Hunter firm looking to build despite 'worst-case' £150m loss

Published on Wednesday 15 July 2009 21:35

SIR Tom Hunter's retail empire was left nursing losses of £150 million in the year prior to a major restructuring, accounts just filed with Companies House reveal.

Despite a slight rise in turnover to 283m in the year to 31 January, 2008, the division was hit by poor trading and 150m of "irrecoverable" write-offs from certain elements of its portfolio – including builders Crest Nicholson and McCarthy & Stone and retailers Qube and USC.

But a spokesman for WCC Trading yesterday told The Scotsman it was looking to grow its portfolio, including the possibility of a "bolt-on acquisition" to boost its troubled USC clothing chain.

He added that the company's Office shoe chain, which is also accounted for under the WCC Trading arm, was performing well in the current year. It reported a 13 per cent rise in turnover to 100m and a 44 per cent rise in pre-tax profit to 6.3m in the 12 months to January this year.

However, separate accounts for the investment arm of Hunter's West Coast Capital, WCC Investments, show a further 103m loss in the financial year to 31 March, 2008. The division, which has stakes in a number of listed companies, has suffered badly from stock market falls. WCC said it had written down the value of its portfolio to a "worst-case scenario".

The accounts reveal that losses could reach as high as 180m in the 12 months to March this year – if the assets were sold at that point. In a statement filed with the accounts, WCC Investments said: "It should, however, be emphasised the losses are unrealised at present."

Although Hunter does not sit on the board of either WCC Trading or WCC Investments, he is chairman of parent company WCC Group and owns 95 per cent of the business. WCC spokesman Ewan Hunter said the firm was taking a medium to long-term view of its investments – and had confidence they would recoup their value.

He said: "Our focus now is on rebuilding our portfolio of some 50 major investments. In effect, we have written down the value of the portfolio to a worst-case scenario and are already seeing signs of values recovering, including our listed investment portfolio." He added: "Our focus now in absolute terms is on rebuilding the value of our portfolio … with 100 per cent support for our plans from our bankers."

In December, USC fell into administration, but WCC bought it back – through new firm Dundonald Holding – for a sum believed to be between 7m and 8m.

In February, Hunter wrote off his 88m stake in retirement property builder McCarthy & Stone as a debt-for-equity deal saw the firm's main lenders take control of the business – while a similar agreement saw him lose his stake in Crest Nicholson.