Losses at car dealership increase 9% to €3.9m

PRE-TAX losses at one of the largest car dealerships in the country, the J Donohoe group, increased by 9% in 2009 to €3.9 million after a major slump in revenues.

In accounts just filed with the Companies’ Office, they show pre-tax losses of €3.9 million to the end of December 2009 at the Co Wexford-based DK Donpac Ltd following the group recording a pre-tax-loss of €3.5m in 2008.

The group operates Donohoe’s Motor Park at Quarrypark, Enniscorthy and is a main dealer for Fiat, Mitsubishi, Mercedes, BMW and MINI.

The figures show the group’s turnover plummeted by 58% from €56.6m to €23.8m in 2009.

The figures show that the group incurred an exceptional cost of €369,699 relating to a DK Donpac Ltd subsidiary, Donohoe Agri Ltd deciding to close two of its operational locations.

The figures show that the group’s workforce declined by 38% going from 142 to 88 resulting in its staff costs declining from €5.6m to €3.3m.

The figures show that the group had accumulated losses of €8.5m in 2009 with a deficit of €3.1m in its shareholder funds at the end of the year.

A note attached to the accounts states that the directors “have developed a comprehensive turnaround plan to address group profitability and the necessary funding requirements”.

The note adds: “At this stage, the directors are satisfied that the plan has been properly implemented and the necessary measures have been taken. As a result, the directors regard the current trading performance of the group as being satisfactory.”

The directors’ report states: “The financial results of the group for 2009 were in line with the industry trend. However, in response to the economic conditions, the group, during 2009, undertook a major review of the business. The major cost cutting initiative which started at the end of 2008, continued into 2009.”

They add: “Major action was taken to realign the cost base to market conditions. A significant cost-cutting programme was implemented with a reduction in head count and appropriate cost control measures are now in place.”

It continues: “The directors believe that the group’s position in the motor industry is well placed to take advantage of the changing environment in the industry.”

The figures show the group’s operating loss in 2009 increased by 3.5% from €3.3m to €3.45m.

The group’s interest payments decreased from €407,987 to €84,690.

The figures show that the directors’ remuneration for management services dropped from €506,371 to €415,600.