Builders PJ Walls loses €38.1m following writedown

ONE of the country’s largest building groups, PJ Walls, recorded a pre-tax loss of €38.1 million in 2010 following a €44.4m writedown in its assets.

Accounts filed with the Companies Registration Office by PJ Walls Holdings Ltd and subsidiaries show that the group plunged into the red in 2010 in spite of increasing revenues.

Revenues increased by 15% from €146.4m to €169m. The loss in 2010 followed a pre-tax profit of €861,642 in 2009.

In operation since 1949, PJ Walls operates in Ireland and Britain across the entertainment, health, education and retail sectors and some projects include the redevelopment of the O2 Arena, Pier C at Dublin Airport, Trinity College’s Biosciences building and the Cliff House Hotel at Ardmore, Co Waterford.

The group’s development loans have been transferred to the National Asset Management Agency (Nama) and the directors say they “view the future with confidence”.

The group recorded an operating profit of €3.7m in 2010 before the writedown and this followed an operating loss of €943,337 in 2009. It also benefited from net interest receivable of €2.8m in 2010.

After incurring the writedown, accumulated profits fell to €18.1m with shareholder funds standing at €21.5m.

The group had €25.9m in cash at the end of 2010.

Total bank borrowings at the end of December 2010 stood at €92.1m and the directors’ report confirms that “the group has submitted its business plan and related proposals to Nama who have completed their independent business review and with the group are actively involved in establishing and agreeing the group’s operational strategy going forward”.

It continues: “The directors are dedicated and committed to working with Nama and to the agreement of the group’s business plan as soon as possible.”

The directors said they “are confident that ‘a letter of support’ will be agreed with NAMA that will enable the group to continue its trading activities into the future on a viable and successful basis”.

A note also states that the group is confident of the support from its main non-Nama banks and the directors “are committed to ensuring the fulfilment of all financial requirements in respect of its non-Nama banks.”

The numbers employed by the group increased from 369 to 389 with staff costs increasing from €23m to €23.2m.

Emoluments, including pensions contributions for the five directors, chairman, Liam V Walls, Shaun Green, William White, Eugene O’Shea and Eithna Begley, reduced from €1.93m to €1.2m.

According to a note attached to the accounts, “the writedown in value of assets represents writedowns of a number of the group’s assets in order to reflect current market conditions.

“A full review has been performed by the group. The review was completed on an asset by asset basis and the respective write downs were provided in light of current market conditions and other construction and property related factors.”