HOUSE BUILDING: House building group Abbey posted a €4.12 million (£3.2 million) drop in pre-tax profits to €14.56 million for the six months to October 31st, 2001.

Operating profits dropped from €17.61 million to €13.86 million in the same period.

Delayed starts significantly affected the turnover of the group's house building division, which fell by €16 million to €54 million.

The house building division completed 251 sales - 157 in Britain and 94 in the Republic - generating an operating profit of €12.74 million.

House building in Britain was held up by logistical and planning issues rather than market issues, Abbey chairman Mr Charles Gallagher said. "So we knew there was going to be a shortfall in the UK," he said.

He described the demand and prices for housing in Britain as "terrific". "We are expecting more completions in the second half and are currently trading in line with these expectations," Mr Gallagher said.

"House sales in the UK improved towards Christmas as the uncertainties engendered by the events of September 11th disappeared into the background.

"Irish sales have been steady for the time of year and the prospects for 2002 look brighter than for the year just passed."

He said the Irish market had a very good start to the year, reflecting rising confidence following the Government's Budget measures.

Abbey's British plant-hire business, M & J Engineers, generated operating profits of €974,000 on a turnover of €10.5 million.

Trading has steadily improved after a difficult first quarter, Mr Gallagher said.

Rental income for the period amounted to €148,000, Abbey said.