Revenues almost halve for timber tycoons

REVENUES almost halved last year at the main holding company of Limerick timber tycoons, the McMahon family, as pre-tax losses at the firm increased by 44% to €6.6 million.

Documents just filed with the Companies Office by Derevoya Holdings Ltd and subsidiaries show revenues at the group declined by 46% from €144 million to €77m to the end of December last.

Derevoya’s main asset is the McMahon Group, Ireland’s largest timber supplier, but the company also holds other investments and property.

The returns show that job cuts totalling 136 – or 34% of the group’s workforce – last year lowered the group’s staff bill by €6m contributing to the group reducing its operating loss by 45% from €7.8m to €4.2m.

The returns show that the group incurred an exceptional cost of €416,201 funding a redundancy programme and this followed costs of €1.4m on redundancies in 2008.

The figures show that the company’s pre-tax loss increased by €2m last year from €4.5m to €6.6m – in 2008, the company benefited from a €9.5m profit on the sale of assets which lowered its pre-tax losses.

The group has bank loans totalling €83.4m and the directors state that “these bank loans were renegotiated during the year. Following renegotiation, the substantial portion of these demand facilities fell due to repayment by March 31st 2010.

They state: “The group continues to operate under these facilities which have not been formally renewed since the renewed date. However, based on discussions with the group’s bankers, the directors are confident of the bank’s willingness to renew these facilities on the same terms as those which apply.”

The directors state that the group’s financing will be available to meet the group’s bank capital repayments, which are expected to be around €5m for 2010, pointing out that the group had cash at hand of €14.6m at the end of 2009.

The figures show that a write-down of €1.95m relating to the impairment of a property development work-in-progress contributed to the group’s losses last year.