Naas-based waste management business Advanced Environmental Solutions (Ireland) Ltd had annual pretax losses €6.25 million in the trading year before it raised €10 million in a new round of funding earlier this year, it has emerged.
While two informed sources said all divisions in the company were now trading profitably, accounts just filed in the Companies Office indicate that the company had a deficit of €11.5 million at the end of its most recent financial year on June 30th, 2004.
The pretax loss in the year grew from €4.6 million, despite an increase in sales to €39.76 million from €31.53 million.
As a result of the firm's difficult financial position, the recent fundraising round led by Davy Stockbrokers was priced a significant discount to a round led by Merrion Capital in 2002.
Several prominent business people are said to be nursing losses from their 2002 investment as a result of the discount.
One of the principal investors in the new round was former SmartForce chief executive, Bill McCabe, whose Oyster Technology Investments fund put €5-$7 million into AES.
Mr McCabe is now the biggest minority shareholder in AES, with Oyster holding a stake of more than 25 per cent. Oyster and AES have a separate €10 million joint venture operation, Bedminster International, which sells a waste recycling system to local authorities and private firms.
The conclusion of the AES fund-raising round was followed by a reorganisation of the company and the resignation of nine directors from the AES board on March 22nd.
According to a Companies Office filing, the departing directors were: Brendan Vaughan, James Cox, Paul O'Brien, Andrew Bailey, Mark Sheahan, Noel O'Meara, John Kerrigan, Philip Danaher and John Doheny.
A note in the company's annual accounts in the year to mid 2004 said the proceeds of the rights issue will be used to pay existing bank debt and €3 million of the existing convertible loan notes.
The company had debts of €24.29 million on June 30th, 2004, up from €19 million a year earlier.
The accounts said the group had achieved positive earnings before interest, tax, depreciation and amortisation, particularly in the second half of the financial year.
However, AES faced "ongoing regulatory and market challenges to ensure that environmental and operating standards are maintained".
