Property firm Pepper posts pre-tax profit of €4.3m

Specialist loan portfolio and property manager Pepper Asset Servicing made a pre-tax profit of €4.3 million in its first full year of operation in Ireland, according to accounts just lodged with the companies office.

Pepper also paid a dividend of €7 million last year to its Australian parent company of the same name.

Last year's profit contrasts with a loss of just under €108 million posted for the three months to the end of December 2012, when Pepper entered the Irish market by acquiring a portfolio of mortgages from GE Capital Woodchester Home Loans Ltd.

The large loss was the result of a €109 million impairment charge on the carrying value of the GE mortgage portfolio. The company had actually made a trading profit of €1.2 million in the three-month period. The accounts show that Pepper increased its revenue to €19.2 million in 2013 from €4.6 million in the previous year. This related to portfolio management income.

It booked administrative expenses of €17.4 million in the year to leave it with an operating profit of €1.7 million. Net interest received of almost €2.6 million boosted its pre-tax surplus.

The company paid corporation tax of €209,465 to close the year with an after-tax profit of just under €4.1 million.

Its staff numbers rose last year to 121 from 96 in 2012 with its wages and salaries increasing to €5.8 million.

Directors' remuneration for the year amounted to €901,579. Five directors are listed in the company's accounts, including chief executive Paul Doddrell.

Pepper won two commercial real estate asset management contracts during 2013, with CarVal Investors and Danske Bank. This brought its assets under management to €2.9 billion at the end of December 2013, up from €700 million a year earlier.

Pepper made a €2 million investment in new IT systems and office facilities in Shannon and Dublin last year as part of its expansion in Ireland. It opened a servicing centre in Shannon and a new head office in Dublin’s city centre.

Established in September 2012, Pepper’s Irish subsidiary is a servicer of third-party loan portfolios, and provides asset management and advisory services. This work spans residential mortgages, commercial mortgages, auto finance, unsecured loans and equipment finance.

It currently has commercial real estate and loan portfolios worth about €10 billion under management on the back of a number of clients wins.