McInerney Holdings PLC 28 September 2005 Wednesday 28th September 2005 McInerney Holdings plc Interim Statement for the six months to 30th June 2005 McInerney Holdings plc reports its results for the six months ending 30th June 2005. As previously indicated, profit performance and earnings growth will be weighted towards the second half of 2005. This has been supported by high sales levels achieved since Spring, which suggest a very strong full year result will be achieved. The Group reports a profit before tax of €11.0m for the period ending 30th June 2005 which compares to €16.6m for the corresponding six month period in 2004. This reflects the change in pattern of site starts and certain one-off factors in the first half of 2004, including the disposal of the Eyre Square Centre in Galway. Group turnover was €171.2m representing an increase of 8.2%. Basic earnings per share were 27.68 cent, compared to 43.90 cent for the same period in 2004. The Directors are satisfied with this performance and demand is robust across all of the Group's markets. Both the Irish and UK housing businesses are significantly forward sold for the latter half of the year and the Group anticipate a strong overall result for the full year and to enter 2006 well positioned. An interim dividend of 9 cent gross will be paid on 28th October 2005 to shareholders registered on 7th October 2005. Ireland Performance in the first six months by the Group's Irish housing business was solid. Margins remained strong. Some 438 housing units were completed as compared to 574 for the corresponding six month period in 2004, the reduction being mainly due to the timing of site starts. A significant volume of sales are on hand and due for completion by year end. The Group anticipates in excess of 1,100 units will be completed in the full year. The division is now selling forward into 2006. The contracting order book has nearly tripled in comparison to the same period last year and this division will increase its contribution considerably in 2005 and 2006. The Group's commercial division reported a significantly strong performance in the first half. It sold 6,723 sq metres of industrial units compared to 3,800 sq metres for the same period in 2004. Its industrial sites Ballycoolin, Hibernian and Newtownmountkennedy have experienced high demand and Hibernian is almost fully sold. UK The Group's UK housing division continues to expand. Our objective is to establish it as a leading home provider in the North of England providing a specific product mix targeted to the affordable homes sector where demand is greater. The division completed 142 units in the first six months. Strong sales since March indicate a completion level in the region of 700 units by the end of 2005 compared to 500 units in 2004. While marginally below our original ambitious target for 2005, it will represent growth of about 40%. In the first six months, the Group increased the landbank under its control from 1,800 to 2,300 plots (plus 400 under option). With the opening of new regions in Yorkshire and the North Midlands, the division is well positioned for further growth in 2006 and beyond. The Group's strategy of producing affordable product in areas with large housing needs positions our UK operations more favourably than our competitors in this market. The Directors expect a strong full year result from the UK housing division in 2005 and sustained growth going forward. The Group's commercial operation is showing significant expansion. A number of new projects have commenced. At Croydon, a business development of 7,400 sq metres, just launched, is attracting strong interest. Our site at Chesham is currently in planning for 10,200 sq metres. A joint venture with Bank of Scotland on a site in Watford has recently received planning approval for 11,100 sq metres and is in development thus offering positive revenue opportunities in 2006. Spain Our Spanish operations recorded a strong result for the first half year and an excellent second half is also anticipated. The freehold division completed 8 units in the first six months, with a total of 60 expected by year end. This compares to 13 for the full year 2004. The planning process at the Group's Mijas site has been slower than expected but is now in the final stages of planning approval. An initial review by town planners of our Sotogrande site is positive. These sites provide excellent earnings potential for the Group from 2006 onwards. Outlook Demand in our key markets continues to be positive. The Irish market remains buoyant and continued strong demand is anticipated over the medium term, supported by demographic factors. Going into 2006, we are well positioned in the UK to capitalise on pent up demand and expansion opportunities within our expanded geographic regions. We expect our UK house building operations to be of similar size to the Irish operation in the near term. The strong sales performance in the first half confirms that a large percentage of revenue earnings and profit recognition will be achieved in the second half of the year. The Group anticipates another strong result for the full year of 2005. Ned Sullivan Chairman MC INERNEY HOLDINGS PLC CONSOLIDATED INCOME STATEMENT For the period ended 30 June 2005 30/06/2005 30/06/2004 31/12/2004 Unaudited Unaudited Audited •'000 •'000 •'000 Revenue Continuing Operations 171,238 157,428 365,939 Acquisitions - 868 7,420 Revenue 171,238 158,296 373,359 Cost of Sales (141,280) (127,777) (302,272) Gross Profit 29,958 30,519 71,087 Administrative