Shareholder funds fall at Ballymena property firm Corbo
Corbo is a specialist property company owned and registered in Ballymena.
A considerable part of the property portfolio and assets are located in Great Britain.
The nature of the property business and the way in which it registers accounts has the effect of showing operating profits as a large proportion of turnover.
The turnover figures reflect mainly the rental income from the property owned by the company. Operating profit is shown before the deduction of net interest payments on borrowed funds and before allowance is made for losses made on the disposal of properties.
Pre-tax profits are shown after interest is deducted which in 2012-13 amounted to £21.8m. In the latest period, to January 2013, interest payments cost £21.8m and a further write-down on the value of assets of £138.1m increased the pre-tax loss to £135m. In addition, an unrealised loss on the revaluation of certain assets of £14.6m was deducted in the balance sheet value of shareholders' funds.
As a result, shareholders' funds, at the balance sheet date, fell from £296m in February 2009 in annual reductions to £190m in January 2012 and a further reduction to £41m in January 2013.
The registered accounts of Corbo showed the gains of improved property valuations until 2010 and then this was followed by the major fall in values in more recent years. The fixed assets of the company on the balance sheet were valued at £772m at the end of February 2010. In January 2013 the value was £440m: a reduction of over £330m.
Of particular interest in a large property company is the way in which bank borrowing has related to the balance sheet value of assets. Bank borrowing in February 2006, at £282m, represented 40% of the balance sheet values. In February 2009, this ratio had risen to over 64% and reciprocally, shareholders' funds had declined as a proportion of assets.
In January, bank borrowing of £401m, presented as due within one year, rose to over 90% of the book value of fixed assets.
Corbo owns a controlling part of the share capital of four other companies: Murray House, Lemon Quay group, ASM (NI) Developments and Arena Fitness.