Sherry FitzGerald back in profit in 2013 after year of “stabilisation”

Irish estate agent Sherry FitzGerald returned to the black in 2013, with a pretax profit of €100,000, according to its latest set of accounts.

This marked a near €1 million turnaround on the previous year when Sherry FitzGerald (Ireland) Holdings Ltd recorded a €910,000 pretax loss.

Turnover in the 12 months to the end of December 2013 rose by 28 per cent to €20.8 million, while staff costs increased by 30 per cent to €15.3 million.

This was driven by increased sales on the residential side and aided by acquisitions during the year in Galway and Limerick.

Operating costs, meanwhile, rose by 12 per cent to just under €5 million. The company benefited from a reduction in its goodwill amortisation – to €278,000 from €856,000 in 2012 – and its provision for onerous leases, which fell by €97,000.

Sherry FitzGerald’s corporate tax bill more than doubled to €52,000, while no dividend was paid to shareholders.

The directors’s report characterised the year as one of “stabilisation” for the group as “property markets and challenges facing the country showed signs of recovery”. This was the year when Ireland exited its EU-IMF bailout programme, after which the property market and economy began to show signs of recovery.

Well positioned

The directors said they “continue to manage costs and maximise revenues and believe the business is well positioned to benefit from a continued recovery in the Irish economy”.

The accounts show the average number of employees in 2013 rose to 224 from 191 in the previous year. The group’s wage bill increased by 31 per cent to €13.9 million. Redundancy payments of €66,000 were booked during the year, down from €96,000 in 2012. Directors’ emoluments were flat on the previous year at €1.4 million.

The accounts also show Sherry FitzGerald (Ireland) Holdings Ltd was owed €4.2 million at the end of 2013 by DTZ Sherry Fitzgerald Ltd, a related company that specialises in commercial property.

Directors said the main risks to the group were “negative changes in market sentiment, a lack of attractive financing to fund residential and commercial properties, a lack of available funding for the business, and adverse movements in interest and inflation rates and their subsequent impact on the property market”.

Two halves

On current trading, Steven McKenna, group finance director, said, “We’ve had a very strong first quarter. It might be a year of two halves. It will be interesting to see in the Dublin market if the new Central Bank mortgage rules have an effect on buyer capacity. Overall, it takes the heat out of the property market, which is a good thing for the industry.”

Mr McKenna declined to comment on results for 2014, which he said were currently being audited.

Founded in 1982, Sherry FitzGerald is Ireland’s largest estate agent.