McInerney Holdings expected to report €50.4m pre-tax profit

HOUSE-building group, McInerney Holdings is expected to report full-year pre-tax profits of around €50.4 million on a turnover of around €540m for 2005, when it issues its 2005 results later this week.

Adjusted earnings per share (eps) of 115.6c are also forecast. The year-on-year eps growth, which would be of the nature of 14%, would be aided by a strong second-half performance by the company last year.

Such growth would not be insignificant as first-half earnings fell on a year-on-year basis by 38% to 26.3c per share. According to Davy Stockbrokers, in order for McInerney to achieve an overall full-year growth in eps of around 14%, earnings of 89.3c per share would be needed for the second half of the year, which would imply second-half growth of around 50%.

According to Davy analyst, Florence O'Donoghue: "McInerney's prospects in the UK, and indeed Ireland, are underpinned by broadly positive market conditions. In the UK, the signs are that the housing market has stabilised and there is no doubt that comments from the sector have improved recently. In Ireland, the market remains buoyant, though McInerney completion levels are unlikely to change significantly."

McInerney has actually under-performed in the British house-building market so far this year and it trades at a near-10% discount, based on current year forecasts. According to Davy, this discount is unjustified as the company "will remain a growth story in a sector where organic growth is increasingly challenging."

Last week, McInerney announced its £6.27 million (€9.13 million) acquisition of the Milton Keynes-headquartered social housing developer, Augusta Developments, which the Irish firm hopes will further develop its market foothold in the British market.