UK arm of Gannon Homes made €8.3m profit in 2012 following debt write-offs

Loans and overdrafts totalling £24.9m assigned to third-party investors

Irish builder and developer Gerry Gannon, whose Irish debts totalling hundreds of millions of euro were taken over by Nama.
Irish builder and developer Gerry Gannon, whose Irish debts totalling hundreds of millions of euro were taken over by Nama.


The UK arm of the business operated by Irish builder Gerry Gannon – whose Irish loans are being managed by Nama – returned to profit in 2012 after securing debt write-offs and the transfer of bank loans.

Gannon Homes (UK) Ltd recorded a profit of £6.875 million (€8.3 million) after assigning the company’s bank loans and overdrafts totalling £24.9 million to third-party investors and writing off £1 million owed by the firm to Irish-based Gannon Homes Ltd.

At the start of 2012 the firm was sitting on accumulated losses of £10.8 million and this was reduced to £3.98 million by year end. Auditors for the firm, Copsey Murray, state in their report: “The company has significant debt associated with the acquisition and development of property assets which was assigned to third party investors during 2012.”


UK property downturn
The auditors add: "The value of these assets was adversely affected by the downturn in the UK property sector in 2008/09. More recently, the company has sold a significant amount of the developed stock at values significantly in excess of its carrying value.

READ MORE

“Nonetheless, it is unlikely that the accumulated losses can be wiped out . . . The company is likely to continue to rely on the support of its third party investors to continue as a going concern.”

Referring to the firm’s debts now taken on by third party investors, a note attached to the accounts states: “Bank loans and overdrafts were previously secured by a debenture over lands, development work in progress and other assets owned by the company – and were supported by a personal guarantee and indemnity from Mr G Gannon.”

Gordon Deegan

Gordon Deegan

Gordon Deegan is a contributor to The Irish Times