Accounts just filed with the Companies Office, show that the Cork-based Brendan Investment Pan European Property plc recorded a pre-tax profit of €60,562 in the 11 months to Dec 31, 2011.
This followed the firm recording a €3.32m pre-tax loss in the 12 months to the end of Jan 31, 2011, after a pre-tax loss of €262,883 in 2010.
The company returned to profit last year after its gross rental income rose 41%, from €895,802 to €1.53m.
A decline in the firm’s rental expenses, from €331,584 to €91,073, resulted in the firm’s net rental income increasing almost three-fold from €564,218 to €1.44m.
Profits were also boosted by a €436,011 share of profit arising from a joint venture agreement of building and selling on a hotel for €16m adjacent to Terminal 2 at Frankfurt airport. According to the directors’ report, the project “was very successful” and was completed on time and on budget — BIPEP had invested €842,633 in the project.
The investment firm recorded an operating profit of €949,596, following an operating loss of €2.4m the previous year.
The operating profit also takes account of a €250,000 writedown in investment properties.
Administrative expenses at the firm last year increased by 8% from €623,467 to €676,435.
The firm’s operating profits were reduced by net interest payments of €889,034.
The directors state: “The company has undertaken due diligence on other markets, including those outside the eurozone, as it seeks to find further opportunities to grow shareholders funds over the terms of the investment. The company will continue to expand and diversify its holdings, in the interests of its shareholders.”
The directors also say the company retains commercial properties in Frankfurt and Düsseldorf that have gross annual rents of €1.696m per annum, no vacancy, and a gross asset value of €26.2m. The firm’s net assets at the end of last year stood at €8.8m.
When starting up, the investment vehicle allowed people to make a minimum investment of €5,000. About 10,000 people downloaded the prospectus and brochure for the venture.
However, the property crash resulted in the company raising only €12.6m from investors through the public round of funding.
The figures show that the company’s cash further reduced last year from €1m to €135,691. The firm had a bank loan of €18.5m at the end of the year.
The accounts show that the four directors, Mr Hobbs, Vincent Regan, Hugh O’Neill, and Dermot Flanagan, received an aggregate €26,933 in directors’ remuneration in 2011.
The accounts show that a sister company with the same directors, Brendan Investments Property Management Ltd, was paid €334,900 by BIPEP, inclusive of directors’ salaries of €107,400, during 2011.