Hobbs's property firm back in profit after two years of losses
THE property investment company established by celebrity consumer advocate Eddie Hobbs (pictured) returned to profit last year after two years of losses, new figures show.
Accounts just filed with the Companies Office show that the Cork-based Brendan Investment Pan European Property (BIPEP) recorded a pre-tax profit of €60,562 in the 11 months to the end of December 31.
This followed the firm recording a €3.32m pre-tax loss in the previous 12 months following a pre-tax loss of €262,883 in 2010.
The company returned to profit last year after its gross rental income increased 41pc to €1.53m.
A sharp decline in the firm's rental expenses from €331,584 to €91,073 resulted in the firm's net rental income increasing almost three-fold from €564,218 to €1.44m.
The firm's profits were also boosted by €436,011 from a joint venture agreement to build and sell a 168-bedroom, three-star hotel for €16m near Frankfurt airport.
According to the directors' report, the project "was very successful" and was completed on time and on budget -- BIPEP had invested €842,633 in the project.
The figures show that the investment firm recorded an operating profit of €949,596 following an operating loss of €2.4m the previous year.
The operating profit also takes account of a €250,000 writedown in investment properties.
Administrative expenses at the firm last year increased 8pc to €676,435.
The firm's operating profits were reduced by net interest payments of €889,034.
"The company has undertaken due diligence on other markets including those outside the eurozone as it seeks to find further opportunities to grow shareholders funds over the terms of the investment," the directors say.
"The company will continue to expand and diversify its holdings, in the interests of its shareholders."
The directors also state that the company retains its commercial portfolio of property in Frankfurt and Dusselforf that has gross annual rents of €1.696m per annum, with a no vacancy and a gross asset value of €26.2m. The firm's net assets at the end of last year stood at €8.8m.
Eddie Hobbs is best known for fronting TV consumer programmes including 'The Consumer Show'. When starting up, the investment vehicle allowed people to make a minimum investment of €5,000 and 10,000 people downloaded the company's prospectus and brochure for the venture.
However, the crash in the property sector resulted in the company raising only €12.6m from investors through the public round of funding.
The figures show that the company's cash further reduced last year from €1m to €135,691. The firm had a bank loan of €18.5m at the end of the year.
The accounts show that the four directors -- Mr Hobbs, Vincent Regan, Hugh O'Neill and Dermot Flanagan -- received an aggregate €26,933 in directors' remuneration in 2011.
The accounts show that a sister company with the same directors, Brendan Investments Property Management (BIPM) Ltd was paid €334,900 by BIPEP, inclusive of directors' salaries of €107,400 during 2011.
The refurbishment costs in 2010 stemmed from the tenant for the building, the DAX-listed Arcandor going into liquidation in October 2009.
A claim for €15m was filed with Arcandor's liquidator in 2009 and the directors state that "the company retains its position with regard to the liquidation of Arcandor which is still ongoing and will monitor any recovery potential in this regard".