Cork firm landbank written down 96.5%

A CORK building firm has written down the value of its landbank by 96.5 per cent or €144 million, contributing to losses of €130 million over the past two years.

In accounts just filed for both 2011 and 2010, Murnane and O’Shea Ltd recorded a loss of €8 million last year on top of a loss of €121.9 million in 2010.

The loss sustained in 2010 arose mainly from a €100 million impairment on the firm’s landbank that year. In total, the company has incurred a 96.5 per cent write-down in its landbank which had been valued at €149 million at the beginning of 2009. At the end of December last, it had a book value of just €5.1 million.

A note attached to the 2010 accounts describes the €100 million write-down as “a prudent measure”.

The firm’s expansion was funded by loans from Anglo Irish Bank and AIB. The amount it owes in bank loans increased from €124.3 million to €132.2 million last year and its loans have been transferred to the National Asset Management Agency (Nama).

The directors’ report states: “The company has drawn down funds from Nama during 2011 and the letter of support for the group has been issued. The directors are working with Nama to achieve all the stated targets and goals.”

It says the results for 2011 were expected given the difficult trading conditions experienced by the economy. “Just like many of our counterparts in business in Ireland today, Murnane O’Shea has had to restructure the business if we are to move ahead and grow out of this recession,” a spokesman for the group said.

The figures show revenues last year fell from €27 million to €6 million. In 2007, the firm recorded revenues of €111.6 million. Numbers employed by the firm have also fallen dramatically with 22 employed last year compared to 351 in 2008. Staff numbers were cut by two-thirds last year alone.