Haughey sale freezes out £14m of debt

Published on Wednesday 29 October 2008 20:46

FORMER Celtic director Willie Haughey's refrigeration firm has wiped out £14 million of debt by selling non-core assets, leaving it poised to grow profits and turnover this year.

City Refrigeration Holdings, which employs more than 8,000 people in Scotland and Northern Ireland, said its lack of debt meant it was not dependent on borrowing from banks – a problem which for many businesses as financial institutions tighten their lending criteria.

In its latest accounts filed with Companies House, City, which supplies large scale fridge equipment to companies including supermarket giant Asda, revealed that turnover in 2007 was 2 per cent higher than the previous year, at 222 million. Pre-tax profit was 37 per cent higher at 1.7m.

Financial director Colin Seggie claimed yesterday that the firm was on track to increase both profit and turnover in the current year.

Seggie said: "

Strengthening the balance sheet was something we wanted to do for the company – to get rid of around 7m overdraft and 7m loans.

"But as a side effect, it has put us in a good position considering the credit crunch.

"It's obviously a good thing that we don't have to be reliant on loans from banks in the current climate."

He added: "We have made a significant change to the balance sheet in terms of cash reserves."

The firm, which is based in new head offices in Lawnmoor Street in Glasgow, has two divisions – facilities management and projects – following a process of streamlining.

City offloaded non-core assets such as its building and property holding company City Air Conditioning and Stevens Property Development Company in December last year, generating 8.9m.

The firms were sold to another company owned by Haughey and his wife Susan, who are 98 per cent shareholders in City.

Seggie continued: "We are expecting a stronger performance from our projects division in 2008. We are dealing with a number of prospective clients at the moment and expect we may have to increase our workforce."

He said that the 2m pledged to the Scottish Cup sponsorship in 2009 – now called the Homecoming Cup – would impact on results in that year. City Refrigeration has asked for no branded sponsorship of the cup. "

Haughey has a long association with Scottish football. He was a Celtic director from 1994 to 1997 and has previously invested in Livingston Football Club.

Recently he has been involved in the redevelopment of Lesser Hampden and was looking for a way to fund youth football after the financial crisis hit plans for an academy in Bothwell.