THE O’FLAHERTY car distribution group suffered a loss of €10 million last year, compared to a pretax profit of €33.5 million in 2007, accounts just filed show.

The group, owned by members of the O’Flaherty family, is involved in the importation and distribution of Mercedes and other car marques, as well as other activities here and abroad.

A dividend of €24.99 million was paid, the same figure as in 2007, the accounts for the holding company, O’Flaherty Holdings Ltd, show. Shareholders’ funds fell to €54 million from €89.9 million at the end of 2007.

The accounts for the subsidiary, Motor Distributors Ltd, show that its turnover fell to €198 million, from €766 million in 2007. Operating costs also fell sharply, to €215 million from €730 million.

The accounts note that during the year the company sold Volkswagen Group Ireland Ltd to an unrelated third party. The accounts show a profit of €26.7 million from the transaction.

A second exceptional item on the company’s accounts for 2008 shows an impairment of financial assets valued at €18 million.

The O’Flaherty business was founded by the late Stephen O’Flaherty, who secured a licence to import Volkswagen’s Beetle into Ireland as far back as 1950.

He acquired the old tramway depot in Shelbourne Road, Dublin 4, for the cars’ assembly, where Ballsbridge Motors, a retail operation in the O’Flaherty group, now operates.

The directors in their report say the market for both cars and commercial vehicles in Ireland has been “seriously diminished by a combination of domestic and international factors. In the immediate future the company’s trading is likely to be negatively impacted by the general market conditions.

“The company believes that its supplier will make available to it products which appeal to the market at prices which will permit it to maintain satisfactory levels of market share, leaving the company in a competitive position when the market improves.”

Motor Distributors had shareholders’ funds of €231 million at year’s end, compared with €200 million the previous year.

The numbers employed during the year fell to 115, from 183 in 2007. Staff costs fell to €5.8 million, from €8.2 million.

Quoted investments suffered an impairment provision of €5.2 million while unquoted investments were impaired by €12.7 million. Total investments at year’s end were €45.7 million. The group has subsidiaries in the UK, the US, and Denmark, and is involved in a variety of activities.