Expenses (14,688) (13,370) (28,450) Share of Results from Joint Ventures 519 3,453 5,754 Profit from Operations 15,789 20,602 48,391 Investment Income 76 127 183 Finance Costs (4,853) (4,167) (8,986) Profit before Tax 11,012 16,562 39,588 Tax (1,839) (2,135) (4,560) Profit for the Period from Continuing Operations 9,173 14,427 35,028 Dividends (3,643) (1,971) (4,273) Retained Profit for the Period 5,530 12,456 30,755 Profit attributable to Equity Holders of the Parent 9,173 14,427 35,028 Earnings Per Share From Continuing Operations: Basic 27.68 43.90 106.50 Diluted 26.28 42.41 101.55 MC INERNEY HOLDINGS PLC CONSOLIDATED BALANCE SHEET As at 30 June 2005 30/06/2005 30/06/2004 31/12/2004 Unaudited Unaudited Audited •'000 •'000 •'000 Non-Current Assets Goodwill 22,390 24,411 21,744 Property, Plant & Equipment 6,071 6,687 6,241 Investment Property 183 5,569 5,509 Interests in Joint Ventures 7,335 4,583 6,854 Assets Classified as held for Sale 4,237 - - Deferred Tax Asset 963 - 908 41,179 41,250 41,256 Current Assets Inventories 341,556 251,565 269,349 Trade & Other Receivables 39,297 55,609 40,827 Cash & Cash Equivalents 33,102 18,595 26,670 413,955 325,769 336,846 Total Assets 455,134 367,019 378,102 Current Liabilities Trade & Other Payables 144,539 141,459 127,872 Retirement Benefit Obligation 320 300 300 Tax Liabilities 9,242 6,254 9,116 Obligations under Finance Leases 383 306 316 Bank Overdrafts & Loans 87,173 24,291 58,433 241,657 172,610 196,037 Net Current Assets 172,298 153,159 140,809 Non-Current Liabilities Bank Loans 79,746 87,611 57,043 Retirement Benefit Obligation 1,896 825 1,656 Deferred Tax Liabilities 2,190 1,549 2,039 Other Payables 4,105 3,786 1,814 Obligations under Finance Leases 440 434 408 88,377 94,205 62,960 Total Liabilities 330,034 266,815 258,997 Net Assets 125,100 100,204 119,105 EQUITY Share Capital 4,144 4,110 4,140 Capital Conversion Reserve Fund 62 62 62 Share Premium Account 17,158 16,764 17,113 Equity Reserve 485 112 298 Hedging & Translation Reserves (1,812) (3,013) (2,269) Retained Earnings 105,063 82,169 99,761 125,100 100,204 119,105 MC INERNEY HOLDINGS PLC CONSOLIDATED CASH FLOW STATEMENT For the period ended 30 June 2005 30/06/2005 30/06/2004 31/12/2004 Unaudited Unaudited Audited •'000 •'000 •'000 NET CASH FROM OPERATING ACTIVITIES (35,035) 2,052 9,242 INVESTING ACTIVITIES Interest Received 76 54 325 Dividends Rteceived from Joint Ventures - 1,900 1,900 Loans advanced to Joint Ventures (1,547) (8,868) (9,202) Loans repaid from Joint Ventures - - 1,078 Proceeds on disposal of Property, Plant & Equipment - - 410 Purchases of Property, Plant & Equipment (686) (1,081) (1,773) Acquisition of Subsidiary - (9,959) (10,952) NET CASH USED IN INVESTING ACTIVITIES (2,157) (17,954) (18,214) FINANCING ACTIVITIES Dividends Paid (3,643) (1,971) (4,273) Share Capital Subscribed 49 125 504 Repayments of Borrowings (28,736) (26,769) (26,884) Repayments of Obligations under Finance Leases (192) (154) (360) New Bank Loans Raised 75,690 38,191 41,047 Increase / (Decrease) in Bank Overdrafts 205 (1,464) (1,057) NET CASH FROM FINANCING ACTIVITIES 43,373 7,958 8,977 NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 6,181 (7,944) 5 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 26,670 26,435 26,435 Effect of Foreign Exchange Rate Changes 251 104 230 CASH AND CASH EQUIVALENTS AT END OF PERIOD 33,102 18,595 26,670 MC INERNEY HOLDINGS PLC NOTES TO THE INTERIM REPORT For the period ended 30 June 2005 Segment Information The Group operates in three countires, Ireland, UK and Spain. The principal activities of the Group are Private Housing, Contracting, Commercial and Leisure. The Leisure activities are divided into Club Management and Freehold sales. Land sales are also a part of each business segment. These divisions are the basis on which the Group reports its primary segment information. The segment information about these businesses is presented below: REVENUE 30/06/2005 30/06/2004 Unaudited Unaudited •'000 •'000 Ireland: Private Housing 89,930 106,723 Developed Sites & Land 1,299 3,320 Contracts 25,535 10,093 Commercial 8,641 1,714 Commercial Land 700 - 126,105 121,850 UK: Private Housing 31,439 25,461 Developed Sites & Land 435 - Contracts 9,839 5,467 Commercial - - 41,713 30,928 Spain: Club Management 1,495 1,617 Leisure Freehold 1,175 3,901 Land 750 - 3,420 5,518 Total Revenue 171,238 158,296 SEGMENT RESULTS 30/06/2005 30/06/2004 Unaudited Unaudited •'000 •'000 Ireland: Private Housing 11,878 14,327 Developed Sites & Land 242 918 Contracts 1,022 1,303 Commercial 948 287 Commercial Land 65 - 14,155 16,835 UK: Private Housing 1,054 2,171 Developed Sites & Land 325 - Contracts 448 180 1,827 2,351 Spain: Club Management 375 56 Leisure Freehold 1,175 138 Land 301 - 1,851 194 Total Segment Results 17,833 19,380 Common Costs (2,563) (2,231) Share of Results from Joint Ventures 519 3,453 Profit from Operations 15,789 20,602 Investment Income 76 127 Finance Costs (4,853) (4,167) Profit Before Tax 11,012 16,562 Tax (1,839) (2,135) Profit After Tax 9,173 14,427 Dividends 30/06/2005 30/06/2004 Unaudited Unaudited •'000 •'000 Charge to Profit & Loss Final Dividend 2004 of 11c per share (2003: 6c per share) paid in period 3,643 1,971 Proposed Dividend Proposed interim dividend for the year ending 31 December 2005 of 9c per share (2004: 7c per share) 2,983 2,302 The proposed interim dividend was approved by the Board on 23 September 2005 and has not been included as a liability as at 30 June 2005. 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