BUILDING: Shareholders in housebuilding group McInerney Properties have been given a pleasant surprise after the company announced a 28 per cent increase in dividends for 2001. A dividend of 4.5 cents per share is being paid, up from 3.5 cents the previous year.

In the statement with its results, McInerney said that, in the past, the group had paid lower dividends to allow for more retained earnings to grow the group's asset base.

McInerney now has a strong asset base and, as a result, has decided to adopt a more progressive dividend policy and bring the proportion of earnings distributed to shareholders to that of its peer group.

The dividend accounts for 10.5 per cent of McInerney's after-tax profits, compared to 7.5 per cent the previous year.

Not surprisingly, McInerney's results for 2001 were a mixed bag, with good results from Irish housebuilding and the Spanish leisure division being balanced by a weaker performance in commercial property and UK housebuilding. Overall, turnover rose to €185.2 million from €174.3 million, while pre-tax profits eased to €18.1 million from €19.1 million.

Housebuilding in Ireland remains the main profit-generator and last year McInerney completed 808 private and contract houses, an increase from the 652 completions in 2000.

While the budget changes reintroducing mortgage interest relief for investors came too late to affect the 2001 results, McInerney at the year-end had 223 deposits, compared to 183 in 2000. "The spring selling season this year has got off to a good start," the group said.