McInerney Holdings, the building and property group, has embarked on a major expansion which will see its business doubling in the next two years. The two-pronged expansion - houses and industrial units - will be financed from a placing of new shares to raise £7.6 million (€9.65 million), and a £10 million (€12.7 million) increase in bank facilities. The shares in the placing have already been conditionally placed with institutional investors at 149c (117p) per share. There is also an open offer to existing shareholders on the basis of one new share at 149c (117p), for every four ordinary shares and/or warrants held. This is at a slight discount to the 155c share price prior to the announced expansion.
McInerney employs 270 people; the expansion will create an additional 50 jobs together with up to 200 indirect jobs.
Capitalising on the continued surge in demand for new houses in the Republic, it plans to sell 1,000 houses in 2000. This will represent a substantial growth on the 582 sales in 1998. Asked about house prices, Mr Barry O'Connor, managing director, said he expected to see increases of 10 per cent to 20 per cent, depending on the area, this year. He stressed it was a "supply problem" and his group would favour a "slower rate of price increase". McInerney sees no difficulty in meeting its new housing sales targets. Because of its geographical spread, it is not too committed to any one area. Mr O'Connor sees strong potential growth in Cork where it sold just 129 units in 1998, and in Dublin where it sold 124 units. "We want to do more in Cork and Dublin and would also like to grow in Galway, and other large provincial centres." McInerney has a land bank with 3,300 plots, sufficient supply for more than three years. The land bank is to be expanded. "We have a number of acquisitions in the pipeline".
The company plans to build 140,000 sq ft of industrial units in 2000. That is almost treble the 65,000 sq ft built in 1998. Some £0.8 million (#1.02 million) of the proceeds from the placing will provide additional working capital for its commercial division. This division has identified a market for the development of industrial units, the group said, and last year completed the construction of the Westpoint Business Park in Mulhuddart, Co Dublin. After completion of that development, a further three sites were secured on which it intends to develop industrial units.
McInerney is also considering re-entering the British construction market, with around £0.5 million (€0.63 million) set aside for this. It is talking to a small construction company which is in housing and industrial property. However, the group has stressed there is no certainty that the acquisition will be concluded.
