House builders McInerney Holdings has reported pre-tax profits of €58m for 2007, up slightly from the previous year on a strong performance in the UK and despite more challenging market conditions.
Revenues rose to €632.8m from €630m in 2006 while basic earnings per share were 23.9 cent, down from 28.04 cent in 2006 after the five for one share split of last May.
The group has recommended a final dividend of three cent for the year. This brings the total dividend to six cent.
The group built a total of 2,414 housing units last year. In the UK, it built a total of 1,400 units, up from 980 units in 2006. Earnings of €26.4m was achieved on a turnover of €317.3m in the UK, where average house prices were achieved of €190,000 (£140,000).
McInerney's Irish house building operation recorded a turnover of €281.8m and earnings of €53.6m, up from €51.6m in 2006. House compilations, as expected, fell short of targets of 850 and the group built just 594 housing units last year. This compared to 1,025 houses in 2006.
The group said that market conditions in the final quarter of 2007 were difficult, with consumer confidence low and personal credit restrictions being felt for the first time in recent years. Average house prices remained 'robust' at €297,000, it added.
Its Irish landbank comprised around 4,500 plots as at December 2007, of which over 2,100 had planning permission. McInerney's contracting business had a turnover of €93m achieved on 391 housing unit completions. It said its order book on hand is worth €100m.
McInerney said its Spanish market experienced deteriorating market conditions in 2007. It completed 29 units in 2007, compared with 53 the previous year. It said that its landbank in Spain in strong, but slow.
Company Chairman Ned Sullivan said that underlying demand in Ireland is being demonstrated by high visitor levels to new housing developments. 'However, consumer confidence is currently a restraining factor,' he added.
'The response by the housing industry in cutting output, combined with strongly underlying demand is likely to preserve the positive fundamentals of the Irish housing market in our view,' he said.
In the UK, Mr Sullivan said that the undersupply of new homes and the recent government initiatives to remove constraints, underscore the potential for substantial housing output increases.
'We are well positioned through out regional spread and product mix to significantly benefit from this,' he said.
The McInerney chairman said that in 2008, the company's markets will be dominated by sentiment, as well as the credit and interest rate environment. He added that the business is 'adjusting to negative external factors'.
'We anticipate that in due course the underlying positive fundamentals of our business will take precedence. Current supply constraints will fundamentally favour our business in the medium term and demand across all our markets is positive for the future. Our business model will serve us well in this process as market conditions improve,' he concluded.
McInerney shares closed 14 cent at €1.30 in Dublin.
