€730,000 'farewell' for Walls director despite €38m loss
CONSTRUCTION giant PJ Walls paid out €730,000 to compensate a director for loss of office in 2010 -- the same year the NAMA-backed company swung to a €38m loss.
Details of the payment are revealed in accounts filed by PJ Walls Holdings, one of Ireland's largest construction, development and civil engineering groups.
Walls has weathered the property downturn better than most of its peers, generating an operating profit of more than €3.7m in 2010 as turnover rebounded by more than 15pc to €169m.
In the latest filings, the group stresses that it intends to "trade out of this difficult environment" and to develop property assets in the UK and Ireland.
The resilient trading in 2010 wasn't enough to insulate Walls from the downturn that year, as it took a €44.7m writedown of its assets "to reflect current market conditions" and "property related factors".
The other striking feature of the year's trading was the €730,000 "loss of office" payment to a former director, for which no further detail was given.
The golden handshake came as average staff costs fell about 4pc for executive directors and staff, though the average was still a relatively high €59,640.
The group had about €92m of bank loans at the end of the year, including development loans that have migrated to NAMA and others that have stayed with commercial banks.
In notes to the accounts, Walls said it was in the "process of agreeing" a business plan with NAMA that will "facilitate the continuance and growth of its trading activities for the foreseeable future".
"The group's overall operational strategy is being finalised with NAMA and the directors are confident that a letter of support will the issued shortly," added the notes, which were signed off last August.
NAMA declined to comment, citing confidentiality. Sources stressed that NAMA had no say in the operational expenses of borrowers if they were servicing their loans.
Walls also said it was "confident" of winning support from its "non-NAMA banks" whose support would be "important to the achievement of the group's strategic objectives going forward".
Future performance largely hinges on the property market and economic recovery. Directors have "assessed the uncertainty regarding the current economic conditions and the value of assets in the property sector
"The group's objective is to trade out of this difficult environment and develop its property assets over a period which fulfils the group's operational strategy," the notes added.
At the end of the year, Walls had "property held for development" worth €34.5m, and €66.6m of "work in progress", plus about €80,000 of stock. All amounts are carried at what it would cost to replace them.
Debts at the end of 2010 included €63m falling due in 2011, €7m of bank loans and overdrafts, almost €14m to trade creditors, €1.3m for tax and social welfare and "accruals and deferred income" of €40.7m. Another €85m of bank loans were due after the 2010 period.