Food and property group narrows losses

Losses narrowed sharply at Cork-based property and food group Reox Holdings last year to €2.2m.

Accounts filed with the Companies Office show revenues at the group fell from €38.9m to €18m in the 12 months to the end of June last year.

This follows the firm closing its 4HOME business and cutting staff numbers from 223 to 50 last year. As a result, staff costs fell from €6.8m to €2.6m

The €2.2m pre-tax loss last year compares to a pre-tax loss of €31m in 2010 that included €28m in impairments.

The company is part-owned by the Dairygold Co-Operative Society Ltd. The figures show the group recorded sales of €43m from various properties to Dairygold.

The directors’ report states: “As a result of the transaction with Dairygold, the group has significantly reduced the level of its debt and has a more manageable interest burden going forward.”

However, acting chairman Eoin McGettigan said “there remains challenges for the group, with significant borrowings to both Ulster Bank and Dairygold remaining”.

“We also still have to deal with certain legacy issues from discontinued businesses, in particularly the remaining 4Home leases. These can only be addressed by disposal of assets.”

Mr McGettigan said the €43m sale to Dairygold and other asset disposals “saw a reduction in bank borrowings by over €21m in the year. Remaining borrowings now stand at just over €11m.”

He said €17m of the €43m from Dairygold was in cash and used to reduce bank borrowings.

Impairment charges since 2008 now stand at over €81m. Mr McGettigan said: “Much progress has been made to stabilise the group’s financial position and the board’s primary objective continues to be to protect the value of the remaining assets for shareholders.”

The group recorded an operating profit of €2.9m last year before fixed asset impairment of €2.2m; goodwill amortisation of €665,000; and investment property impairment of €655,000 are taken into account.

Interest charges of €1.1m contributed to the pre-tax loss of €2.2m.

The firm operates a consumer food business in the Netherlands and a property business, Alchemy Properties, in Ireland, the UK, and the Netherlands.

Mr McGettigan said: “Our current position remains to adopt a holding position regarding Alchemy Properties until such time as the market improves.”

Accumulated losses at the group last year stood at €10.3m. The group had shareholder funds totalling €5.8m that included €2.9m in cash.