Exceptional costs of €22 million resulted in a loss before tax of €13.4 million at property company Dunloe Ewart for the year to end-December 2001. The latest result includes a €15.4 million writedown in the carrying cost of development property in Northern Ireland, early debt repayment penalties of €5.3 million and employee termination costs of €1.3 million.
The 2001 outcome compared with a pre-tax profit of €9 million for 2000. At the end of December 2001, shareholders' funds were €6.6 million lower at €171.4 million but repayment of debt had reduced gearing (debt to shareholders' funds) to 61 per cent from 137 per cent and gearing on group properties was down to 40 per cent from 51 per cent. Dunloe shares closed unchanged at 28 cents.
Chairman Mr Noel Smyth said the group was focusing on key development properties and joint ventures and would continue to dispose of non-core joint ventures, investment and development properties and to reduce administration expenses.
"We believe that the strategy which we are implementing recognises the realities faced by your group and will ultimately help to ensure a substantial return to all shareholders," he said.
Commenting on the writedowns in the value of group property, he said this reflected concern about current depressed property market conditions in Northern Ireland. The writedowns included a €13.2 million provision against the carrying cost of the 16-acre waterfront Sirocco site in Belfast which was purchased in September 1999 for €38.2 million.
During 2001 Dunloe sold investment properties for €172.2 million and development properties for €41.4 million and rescinded its planned €34 million Barrow Street acquisition. At December 31st 2001, the Dunloe balance sheet included 10 development properties valued at €168.1 million - the lower of cost and net realisable value.
After the disposal of 20 investment properties, the group had 11 properties at year-end and expected to produce an annualised net rental income of €10.2 million. In addition, investment properties in joint-venture operations in Cherrywood and the Horizon Logistics Park were expected to produce annual rental income of €5.65 million.
