Eatonfield at a loss
COMMERCIAL property company Eatonfield Group has made a half year loss of £10.3m, with the company blaming the recession for putting pressure on its business model “at both ends”.
The pre-tax loss for the six months to the end of December is a marked decline on the £2.2m pre-tax profit the company made a year earlier. Revenues stood at £5m, a 14% fall on the £5.8m it made a year ago.
On the same day it announced the figures, Tarporley-based company said outline planning permission had been granted for a multi-million pound coastal development on the 87 acre site of the former Corus rail-making plant in Workington.
It is understood that the development could include 650 houses and flats, a retirement village, a hotel, pub, shops and office and industrial units.
Chairman Leslie Young said: “we are in the midst of one of the most serious economic recessions of recent times. We have taken a number of tough decisions over the last six months in order to ensure that the group will be positioned for long-term growth.
“One of the most visible effects of the current recession has been the reluctance of banks to lend either to commercial users such as Eatonfield, or to those seeking mortgages for residential dwellings.
“The net effect of this recent trend has been to put additional pressure on Eatonfield’s business model at both ends of the spectrum by restricting further development work and making sales that much more difficult.”
He added that the group was now seeking joint venture partners and that risk management was the company’s “watchword” for the future.
Eatonfield took a £750,000 loan from chief executive Rob Lloyd towards the end of October. At the end of December, the group’s cash and bank balances amounted to £1.7m (Dec 2007: £2.2m).
But the group now says more funds are needed to keep the group going, in the form of both bank overdrafts and another loan from Mr Lloyd.
Mr Young said: “Our focus on cash generation and cost cutting has been key in recent months and will continue going forward. Indeed the board is currently taking further action to reduce its operational cost base.”
However, the company also said there is doubt over its ability to continue as a going concern should any overdraft facility not be renewed or other loan facility becomes payable prior to the sale of the related asset.
If this happened it would have to dispose of assets to meet its debts but market conditions mean the process would take longer and that the assets would not achieve their book value.
Mr Lloyd founded AIM-listed Eatonfield in 1998 after running Manchester-based developer UK Land.
