One of NAMA’s €200k a year developers reports annual loss of €0.5bn

There have been some problems this week with accessing accounts from the UK’s Companies House, so it will be next week when the latest report and accounts for both Gannon Homes (UK) Limited and Ballymore Properties Holdings Limited are made available on here. Meantime, we have Gordon Deegan’s reporting in the Irish Examiner which says Ballymore notched up a loss of GBP 372m (€459m) in the year to March 2012. Ballymore is controlled by NAMA Top 10 developer, Sean Mulryan and is understood to be one of the three NAMA developers on a salary of €200,000 – the other two are understood to be Dundrum Shopping Centre’s Joe O’Reilly and Cork developer Michael O’Flynn.

It was the GBP 294m writedown in the value of UK property which is largely responsible for what is a remarkable loss in 2012, given the relatively stable UK commercial and residential markets. The highest paid director in 2012 was paid GBP 175,000 which at today’s exchange rates would translate to about €215,000 but applying the average rate in April 2011-March 2012 would be €200,000. It is understood that NAMA has not breached the €200,000 cap on salaries in any instance, but you should remember that NAMA has profit sharing arrangements in place which could earn millions for developers if certain targets are exceeded.

Gordon Deegan’s report in the Examiner states that in 2012, revenues comprised GBP 120m of property sales, GBP 13m of rental income and GBP 6m of hotel rental income.

Sean Mulryan is understood to be one of the select “saved” developers at NAMA with an agreed business plan for five years, and Ballymore’s John Mulryan, son of Sean described the Agency as “professional”, “supportive” and positive. The loss is curious as it was understood that Ballymore was going great guns at its development at Embassy Gardens in south central London, adjacent to the Battersea Power Station, with planning approval last year and it was reported that it had pre-sold apartments at prices of in excess of GBP 950 psf. It will be interesting to see next week if the detailed accounts provide any further clues for the remarkable write-downs.

The company has GBP 1bn of loans from NAMA and other lenders – that’s down from about €1.5bn originally owed to NAMA alone – and there is apparently a GBP25m personal guarantee from Sean himself on the loans. It’s not exactly clear what the prospects are of NAMA getting its loans repaid in full, the accounts apparently show a shareholder’s deficit of GBP 800m.

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