Glencullen records €8.2m loss

GLENCULLEN HOLDINGS, the main company owned by motor dealer and star of TV3's The ApprenticeBill Cullen, sustained pre- tax losses of €8.2 million in 2008.

While this was significantly less than the loss of €18.6 million posted the previous year, the 2007 figure included a one-off exceptional cost of €13.5 million arising from the write-off of monies owed by the company’s distribution business.

In 2007, Glencullen lost the distribution franchise for Renault in Ireland, which it had held since 1986, after the French car-maker decided to take direct control of its Irish franchise. Glencullen still operates five Renault dealerships across the country.

The accounts, which have just been filed at the Companies Registration Office, show the impact the loss of the Renault franchise has had on revenues at Glencullen.

Sales fell to €53.7 million in 2008, down from just over €166 million in 2007, €118.7 million of which constituted “discontinued operations” according to the accounts.

In 2006, the company posted sales of €241 million.

The average number of persons employed by Glencullen in 2008 was 108, compared to 266 in 2007.

In a note to the accounts, which were prepared on a “going concern” basis, the company said that the outlook “presents significant challenges in terms of sales volume and pricing”

The company states that it experienced adverse trading conditions in 2008 “as a consequence of the Government’s implementation of a poorly conceived revision of the VRT system, which had a huge impact on the residual values of second-hand cars”.

A spokesman for Mr Cullen yesterday reiterated the company’s contention that the €8.2 million loss was attributed to the introduction of the VRT scheme.

He added that while the company “took a hit” in 2008, 2009 saw a major recovery in the business, while the company will return to profitability for 2010.

The financial statements for 2008 – which were approved on December 22nd, 2009 – also state that the company is in negotiations to renew its finance facilities.

As of December 31st, 2008, Glencullen had net debt of €40.7 million, which included a €19 million bank loan due for repayment within one year, an overdraft of €2 million and an €18.3 million loan from Mr Cullen.

The company says that negotiations on the renewal of finance are “nearing finalisation” and that the directors are confident that these negotiations will be successful.

The accounts also show that Glencullen Holdings has provided securities in respect of facilities to other group companies up to the value of €23 million, €17 million of which was borrowed as of December 31st, 2008.

Glencullen has also guaranteed the loan facilities of subsidiary companies up to a maximum of €10.9 million, of which €4.6 million has been borrowed.