Frustrated at its treatment in the market where its shares have languished for the best part of three years, all-Ireland property group Dunloe Ewart is carrying out a major strategic review of its operations which may lead to a sale or merger, asset disposal or the current management taking the group private.

In his statement with Dunloe's 1999 results yesterday, chairman Mr Noel Smyth made no secret of his frustration and irritation at the low rating given to his company's share on the Dublin market. The shares have traded in a narrow range between 38 cents and 45 cents this year and yesterday rose 6 cents to 45 cents after results that were ahead of market expectations.

But even this price is only a modest premium on Dunloe's net asset value of 40.5 cents per share while the 1999 earnings per share of 5 cents puts Dunloe on a historical price/earnings multiple of less than 9.

Mr Smyth and his wife Anne-Marie are Dunloe's biggest shareholders with a 23.9 per cent stake, with 9.9 per cent held by Monarch Properties and 6.7 per cent by Monarch chief executive Mr Phil Monahan. The biggest institutional shareholders are Bank of Ireland Asset Management with 4.4 per cent and Fidelity with 3.7 per cent.

Mr Smyth said that board was concerned about its ability to raise funds for the future developments of Dunloe's assets, mainly because of the weak share price and institutional disinterest in small capitalisation property companies. Dunloe is capitalised at €174 million at yesterday's price in the market.

Even though the share price has improved somewhat Mr Smyth said that there is still no real interest among either institutional or private investors in property companies "no matter how significant their development assets may appear".

"If the large development of the company which is to be turned into profit over the next five years results in a market valuation of the company which is a significant discount to net asset value, it is difficult to justify undertaking developments where the ultimate value for shareholders is diminished rather than enhanced," said Mr Smyth.

A special board meeting to decide on what action Dunloe takes is to be held in the next few weeks.

Speaking to The Irish Times later, Mr Smyth said: "All options are open. We could try and do a fund-raising but we'd be lucky to get institutions to pay 22p or 23p a share. We could sit it out and hope it's a glitch or we can be proactive - try and do a fund-raising with some sort of participative bond issue, look to be taken over, a trade sale or go private." He added that Dunloe hopes to have a formal proposal to put to shareholders before Easter.

Dunloe Ewart's results for 1999 showed a near trebling in pre-tax profits to €25.7 million although the 1999 results are distorted by the inclusion of a €18.4 million profit on the sale of 50 per cent of Dunloe's Cherrywood office development in south Dublin to British Land. This accounted for 52 per cent of operating profits last year and the results also include profits on the sale of development land at Clondalkin to Superquinn and the sale of a city centre office development to Fyffes.