26th Feb 2007 07:20
McInerney Holdings PLC26 February 2007 McInerney Holdings PLC 26 February 2007 NOT FOR RELEASE, PUBLICATION, TRANSMISSION, OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, OR JAPAN. McInerney Holdings PLC ('McInerney' or the 'Company') Preliminary Announcement of Financial Results for the Year Ended 31 December 2006 Acquisition of Lancing Homes Limited and 1 for 5 Rights Issue at €13.00 per share Ireland, Dublin: McInerney Holdings plc today provides a PreliminaryAnnouncement of Financial Results for the year ended 31 December 2006, announcesthe acquisition of Lancing Homes Limited ('Lancing') for £16.25 million (plusthe assumption of £3 million of debt) and announces a 1 for 5 Rights Issue at€13.00 per share. Barry O'Connor, Managing Director of McInerney, commented: 'Our businesses in Ireland, the UK and Spain have performed well in 2006 andstrong progress was achieved across all regions. The Group is well positionedgoing into 2007. We now have a significant operational base in the UK as a result of ouracquisition strategy, continued investment in our land bank and development ofour senior management team. Operationally, we have achieved our objective ofgrowing our UK home building division to a scale similar to that of our existingIrish operations. The acquisition of Lancing further expands our land bank capacity andconsolidates our position in the North East of England. In order to facilitate our continued growth in the UK, we believe it is nowappropriate to raise additional funds from shareholders to strengthen theGroup's capital base.' Financial Results for the Year Ended 2006 Key Highlights • Profit from operations up 22% • Pre tax profits up 16% • Basic earnings per share increased by 18% • Total dividend per Ordinary Share increased by 17% • UK unit output increased by 49% • Total private and contracting residential completions up18% The Directors are pleased to report an increase in basic earnings per share of18% to 145.85 cent, as compared to 124.01 cent in 2005. Pre-tax profitsincreased by 16% to €58.0 million compared to the 2005 result of €50.1 million.Profit after tax for the year was €48.6 million compared with €41.1 million forthe full year in 2005, an increase of 18%. Dividend The Board recommends a final dividend for the year ended 31 December 2006 of 18cent per share (2005: 15 cent), up 20%, payable to all shareholders on theregister at the close of business on 16 March 2007. Subject to confirmation atthe Annual General Meeting on 9 May 2007, this final dividend will be paid toshareholders on 11 May 2007. This brings the total dividend for the year to 28cent (2005: 24 cent), an increase of 17%. For the avoidance of doubt, NewOrdinary Shares issued pursuant to the Rights Issue will not carry anyentitlement to the final dividend for the year ended 31 December 2006. Thedividend cover remains in line with the Group's stated target of 5 times basicearnings per share. Operational Highlights Strong sales and profitability were achieved across the Group's three coreregions of Ireland, the UK and Spain. The Group completed a total of 2,372private and contract residential units in 2006 as compared to 2,013 in 2005, anincrease of 18%. In particular, the UK division's growth strategy gainedsignificant momentum and operationally is now similar in scale to the Irish homebuilding division. The Group undertook two acquisitions in the UK in 2006 whichextended the division's regional spread in the North and Midlands of England.The Group's UK operations recorded a 49% volume increase in 2006. The Group hasachieved a comprehensive regional spread of housing operations across Irelandand the UK. Both the Irish and UK markets continued to demonstrate strongdemand for product consistent with McInerney's portfolio. Hillview continued toconcentrate on its development plans in both the Irish and UK markets andachieved considerable success in the UK. Ireland: The Irish house building operation recorded a favourable result withturnover of €261 million and operating profit of €51 million. The increase wasdriven by an improvement in average unit pricing to €285,000 which offset thereduction in 2006 completions to 1,025 units (2005: 1,138). The Irish land bankcomprised 4,788 plots as at 31 December 2006, of which 1,671 plots had fullplanning permission and a further 1,427 plots were in the planning process. TheGroup also held further land with potential for 1,240 units for development inthe longer term. The Group's commercial division, Hillview Developments completed 5,632 sq metresof industrial units in Ireland in 2006, achieving turnover of €11 million (2005:€21 million). This compares to 14,217 sq metres of industrial units in 2005. The Irish contracting business secured significant growth in 2006 with turnoverof €93 million achieved on 309 housing unit completions. The order book on handis €156 million compared to €129 million a year ago. UK: Our objectives to scale up our UK operations and extend our presence acrossthe North of England were realised in 2006. Operating profit of €22 million wasachieved on turnover of €240 million. Substantial progress was accomplished inincreasing unit output with some 980 private housing units completed, comparedto 658 in 2005, representing an increase of 49%. Average unit pricingprogressed by 8% to €206,000 (£140,000). As per the Board's stated growthstrategy, the UK and Irish divisions are now of equivalent