Shopping centre firm AWG posts €9.8m loss
THE owners of the Rathdowney Shopping Outlet in Co Laois, which is home to retailers such as Dunnes Stores and Carphone Warehouse, have written off almost the entire value of the centre and posted a €9.8m loss for the 12 months to the end of March 2010
The company behind the scheme -- AWG Outlets -- said in accounts just filed for the business that attempts to sell the development have so far failed and that its loan from Anglo Irish Bank has been transferred to a fund management company, making it difficult to determine the long-term strategy for the centre that opened in 2001. The owners warn that the continued viability of the retail centre is also uncertain.
AWG is controlled by Guernsey-based Ironbridge Estates, which is controlled by developer Peter Kaufman-Kent and Edinburgh-based firm Morrison Glosha, whose ultimate parent company is Anglian Water.
Directors of AWG note in the latest set of accounts that prior to its banking facilities with Anglo expiring in November last year it approached the institution with a view to transforming the Rathdowney centre into a "destination site", while at the same time providing it with a "financially stable longer-term business".
"Given it is clear that the market for a pure retail outlet is currently restricted, the directors believed that this represented the greatest opportunity to improve the fortunes of the centre," they add -- pointing out that attracting and retaining quality tenants had been "very challenging".
The accounts show that AWG's revenue from its rent roll slumped to just €346,000 in the 2010 financial year from €643,000 a year earlier. It shouldered €9.1m of impairments -- up from €4.6m the previous year and had a shareholders' deficit of just over €20m at the 2010 fiscal year end.
The directors added that they agreed with Anglo in 2010 to put the retail centre up for sale -- a process that began early this year. However, in March Anglo transferred its loan on the centre to a fund management company.
"Recent discussions with the new lender have led the directors to conclude that it is difficult to be certain around the longer term strategy for the asset."
They note that the support of shareholders and the new lender are necessary in order to continue as a going concern.
"Recent discussions have indicated this is uncertain," they warn, while noting that while those discussions continue the directors believe it appropriate to adopt the "going-concern principle".
The performance to the end of March 2010 cemented a poor run from the previous year, when the company recorded a €6.1m loss. Just half of its retail units at Rathdowney were occupied at the time.
Some tenants had gone out of business and others defaulted on rent payments.