Preliminary Results 2001
McInerney Holdings PLC
28 February 2002
Thursday 28th February 2002
PRELIMINARY ANNOUNCEMENT
Financial Results for Year ended 31 December 2001
McInerney Holdings plc performed solidly despite an undoubtedly turbulent period
in the Irish construction industry in 2001.
Financial Highlights
The Directors are pleased to report a pre-tax profit of €18.14m, compared to the
2000 result of €19.10m. Basic earnings per share in 2001 were 43.74 cent as
compared to 46.32 cent in 2000.
Profit after tax for the year was €13.94m compared with €14.67m in 2000. Group
turnover rose from €174.34m in 2000 to €185.15m in 2001.
The Group has become diversified with five businesses in three countries. Our
Irish house-building division remains the main contributor to Group
profitability having completed 808 private and contract housing units in 2001,
up from 652 units in 2000. The Group's Irish contracting operations and Spanish
leisure activities also performed well during the period. However the
performances of the Group's Irish commercial division and the UK division were
below expectations during the year. Significant improvement is anticipated in
both these divisions in 2002.
Dividend
Based on these results, as is our practice, the Group is proposing to pay an
interim gross dividend of 4.5 cent (3.5 cent in 2000) in lieu of a final
dividend. This will be paid on 22nd March 2002, to shareholders registered at
8th March 2002.
This increase in dividend represents a more progressive dividend policy by the
Group. In the past our dividend pay-out has been maintained at a lower level to
facilitate the retention of earnings to grow the Group's asset base. McInerney
now has a strong asset base and consequently the Board has decided that the
proportion of earnings distributed to shareholders should be increased over a
period of time to match our peer group.
Board
As part of our policy of strengthening our knowledge and understanding of the UK
construction and leisure markets, it is with pleasure that I welcome the recent
appointment of Michael Leece as a Non-Executive Director to our Board.
Operational Highlights
The Group's operations are divided into Irish house-building and contracting,
Irish commercial property development, Spanish leisure development and UK
construction activities.
House-building Division
The number of Irish house completions during the year was 808, of which 663 were
in private housing and 145 were in contract housing. This compares with a total
of 652 house completions for 2000.
The Group's strategy of focussing on first time buyers and maintaining an active
land management policy is clearly reflected in the robust 2001 performance in
this division despite difficult trading conditions. The Budget changes in
December re-introducing mortgage interest relief for investors occurred too late
in the year to impact on our 2001 result.
Deposits on hand at year-end were 233 compared to 183 in 2000. The spring
selling season this year has got off to a good start.
As part of our land management strategy, land sales of €16.7m were closed in
2001, including the sale of serviced sites to other developers. An additional
€10m in contracted land sales are expected to close in the first half of 2002.
The Group's residential land bank at the end of December was 3,915 plots, down
from 4,800 plots at the beginning of the year. Of these plots some 75% have full
planning permission.
During the year our contract housing activities increased by 15% to €22.2m. The
Group secured local authority housing contracts in Dublin, Cork and Waterford
and it is anticipated that further growth in this activity will be achieved in
the current year.
Commercial Division
Hillview Securities continues to develop its 40 acre, Millennium Business Park
in Ballycoolin, Dublin. The first development phase of 12,000 square metres of
industrial units has sold well and is near completion. In January 2002, Hillview
successfully disposed of 11 acres of land at Ballycoolin to an end user. The
company is also developing the smaller Euro Business Park in Cork.
Spanish Division
The Spanish division performed strongly during the period. In particular there
was a highly successful launch of our second major freehold development at Los
Flamingos in the Marbella region. Demand for these upmarket apartments has been
well ahead of expectations. At year-end 73 deposits were on hand with a sales
value of €27m. Significant further development is planned for this location
Our successful freehold apartment development at Carib Playa near Marbella is
completed. Income from our rental activities at the Four Seasons Country Club at
Marbella increased during the period with 8 new rental apartments completed
during 2001 and a further 22 apartments coming on-stream in early 2002.
UK Division
During 2001, a new Regional Director was appointed for McInerney UK with the
objective of increasing the level of capital invested in our UK operations. In
January 2002 we completed the acquisition of the Charlton Group, a successful
Lancashire development and construction company for a total consideration of
stg£8.05m (€12.98m). Combined with our existing operation in the North West,
William Hargreaves, this company provides the Group with the critical mass
necessary to service a regional population of 8 million people. The acquisition
will be immediately earnings enhancing and was financed without recourse to
shareholders.
During the year William Hargreaves realised €2m of cash for reinvestment as a
result of the sale of its interest in the Riverside joint venture project.
The Future
We believe the Group is well positioned to face the future with renewed
optimism. Our acquisition of the Charlton Group in the UK represents important
progress in diversifying our income stream and spreading our capital base across
our three chosen markets of Ireland, UK and Iberia.
The recent Budget change in Ireland re-introducing mortgage interest relief for
investment properties has encouraged investors back into the housing market and
is stimulating increased demand from owner occupier purchasers in the current
year.
We continue to have a strong land-bank for our house-building, industrial and
leisure operations. We have a high level of planning permissions in place and a
solid demand for our products in our chosen markets. In addition, an increased
level of business already written for 2002 provides the Group with a solid base
for the year ahead.
