Mid-Town Property losses rise to €15.6m on stock re-evaluation

Accumulated losses at a property development firm controlled by one of the largest providers of accommodation to asylum seekers in Ireland increased to €15.6m in 2010.

In accounts recently lodged by Mid-Town Property Development Ltd, the company reports losses of €15.8m at the end of Dec 2010.

The figures show the firm’s accumulated losses increased by €5.8m during the year.

The property firm is 100% owned by Bridgestock Ltd, which is one of the largest providers of accommodation to asylum seekers.

The company operates asylum seeker accommodation centres at Ballyhaunis, Co Mayo, Sligo, Galway and Athlone — the centres in Sligo and Galway city each having the capacity to house 250 asylum seekers.

The increased losses at Mid- Town Property Development resulted from the company revising downwards the value of its stock and work-in-progress due to the construction downturn.

The firm is controlled by Seamus and Kathleen Gillen of Cloonagh, Tullamore and they also control Bridgestock Ltd.

Bridgestock Ltd’s latest accounts show that the Gillens received the €1.3m dividend in 2010, and this followed them receiving a dividend payout of €500,000 in 2009.

In addition, the Gillens received €1.2m in rent from the company during 2010 in respect of properties owned by them.

The dividend payout coincides with the company going into the red in 2010 to record a loss of €1.17m, following a profit of €1.67m in the 18 months to the end of Dec 2009.

The loss sustained by the Co Mayo-based firm comes against the background of a continuing decline in numbers seeking asylum in Ireland.

The figures show that 1,250 people sought asylum in Ireland last year, this compares to 3,866 in 2008, a drop of 67% in four years. In 2002, 11,634 people sought asylum here.

In response to the downturn in the numbers seeking asylum, Bridgestock has diversified and provides catering and security services and operates retail outlets for clothing and homewares.

Documents filed with the Companies Office show that Kathleen Gillen stepped down as a director of the firm in Dec 2011.

The directors’ report for 2010 states: “The results for the period and the financial position at the period end were considered satisfactory by the directors who expect that there will be minimal growth in their provision of accommodation for asylum seekers.

“However, they expect continued growth in their other business activities.”

On the risks facing the company, the directors state: “Bridgestock Ltd operates in an industry that is affected by factors beyond the control of the company, e.g. the immigration policy of the Irish Government.

“The company faces strong competition in the market and if the company fails to compete successfully, market share may decline.”

The figures show the chief factor behind the company’s loss in 2010 related to the firm writing down its property in value by €1.13m due to the significant downturn in the economy and a depreciation charge of €860,039.

When these non-cash costs are taken into account, the company was able to report a cash profit of €859,396. This figure includes bank interest payments totalling €904,671.

At the end of December 2010, the company had bank loans totalling €18.4m.