A delay in gaining planning permissions and "other intrastructural bottle-necks" led to a cut in sales and profits from McInerney Holdings' private housing division in the Republic.
However, a first-time contribution to sales from the UK, and a boost in profits from commercial property, pushed the group pre-tax profit from €7.3 million to €7.6 million in the six months ended June 30th, 2000.
Also, a recent granting of a "significant number of new planning permissions" will lead to a strong second half, according to the company. The first-half results do not reflect the group's strong underlying position. This is likely to be reflected in the full year's results, which should show a profit growth of some 30 per cent.
McInerney said it was concerned at the provisions of part five of the Planning and Development Bill that provides for up to 20 per cent of all new homes being delivered as social housing. While noting it has already outlined its views, chairman Mr Roy Ferris said this will, in effect, only serve to worsen the market for the first-time buyer.
"The implementation of similar provisions in the UK housing market only served to push up the price of building land and reduced the number of first-time buyers' units being delivered" and could result in private purchasers "effectively cross-subsidising the public sector".
The latest results show a 33 per cent increase in sales to €66.7 million. This was mainly due to the UK subsidiary, William Hargreaves, contributing for the first time.
Basic earnings per share rose from 17.32 cents to 18.24 cents. No interim dividend is being paid but in line with recent tradition, a final will be paid next year.
The balance sheet shows a sharp rise in net borrowings, from €13.9 million to €31.6 million, reflecting the rise in stocks from €65 million to €92 million. Gearing is now 85.9 per cent compared with 45 per cent previously.
The chairman said he was satisfied with the results considering the planning permission problems. For the first time since it was rejuvenated, the number of house completions fell from 299 to 227.
This is reflected in the fall in private house sales from €39.5 million to €34.7 million and the drop in profits from €7.0 million to €6.5 million.
However, it now has planning for 2,200 units with a further 1,700 units subject to planning appeals.
Sales in the commercial division increased from €0.4 million to €6.2 million while profits from this sector increased from €0.4 million to €1.3 million. The division is growing rapidly.
It hopes to develop 130,000 sq ft this year, up from 50,000 sq ft last year. This year it could top 190,000 sq ft. The contracts division reduced sales from €7.8 million to €6.2 million but almost doubled profits to €1.3 million.
Sales in the leisure division dropped from €1.4 million to €1.3 million and profits fell from €0.6 million to €0.4 million. Mr Ferris said the focus on rentals at its Four Seasons Country Club at Marbella continues to pay dividends. It has started developing a new phase of 28 apartments.
