McInerney Holdings, the construction group, reported today pre tax profits of €58.093 million for the year ended 31 December 2007 (2006: €57.998 million). Basic earnings per share were 23.9 cent (2006: 28.04 cent) in 2007. Profit after tax for the year was €47.910 million (2006: €48.621 million).
Highlights:
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Pre tax profit €58 million.
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Strong performance in the UK with Sterling EBIT advancing by 20%.
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Delivering total of 2,414 private and contract residential units in more challenging market conditions (2006: 2,372)
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Rights Issue proceeds invested to secure further growth in UK
McInerney says that it delivered a solid result in 2007, despite more challenging conditions in the Irish market in the second half of the year. Significant profits were realised from the disposal of a number of non-core land holdings.
The group says its continued focus on expanding its UK division made excellent progress with increased units and economies of scale achieved. The group undertook the acquisition of Lancing Homes in the UK North East in early 2007. This operation is now fully integrated and contributed immediately to earnings.
Our Irish housing division achieved a good result within a market experiencing cautious consumer sentiment and tightening of mortgage accessibility.
The board recommended a final dividend for the year ended 31 December 2007 of 3 cent gross per share, payable to shareholders on the register at the close of business on 14 March 2008. Subject to confirmation at the AGM on 15 May 2008, this final dividend will be paid to shareholders on 16 May 2008. This brings the total dividend for the year to 6 cent (2006: 5.6* cent).
Outlook
McInerney says that in the UK the undersupply of new homes and the recent Government initiatives to remove constraints, underscore the potential for substantial housing output increases. It says it is well positioned through a regional spread and product mix to significantly benefit from this.
The group says in Ireland, underlying demand is being demonstrated by high visitor levels. However, consumer confidence is currently a restraining factor. The response by the housing industry in cutting output, combined with strong underlying demand is likely to preserve the positive fundamentals of the Irish housing market in our view.
"This year our markets will be dominated by sentiment, as well as the credit and interest rate environment. Our business is adjusting to negative external factors. The logical approach is to be cautious in this environment. However, 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," McInerney says.
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