Directors at Michael Cotter’s Park Developments have blamed industry wide challenges of a lack of zoned land, planning delays and lack of investment in public infrastructure for revenues plummeting by €119.3m last year.
New consolidated accounts filed by Park Developments (Dublin) Ltd show that pre-tax profits declined by 50% from €23.45m to €11.6m in the 12 months to the end of June last.
This followed revenues declining by 54% or €119.38m from €222.14m to €102.75m.
The family owned business operating since 1962 has constructed more than 13,500 homes in that time and its schemes include East Village at Clay Farm in south Dublin and Woodward Square at Leopardstown in Dublin 18.
In their report, the directors state that the decline in revenues was due to a number of industry wide challenges.
The directors state that there has been a lack of zoned land available in the marketplace to enable a strong pipeline for continuation of construction projects, particularly housing projects.
The directors state that there has been a number of challenges and delays in determining planning decisions – in some cases where it has taken more than two years to adjudicate.
The directors state that there has also been a lack of investment in public infrastructure, which in turn causing significant delays which imposes challenges on the viability of projects.
The directors also state that while the company continues to deliver all tenures of new homes namely the private purchaser, social housing and also rental homes, there has been a considerable reduction in the delivery of apartments.
They also state that the demand for new apartments from private rental sector has declined significantly and this is due to changes in legislation and also changes in interest rates and investment yields.
The directors state that the company is a member of the Gansu Group and the group holds a facility with Allied Irish Bank plc and Bank of Ireland.
The note states that “all loans were fully performing throughout the year. The directors believe that the group can continue to manage its business and pay its liabilities as they fall due, including the servicing of interest on all of the group’s external bank facilities”.
On the group’s profits declining, the directors state that over the past two years, the group’s net margin has been impacted as a result of cost inflation and interest rate increases experienced in the construction sector.
The group recorded a post tax profit of €9.83m after incurring a corporation tax charge of €1.78m.
A breakdown of revenues shows that €83.29m was generated through residential and €19.46m from commercial.
Numbers employed reduced from 74 to 65 as staff costs declined from €9.23m to €8.14m.
Directors emoluments reduced from €2.2m to €1.94m.
Reporting by Gordon Deegan
