Fears for future of building group

AUDITORS for Limerick-based international construction group, Chieftain Construction, have indicated there is uncertainty over the future of the group.

Deloitte & Touche made the statement as Chieftain Construction Holdings showed a €6.7m pretax loss to the end of September 2008 after writing down the value of sites and contracts by €7.9m.

The company has bank borrowings totalling €90m and & is reviewing borrowing facilities with its principal bankers to ensure the orderly completion of its current projects.

In the accounts just filed with the Companies’ Office by the holding company, the auditors add, however: “Based on regular discussions with the bankers, the directors are not aware of any matters to suggest that any required renewal or reschedulingof facilities will not be forthcoming on acceptable terms.”

The accounts show that the company — which has constructed the €200m Coonagh Retail Park on the outskirts of Limerick — recorded an operating loss of €5.7m after revenues dropped by 26% from €76m to €56m.

A breakdown of the company’s turnover confirms that Chieftain’s Irish business plummeted by 73% or €46m to €16m during the period, while its US sector increased almost four-fold to €33.6m.

The company’s South African business increased by 13% to €5.4m.

The directors state that while they recognise the continuing difficult trading conditions, the group remains focused on reducing costs, maximising sales and managing cash balances to position the group for market recovery.

The accounts show that the numbers employed by the group more than halved from 98 to 41 with aggregate payroll costs dropping by 63% from €7.2m to €2.6m.

The directors believe “that the projects in progress at September 2008 will generate future profits for the group and that the affordable value of the group’s product will provide a market advantage when the market recovers”.