Slow construction starts in the first half of the year dented interim profits at quoted house builder McInerney Holdings, the company said yesterday.

Pretax profits for the first six months of the year dropped by 33 per cent to €11 million from the €16.6 million they reached during the same period in 2004.

The group said this was down to slower site starts this year. Its Irish business completed 438 houses during the period as against 574 last year.

Also, the first half of 2004 was marked by a once-off gain from the sale of its Eyre Square centre in Galway city.

Operating profit was €15.7 million, down 20 per cent from €20.6 million.

Turnover in the first six months rose 8.2 per cent to €171.2 million from €157.4 million during the same period in 2004. Sales in its Irish business increased to €126.1 million from €121.8 million.

But the figures show that, of this, private housing sales actually fell to €89.9 million from €106.7 million.

British turnover rose to €41.7 million in the first half from €31 million during the same period in 2004.

Earnings per share dropped 33 per cent to 27.68 cent this year from 43.9 cent in 2004. The board is proposing an interim dividend of nine cent per share.

Investors reacted to the news by selling the stock. The price dropped five cent to close at €8.40 in Dublin last night.

A group statement said that demand is robust across all its markets. "Both the Irish and UK housing businesses are significantly forward sold for the latter half of the year," it said.

Chief executive Barry O'Connor said demand was strong in both Ireland and Britain.

"We had very strong sales in June, July and August," he said. Mr O'Connor added that, in the UK alone, it had taken deposits on 512 houses, compared to 321 last year.

He pointed out that the company had already flagged its dip in profits and said that the earnings from its strong sales performance in the second half would be recognised in its full-year results for 2005.

Mr O'Connor said that it needed to deliver just over one house per week on all its sites to meet its target.