Car auction firm makes loss after debt write-off
MERLIN CAR Auctions recorded a loss of €2.8 million last year after writing off debt due from fellow subsidiaries of Merlin Car Auction Group Ltd.
The latest accounts for WCA Car Auctions Ltd, trading as Merlin Car Auctions, show that for the year ended December 31st, 2011, the business recorded a turnover of €2.6 million, down 35 per cent on the previous year.
A director of the firm said yesterday that provision of €2,373,000 was made in the 2011 accounts due to a debt of €2,827,321 owed by other firms within the Merlin Car Auction Group, which was unlikely to be fully recovered. Two of these group firms went into liquidation in 2010.
Merlin Car Auctions recorded a loss before tax of €2,817,000 for the year.
Leaving aside the provision made for intra-group debt, the business recorded a pretax loss of €444,000 last year, compared to an operating profit of €804,000 in 2010.
The accounts state that the controlling shareholder, Patrick M O’Reilly, has indicated he will provide sufficient financial support to the company.
They note he provided €1.3 million to the firm in 2011 and a further €200,000 on June 28th this year.
Merlin Car Auctions has undergone a restructuring and review of its business this year, which is expected to reduce overheads by €400,000 in a full year, according to the latest accounts.
The rent on its premises at Naas, Co Kildare, and Kylemore Road, Dublin, was also reduced in 2011 to €38,632 from €230,000 the previous year. These premises are rented from entities controlled by the O’Reilly family.
According to a company director, the firm’s turnover has suffered from a drop in the supply of used cars, a consequence of the fall in new car sales in recent years.
He said that while supply would always be an issue, the business had improved in 2012.