Fitzwilton take €28m hit from sale

FITZWILTON, the holding company owned by Tony O’Reilly and his brother-in-law Peter Goulandris, tripled its losses last year after taking a €28 million hit on the sale of its stake in Safeway’s Irish stores.

The company notched up a loss before tax of €46 million in 2002, up from just over €15m the previous year, according to accounts recently filed with the companies registration office. The bulk of the loss come from the sale of its 50% stake in the Irish stores of food retailer Safeway in 2002, where it booked the €28m loss on the disposal.

The sale of the Safeway stores also hit turnover, which fell from €222m to €144m last year.

The sale also helped to lower the Fitzwilton’s cost base with the wages and salary bill falling from €12.8m in 2001 to €9.29m. The number of employees dropped to 254 from more than 420.

The company managed to reduce its debt despite the mounting losses, bringing it down to €120m from €128m, while increasing its cash balance in the year from €8m to €13m. Apart from Safeway, Fitzwilton owns Rennicks, the road signs maker, and a stake in British financial services firm Portfolio Design Group.

“On the trading front, the signage division achieved a substantial improvement in its trading performance compared to the previous year,” the company said, helped by new product launches.

It added: “The signage division continues to develop its relationship with its principal supplier Nippon Carbide Industries of Japan and discussions are taking place with the objective of Rennicks obtaining full operational control of Nippon Cabrine Industries (USA) through a service arrangement.”

Last year Fitzwilton closed the Rennicks’ plastics factory in Meath saying it could not compete with firms from Eastern Europe and Asia on price and was making losses.

Portfolio Design Group, which provides financial and fund management services, had a good year Fitzwilton said, and now has four funds under management from DKB worth €400m and is looking for a “significant” increase in business this year.

Dr O’Reilly and Mr Goulandris’ investment vehicle Stoneworth paid €170m for Fitzwilton in 1998. This worked out at 63 cents for every Fitzwilton share and €1.27 in cash for every preference share.

The company is majority owned by the pair, though Dr O’Reilly’s long-time business associate Lew Glucksman also has a stake in the company.

Fitzwilton did not pay a dividend to its owner given the scale of the losses incurred.