ordinary shares will be paid on 17 May 2024 to ordinary shareholders on the Company’s register on 26 April 2024.
14. Approval of Financial Statements
The financial statements were approved by the Board of Directors on 15 March 2024.
170
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Notes
171
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172
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Notes
FSC TBC
Cairn Homes plc
45 Mespil Road
Dublin 4
D04 W2F1
T: +353 1696 4600
www.cairnhomes.com