O'Flaherty Holdings pays out dividend of €25m

O'FLAHERTY HOLDINGS, which last month handed over its Volkswagen import franchise to the German auto company, paid a €25 million dividend to shareholders last year as its pretax profit from continuing operations increased by more than 18 per cent to €76.42 million.

The company, one of the largest and most profitable privately held businesses in the State, saw its turnover rise by almost 10 per cent to €1.26 billion. The business employs more than 1,400 staff.

The chief beneficiaries of the dividend payment were brothers Michael and Nigel O'Flaherty, whose late father Stephen O'Flaherty secured the exclusive Irish franchise for the Volkswagen marque in the immediate aftermath of the second World War.

The dividend payment last year was virtually unchanged from the payment to shareholders in 2006.

O'Flaherty Holdings controls Motor Distributors Ltd, owner of the Mercedes franchise in addition to the import rights for Volkswagen and its sister marques Audi and Skoda.

It also owns the Dublin-based car showrooms Ballsbridge Motors, Grange Motors and Park Motors. O'Flaherty Holdings' other interests include an aerial lift business in Europe and the US digital imaging firm C3.

Accounts newly filed in the Companies Office show that a €19.64 million revaluation gain on properties held by the company brought its total pretax profit for the year to €96.06 million. The business had €351.41 million in its profit-and-loss at year-end, and shareholders' funds of €413.94 million.

In keeping with company policy, a spokesman declined to comment on the financial performance of the business at large or on the impact on the business of the Volkswagen transaction.

The sale of the Irish distribution rights for the three Volkswagen marques and spare parts was cleared by the European Commission in September, although the consideration was not disclosed. The sum involved is widely believed to have been significant as the brands represent almost 17 per cent of the Irish car market.

A ruling by the commission indicates that Volkswagen executed the deal by acquiring shares in Volkswagen Group Ireland Ltd, a wholly owned O'Flaherty Holdings subsidiary set up for the purposes of the transaction.

Separate filings for the subsidiary in question show that it achieved a turnover of €211.24 million in the six months to December 2007 and an operating profit of €6.63 million.

Such figures, which reflect the value of O'Flaherty Holdings' Volksagen business for half a year, suggest that the company's turnover will be greatly diminished by its loss of the Volkswagen franchise.

However, there have been no public filings to date on the terms of the Volkswagen transaction.

Volkswagen assumed direct control of the Irish import rights for its marques amid very difficult conditions in the Irish motor market.

According to the Society of the Irish Motor Industry, the number of new cars sold last month was down 54.59 per cent on the same period last year, and sales in January-October were 18.22 per cent down on the same period in 2007.