operational scale.The Group is an expanding home builder in the North of England and the capitalraising announced today is intended to assist our UK business to achieve furthergrowth going forward. The acquisitions of Augusta Developments and Bowey Homes in 2006, gave the Groupaccess to new regions and product specialities. Augusta's expertise in socialhousing gave the Group a presence in the South Midlands and access to a newmarket of housing demand. The acquisition of Bowey added to the Group'slandbank and market presence in the North Eastern region. In addition, strategicorganic expansions were undertaken through selected land purchases. In tandem,the senior management team was augmented to take best advantage of the Group'sincreased scale of operations and regional spread. The Group has a progressiveland bank policy, controlling 3,644 plots in the UK as at 31 December 2006, ofwhich 3,222 have detailed or outline planning. In addition, the Group heldoptions on longer term strategic land with potential for over 900 units. The commercial operations, Hillview Developments, also delivered a solidperformance with the completion of 7,476 sq metres of industrial/commercialunits in its UK operations compared to 1,122 sq metres in 2005. Spain: The Group's Spanish operations completed 53 units in 2006 compared to 35units in 2005. Operating profit of €4 million on turnover of €30 million wasachieved. Average unit prices were €505,000. Work has commenced on a newfreehold site of 45 units at El Cortesin, a golf urbanisation adjacent toEstepona. A further site with planning permission for 80 units has recentlybeen secured at La Cala, near Mijas. Outlook The fundamentals and dynamics affecting both the Irish and UK housing marketsoffer good potential for the Group going forward. Each division isstrategically positioned with an advantageous geographic footprint and anappropriate housing portfolio for its target segment. Further benefits shouldarise from the full year impact of the businesses recently acquired. We lookforward to continued progress in the year ahead. Acquisition of Lancing • House builder specialising in affordable private homes inthe Newcastle and Gateshead regions of North East England. • Immediately earnings enhancing. • Brings additional land opportunities in the region anddiversifies product portfolio. • Recorded profit before tax of £1.5 million for thefinancial year ended 28 February 2006. • Consideration of £16.25 million payable in cash oncompletion, plus the assumption of £3 million of debt. • Expands land bank in the North East of England by 413units across 4 sites. • Average price of units is £154,000. • Three of the four sites are already under construction andexpected to contribute to Group unit completions and earnings from quarter oneof 2007. Rights Issue • Approximately €86.8 million (gross) to be raised through afully underwritten Rights Issue. • 6,676,114 New Ordinary Shares to be issued at €13.00 pershare, representing approximately 16.7%, of the enlarged issued share capital. • The Issue Price of €13.00 per share represents a discountof 22.4% to the closing price of €16.75 per Ordinary Share on 23 February 2007,the last dealing day prior to this announcement and a 21.5% discount to thatclosing price adjusted for the final dividend announced today. • Rights Issue fully underwritten by The Governor andCompany of the Bank of Ireland. • IBI Corporate Finance is acting as sponsor and financialadviser to McInerney in relation to the Rights Issue. • The Executive Directors have each irrevocably committed totake up all their rights under the Rights Issue in respect of their beneficialinterests in Existing Ordinary Shares over which they have control, representingapproximately 11%, of the issued share capital. • Net proceeds of approximately €83.8 million to be used toacquire Lancing and to provide capital to expand the Group's land bank in theUK. • The Rights Issue is conditional, inter alia, upon: (a) theUnderwriting Agreement having become unconditional in all respects (save for thecondition relating to Admission) and not having been terminated in accordancewith its terms prior to Admission; and (b) Admission of the Nil Paid Rightshaving become effective by not later than 8.00 a.m. on 27 February 2007. Davyis to arrange the sub-underwriting of the Rights Issue. • A Prospectus containing full details of the Rights Issueand an accompanying Provisional Allotment Letter which sets out details of eachQualifying Shareholder's Basic Entitlement will be posted to Shareholders today. Enquiries: Telephone: IBI Corporate Finance Limited +353 1 637 7800 Tom Godfrey Brian Farrell Media: Weber Shandwick +353 1 676 0168 Siobhan Molloy +353 86 817 5066 This summary should be read in conjunction with the detailed announcement whichfollows. Section 7 of the full announcement contains the definitions of certainterms used in this summary and the full announcement. This announcement does notconstitute, or form part of, an offer to sell, or the solicitation of an offerto subscribe for or buy any of the New Ordinary Shares to be issued inconnection with the Rights Issue. The Directors of McInerney have taken all reasonable care to ensure that theinformation contained in this announcement is, to the best of their knowledge,in accordance with the facts and contains no omission likely to affect theimport of such information. IBI Corporate Finance Limited, a subsidiary