Roy B. Ferris
Chairman
MC INERNEY HOLDINGS PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2001
2001 2000
€'000 €'000
TURNOVER INCLUDING GROUP SHARE OF
JOINT VENTURE 186,485 178,120
Less: Share of Joint Venture Turnover (1,331) (3,784)
GROUP TURNOVER 185,154 174,336
COST OF SALES (150,533) (141,176)
GROSS PROFIT 34,621 33,160
Administrative Expenses (13,755) (12,525)
GROUP OPERATING PROFIT 20,866 20,635
Share of Operating Profits in Joint Ventures 578 1,210
TOTAL OPERATING PROFITS INCLUDING JOINT VENTURES 21,444 21,845
Profit on Disposal of Office Buildings 1,178 277
Interest Payable and Similar Charges (4,480) (3,019)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 18,142 19,103
Taxation Charge arising on Ordinary Activities (4,199) (4,432)
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 13,943 14,671
Proposed Dividend (1,465) (1,110)
PROFIT RETAINED FOR THE YEAR 12,478 13,561
BASIC EARNINGS PER SHARE 43.74 c 46.32 c
FULLY DILUTED EARNINGS PER SHARE 41.69 c 43.98 c
The Auditors have confirmed that they will be issuing an unqualified opinion on the accounts from which the
financial information set out on pages 4 to 8 for the year ended 31 December 2001 has been extracted. The
Financial information for the year ended 31 December 2000 has been extracted from audited accounts on which
the Auditors issued an unqualified opinion and which have been delivered to the Registrar of Companies.
MC INERNEY HOLDINGS PLC
CONSOLIDATED BALANCE SHEET
As at 31 December 2001
2001 2000
€'000 €'000
FIXED ASSETS
Intangible Assets 5,566 5,733
Tangible Assets 9,411 7,007
Financial Assets
Joint Ventures: Share of Gross Assets 7,342 12,353
Share of Gross Liabilities (7,246) (12,111)
Loans to Joint Ventures 1,451 1,858
1,547 2,100
TOTAL FIXED ASSETS 16,524 14,840
CURRENT ASSETS
Stocks 124,433 105,710
Debtors 21,691 13,405
Cash at Bank and in Hand 33,713 11,582
179,837 130,697
CREDITORS (Amounts falling due within one year)
Bank Loans and Overdrafts 23,839 13,925
Trade and Other Creditors 64,861 54,830
88,700 68,755
NET CURRENT ASSETS 91,137 61,942
TOTAL ASSETS LESS CURRENT LIABILITIES 107,661 76,782
CREDITORS (Amounts falling due after more than one year)
Bank Loans 48,750 29,817
Other Creditors 1,505 1,786
50,255 31,603
PROVISIONS FOR LIABILITIES AND CHARGES
Deferred Taxation 504 651
56,902 44,528
FINANCED BY :
CAPITAL AND RESERVES
Called up Share Capital 4,072 3,964
Capital Conversion Reserve Fund 62 62
Share Premium Account 16,298 16,294
Revaluation Reserve 138 171
Profit and Loss Account 36,332 24,037
TOTAL SHAREHOLDERS' FUNDS - ALL EQUITY 56,902 44,528
MC INERNEY HOLDINGS PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2001
2001 2000
€'000 €'000
Net Cash Inflow / (Outflow) from operating activities 4,866 (8,039)
DIVIDENDS RECEIVED FROM JOINT VENTURES 112 76
RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE
Interest Received 46 124
Interest Paid (4,912) (2,969)
Interest element of Finance Lease payments (32) (6)
(4,898) (2,851)
TAXATION (4,476) (4,479)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Expenditure on Tangible Assets (4,208) (3,457)
Sale of Tangible Assets 2,532 940
Investment in Financial Assets 529 525
(1,147) (1,992)
EQUITY DIVIDENDS PAID (1,110) (804)
Net Cash Outflow before Financing (6,653) (18,089)
FINANCING
Share Capital Subscribed 114 32
Repayment of Loans (18,742) (17,373)
Proceeds from Borrowings 47,751 35,358
Capital Element of Finance Lease Rentals (179) (165)
28,944 17,852
Increase / (Decrease) in cash in year 22,291 (237)
MC INERNEY HOLDINGS PLC
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
For the year ended 31 December 2001
2001 2000
€'000 €'000
Increase / (Decrease) in cash in year 22,291 (237)
Cash inflow from increase in debt and lease financing (28,829) (17,820)
Changes in net debt resulting from cashflows (6,538) (18,057)
New finance leases (323) (416)
Movement in net debt for the year (6,861) (18,473)
Net debt as at 1 January 2001 (32,649) (14,176)
Net debt as at 31 December 2001 (39,510) (32,649)
MC INERNEY HOLDINGS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2001
SEGMENTAL INFORMATION
Segmental Analysis of Turnover and Profit
2001 2000
€'000 €'000
Turnover
Private Housing 107,696 90,756
Developed Sites & Land 16,740 13,526
Contracts 22,203 19,650
Leisure 12,999 7,304
Commercial 8,096 10,631
UK Construction 17,420 32,469
Total Turnover 185,154 174,336
Profit before Interest & Taxation
Private Housing 14,054 15,865
Developed Sites & Land 5,774 2,086
Contracts 1,414 1,562
Leisure 2,201 2,089
Commercial 919 2,341
UK Construction 78 767
Segment Profits 24,440 24,710
Profit on Disposal of Office Buildings 1,178 -
Common Costs (2,820) (2,088)
Costs incurred in on-going Development / Acquisition
Activities (176) (500)
Net Interest Payable (4,480) (3,019)
Profit Before Taxation 18,142 19,103
Segmental Analysis of Net Assets
2001 2000
€'000 €'000
Business Sectors
Private Housing 55,036 48,388
Leisure 11,548 9,482
Commercial 23,239 10,305
UK Construction 8,467 10,375
Net Operating Assets 98,290 78,550
Unallocated Liabilities (2,512) (1,862)
95,778 76,688
Net Borrowings (38,876) (32,160)
Total Net Assets 56,902 44,528
All activities are located in Ireland with the exception of Leisure, which is located in Spain,
and UK Construction which is located in the North of England.
This information is provided by RNS
The company news service from the London Stock Exchange