McInerney Holdings, the Irish building group, reports today that in the first half of 2008, it made a loss before tax of €53.6 million compared with a profit of €9.2 million in the same period last year.

The company says that it has experienced unprecedented weakened conditions in its key markets of the UK and Ireland since earlier this year.

As a result of the difficult market conditions, McInerney says that it recorded an operating loss before tax and exceptional items of €22.1m for the first six months of 2008, which compares to an operating profit before tax of €9.2m for the corresponding period in 2007. In addition it has taken a one off exceptional charge of €4m in respect of the cost rationalisation programme and has made what it terms a prudent exceptional write down of €27.6m against the carrying value of certain sites in the landbank. Overall, the landbank continues to have a surplus above written down book value, as some sites retain surplus value.

McInerney says that the trading losses for the first six months are primarily attributable to lower housing volume outputs in both Ireland and the UK in addition to price incentivisation in both markets. Total unit completions were 423 in the first half compared to 703 in the first half of last year. 

McInerney Chairman Ned Sullivan commented: "The current business environment for both our main markets continues to be highly challenging. Whilst the key influences of credit restrictions and subdued consumer confidence prevail, the Group's management is focusing on operating its business prudently and efficiently for cash.  

Until mortgage availability in both UK and Ireland improves and stock supply issues are resolved in Ireland, the output of the industry will remain below the fundamental needs of the market place.  The autumn selling season is a significant period and will provide greater clarity on anticipated performance for the year.

Our management team has streamlined the operational structure of the Group and reduced overheads substantially. It is sharply focused on effectively guiding the business through these challenging conditions. We believe that the medium term fundamentals of housing demand in both UK and Ireland remain strong. The Group is positioned to resume growth when current uncertainties are removed. Our new cost base has been tailored to allow the Group to generate cash and profit from operations in current market conditions and will ensure that market improvement, when it comes, will flow rapidly to earnings."  

Results detail