of The Governor and Company of theBank of Ireland (which is regulated in Ireland by the Financial Regulator), isacting exclusively for McInerney, as sponsor and financial adviser in relationto the Rights Issue and no one else in relation to the Rights Issue and will notbe responsible to anyone other than the Company for providing the protectionsafforded to clients of IBI Corporate Finance or for advising any other person inrelation to the Rights Issue or any other matter referred to in thisannouncement. This announcement is not for release, publication or distribution, directly orindirectly, in whole or in part, in or into the United States, Canada,Australia, Japan or their respective territories or possessions or any otherjurisdiction where it would be unlawful to do so ("Excluded Territories"). The New Ordinary Shares, the Nil Paid Rights and the Fully Paid Rights have notbeen, nor will they be, registered under the Securities Act or under thesecurities laws of any state of the United States or any other state, provinceor territory of the Excluded Territories and they may not, subject to certainlimited exceptions, be offered or sold directly or indirectly within theExcluded Territories or to any persons in the Excluded Territories. Thisannouncement does not constitute or form part of any offer or invitation to sellor issue, or any solicitation of any offer to buy or subscribe for, New OrdinaryShares, Nil Paid Rights or Fully Paid Rights in any jurisdiction in which suchoffer or solicitation is unlawful. Prices and values of, and income from, shares may go down as well as up and aninvestor may not get back the amount invested. It should be noted that pastperformance is no guide to future performance. Persons needing advice shouldconsult an independent financial adviser. Certain statements made in this announcement constitute forward-lookingstatements. Such statements are based on current expectations and, by theirnature, are subject to a number of risks and uncertainties that could causeactual results and performance to differ materially from any expected futureresults or performance expressed or implied by the forward-looking statement.Furthermore, these forward-looking statements speak only as of the date of thisannouncement. The information and opinions contained in this announcement are subject tochange without notice and the Company assumes no responsibility or obligation toupdate publicly or review any of the forward-looking statements containedherein. Preliminary Financial Results for the Year Ended 31 December 2006 MCINERNEY HOLDINGS PLC CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2006 2006 2005 •'000 •'000Continuing OperationsRevenue 630,064 489,098Cost of Sales (507,484) (394,478)Gross Profit 122,580 94,620Administrative Expenses (49,303) (33,458)Share of Results from Joint Ventures 1,064 (21)Profit from Operations 74,341 61,141Investment Income 570 421Finance Costs (16,913) (11,502)Profit Before Tax 57,998 50,060Tax (9,377) (8,963)Profit Attributable to Equity Holders of the Parent 48,621 41,097 Earnings Per ShareFrom Continuing OperationsBasic 145.85c 124.01cDiluted 140.62c 118.66c MCINERNEY HOLDINGS PLC CONSOLIDATED BALANCE SHEET As at 31 December 2006 2006 2005 •'000 •'000Non-Current AssetsGoodwill 49,485 22,390Property, Fixtures & Equipment 7,544 6,188Investment Property - 183Interests in Joint Ventures 3,877 4,660Deferred Tax Assets 1,696 318 62,602 33,739Current AssetsInventories 442,093 333,241Trade & Other Receivables 68,230 52,044Cash and Cash Equivalents 84,382 62,056Assets Classified as held for Sale 1,507 2,750 596,212 450,091Total Assets 658,814 483,830 Current LiabilitiesTrade & Other Payables 142,178 126,132Retirement Benefit Obligation 345 422Tax Liabilities 19,225 15,795Provisions 2,500 2,200Obligations under Finance Leases 398 395Bank Loans and Overdrafts 42,106 106,058 206,752 251,002Net Current Assets 389,460 199,089 Non-Current LiabilitiesBank Loans 238,230 66,990Retirement Benefit Obligation 1,039 1,358Deferred Tax Liabilities 2,296 2,303Provisions 4,007 3,301Other Payables 4,531 3,649Obligations under Finance Leases 477 412 250,580 78,013Total Liabilities 457,332 329,015Net Assets 201,482 154,815 EQUITYShare Capital 4,173 4,145Capital Conversion Reserve Fund 62 62Share Premium Account 17,484 17,180Equity Reserve 2,328 674Hedging & Translation Reserves 2,504 (1,524)Retained Earnings 174,931 134,278 201,482 154,815Total Equity and Liabilities 658,814 483,830 MCINERNEY HOLDINGS PLC CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2006 2006 2005 •'000 •'000Profit from Operations 74,341 61,141 Adjustments for:Depreciation 2,340 1,952Share of Results from Joint Ventures (1,064) 21Provision for Fair Value of Share based Payments 591 376Loss/(Profit) on Disposal of Tangible Assets 10 (48)Pension Service Costs 420 281Increase in Provisions 1,006 1,109Operating Cash Flows before Movements in Working Capital 77,644 64,832Increase in Inventories (66,948) (63,267)Increase in Receivables (7,595) (3,233)Increase in Payables 5,423 8,643Cash Generated by Operations 8,524 6,975Taxation Paid (12,148) (7,625)Interest Paid (16,056) (10,747)Net Cash from Operating Activities (19,680) (11,397) Investing ActivitiesInterest Received 187 134Dividends Received from Joint Ventures 1,976 2,000Loans Advanced to Joint Ventures (5,030) (9,270)Loans Repaid from Joint Ventures 351 5,267Proceeds on Disposal of Property, Fixtures & Equipment 250 