McInerney Holdings, the housebuilder, has continued its strong recovery with pre-tax profits of £717,000 in the first half of 1997 compared with losses of £165,000 in the same period a year ago. The upward trend continued despite a drop in the number of house completions from 174 to 148.
The drop in completions, reflected in the fall in private housing sales from £10.97 million to £10.38 million, is attributed to the phasing of developments and planning procedures. A pick-up is anticipated with a full year target of more than 500 completions compared with 454 in 1996. And this is expected to lead to a resumption of dividend payments in 1998.
Managing director, Mr Barry O'Connor, said the group had detected a slowdown in housing demand in areas outside Dublin. The group, he added, was "not too concerned" about the slowdown. While demand in the Dublin area remained high, this area accounted for only a small proportion of house sales, between one-third and one quarter. However, he stressed that the group had well-located sites. McInerney has a land bank with scope for 2,284 plots. These are expected to cater for its needs over the next four years. Mr O'Connor said this land bank included 889 plots with full planning permission and 505 plots zoned for housing with no planning permission. It also has 12 new sites with 890 plots which have some planning permission. He noted it was the group's intention to engage in a policy of active land bank management.
The latest results show a rise in group sales from £14.7 million to £16.6 million. Earnings per share amounted to 1.86p. Net borrowing rose from £1.26 million at the end of 1996 to £3.77 million, pushing the gearing up from 83 per cent to 169 per cent. However, Mr O'Connor stressed that the periods were not comparable and that the higher borrowings reflect investment in stocks which rose from £15.7 million to £21 million. This work in progress would be reflected in future sales, he added. Reviewing the latest results, the group noted that economic conditions continued to favour its businesses. "Good margins are being earned despite continued increases in land prices and certain construction costs," the interim statement said.
The group will continue to capitalise on the strong position of its Irish operations, which are spread over 20 sites.
Sales in Ireland grew from £11.9 million to £14.2 million.
A breakdown of group sales shows the fall in private housing, an increase in contracts from £500,000 to £2.7 million, a contraction in leisure activities from £2.8 million to £2.4 million and a rise in other activities from £400,000 to £1 million.
McInerney is continuing to develop its regional housing areas. The developments of 18 apartments at Townsend Street, Dublin and the 48 units on the Naas site will begin shortly. A development of 55 holiday cottages has started in Courtown, Co Wexford, while the Mount Juliet contract for 12 houses has been completed. Its commercial division continues to expand. This includes an industrial park consisting of 20 units which is underway at Mulhuddart, Co Dublin. Further afield, sales in the Iberian Peninsula fell from £2.8 million to £2.4 million. Sales at the Four Seasons leisure development in Marbella are described as satisfactory with the completion of the rationalisation programme.
