Abbey, the house-building group, has announced a rise in pre-tax profit from £9.9 million (€12.57 million) to £10 million (€12.7 million) in the six months ended October 31st, 1999. Further growth is anticipated and Abbey said it was heading for another good year. Earnings per share rose from 17.56p to 18.29p and shareholders are to benefit with a 14 per cent increase in the interim dividend to 4.0p per share.

However, it built fewer houses in the Republic, down from 127 to 119, and domestic profits were lower. Executive chairman Mr Charles Gallagher blamed the escalating cost of building land for the lower returns. The "risks are higher", he said. Mr Gallagher also complained about the lack of building land.

It expects to build around 280 houses in the Republic in the full year, down from 310. The following year there could be a recovery to about 300 houses but it could remain at that level for the following few years.

Nevertheless, Abbey's interim statement described the Irish market as "strong with good sales being achieved on all our developments". Shortly after the end of the interim period, it completed the first phase of its planned development in Swords.

Mr Gallagher concedes that there will be "less money in Ireland" and the focus will be in the UK where it built 226 houses, up from 217 in the first half. The projection from this year is 500, an increase on the 427 built last year. "The UK housing market was good throughout the period," the interim statement said. "Our forward sales position is encouraging for the time of year. However, recent rises in interest rates may temper trading conditions in the future".

The drop in sales from M&J Engineering, the UK plant-hire business, is attributed to the closure of two depots. Margins are expected to improve as a result.

Abbey will shortly have no investment property. It has received an offer for its Fenian Street property and its investment in Trinity Street will be offered shortly. They have a book value of £13.5 million.