195Purchases of Property, Fixtures & Equipment (3,157) (1,735)Employer Contributions to Pension Scheme (346) (421)Acquisition of Subsidiary (38,133) -Net Cash Used in Investing Activities (43,902) (3,830) Financing ActivitiesDividends Paid (8,343) (6,629)Share Capital Subscribed 332 72Repayments of Borrowings (106,929) (80,183)Repayments of Obligations under Finance Leases (630) (460)New Bank Loans Raised 198,789 135,894Increase in Bank Overdrafts 1,047 258Net Cash from Financing Activities 84,266 48,952 Net Increase in Cash and Cash Equivalents 20,684 33,725Cash and Cash Equivalents at Beginning of Year 62,056 26,670Effect of Foreign Exchange Rate Changes 1,642 1,661 Cash and Cash Equivalents at End of YearBank Balances and Cash 84,382 62,056 MCINERNEY HOLDINGS PLC NOTES TO THE ACCOUNTS For the year ended 31 December 2006 Business and geographical segments The Group operates in three markets, Ireland, the UK and Spain. The principalactivities of the Group are Private Housing, Contracting, Commercial Developmentand Leisure. The Leisure activities are divided into Club Management andFreehold Sales. Land sales are also part of each business segment. Thesedivisions are the basis on which the Group reports its primary segmentinformation. REVENUE 31 December 2006 31 December 2005 External Inter-Segment Total External Inter-Segment Total Sales Sales •'000 Revenue Sales Sales Revenue •'000 •'000 •'000 •'000 •'000Ireland :Private Housing 257,621 - 257,621 244,575 - 244,575Developed Sites & Land 3,189 - 3,189 1,951 - 1,951Construction Contracts 93,288 22,046 115,334 47,293 16,615 63,908Commercial 11,365 - 11,365 21,134 - 21,134Commercial Land 2,860 - 2,860 2,667 - 2,667 368,323 22,046 390,369 317,620 16,615 334,235 UK :Private Housing 198,244 - 198,244 123,087 - 123,087Developed Sites & Land 8,788 - 8,788 13,543 - 13,543Construction Contracts 17,128 - 17,128 17,596 952 18,548Commercial 15,457 - 15,457 2,026 - 2,026 239,617 - 239,617 156,252 952 157,204 Spain :Club Management 3,309 - 3,309 3,461 - 3,461Leisure Freehold 26,762 - 26,762 12,446 - 12,446Developed Sites & Land - - - 751 - 751 30,071 - 30,071 16,658 - 16,658 Eliminations (7,947) (22,046) (29,993) (1,432) (17,567) (18,999)Total Revenue 630,064 - 630,064 489,098 - 489,098 Inter-segment sales are tendered for on an arm's length basis to ensure costefficiencies. The contract sum is agreed at cost plus a commercial margin. MCINERNEY HOLDINGS PLC NOTES TO THE ACCOUNTS (CONT'D) For the year ended 31 December 2006 SEGMENT RESULTS 31 December 2006 31 December 2005 Group Joint Total Group Joint Total Subsidiaries Segment Subsidiaries Segment Ventures Ventures •'000 •'000 •'000 •'000 •'000 •'000Ireland :Private Housing 49,347 82 49,429 37,686 (21) 37,665Developed Sites & Land 1,338 - 1,338 749 - 749Construction Contracts 816 - 816 1,564 - 1,564Commercial 2,531 674 3,205 4,572 - 4,572Commercial Land 812 - 812 275 - 275 54,844 756 55,600 44,846 (21) 44,825 UK :Private Housing 15,237 (4) 15,233 12,447 - 12,447Developed Sites & Land 5,290 - 5,290 4,135 - 4,135Construction Contracts 577 - 577 361 - 361Commercial 1,152 312 1,464 153 - 153 22,256 308 22,564 17,096 - 17,096 Spain :Club Management 936 - 936 1,295 - 1,295Leisure Freehold 3,248 - 3,248 3,500 - 3,500Developed Sites & Land - - - 260 - 260 4,184 - 4,184 5,055 - 5,055Total Segment Results 81,284 1,064 82,348 66,997 (21) 66,976 A summary of the above results by activity is as follows : Private Housing 64,584 78 64,662 50,133 (21) 50,112Developed Sites & Land 7,440 - 7,440 5,419 - 5,419Construction Contracts 1,393 - 1,393 1,925 - 1,925Commercial 3,683 986 4,669 4,725 - 4,725Club Management 936 - 936 1,295 - 1,295Leisure Freehold 3,248 - 3,248 3,500 - 3,500Total Segment Results 81,284 1,064 82,348 66,997 (21) 66,976 Common Costs (8,007) (5,835)Profit from Operations 74,341 61,141 Investment Income 570 421Finance Costs (16,913) (11,502)Profit before Tax 57,998 50,060Tax (9,377) (8,963)Profit after Tax 48,621 41,097 MCINERNEY HOLDINGS PLC NOTES TO THE ACCOUNTS (CONT'D) For the year ended 31 December 2006 BALANCE SHEET 31 December 2006 31 December 2005 Assets Liabilities Net Assets Assets Liabilities Net Assets •'000 •'000 •'000 •'000 •'000 •'000Ireland :Private Housing 212,607 (100,094) 112,513 173,004 (89,689) 83,315Commercial 10,748 (1,560) 9,188 9,397 (857) 8,540 223,355 (101,654) 121,701 182,401 (90,546) 91,855UK :Private Housing 257,711 (47,353) 210,358 161,287 (32,071) 129,216Commercial 24,818 (1,045) 23,773 24,899 (523) 24,376 282,529 (48,398) 234,131 186,186 (32,594) 153,592Spain :Club Management 9,695 (4,391) 5,304 8,741 (4,022) 4,719Leisure Freehold 56,373 (15,861) 40,512 43,045 (19,112) 23,933 66,068 (20,252) 45,816 51,786 (23,134) 28,652Total Operating Assets/ 571,952 (170,304) 401,648 420,373 (146,274) 274,099(Liabilities) Total Cash/(Bank 84,382 (280,336) (195,954) 62,056 (173,048) (110,992)Borrowings)Unallocated Assets/ 2,480 (6,692) (4,212) 1,401 (9,693) (8,292)(Liabilities) 658,814 (457,332) 201,482 483,830 (329,015) 154,815 Further details of the Lancing Acquisition McInerney has today unconditionally contracted to purchase Lancing HomesLimited, a housebuilder based in South Shields, Gateshead in the North East ofEngland for £16.25 million in cash, payable on completion plus the assumption of£3 million of debt. The acquisition will be financed from the proceeds of theRights Issue. Lancing specialises in low cost housing and apartments in Newcastle