Monday 23 September 2019

Below-par trading for McInerney offset by property sales

Tom McEnaney

Housing developer McInerney Holdings said yesterday trading at an operational level was below market expectations.

The below-par operational numbers were offset by exceptional gains from the sale of property.

McInerney's share price fell by only 4c, or 2.5pc, on the news. The movement could have been much greater were the housebuilder's share price not underpinned by stakebuilding, most notably by developer Liam Carroll, who is understood to have built up a 9pc stake in the housebuilder using CFDs (contracts for difference).

The group built 2,414 houses and apartments in Ireland, the UK and Spain last year, compared with 2,372 in 2006.

The trading statement showed McInerney is not immune to the slowdown in the Irish housing market, where it completed only 594 houses last year, compared with 1,025 in 2006.

Facing into 2008, it holds 282 deposits for Irish houses, compared with 380 at the same time last year.

Managing director Barry O'Connor said: "We performed well in the more challenging market conditions in the second half of 2007. Our balance sheet is strong going into 2008. We remain comfortable with the current range of market expectations for 2007 profit."

Those expectations give it a pre-tax profit of €58m for 2007, which is broadly in line with the previous year. McInerney's commercial division delivered results which were in line with the preious year, completing 13,202 sq m of development.

McInerney said it hoped to "achieve a significant volume increase" in its British homes division this year. Market sources said the company was pencilling in 2,000 houses for 2008, compared with 1,400 UK houses last year.

One analyst described this target as "ambitious".

Although McInerney has lost 50pc of its value over the past 12 months, its shares are still trading at a premium to the sector, reflecting recent stakebuilding.

It is currently trading at a price which puts a value on the firm equivalent to its net asset value (NAV).

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