McInerney builds in confidence

BUILDING company - McInerney Construction is coming out from the shadow cast over it by the financial problems of its holding company and it is looking forward to a period of steady growth, according to Barry O'Connor.

"We are like a brand new company, with a 100 years of experience, says Mr O'Connor, managing director of McInerney Properties plc.

McInerney Construction is currently working on 18 residential projects around the country and has a further nine which it hopes to start work on over the next 12 months.

By the end of the year, McInerney will have built about 450 houses in Waterford, Cork, Limerick, Dublin, Clonmel and Dungarvan.

"In the short to medium term, we would like to increase the number of houses we are building in Cork. In Dublin, we are looking for further growth, and in Limerick and Waterford, we hope to keep the number we are doing at the moment.

"We are hoping for a reasonable, sustained growth rate," says Mr O'Connor.

He would like to see a slowing down in the rate of increase in land prices and house prices.

"A boom doesn't do anyone any favours. A boom is followed by a bust. Our feeling is that there is a certain amount of hyping going on. The rate of growth is not as it is being portrayed in the newspapers but it is there.

"Demand is good. Like most builders, we would like to see growth plateau out."

McInerney Properties is the holding company for McInerney Construction, Hillview Securities, a small Irish property developer, and two other companies with interests in Portugal and Spain.

The holding company has a £9 million deficit which is not, Mr O'Connor is anxious to point out, due to either McInerney Construction or Hillview Securities.

A restructuring, whereby debts will be converted to equity and the deficit removed, should be completed within a matter of weeks

"We are trying to get the best deal possible for everyone including shareholders."

While the restructuring is essential, it is not necessary that it be completed within any particularly tight time scale.

McInerney Construction is by far the biggest of the four companies in the group and it is "ringfenced" from the rest. Each of the four companies are run separately, with their own boards. management teams and banking facilities.

"They are four profitable businesses and a holding company with debts that are casting a shadow and restricting business growth."

The easing off of the shadow will make it easier for McInerney Construction to do business and seek opportunities to grow. "We are looking for steady growth, not spectacular growth."

"McInerney Construction is quite a profitable company and it always has been. In fact, it is going from strength to strength."

The company is involved in the construction of new government offices in Kilkenny and Waterford, worth £9 million between them, and in a residential/commercial scheme in a tax-incentive area beside the Suir, in Waterford. These are Hillview Security developments.

Hillview Securities has been involved in developments on Parliament Street, Dublin, and The Corner Store, near Eyre Square, Galway, which is fully let.

"In a 50/50 partnership with ICC, it developed the £25 million Eyre Square shopping centre, which is coming to a very successful conclusion".

The Waterford residential/commercial development, on Adelphi Quay, was developed in a 50/50 partnership with MBA, and built by McInerney Construction. All the units are sold and the development is "successfully concluded".

Asked about the type of partner looked for in commercial developments. Mr O'Connor says the company is trying to build up a number of partners it can work well with on a number of projects. "We would regard it as a failure if we did only one project with a partner. So far this year, we've been very lucky with the partners we've had."