Financial Situation
As a private company registered in Ireland, Quinn Group (ROI) Limited files annual statements with the Companies Registration Office. The last accounts were filed in October 2009. In the latest filing, the company reported a net profit of €68.9 million for the year to December 2008, based on gross sales of €2,264.4 million. Although Quinn Group has reported an operating profit in its two main divisions, insurance and non-insurance (e.g. Cement, Property) for each of the last 3 years, the company was impacted by significant provisions in 2006 and 2007.
| Dec 2006, € millions | Dec 2007, € millions | Dec 2008, € millions | |
|---|---|---|---|
| Gross Sales | 1,639.8 | 2,115.5 | 2,264.4 |
| Insurance Turnover | 683.8 | 982,1 | 1,128.1 |
| Insurance Operating Profit | 160.8 | 192.1 | 85.8 |
| Non-Insurance Turnover | 768.3 | 898.4 | 1,105.7 |
| Non-Insurance Operating Profit, before Provisions | 95.5 | 55.7 | 279.9 |
| Profit-Before Provisions | 376.1 | 302.0 | 194.8 |
| Loan Provisions | n/a | -753.1 | -125.9 |
| Net Profit | 376.1 | -451.1 | 69.9 |
Despite the reported profit of €69.9 million in the year to December 2008, Quinn Group's shareholders equity fell by over €220 million in the year, partly due to a €200 million distribution and other recognized losses that were not applied to the Income Statement but appeared directly in shareholders equity. Over the 3 year period to December 2008, Quinn Group revalued upward its assets and investments by a net cumulative €306 million, which positively impacted shareholders equity. Over the same period it took a charge to equity of a net cumulative € 312 million due to adverse exchange rate movements.
| Dec 2006, € millions | Dec 2007, € millions | Dec 2008, € millions | |
|---|---|---|---|
| Shareholders Equity, 1 January | 930.7 | 1,319.7 | 974.1 |
| Profit in the financial year | 376.1 | -451.1 | 68.9 |
| Revaluation in the year | 4.4 | 137.9 | 163.4 |
| Capital contributions (distributions) | n/a | n/a | -200.0 |
| Gain (loss) in pension scheme | 2.6 | 1.4 | -8.7 |
| Change in deferred tax asset | -.6 | -.0 | 1.5 |
| Exchange Rate gain (loss) on investments | 6.5 | -33.8 | -285.3 |
| Tax on exchange adjustments | n/a | n/a | 39.7 |
| Shareholders Equity, 31 December | 1,319.7 | 974.1 | 753.6 |
Further complicating the financial picture of Quinn Group's financial statements is a collection of other related party transactions. In the year to December 2008, Quinn Group reported an income of €150 million from the Quinn family and related entities, for services provided by the Group including: "the identification of sites for acquisition and development, the negotiation of purchase price, the negotiation and arrangement of financing, the engagement of developers and related professional advisors and the ongoing monitoring of the projects through the construction phase." For accounting purposes, these incomes, totaling €221 million in 2008, would have been included in the income statement that lead to the reported profit of €68.9 million in the year to December 2008.
| Dec 2006, € millions | Dec 2007, € millions | Dec 2008, € millions | |
|---|---|---|---|
| Sale of good and services to the directors and related undertakings | 6.4 | 15.5 | 2.4 |
| Income from related undertakings for property development services | n/a | n/a | 150.0 |
| Purchase of goods and services from related undertakings | n/a | n/a | 30.8 |
| Interest charged to related undertakings | n/a | 69.9 | 37.6 |
| Sub-total income from related parties | n/a | 85.3 | 220.8 |
At the end of December 2008, the Quinn family and related undertakings had loans of €891.3 million to Quinn Group (ROI) Limited. The annual report for 2008 states in the "related party transactions" section that Quinn Group had taken a total of €888m of provisions related to loans given to family controlled property companies, investment and finance companies, and other family controlled companies. Of these provisions, €785.6 million related to the investment and finance companies which includes Quinn Finance Holdings, the entity that owned an economic interest of 15% in Anglo Irish Bank. Provisions of €888m accounted for against the €891m of loans, may indicate the family and the related entities may be unlikely to repay over 99% of these loans to Quinn Group.
In April 2011 Kieran Wallace of KPMG was appointed as share receiver to Anglo Irish Bank (to which the Quinn Group owe over €2.8 billion) and took control of the Quinn family’s equity interest in Quinn Group. Sean Quinn and the Quinn family no longer have any role in the management, operations or ownership of the Quinn Group. Quinn was declared bankrupt on 11 November 2011 in Northern Ireland; this was annulled on appeal but he was declared bankrupt in the Republic of Ireland on 16 January 2012.
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