andGateshead. The company reported profit before tax of £1.5 million for thefinancial year ended 28 February 2006 on gross assets of £12 million. Theacquisition provides McInerney with additional land bank capacity in the NorthEastern region. Lancing holds four sites (comprising 413 units), of which three are inconstruction. Unit completions and contribution to Group earnings areanticipated to commence in the first quarter of 2007. Further details of the proposed Rights Issue 1. Introduction The Board of McInerney announces today that it proposes to raise approximately€83.8 million (net of expenses of approximately €3.0 million) by means of aRights Issue of 6,676,114 New Ordinary Shares, representing approximately 16.7per cent. of the enlarged issued share capital. The Rights Issue has beenunderwritten in full by The Governor and Company of the Bank of Ireland. IBICorporate Finance is acting as sponsor and financial adviser to McInerney inrelation to the Rights Issue. The Rights Issue will be made to Qualifying Shareholders on the basis of 1 NewOrdinary Share for every 5 Existing Ordinary Shares held at close of business onthe Record Date, and so in proportion to the number of Existing Ordinary Sharesthen held. The Rights Issue Price of €13.00 per New Ordinary Share represents a 22.4 percent. discount to the closing price of €16.75 per Existing Ordinary Share on 23February 2007, the latest practicable date before the announcement of the RightsIssue and a 21.5 per cent. discount to that closing price adjusted for the finaldividend announced today. The Executive Directors have irrevocably committed to take up their rights underthe Rights Issue in respect of all of their beneficial interests in ExistingOrdinary Shares over which they have control, representing approximately 11 percent. of the issued share capital. The net proceeds of the Rights Issue are to be used to acquire Lancing and toprovide capital to expand the Group's land bank development in the UK. 2. Information on the Company McInerney is one of Ireland's leading property development companies, withdivisions specialising in various aspects of the construction market includingconstruction of private houses, trading in developed sites and land, developmentof residential land for third parties and under joint venture, contracting forthird parties and the development of commercial property. The Group is a long established home builder in Ireland, and an expanding homebuilder in the North and Midlands of England. Home building operationsconcentrate on quality homes, primarily aimed at the entry level segment of themarket. McInerney has recently expanded into new niche segments such asaffordable housing schemes and golf based residential schemes. The Group alsoundertakes contracting and industrial/commercial activities in Ireland and theUK and leisure projects in Spain. 3. Background to and reasons for the Rights Issue Since listing on the Irish Stock Exchange and the London Stock Exchange in 1997,McInerney has grown annual turnover from €66 million in 1997 to €630 million in2006. Total profits after tax in the period from 1997 to 2006 were €214million, from which €28 million has been declared in dividends with the balanceretained to support development. Over that period, the number of annualhousing completions grew from 486 units from 27 sites solely in Ireland, to2,372 units from 96 sites in Ireland, the UK and Spain. The Group's industrial/commercial business, Hillview Developments Limited, grewfrom a start-up in 1997 to a business developing over 13,000 sq metres ofcommercial property in Ireland and the UK in 2006. The contracting business inIreland grew its turnover from €12 million in 1997 to €93 million in 2006. At the 1998 year end, the landbank under the control of the Group wasapproximately 3,100 units, solely in Ireland. This had increased to in excessof 9,600 units by the 2006 year end, of which approximately 6,000 are in Irelandand approximately 3,600 are in the UK. The Company outlined a strategy for expansion in its 2002 annual report. Theprimary objective of this strategy was to achieve substantial growth in its UKand Spanish businesses, whilst continuing to grow its Irish developmentbusiness, resulting in the creation of a balance in size and profit generationbetween operations within the subsequent five year period. To date, significantprogress has been made with an increasing proportion of earnings generatedoutside of Ireland. McInerney continues to implement this strategy and theBoard believes the Company is on course to achieve its objectives. The business in Ireland, supported by a positive economic backdrop, continues toperform solidly. Opportunities to carry on the roll-out of the Group's existingbusiness model of affordable quality homes and to establish developments in newlocations across the country continue to present themselves. The Groupcontinues to develop quality leisure houses in premium locations in Spain inaddition to a leisure freehold business, while the management team in the UK hasbeen focussed on site acquisition opportunities and selective corporateacquisitions with strong land banks to develop its geographic spread. Having experienced strong organic growth and successfully integrated theacquisitions of William Hargreaves, Charlton Homes, Alexander Developments andAugusta Developments, in conjunction with the recent acquisition of Bowey Homes,the Group now has an established