Park Developments sees profit jump by 32% on sharper cost control

Pretax profit at Michael Cotter’s Park Developments last year increased by almost a third to €23.45 million as lower costs offset a 12.5 per cent drop in revenue in the 12 months to June 29th.

Sharper control of costs saw the business deliver a net profit margin of almost 10 per cent, up significantly on the 6.4 per cent margin the previous year despite directors at Park Developments (Dublin) Ltd stating that “over the past two years, the group’s net margin has been impacted as a result of cost inflation and interest rate increases experienced by the construction sector”.

A dramatic fall-off in business on the commercial contracting side, where revenue slumped by 38 per cent to €44.57 million, was largely responsible for the lower turnover with the company reporting overall sales of €222.14 million, down from €254.4 million.

Residential contract work, which accounted for about 80 per cent of business last year, saw revenue dip by a more modest 2.6 per cent to €177.56 million. The company also received other operating income of €9 million that was mainly made up of a management charge of €8.87 million.

The family-owned business operating since 1962 says it has constructed more than 20,000 houses and apartments around Dublin in that time, with more recent schemes including Clay Farm in south Dublin and at Hanover Quay.

Numbers directly employed by the business last year were stable at 74, with staff costs rising to €9.33 million, up from €8.7 million. A breakdown show that 46 are employed in production, 16 in administration and 12 in management.

Pay to eight directors increased by 16 per cent to €2.36 million, made up of €2.28 million in emoluments and €86,417 in pension contributions.

The value of the group’s construction work in progress and development land and buildings increased from €43.54 million to €69.83 million.

A note attached to the accounts states that the company is a member of the Gansu Group, which holds a facility with Allied Irish Bank plc and Bank of Ireland.

The note states that “all loans were fully performing throughout the year. The directors believe that the group can continue to manage its business and pay its liabilities as they fall due, including the servicing of interest on all of the group’s external bank facilities.”

At the end of June 2023 the firm had shareholder funds of €159.48 million, including accumulated profit of €151.48 million.