Building group McInerney posted a 43 per cent increase in profits last year to €40.7 million, boosted by continuing strong demand for housing in Ireland and Britain. Profit after tax was €35 million, compared to €23.8 million in 2003.

The company's chief executive, Mr Barry O'Connor, said yesterday that Britain presented strong growth opportunities and the company was targeting it for expansion.

Mr O'Connor said only 175,000 houses on average were being built per year in Britain, compared to around 80,000 in the Republic.

He said there was no doubt that house price growth in the Republic had moderated over the past couple of years. "Supply has increased to meet demand in Ireland," he said.

However, he said there were few similarities with Britain, where housing shortages had driven up prices and one of the reasons interest rates had been increased there was to keep a lid on house prices.

"We think interest rates are artificially high in Britain," he said.

Last year the company built 1,614 homes, a 9 per cent increase on 2003. Of these, the majority, 1,100, were in Ireland.

The company currently has 4,800 plots in its Irish land bank, of which 57 per cent have planning permission, with the remainder residentially zoned.

"The group is satisfied that the current land bank will support its growth plans," its results statement said.

The company is also involved in developing small industrial units of 2,500-3,000 sq ft.

Mr O'Connor said there had been a strong pick-up in demand from investors and tenants for such units in the Republic.

In Britain, McInerney's completed 500 houses, up from 447 in 2003.

Earnings per share were up 46 per cent to 106.43 cent. The final dividend was 11 cent per share, giving a total dividend of 18 cent.