Pre-tax losses at Claret Capital increase 8.5% to €3.7m

PRE-tax losses at Irish private equity group Claret Capital last year increased by 8.5% to €3.7 million.

Claret was established by Co Clare native and Irish financier Dómhnal Slattery and the documents confirm that the company last year restructured, reducing its workforce by 41% in response to revenues plummeting by 88% from €4.42m to €508,585 to the end of December last.

The family of Senator Feargal Quinn owns 25% of the business and, in the past, the company managed funds on behalf of the former Anglo Irish Bank chief, Seán FitzPatrick.

Claret is only to manage its existing portfolio and is not making any further investments with a note in the accounts stating that the company was last year granted voluntary revocation of authorisation to operate as an investment firm by the Irish Financial Regulator. However, the company received a dividend of $16m for its investors from its largest investment of $50m into Hospital Corporation of America earlier this year and a similar sized dividend was received for its investors in 2010 from investment in Aeolus.

Last year, four members of the Claret board, Tom McAleese, Max Doyle, Tom Browne and Bryan Moloney resigned, with Eamon Quinn appointed in April 2009.

This year, in a separate venture, Mr Slattery secured $1.4bn in funding to successfully launch aircraft leasing firm Avolon.

The pre-tax losses sustained by Claret Capital to the end of December last year followed the company incurring losses of €3.47m in 2008.

The accounts confirm that the company owes its directors and key management €4.1m and the directors “acknowledge that the company’s ability to continue trading up to and subsequent to year end was dependent on it obtaining funding from shareholders”.

The note continues: “The directors are of the opinion that the additional shareholders’ funding and the ‘right-sizing’ measures taken by directors during the year will support the company’s financial requirements in the 12 month period from date of approval of these financial statements.”

The company had a shareholders’ deficit of €3m at the end of December last. According to the directors’ report, “in light of the economic downturn and ‘credit crunch’, the board implemented a ‘right-sizing’ of the business in 2009”.

This involved the company reducing its workforce from 24 to 14, reducing the company’s staff costs by 55% from €2.8m to €1.2m. Directors’ remuneration last year reduced by 75% from €1m to €250,000.

The report states: “The board anticipates that the additional shareholders’ funding and the ‘right-sizing’ measures taken during 2009 will continue to result in an improvement in the company’s trading performance, which is expected to be sufficient to support the company’s financial requirements in the 12-month period from date of approval of these financial statements”.

The filings confirm the company’s shareholders issued share-capital of €2.5m during 2009.

Claret Capital yesterday declined to comment.