Dividend at NAMA debtor up four-fold despite €5m rise in losses
Published 07/11/2011 | 05:00
NAMA debtor Harcourt Developments almost quadrupled its dividend payments last year -- even though losses at the company rose by more than €5m.
The €1.7m dividend is revealed in accounts just filed by the Pat O'Doherty-led company, which has had hundreds of millions of loans transferred to NAMA.
The dividends were only paid to one class of shareholder, The Harcourt Industrial and Provident Society, which was registered as a "friendly society" in 2010. In notes to the accounts, Harcourt's directors said the "full amount" of the dividend was loaned back to the company last year.
No detail on the rationale for the payment is given.
With a €600m portfolio of hotels, shopping centres and other assets across Ireland, Jersey, the UK, the Bahamas and Las Vegas, Harcourt is one of Ireland's biggest surviving developers.
In its 2010 accounts, the company notes that the "majority" of its NAMA loans were "secured on income-producing assets which are sufficient to service the interest obligations".
The company has convinced NAMA of its financial viability by producing a "comprehensive business plan" and is in "active negotiations with a number of financial institutions", its directors said.
In accounts signed off three months ago, the company also said it expected NAMA to agree to "restructure" a €470m loan that was "payable on demand" into a longer term loan.
Property and investment write-downs have been a major drag on Harcourt's recent results, with the firm booking an €8.6m "fixed-asset impairment" in 2010 and taking another €2.1m hit on investments.
The company's directors attributed the latest write-downs to "a review of stock and work in progress".
"The directors are confident that, in overall terms, the carrying value remains significantly below market value despite the recent downturn," the statement continued -- language that hints at future value recovery.
Last year's results featured a €15m revaluation upwards of Harcourt's investment properties, though this wasn't added to 2010's pre-tax earnings since it was an "unrealised" gain.
Harcourt's directors identified the firm's interest costs as "largely" to blame for 2010's operating losses of €29.8m, up from €23.8m a year earlier.
The firm's interest bill for the year came in at €32.8m, up on 2009's €30.2m. No comments were made on whether the new arrangements with NAMA will carry a lower interest charge.