business platform across the North and Midlandsof England. The Board believes that the Group's significant investment inoperating infrastructure and geographic expansion leaves it well placed toaccelerate the development of its UK division. Consistent with its stated strategy, McInerney today announced the acquisitionof Lancing Homes, a housebuilder based in South Shields, Gateshead in the NorthEast of England for £16.25 million in cash, payable on completion plus theassumption of £3 million debt outstanding. The acquisition will be financedfrom the proceeds of the Rights Issue. Lancing specialises in low cost housingand apartments in Newcastle and Gateshead. The company reported profit beforetax of £1.5 million for the financial year ended 28 February 2006 on grossassets of £12 million. The acquisition provides McInerney with additional landbank capacity within its North Eastern region. Lancing holds four sites(comprising 413 units), of which three are in construction. Unit completionsand contribution to Group earnings are anticipated to commence in the firstquarter of 2007. During the period of expansion since the Company's flotation in 1997, McInerneyhas had recourse to shareholders for additional capital on only one occasion(March 1999) when a total of €9.7 million (gross) was raised through a placingand open offer. The Board believes it is now appropriate to raise additionalfunds from shareholders to strengthen the Group's balance sheet by means of theRights Issue. The larger capital base of the Group following the Rights Issue shouldfacilitate the continued expansion of the business and also enable McInerney toraise additional bank debt facilities, thus augmenting the Group's capacity toacquire sites and further accelerate growth. Whilst the level of suchincremental debt will be dependent on prevailing market conditions at the timeof sourcing and development of sites, the Company envisages such debt will be ofa similar profile and gearing level to that currently employed by the Group. A portion of the funds raised will be used to acquire Lancing. Whilst McInerneywill continue to grow the Irish business, based on the current pipeline ofopportunity, it is anticipated that the primary use of the net proceeds of theRights Issue will be to expand its land bank in the UK. This will be achievedthrough the acquisition of new sites within the Company's existing regions,whilst considering further acquisition opportunities should they presentthemselves. A combination of encouraging demographics, high employment and favourableeconomic conditions are contributing to steady market demand in each of theGroup's core divisions (Ireland and the UK). This is supported by a depth ofexperienced management and continued brand development in the UK. McInerneycontinues to see opportunities for extended business growth and the Boardbelieves the Rights Issue will put the Group in a stronger position to takeadvantage of such opportunities. 4. Principal terms of the Rights Issue McInerney is proposing to raise approximately €83.8 million (net of expenses ofapproximately €3.0 million) by the issue of 6,676,114 New Ordinary Shares at aprice of €13.00 per New Ordinary Share. The Issue Price reflects a discount of22.4 per cent. to the closing price of €16.75 per Ordinary Share on 23 February2007, the latest practicable date prior to issue of this Prospectus and a 21.5per cent. discount to that closing price adjusted for the final dividendannounced today. The New Ordinary Shares will be offered to QualifyingShareholders on the basis of 1 New Ordinary Share for every 5 Existing OrdinaryShares held. If a Qualifying Shareholder does not fully take up the offer ofNew Ordinary Shares, his shareholding will be diluted by 16.7 per cent. as theRights Issue has been fully underwritten. The New Ordinary Shares will, when issued and fully paid, rank equally in allrespects with the Existing Ordinary Shares, including the right to receive alldividends or distributions made, paid or declared after the date of thisannouncement (except for the avoidance of doubt, the final dividend in relationto the year ended 31 December 2006 announced today). Entitlements to NewOrdinary Shares will be rounded down and the aggregated fractions will not beallotted to McInerney Shareholders but will be sold for the benefit of theGroup. Application has been made to the Irish Stock Exchange and the UK ListingAuthority for the New Ordinary Shares (nil and fully paid) to be admitted totheir respective Official Lists. Application has also been made to the IrishStock Exchange and the London Stock Exchange for the New Ordinary Shares to beadmitted to trading on their respective main markets for listed securities. Itis expected that admission of the New Ordinary Shares (nil paid) to the OfficialLists and to trading will become effective and that dealings will commence, nilpaid, in the New Ordinary Shares at 8.00 a.m. on 27 February 2007. The latesttime and date for acceptance and payment in full for the New Ordinary Shares tobe issued pursuant to the Rights Issue by holders of Nil Paid Rights is expectedto be 11.00 a.m. on 20 March 2007. The Rights Issue is conditional upon the satisfaction of all conditions to theUnderwriting Agreement and Admission. 