Impairment charge wipes €22m off value of Cash & Carry firm
NEARLY €22m was wiped off the value of the Cork-based Cash & Carry Kitchens business last year as it faced the full onslaught of the slowdown.
Owned by 63-year-old Bugatti-driving founder Eamonn O'Rourke, new accounts for immediate parent company ORM confirmed that it shouldered the massive €22m impairment charge during 2010. That slashed shareholder funds at the group from €48.5m in 2009 to €26.8m in 2010.
The impairment also pushed ORM to a pre-tax loss of €21.6m, compared to a €1.6m profit the previous year.
AFA Investments, a holding company for both ORM and Cash & Carry Kitchens, has also cut €12m from the value of its investments in the business. This was done in recognition of the "current difficulties in the economy," new accounts for AFA noted.
Those accounts for AFA also noted that the company hadbeen in discussions with AIB with a view to "renewing available bank loan facilities".
"The directors are confident agreement will be reached," the accounts added. By the end of last year, AFA had incurred cumulative losses of €28.4m and, at the time, liabilities at the firm exceeded assets by the same amount.
But despite the losses at AFA, ORM and subsidiary Cash & Carry Kitchens, Mr O'Rourke has continued to be paid extremely well.
New accounts for Cash & Carry Kitchens showed that the company narrowed its pre-tax losses to €560,000 last year from €1.6m in 2009. But even as the firm plunged into the red, its directors rewarded themselves with a combined €1m pay packet last year. That compared to €1.13m in 2009.
At the end of last year, the three directors of Cash & Carry Kitchens were Mr O'Rourke, his wife Teresa, and Niall Cuthbert. Mr Cuthbert is also a director of ORM.