Developer shares €600k paypot despite losses
on 05/01/2013 00:00:00
During the two years, the company's combined losses totalled €24m as revenues plummeted by 86%, from €10.7m in 2010 to €1.5m in 2011.
The firm's accumulated losses at the end of Dec 2011 stood at €141m, with liabilities exceeding assets by €140m.
The firm's pre-tax losses in 2011 totalled €11.7m compared to €12.3m in 2010.
The loss in both years arose mainly from interest payments of €13.2m in 2011 and €10.1m in 2010.
An examination of the firm's accounts between 2006 and 2009 show Mr Gannon and his two colleagues gave themselves remuneration of €6.6m in the four years, including an exceptional pension payment of €1.5m in 2006.
Mr Gannon did not charge rent to the firm in 2011, but in the years 2006 to 2010 received aggregate rent payments of €831,894 from Gannon Homes.
An unidentified director advanced a loan of €2.3m to the firm during 2011.
At the end of Dec 2011, the firm owed €208.5m in bank loans and overdrafts. Loan facilities and overdrafts provided by AIB, Irish Nationwide Building Society, and the Anglo Irish Bank Corporation have been taken over by Nama.
Mr Gannon and his directors are of the opinion "the main bulk of advances will only be repayable as and when development projects and completed residential units can be sold to generate cash flow to reduce borrowings".
Mr Gannon owed €618,913 to the firm amongst trade debtors.
A note states: "In the ordinary course of trading, the company and Mr Gannon conduct business with each other.
"The account is settled on a regular basis. At no time during the year was Mr Gannon indebted to the company outside normal trading terms."
The report continues: "While the company continues to experience a lot of interest in its stock for sales, most potential purchasers were waiting for a sense of stability to return to the residential property market.
"Since year end, the directors have seen evidence that a positive market sentiment has slowly begun to return, albeit starting gently, it is more evident in higher population areas."
The report goes on: "Having witnessed continued low demand for house sales, the directors believe the outlook for the business in the short term is poor.
"The expectation is that a positive market sentiment will redevelop over a two to five-year period."
The report states: "The directors are working with Nama on agreed business plans and are confident that Nama will support these plans to enable the company trade through the current difficult market conditions."