McInerney Holdings, the housebuilding group, is reaping the benefits of the booming housing market, with a surge in pre-tax profit from £964,000 to £3,931,000 in the six months to June 30th 1998. It is now on target to pay its first dividend since 1990. No interim dividend is being paid but the group said it expects to pay a final dividend in 1999, based on 1998's full results.

Further strong growth is anticipated in the second half of 1998 and in 1999. The number of deposits received at mid-year was 354 compared with 284 in the comparable period in 1997, indicating a continuation of the strong growth.

Chairman, Mr Roy Ferris, noted the Irish economy should continue to grow strongly for a number of years and the young population "is likely to contribute to an increase in household formation in the coming years".

The group is planning further expansion of its Irish housebuilding division. Managing director, Mr Barry O'Connor said the focus would be on Dublin, Cork and other areas. It had a land bank which should cope with anticipated demand for more than four years, said Mr O'Connor. McInerney has 2,581 plots available.

The group has welcomed the Bacon Report, which was designed to take the heat out of the housing market. As the group relies on genuine house buyers, rather than investors, it has continued to experience strong levels of demand since the introduction of the initiatives.

The latest results were boosted by an exceptional profit of £1,086,000 from the sale of land. This land, in Dublin and Limerick, was surplus to its equirements, Mr O'Connor said. If this profit is excluded, the group still notched up underlying growth of some 200 per cent.

Profit growth was achieved in all its businesses, including a big boost from its leisure developments in Spain. By far the largest contribution came from housing, which accounted for 69.3 per cent of sales and 49.2 per cent of profits. The number of house completions amounted to 246 in the first half, up from 148 in the first half of 1997. This is reflected in the rise in housing sales from £10.4 million to £18.58 million and in pretax profit from £1 million to £2.3 million.

Chairman Mr Roy Ferris attributed the growth to demographic change, inward investment, increased employment and low interest rates.

The contracts division saw an increase in sales from £2.75 million to £3.28 million and a rise in profits from £186,000 to £423,000. It has completed the Westpoint Business Park at Mulhuddart and it is to shortly start a new business park development close to the M50 in Glasnevin. The buoyant economic conditions, said Mr Ferris, were contributing to significant demand from small businesses and investors "for developments of this nature".

Overall, turnover rose by 62 per cent from £16.55 million to £26.83 million. Earnings per share grew from 1.86p to 10.4p. Despite the profit surge, net borrowings rose from £3.5 million to £5.7 million, reflecting the much larger volume of business. Gearing has improved from 85.5 per cent to 81.4 per cent. The group was "comfortable with that", Mr O'Connor said.