A UK subsidiary of Irish developer Seán Mulryan’s Ballymore Group set aside £17.9 million (€20.9m) as a provision against sums owed to it by other group companies that may not be recoverable amid what the directors described as a “very challenging” outlook for Britain’s housing market.
Ballymore Ltd and Subsidiaries, a holding company in the group focused on the development and sale of residential properties in London, reported losses of more than £5 million in the year to end of March 2023, according to accounts filed this week in the UK.
Losses narrowed from £34.3 million in Ballymore’s previous financial year amid a more than 60 per cent increase in turnover from slightly more than £8.8 million in 2022 to £14.3 million in the 12 months to March last.
Both sets of results were negatively impacted by one-off exceptional items.
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In 2022, the company set aside £36.9 million as a provision against additional costs associated with the decision to sign up to the so-called “developers’ pledge”, an initiative of the UK government. Ballymore was one 48 developers to sign up to the agreement that guarantees apartment owners or occupiers in blocks it has built or refurbished over the last 30 years will not have to pay to ensure the structures meet new, post-Grenfell safety rules.
Mr Mulryan’s group formally signed up to the scheme in March 2023. Ballymore had been singled out for criticism by UK secretary of state for levelling up Michael Gove as one of 11 firms that had not put pen to paper by a March 13th deadline.
Last year the Ballymore subsidiary set aside a further £17.9 million as a provision against amounts owed it to by other group companies “where there is some uncertainty over recoverability”, the directors said in a report attached to the accounts. The uncertainty “mainly arises as those companies in turn have receivables due from joint ventures and the performance...has not been in line with expectations”.
The UK entity was owed some £220.9 million by companies in the wider Ballymore Group, according to the accounts.
The directors described the outlook for the UK as “very challenging”. They said: “Globally, there have been significant inflation pressures and increases in interest rates in the UK, the euro zone area, and the US. Such changes lead to falling demand and tightened mortgage availability, on which most of our customers are reliant, reducing the affordability of our homes.”
However, the group’s financial position is “robust with low levels of leverage”, they said, highlighting opportunities to expand its London land bank “at favourable prices”.
Subsequent to its financial year-end date, the UK entity also refinanced a £30 million loan from Investec, paying back £3 million in the process and pushing out the repayment date to August, 2026.
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