12th May 2005 12:00
McInerney Holdings PLC12 May 2005 Thursday, 12th May 2005 CHAIRMAN'S STATEMENT ANNUAL GENERAL MEETING It is a great pleasure to report that the Group recorded an excellentoperational performance in 2004. Profit before tax was €40.7m, which is anincrease of 43% on our 2003 result. Earnings per share also rose by some 46% to106.43 cent, with the total dividend increasing 65% to 18 cent per share. During the year, market and trading conditions remained strong across theGroup's three core regions of Ireland, the UK and Spain. In particular, ourbusiness benefited from continued buoyancy for affordable homes in both Irelandand the UK. We successfully endeavoured to closely match our product portfoliowith consumer requirements. Our focus on achieving strong growth in the UK was fruitful. The acquisition ofAlexander Developments in May 2004 provided the Group with the foothold requiredin the North East of England to match our positioning in the North West. Ouractivities now span across the North of England and we are particularlysatisfied with the platform for further growth now in place. We have strongambitions for the future growth of our UK business. Dividend The Board's objective to put in place a more progressive dividend policy hasprogressed substantially. The Board proposes to pay a final dividend of 11 centgross per share. This will result in a total dividend of 18 cent per shareequating to a dividend cover of 5.9 times. It is proposed that the finaldividend will be paid on 16 May 2005. Operations So to our 2004 operational highlights for each division. There were a total of1,614 private home completions across all our divisions representing an increaseof 9% on the 1,481 units completed in 2003. Ireland In Ireland, the housing market continued to be excellent with the Irishoperation increasing its profits to Group earnings by some 37% in 2004. Therewas strong unit delivery with some 1,101 private home completions in 2004,compared to 969 in 2003. The first quarter of 2005 has shown strong salesinterest. We are operating from some 30 sites around the country with a wellplaced landbank and we anticipate 2005 completions of a similar high level to2004. - 2 - We remain strongly positioned to take best advantage of continuing good demandgoing forward which is underpinned by favourable demographics and high levels ofemployment. 2004 also recorded a favourable outcome for our commercial division, HillviewSecurities. It sold 50,000 sq. ft., of industrial units and also sold itsinterest Eyre Square Shopping centre in Galway. These funds were reinvested innew development opportunities in both Ireland and the UK. Our Irish contracting business had a good year, increasing its contribution from€2.2m to €3.4m. Very good progress has been made in increasing its order bookand we anticipate further growth in this business in 2005. UK We stated last year that our ambition with our UK business was to achieve growththrough geographic expansion and organic growth. I am pleased to report todaythat our ambition is on target with the UK business performing strongly in 2004. We have actively grown our land bank and now have over thirty strategicallychosen sites under construction representing some 1,900 plots. Operations spanGreater Manchester, Lancashire, Staffordshire, Derbyshire, Cheshire, Liverpool,Merseyside and Durham. A regional office has recently opened in Leeds - markingour organic expansion into Yorkshire. The UK operation now targets its productsto a market of some eight million people. The Group's strategy will continue tobe aimed at providing housing for the entry level of the market where demand isgreatest and supply constrained. The UK housing market in the North of England continues to experience gooddemand. In addition, an element of undersupply is prevalent and combined withrelatively low interest rates benefits our product offering. It is our viewthat the UK division will complete in the region of 800 units in 2005. The Board is pleased that this division is now structured to achieve progressivegrowth going forward and our objective will be to further increase unit outputin 2006 and add further regions. The commercial division sold 39,000 sq. ft., in the UK at its Park Royal projectnear London. In addition, two new sites at Croydon and Chesham have opened, aswell as a joint venture in Watford. Spain Whilst our activity was somewhat slower in Spain than we would have liked,nevertheless, a 4% increase in profits was achieved in 2004. Our Spanishbusiness completed 13 units at its high end luxury development, Los Flamingos.Those units that were not completed in 2004 will be made up in 2005. Inaddition, a significant land sale provided good profit recognition during 2004.We have two new very exciting sites at Sotogrande and Mijas. The planningprocess is moving ahead on both sites, with Sotogrande most recently having itsapplication reviewed favourably by the local planners. We are confident offuture growth in our Spanish developments in 2005 and beyond. - 3 - Conclusion Our growth strategy has shown exceptional progress in 2004. The Group performedstrongly, delivering good volumes and strong operating margins. Marketconditions remain favourable for each of our businesses and they are well placedto provide continued revenue growth going forward. Earnings visibility is strong with a good level of deposits on hand to date.Profit recognition will largely be achieved in the second half of the year dueto the pattern of site starts. We anticipate strong unit increases from the UKand Spain in 2005. In line with our strategy, this will further diversify ourincome stream. Our key markets continue to be favourable. We look forward to another strongresult and performance for the full year of 2005. Ned Sullivan, Chairman, McInerney Holdings plc. ENDS FOR INFORMATION: Siobhan Molloy, Weber Shandwick FCC Tel: (01) 676 01 68 or (086) 817 50 66 About McInerney Holdings plc McInerney Holdings plc is one of Ireland's leading development companies, withdivisions specialising in various aspects of the construction market. McInerneyHoldings plc comprises four divisions operating in Ireland, Spain and the UnitedKingdom. Established in 1909, the Group is Ireland's largest nationalhomebuilder, and undertakes extensive commercial and leisure projects both inIreland and abroad. The company is listed on the Dublin and London StockExchanges (ISE: MCI.I/LSE: MCI). This announcement has been issued through the Companies Announcement Service of The Irish Stock Exchange This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Medcaw Investm.