Timber tycoons’ firm back in profit

The group operated by Limerick timber tycoons the McMahon family returned to profit last year — but only after recording a €7.1m profit from the sale of an investment property.

Documents just filed with the Companies Registration Office by Derevoya Holdings Ltd and subsidiaries show the group recorded a €1.8m profit in the 12 months to Dec 31.

The group recorded the pre-tax profit of €1.8m after recording a pre-tax loss of €6.2m in 2010 and a pre-tax loss of €6.6m in 2009.

The filings show the group’s operating loss last year fell from €4.2m to €3.2m. This followed revenues at the group last year declining by 21% from €67.7m to €53.3m.

Derevoya’s main asset is the McMahon Group, Ireland’s largest timber supplier, but it also holds other investments and property.

The directors’ report read: “All the group’s activities are associated with the construction sector which continues to experience a slow down in activity.

“This reduction in activity was matched by a continued reduction in the cost base during the year and resulted in a reduced operating loss for the year compared to the previous year.”

The group’s accumulated profits last year stood at €39.5m. Cash last year rose from €10.2m to €14m.

The numbers employed by the group last year fell from 235 to 200, with staff costs down from €8.2m to €7.8m. A breakdown of the staff numbers shows 92 are involved in manufacturing, 66 general operatives, and 42 in administration.

The profit last year includes a non-cash depreciation charge of €1.6m.

The figures show that five directors’ remuneration last year increased by 60% from €590,158 to €942,058

The group cut the amount owed to banks from €72.5m to €55.5m in 2011, with interest payments totalling €2.3m.

A note states: “Forecasts indicate that adequate financing will be available to meet the group’s requirements, including the bank loan capital repayments, which are expected to be in the order of €5m for 2012.

“The group had cash in hand of €14m at year end. Accordingly, the directors consider it appropriate to prepare the financial statements on a going concern basis.”

The filings show the group received €2.9m in “other operating income” that included €2.8m in rent receivable.

The filings show the cost of sales last year fell from €56.3m to €42.5m, while operating expenses fell €18.9m to €17m.