Taggart Holdings, which has been an expanding housebuilding business, was placed in administration last week by the Ulster Bank and the Bank of Ireland.
In the last four years, until 2007, this business grew very rapidly. Up to the date of the accounts for 2006, registered in mid-2007, higher turnover was followed by increasing operating and pre-tax profits.
Part of the expansion in 2006 was a consequence of the purchase of the business of English housebuilders CMYuill Ltd.
Major expansion also took place in Ireland, north and south, and as part of a longer term plan in mid-2006 the company purchased the business of Fraser Estates (later renamed as Taggart Estates).
These transactions brought a large area of development land into the company which was reflected in the value of land for development, classified as stocks, entered into the balance sheet.
The total rose by nearly £70m in December 2006 to £113m. Intangible assets also increased in that year to £17m. Much of the working capital for the changed business prospects during 2006 was in the form of bank borrowing.
At December 2006, bank borrowing rose to £110m; an increase of £81m. Net interest payments to the banks in 2006 were over £7.5m.
The expectation would have been that the evolving business in 2007-8 would have supported the big increase in borrowing and, if land and house prices had not fallen, would have generated a revenue flow to reduce borrowed funds.
Although the 2007 accounts would normally have been lodged in the latter half of 2008, at the date of administration they had not been officially registered.