McInerney pre-tax profits up by 38%

PRE-TAX profits at McInerney Holdings have exceeded all expectations, increasing by 38% to €28.46m in 2003.

And it sees unlimited growth opportunities in Britain, where it is seeking more building land.

Managing director Barry O’Connor said that with just two years’ supply of building land in hand in England, compared to four in Ireland, the company is looking for new sites in the Manchester/Liverpool corridor and in the Leeds and Newcastle areas. “We see unlimited opportunity in Britain,” he said.

Mr O’Connor said they see Dublin and Cork as the two main areas of growth in Ireland, where the company built 969 homes in 2003 compared to 879 in 2002. The company will continue to be a buyer of new sites, keeping four years’ supply of plots in hand at any time. “The group’s residential land bank at the end of December, at over 4,200 plots was similar to the level of plots at the beginning of 2003. Of these, some 60% have full planning permission and the balance are residentially zoned. The group is satisfied that this mix of land in strategic locations will cater for the division’s ongoing and future land requirements,” he said.

In the 12 months to December 31, pre-tax profits grew by 38% to €28.46m, compared to the 2002 result of €20.62m. It also sold off €17.2m of surplus land, generating a profit of €3.5 million on land sales alone.

Total sales hit €343.3m, compared to €258m a year earlier and a low tax charge saw post tax profits rise to €23.81m compared with €16.40m in 2002. Davy Stockbrokers Florence O’Donoghue said they forecast PBT of €26.0m and EPS of 64.0c.

“The results beat our estimates by 8% at the PBT line and 12% at the EPS line. A factor in the latter was a drop in the group’s tax rate from 20% to 16%. We had assumed it would remain at 20%.

“Reflecting the results, as well as the board’s confidence, a second-half dividend per share of 6c has been proposed. This will bring the full-year dividend to 11c, 76% higher than what was paid in 2002.

Davy is upgrading estimates and says an 82c EPS can be achieved. “This represents a 16% increase on our prior forecast of 70.4c.”