MCINERNEY Holdings sold 1,831 housing units last year compared to 1,614 in 2004, with demand in the UK picking up in the second half of 2005, said chief executive Barry O'Connor last week.

In a company trading statement, he said he remains "comfortable with market earnings' expectations". He said the construction company is operating in key areas of "solid demand" and that "good demand" is being experienced by the Irish and UK housing markets. Of the total McInerney house completions last year, 1,138 were in Ireland, 658 in the UK and 35 in Spain.

The company said its Irish contracting business achieved a "significant increase" in operations in 2005, with 182 housing units completed compared to 116 in 2004. Total contracting turnover from housing and commercial contracts rose from 24m to over 50m.

McInerney releases full-year results on 23 February.

Florence O'Donoghue, an analyst with Davy Stockbrokers, is forecasting earnings growth of over 15% for McInerney in 2006. "We do not think the stock should trade at a discount of 6% to the sector based on current 2006 estimates, " he said in a note last week.

"Applying a sector multiple to the stock suggests a revised price target of around 11.50."

The stock was trading at 11.15 Friday morning.

McInerney should report earnings per share of 118 cents according to a consensus of analysts' forecasts. That compares to earnings per share of 101.5 cents in 2004.

MADISON DEARBORN IN SEARCH OF $5BN

A NEW departure by Madison Dearborn, the Chicago private equity firm behind the 3.5bn Smurfit take-private, could signal interesting times ahead.

The firm is trying to raise $5bn for its fifth fund, 20% of which it wants to generate from new investors. For the first time ever, it is working to woo limited partners from around the world. Teams from Madison Dearborn have been trotting from Europe to the Middle East, Japan and Australia to pitch to big investors, including pension funds.

Madison Dearborn's move reflects the growing international appetite for private equity funds. A survey by the multinational Russell Investment Group found that institutional funds and foundations will put record amounts of money into alternative investments in 2007.

The survey found that European institutions expect to boost the portion of their portfolios in private equity to 6.1%, up from 4.5% last year. Japanese institutions expected to nearly double the proportion of their portfolios in private equity to 4.5%, from 2.4%.

This yearning by institutional fund managers for more aggression could be profitable for pension holders. Private equity houses aim to deliver substantially over the stock market, with giant private equity firm the Carlyle Group telling potential investors in its last US fund that it was targeting 25% annual returns.

Madison Dearborn's move to follow its rivals such as Carlyle, Blackstone and Kohlberg Kravis Roberts into overseas fundraising will also bolster the private equity firm's network of contacts, which beleaguered corporates may see as good or bad news.

GOODBODY TALKS UP DCC'S PRICE TARGET

GOODBODY Stockbrokers has upgraded its price target on distribution and support services group DCC for the second time in a month.

The broker has revised its target from 18.50 to 20 on the back of an improved outlook for its IT, healthcare and energy divisions.

Goodbody bumped up its DCC valuation as recently as December, following the conclusion of the High Court case against DCC by fruit distributor Fyffes, but revised it again in light of recent events.

Analyst Liam Igoe said DCC's IT division, through which the company handles distribution for products such as Microsoft's XBox 360 entertainment console, was likely to benefit from improved customer sentiment in the UK, its largest market.

A number of DCC's key customers, computer and electronics retailers such as Game, DSG, owners of the Dixons chain, and Computacenter, reported better than expected Christmas trading figures. A strong finish to the second half, the most important from DCC's point of view, bodes well. Igoe also notes Computacenter's statement that it expects full-year results to be "materially ahead of expectations".

"We have increased our sector valuation multiples for DCC's IT division to reflect the improving outlook and share price performance of the sector recently, " said Igoe.

Goodbody has also revised its valuations of DCC's healthcare and energy divisions, which it said were conservatively valued in its previous model.

US BANKS' FIGURES REFLECT WELL ON AIB

A BATCH of results last week from US banks underlined the "solid" performance of AIB's US associate M&T, according to analyst Emer Lang of Davy Stockbrokers, which at the end of November raised its price target for AIB from 2 to 2.10.

Common features of last week's US bank results included a slowdown in deposit growth and consumer lending, Lang noted, though they showed that commercial lending is growing, led by real estate.

Some of the results fell short of market expectations.

"The results illustrate the solid performance by M&T, which recently reported fullyear EPS growth of 12%, driven by lending growth of 5.9%, tight expense control and solid asset quality, " Lang wrote.