Pre-tax losses as food group narrow sharply to €2.2m

Pre-tax losses narrowed sharply at Cork-based property and food group, Reox Holdings last year to €2.2 million.

In accounts just filed with the Companies Office, they show revenues at the group more than halved from €38.9m to €18m in the 12 months to the end of June last year.

This follows the firm closing its 4HOME business with the numbers employed by the group declining from 223 to 50 last year.

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 and the figures show that the group recorded sales of €43 million 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 that “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 that the €43 million 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 that €17m of the €43m received from Dairygold was in cash used to reduce bank borrowings.

Mr McGettigan said impairment charges since 2008 are now at over €81 million. He 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. This is done against the background of a very difficult economic environment.”

The figures show that 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 is taken into account.

The figures show that interest charges of €1.1m contributed to the pre-tax loss of €2.2m.

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

Mr McGettigan stated: “Although much progress has been made, the outlook remains challenging for the group.”