McInerney Holdings PLC 12 May 2005 Thursday, 12th May 2005 CHAIRMAN'S STATEMENT ANNUAL GENERAL MEETING It is a great pleasure to report that the Group recorded an excellent operational performance in 2004. Profit before tax was €40.7m, which is an increase of 43% on our 2003 result. Earnings per share also rose by some 46% to 106.43 cent, with the total dividend increasing 65% to 18 cent per share. During the year, market and trading conditions remained strong across the Group's three core regions of Ireland, the UK and Spain. In particular, our business benefited from continued buoyancy for affordable homes in both Ireland and the UK. We successfully endeavoured to closely match our product portfolio with consumer requirements. Our focus on achieving strong growth in the UK was fruitful. The acquisition of Alexander Developments in May 2004 provided the Group with the foothold required in the North East of England to match our positioning in the North West. Our activities now span across the North of England and we are particularly satisfied with the platform for further growth now in place. We have strong ambitions for the future growth of our UK business. Dividend The Board's objective to put in place a more progressive dividend policy has progressed substantially. The Board proposes to pay a final dividend of 11 cent gross per share. This will result in a total dividend of 18 cent per share equating to a dividend cover of 5.9 times. It is proposed that the final dividend will be paid on 16 May 2005. Operations So to our 2004 operational highlights for each division. There were a total of 1,614 private home completions across all our divisions representing an increase of 9% on the 1,481 units completed in 2003. Ireland In Ireland, the housing market continued to be excellent with the Irish operation increasing its profits to Group earnings by some 37% in 2004. There was strong unit delivery with some 1,101 private home completions in 2004, compared to 969 in 2003. The first quarter of 2005 has shown strong sales interest. We are operating from some 30 sites around the country with a well placed landbank and we anticipate 2005 completions of a similar high level to 2004. - 2 - We remain strongly positioned to take best advantage of continuing good demand going forward which is underpinned by favourable demographics and high levels of employment. 2004 also recorded a favourable outcome for our commercial division, Hillview Securities. It sold 50,000 sq. ft., of industrial units and also sold its interest Eyre Square Shopping centre in Galway. These funds were reinvested in new development opportunities in both Ireland and the UK. Our Irish contracting business had a good year, increasing its contribution from €2.2m to €3.4m. Very good progress has been made in increasing its order book and we anticipate further growth in this business in 2005. UK We stated last year that our ambition with our UK business was to achieve growth through geographic expansion and organic growth. I am pleased to report today that our ambition is on target with the UK business performing strongly in 2004. We have actively grown our land bank and now have over thirty strategically chosen sites under construction representing some 1,900 plots. Operations span Greater Manchester, Lancashire, Staffordshire, Derbyshire, Cheshire, Liverpool, Merseyside and Durham. A regional office has recently opened in Leeds - marking our organic expansion into Yorkshire. The UK operation now targets its products to a market of some eight million people. The Group's strategy will continue to be aimed at providing housing for the entry level of the market where demand is greatest and supply constrained. The UK housing market in the North of England continues to experience good demand. In addition, an element of undersupply is prevalent and combined with relatively low interest rates benefits our product offering. It is our view that the UK division will complete in the region of 800 units in 2005. The Board is pleased that this division is now structured to achieve progressive growth going forward and our objective will be to further increase unit output in 2006 and add further regions. The commercial division sold 39,000 sq. ft., in the UK at its Park Royal project near London. In addition, two new sites at Croydon and Chesham have opened, as well as a joint venture in Watford. Spain Whilst our activity was somewhat slower in Spain than we would have liked, nevertheless, a 4% increase in profits was achieved in 2004. Our Spanish business completed 13 units at its high end luxury development, Los Flamingos. Those units that were not completed in 2004 will be made up in 2005. In addition, a significant land sale provided good profit recognition during 2004. We have two new very exciting sites at Sotogrande and Mijas. The planning process is moving ahead on both sites, with Sotogrande most recently having its application reviewed favourably by the local planners. We are confident of future growth in our Spanish developments in 2005 and beyond. - 3 - Conclusion Our growth strategy has shown exceptional progress in 2004. The Group performed strongly, delivering good volumes and strong operating margins. Market conditions remain favourable for each of our businesses and they are well placed to provide continued revenue growth going forward. Earnings visibility is strong with a good level of deposits on hand to date. Profit recognition will largely be achieved in the second half of the year due to the pattern of site starts. We anticipate strong unit increases from the UK and Spain in 2005. In line with our strategy, this will further diversify our income stream. Our key markets continue to be favourable. We look forward to another strong result and performance for the full year of 2005. Ned Sullivan, Chairman, McInerney Holdings plc. ENDS FOR INFORMATION: Siobhan Molloy, Weber Shandwick FCC Tel: (01) 676 01 68 or (086) 817 50 66 About McInerney Holdings plc McInerney Holdings plc is one of Ireland's leading development companies, with divisions specialising in various aspects of the construction market. McInerney Holdings plc comprises four divisions operating in Ireland, Spain and the United Kingdom. Established in 1909, the Group is Ireland's largest national homebuilder, and undertakes extensive commercial and leisure projects both in Ireland and abroad. The company is listed on the Dublin and London Stock Exchanges (ISE: MCI.I/LSE: MCI). 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 Exchange