IGB says it can still trade as a going concern

The Irish Greyhound Board has said it can continue to trade as a going concern despite independent consultants delivering a damning assessment of the first year of its survival plan.

It also said its recent statement to the Public Accounts Committee (PAC) that said it hit its first year targets was still accurate, despite the company falling well short of its financial projections.

On Monday, the independent consultants, Indecon, said after 12 months the IGB was already one year behind its schedule. The report said the company’s plan to grow track turnover had not been realised and it should instead look to sell off tracks to pay down its €22m bank debt.

Yesterday the junior minister who commissioned the report, Tom Hayes, said he believed the five-year plan was “overly ambitious” and he had told the board as much.

This contrasted with comments made by IGB chairman Phil Meaney at the PAC in November when he said the plan’s first year targets were met.

In a statement, the IGB said Mr Meaney’s assertion was still correct.

“The IGB can stand over their statement that targets for the first year of the strategic plan were met.

“While forecasted revenues did not meet expectation, control was maintained over discretionary expenditure as envisaged in the strategic plan to deliver the operating surplus that was in excess of that anticipated within the strategic plan,” it said.

The Indecon report said: “The first year of the strategic plan ended with a total group surplus of €40,000 compared with the plan figure of €238,000.”

At the same PAC meeting in November, the Comptroller and Auditor General, Seamus McCarthy, said the company could trade as a going concern but only on the basis of its plans to increase turnover.

“[The going concern status assumes] significantly, that there would be future increases in turnover from greyhound racing, including Tote-related activities,” Mr McCarthy said.

The Indecon report carried out a full breakdown of the company’s performance in the first year of its five year plan.

It said Tote revenues were €2.7m (11.5%) below the target the IGB had set itself.

Advertising was 78% below the level set out in the plan and sponsorship was 12.5% under.

Some of losses were offset by cutting back on administration costs and advertising.

But Indecon said the company was already one year behind where it wanted to be and its strategy to rely on new contracts would not be achievable.

It said it instead had to look at selling assets including the track at Harold’s Cross.

In its statement, the IGB said despite the figures contained in the Indecon report, it could continue to trade normally particularly in light of the consultants’ recommendations to sell assets to lower its debt.

“The board consider that the going concern basis remains appropriate based on five-year projections, which are subject to normal reviews and updates. This principle should be further enhanced with the adoption of the Indecon recommendations,” it said.

Mr Hayes said notwithstanding the company’s failure to meet its first year’s targets, he had confidence in the ability of the current board to deliver on the recommendations of the Indecon report.

Mr Hayes said he has given the IGB three months to respond to the report but he has already begun the process of taking some of its powers from it.

He told Tipp FM yesterday morning that he had instructed his officials to begin drawing up legislation to take the function of the control committee, which hears doping cases, away from the company.

He said the industry needed to be “truly and properly” regulated.

He said he wants a no nonsense approach that will see anybody who is caught for giving prohibited substances to dogs having their names published.

Indecon had also recommended cutting back on racing on poorly performing tracks, but he told the station that the two facilities in his constituency, Thurles and Clonmel, would not close.

“I think they are quite secure into the future,” he said.


Lifestyle

With the housing crisis, renovating a run-down property is worth considering if you have the inclination, time, funds and a good team of contractors around you, writes Carol O’CallaghanBehind the scenes in The Great House Revival

More From The Irish Examiner