McInerney reports losses of €25m

HOMEBUILDER McInerney has reported €25 million losses for last year as it halves the value of its Irish landbank.

The pre-tax, before exceptional losses for the year ended December 2009, compares with pre-tax losses of €47m in 2008.

It completed 131 private homes in Ireland last year compared with 296 in 2008 and said low housing prices are attracting interest.

“This is beginning to translate into positive demand for good housing at keen prices in key geographical locations,” said chairman Ned Sullivan.

McInerney warned, however, that it may need a restructuring or equity fund-raising resulting in significant dilution.

The company said the economic and financial backdrop to its business remains challenging and the focus of the board of directors is to retain the practical support of its funders until a market recovery begins. This is in addition to cutting costs and reviewing all non-cash generative aspects of the business.

It has also written down its British landbank by almost 40% since mid-2008 and is not proposing a dividend for 2009.

In 2009, the group completed 744 private and contracting residential units in Ireland and Britain compared with 1,352 in 2008.

The Irish contracting business completed 31 housing units compared with 306 in 2008, reflecting a decrease in local authority housing activity in the market. It said the 2010 selling season in Britain is showing some signs of improvement and the company is seeing demand for its social housing units increase. It said credit approval has been received for revised banking arrangements for its Irish housing business.

The company is undertaking a review, which includes the possibility of raising new capital and restructuring its commitments. Any restructuring or equity raise may result in significant dilution of existing shareholders.

Davy analyst Robert Gardiner said: “The results are along expected lines. While the strategic alternatives being examined may involve dilution for existing shareholders, it is positive that funding arrangements are being put in place – especially as the group’s end-markets are showing signs of improvement.”

“A stable funding platform is fundamental for the group’s operations,” said Ned Sullivan.