McInerney issues pessimistic update

INVESTORS are looking before they leap into McInerney Holdings stock after the construction group issued a pessimistic trading update yesterday.

McInerney’s share price hovered at around €0.18 on the Irish Stock Exchange for most of yesterday after the group confirmed that weak consumer sentiment and mortgage constraints would hamper its business for the foreseeable future. Several stockbrokers also predict that investors will remain hesitant until the group completes its negotiations with its Irish and British banks to revise its loan facilities.

“Investors continue to focus on the group’s banking covenants and it was confirmed that these are still being breached,” noted one Bloxham analyst.

“Banks are also funding the ongoing trading activities of the group despite the continued focus on cash generation. Drafts for the revised banking covenants are, however, expected shortly.”

Davy Stockbrokers agreed that it would be difficult for investors to concentrate on the underlying fundamentals of McInerney’s business until its revised banking arrangements were formalised. The group’s trading update confirmed it is dependent on the continued support of its principal banks for its ongoing trading activities.

McInerney said it is reviewing all non-cash generative aspects of its business and will take appropriate remedial action where necessary.