GORDON DEEGAN

Losses continued to mount at the group that operates the five-star K Club golf resort in 2011 as pre-tax losses totalled €6.59 million.

According to new accounts just filed with the Companies Office by Bishopscourt Investments Ltd and subsidiaries, losses narrowed by 7 per cent from €7 million to €6.59 million in the 12 months to the end of December 2011.

The narrowing of losses followed revenues at the group, which staged the 2006 Ryder Cup at the Co Kildare resort, increasing by 10 per cent from €10 million to €10.9 million.

The directors state that subsequent to December 2011, “the group has incurred further losses on ordinary activities after interest”.

Last year, Dr Michael Smurfit purchased developer Gerry Gannon's 49 per cent stake in the K Club for a reported €40 million to give him full control of the business.

A note attached to the accounts states that in April 2012, the company successfully concluded discussions with Nama in relation to the debt facilities included in the company’s balance sheet.

The business had bank loans totalling €54.8 million at the end of December 2011.

However, the directors’ report, dated September 12th, 2013, states that the group no longer has external bank debt arising from a loan from “certain of the shareholders [sic]”. The group recorded a €4.1 million operating loss in 2011 and interest payments of €2.5 million added to the losses.

The group had accumulated losses of €33.3 million at the end of December 2011.

It had a shareholders’ deficit of €1.33 million after a share premium of €32.3 million is taken into account. Its cash reduced from €2.7 million to €1.6 million.

The numbers employed at the club increased from 161 to 163 in 2011 with staff costs reducing from €4.9 million to €4.6 million.

The 2011 loss takes account of €2.9 million in depreciation. Directors’ fees were €124,220.

In the accounts, auditors KPMG has repeated its adverse opinion made in the 2010 accounts over the failure by the club to write down the value of its assets.

In its 2011 audit report, it says the group’s fixed assets are valued at €87.5 million and no provision has been made for impairment. The €87.5 million valuation includes a €55.4 million value on land and buildings and €10.1 million on golf course construction.

The auditors say the effect of the omission to impair the assets “is likely to materially overstate the carrying value of the group’s fixed assets, understate its loss for the year and retained earnings at December 31st, 2011”.