Property sale boosts Shannon Development

Shannon Development last year avoided recording losses of over €14 million only after selling off part of its property portfolio to realise a profit of €12.5 million.

Accounts recently filed with the Companies Office also reveal that the development agency has a €33 million shortfall in its pension fund and the deficit will have to be met by the tax-payer.

The accounts show that the company recorded a loss of €1.6 million last year. However, the returns show that the loss would have been eight times that amount but for the €12.5 million profit the company made in selling off property during 2004.

The profit of €12.5 million includes a profit of €4.2 million on the sale of Shannon town services and landbank to Clare County Council, while the company made profits of €8.3 million on the sale of other assets.

In documents lodged with Government during the year, the company anticipates making a loss of €6 million in 2005. On the company's pensions deficit, the accounts for 2004 show that the deficit increased by €6.9 million during 2004 to €33.8 million from €26.9 million the previous year.

However, the accounts state that the Exchequer will meet any shortfall in the pensions fund as a result of a High Court settlement between the pension fund's trustees and the company and the Department of Finance last year.

The accounts show the company's pension fund stood at €46.5 million at the end of last year, with €34.5 million of that made up in equities. However, the anticipated cost of the fund - which provides employees with a guaranteed amount for their retirement - is €80 million, resulting in the €33 million shortfall.

The company employs 187 people and the largest department is industrial development, where 75 employees are based.However, those jobs are under threat following a new mandate for the company announced by the Minister for Enterprise, Trade and Employment, Micheál Martin, last July, which proposes to strip the agency of its industrial promotion function.

The agency's employees are refusing to co-operate with the mandate and talks are continuing between Siptu and the department.

The accounts show the company's staff costs amounted to €14.5 million in 2004, a 10 per cent rise on the 2003 figure of €13.2 million. In a bid to reduce staff numbers, the agency has a voluntary retirement scheme in place, which it has spent €2.24 million on in the past two years.