THE COMPANY behind the Clancy Quay development at Islandbridge in Dublin 8 has said it is difficult to value the site and there is uncertainty as to whether it can secure finance to complete the project.
KPMG, auditors to Clancy Quay Properties, gave “an adverse opinion” on the company’s 2008 accounts, which have just been filed, saying they do not give a true and fair view of the firm’s affairs or the loss for the financial year.
The accountants said the firm had made no provision for impairment of the site’s value and the property had not been valued since its purchase. They advised an impairment provision be taken given very significant reductions in similar properties.
“The effect of its omission may be to overstate the carrying value of the company’s work in progress and retained earnings at 31st December 2008 and to understate the loss of the year,” KPMG said.
The company reported a loss of €1.4 million for 2008 but no turnover, compared with a profit of €7,000 on a turnover of €27 million the previous year.
Properties in the first of three phases in the Clancy Quay development were completed and sold.
Clancy Quay Properties said the site had a carrying value of €190 million at the end of 2008 and the directors said they considered it difficult to establish a valuation in light of current market conditions. “There is also considerable uncertainty as to whether ongoing and future finance will be available to the company to allow it to continue in its current form,” they say.
The firm is financed by Bank of Scotland (Ireland) and by National Irish Bank.
Led by developer David Kennedy, Clancy Quay Properties planned to build more than 700 new homes, restaurants, shops and a hotel on the 14.5-acre site beside the Liffey at Islandbridge.
KPMG said that the company’s ability to recover €27.8 million due from group undertakings and investments of €35.6 million in group undertaking depended on the success of development projects undertaken by the group.
They said the company should take a provision against these amounts.
In 2007, BoSI took a 20 per cent stake in a joint venture behind Clancy Quay and two other sites previously owned by Unilever and Lyons Tea on Davitt Road in Dublin 8.
The Clancy Quay site was to be developed first.
The bank was reported earlier this year to have written off its stake in the joint venture. Mr Kennedy was a 70 per cent shareholder in the joint venture.
The remaining 10 per cent was held by UK property services company, Formation Group.