5. Expected Timetable for the Rights Issue Event Time and Date Record Date for the Rights Issue 6.00 p.m. on 21 February 2007 Despatch of Prospectus 26 February 2007 Despatch of Provisional Allotment Letters (to Qualifying Non-CREST 26 February 2007 Shareholders only) Dealings in New Ordinary Shares, nil paid, to commence on the Irish 8.00 a.m. on 27 February 2007 Stock Exchange and the London Stock Exchange ("Ex-Rights Date") Nil Paid Rights credited to stock accounts in CREST of Qualifying CREST as soon as practicable after 8.00Shareholders only a.m. on 27 February 2007 Recommended latest time for requesting withdrawal of 4.30 p.m. on 14 March 2007 Nil Paid Rights from CREST Ex dividend date for final dividend in respect of the year ended close of business on 14 March 2007 31 December 2006 Recommended latest time for depositing renounced 3.00 p.m. on 15 March 2007 Provisional Allotment Letters into CREST Latest time and date for splitting Provisional Allotment Letters, 3.00 p.m. on 15 March 2007 nil or fully paid Record date for final dividend in respect of the close of business on 16 March 2007 year ended 31 December 2006 Latest time for registration of renunciation of Provisional 11.00 a.m. on 20 March 2007 Allotment Letters, fully paid Latest time and date for acceptance and payment in full 11.00 a.m. on 20 March 2007 Admission and commencement of dealings in New Ordinary Shares, 8.00 a.m. on 21 March 2007 fully paid CREST members accounts credited in respect of New Ordinary Shares by 21 March 2007 in uncertificated form Despatch of share certificates for New Ordinary Shares in by 28 March 2007 certificated form (Qualifying Non-CREST Shareholders only) The dates set out in the "Expected Timetable for the Rights Issue" and mentionedthroughout this announcement may be adjusted by McInerney, in which eventdetails of new dates will be notified, via a Regulatory Information Service, tothe Irish Stock Exchange, the UK Listing Authority and the London StockExchange. Please note that any Existing Ordinary Shares sold prior to close ofbusiness on 26 February 2007, the Business Day before the Existing OrdinaryShares will trade ex-rights, will be sold to the purchaser with the right toreceive entitlements under the Rights Issue. 6. Glossary of Technical Terms The following explanations are not intended as technical definitions, but ratherare intended to assist the reader in understanding certain terms used in thisannouncement: "completion" means a unit in relation to which building work is substantially complete and ownership has been transferred to its purchaser and "completed units" and similar terms should be construed accordingly; "held under option" in relation to land, means the Group holds a legally binding option to purchase that land; "land bank" means a plot of land owned, controlled or licenced by the Group; "social and affordable housing" means housing units which are defined as social or affordable units under the Planning and Development Act 2000 in Ireland and section 106 of the Town & Country Planning Act, 1990 in the UK; "unit" means a single residential dwelling within a development. 7. Definitions The following definitions apply throughout this announcement unless the contextotherwise requires or unless it is otherwise specifically provided: "Admission" the admission of the New Ordinary Shares to the Official Lists becoming effective in accordance with the Listing Rules, and the admission of the New Ordinary Shares to trading on the respective main markets for listed securities of the Irish Stock Exchange and the London Stock Exchange becoming effective in accordance with the Listing Rules of the Irish Stock Exchange and the LSE Admission and Disclosure Standards respectively; "Alexander" or "Alexander Developments" Alexander Developments (North East) Limited; "Augusta" or "Augusta Developments" Augusta Developments Limited; "Australia" the Commonwealth of Australia, its states, territories and possessions; "Basic Entitlement" the number of New Ordinary Shares for which a Qualifying Shareholder is entitled to apply, being 1 New Ordinary Share for every 5 Existing Ordinary Shares registered in such Qualifying Shareholder's name at the Record Date; "Board" or "Directors" the board of directors of the Company, whose names are set out in Part 3 of the prospectus; "Bowey" or "Bowey Homes" Bowey Homes Holdings Limited; "Business Day" any day (other than a Saturday or Sunday) on which lending banks in Dublin and London are open for business; "Canada" Canada, its provinces and territories and all areas subject to its jurisdiction and any political subdivision thereof; "certificated form" not in uncertificated form; "CREST" the relevant system for the paperless settlement of trades and the holding of uncertificated securities operated by CRESTCo in accordance with the 1996 Regulations; "Davy" Davy, Davy House, 49 Dawson Street, Dublin 2; "Ex-Rights Date" 27 February 2007; "Excluded Territories" the United States, Australia, Canada, Japan and any other jurisdiction where the extension or availability of the Rights Issue would breach any applicable law; "Executive Directors" Enda Cunningham, Tommy Drumm, Daniel P. McInerney, Barry O'Connor and Mark Shakespeare, being the executive directors of the Company; "Existing Ordinary Shares" the 33,380,571 Ordinary Shares in issue as at 23 February 2007 (being the latest practicable date prior to publication of this announcement); "FSMA" the UK Financial Services and Markets Act 2000; "Fully Paid Rights" Rights to acquire New Ordinary Shares, fully paid; "Group" the Company, its subsidiaries