Construction group further in the red

Kildare construction and hotel group Faxhill Homes plunged further into the red last year after incurring writedowns totalling €34.7m.

Accounts filed by Faxhill Homes Ltd to the Companies Office show the group recorded a loss of €44.4m in the 12 months to the end of October last after recording a loss of €2.8m in 2010.

A note attached to the accounts confirms that “the group continues to incur significant losses”.

Revenues at Faxhill Homes — which hit the headlines over a decade ago after building a contentious extension to the home of independent North Tipperary TD Michael Lowry — last year decreased from €11.69m to €10.62m.

In spite of the losses and decline in revenues, aggregate remuneration for the two directors, John Tierney and Denis McCoy, remained on the same level as 2010, at €200,000.

Staff costs decreased from €4.6m to €4.3m.

According to the directors’ report, “the directors are endeavouring to optimise the value of work in progress and are of the view that it be can developed and sold early in the recovery cycle once the lending market returns to normality”.

The report states that “the directors have undertaken a critical review of the carrying value of group work in progress and freehold property as the current environment is not conducive to planned development activity”.

As a result, the group has written down the value of its land and buildings by €27.8m, from €33.5m to €5.7m.

The directors have also written down freehold property by €6.9m “to reflect estimated current carrying value”.

Faxhill Homes had bank loans totalling €75m at the end of October last and in 2011, the group paid €2.5m in bank interest charges. The group had a shareholders’ deficit of €48.7m.

The loss last year takes account of non-cash depreciation costs totalling €1.1m. Faxhill Homes received a tax credit of €233,349, and cash in hand at the end of last year was €726,358.

A breakdown of the group’s revenues show that 87% group’s income last year came from its hotel business with only €113,022 coming from construction.

The directors state that the validity of the going concern basis is primarily dependent on the continuing support of its bankers; a return of construction and development activity in the Irish economy and a return to profitability.