Revenues down 70% at construction firm

REVENUES at one of the best known construction companies in the mid-west plummeted 70% last year as it felt the downturn in the construction sector.

Accounts filed by Michael Lynch Ltd show the Ennis, Co Clare-based company’s revenues in the 12 months to the end of March 2010 were €4.6m. This is compared to 15.5m in the 18 months from October 2007 to March 2009.

The company recorded a pre-tax profit of €3,948 in the 12 months to the end of 2010. The directors state that this result arose “due to the economic downturn, which may continue to affect the future operations of the company”.

The directors state “the future of the company is dependent on the continued support of its bankers and based on the discussions to date the directors are satisfied the outcome of these discussions will be favourable”.

They continue: “The directors recognise in the current economic environment risks exist regarding the achievability of forecast sales and margins and the timing and occurrence of forecasted cash flows.”

But they “are satisfied having reviewed the trading results of the business since the year March 31 2010, that it is appropriate for the accounts to be prepared on the going concern basis.”

The company has plans for a €40m retail park before Ennis Town Council. The figures show the firm’s employees were reduced by two thirds during the period from 32 to 10. Operating profits declined last year from €950,883 to €333,771. However, interest payments of €327,717 reduced the pre-tax profits to €3,948.

The company received a tax credit of €233,257 resulting in an after-tax profit of €237,257. The modest pre-tax profit followed the company recording a pre-tax loss of €57,867 in 2009 and this arose chiefly from bank interest loan payments of €1m.

At the end of March last year, the company had accumulated profits of €4.7m with net assets of €5.1m. Staff costs reduced from €3m in the 18-month period to the end of March 2009 compared to €645,557 in the 12 months to the end of March 2010.

The figures show the remuneration to the company’s five directors fell from €370,004 to €228,791. The filings record that the company had bank loans of €10 million at the end of March last year.

The returns show Managing director Seamus Lynch has provided two letters of personal guarantee in the amount of €6.3m supported by a letter of undertaking to affect legal charge over land owned by Seamus Lynch and life policies held by him.