and its subsidiary undertakings; "Hillview" or "Hillview Developments" Hillview Developments Limited; "IBI Corporate Finance" IBI Corporate Finance Limited, of 40 Mespil Road, Dublin 4; "Ireland" the island of Ireland, excluding Northern Ireland, and the word "Irish" shall be construed accordingly; "Irish Listing Rules" the Listing and Admission to Trading on the Irish Stock Exchange - Requirements of the Irish Stock Exchange; "Irish Stock Exchange" The Irish Stock Exchange Limited; "Issue Price" €13.00 per New Ordinary Share, being the price at which each New Ordinary Share is to be issued; "Japan" Japan, its possessions and territories and all areas subject to its jurisdiction and any political subdivision thereof; "Lancing" or "Lancing Homes" Lancing Homes Limited; "Listing Rules" the Irish Listing Rules and/or where appropriate the UK Listing Rules; "London Stock Exchange" London Stock Exchange plc; "McInerney" or the "Company" McInerney Holdings plc, a company incorporated in Ireland with company number 253811 and having its registered office at 29 Kenilworth Square, Rathgar, Dublin 6; "New Ordinary Shares" 6,676,114 new Ordinary Shares to be issued by McInerney pursuant to the Rights Issue; "Nil Paid Rights" rights to acquire New Ordinary Shares, nil paid; "Official List(s)" the official list of the Irish Stock Exchange and/or, as appropriate, the official list maintained by the UK Listing Authority; "Ordinary Share(s)" ordinary shares of nominal value €0.125 each in the capital of the Company; "Overseas Shareholder(s)" shareholders who are resident in, or who are citizens of, or who have registered addresses in territories other than Ireland or the United Kingdom; "prospectus" the document comprising a prospectus relating to the Company for the purposes of the Rights Issue and the admission to trading of New Ordinary Shares on the respective main markets of the Irish Stock Exchange and the London Stock Exchange; "Provisional Allotment Letter" the provisional allotment letter accompanying the prospectus in which Qualifying Non-CREST Shareholders may apply for New Ordinary Shares provisionally allotted to them pursuant to the Rights Issue; "Qualifying CREST Shareholders" Qualifying Shareholders whose Existing Ordinary Shares are in uncertificated form; "Qualifying Non-CREST Shareholders" Qualifying Shareholders whose Existing Ordinary Shares are in certificated form; "Qualifying Shareholder(s)" holders of Existing Ordinary Shares on the register of members of the Company on the Record Date, with the exception of certain Overseas Shareholders; "Record Date" 6.00 p.m. on 21 February 2007; "Regulatory Information Service" or "RIS" one of the regulatory information services authorised by the Irish Stock Exchange and/or the UKLA to receive, process and disseminate regulated information from listed companies; "Rights" rights to acquire New Ordinary Shares in the Rights Issue; "Rights Issue" the proposed issue by way of Rights of 6,676,114 New Ordinary Shares to Qualifying Shareholders on the terms and subject to the conditions set out in the prospectus and in the Provisional Allotment Letter; "Securities Act" the Securities Act 1933 of the United States (as amended); "Shareholder(s)" holders of Ordinary Shares; "Spain" The Kingdom of Spain, its possessions and territories and all areas subject to its jurisdiction and any political subdivision thereof; "Sponsor" IBI Corporate Finance, in its capacity as sponsor to McInerney under the Listing Rules; "subsidiary undertakings" shall have the meaning given by the European Communities (Companies: Company Accounts) Regulations 1992; "subsidiary" shall be construed in accordance with the Act; "UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland; "UK Listing Authority" or "UKLA" the UK Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of FSMA; "UK Listing Rules" the Listing Rules of the UK Listing Authority; "uncertificated" or in "uncertificated form" Ordinary Shares recorded on the register of members of the Company as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of an instruction issued in accordance with the rules of CREST; "Underwriting Agreement" the agreement dated 26 February 2007 between the Company, The Governor and Company of the Bank of Ireland, IBI Corporate Finance and the Executive Directors, whereby The Governor and Company of the Bank of Ireland has agreed to underwrite the Rights Issue, the principal terms of which are summarised in paragraph 12 of Part 11 of the prospectus; "US" or "United States" the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all other areas subject to the jurisdiction of the United States of America. Notes: (i) Unless otherwise stated in this announcement, all reference tostatutes or other forms of legislation shall refer to statutes or forms oflegislation of Ireland. Any reference to any provision of any legislation shallinclude any amendment, modification, re-enactment or extension thereof (ii) The symbols "•" and "c" refer to euro and euro cent.respectively, the lawful currency of Ireland pursuant to the provisions of theEconomic & Monetary Union Act 1998. The symbols Stg£ or £ or p refer tosterling, the lawful currency of the United Kingdom. (iii) Words importing the singular shall include the plural and viceversa and words importing the masculine gender shall include the feminine orneuter gender. 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.