David Murray’s empire losses widen to £97 million
Restructuring costs and property writedowns contributed to pre-tax losses at his Murray International Holdings (MIH) group in the year to 30 June, widening to £96.6m from £86.9m.
At an operating level, there was a £12.8m loss before exceptional items, compared with a £11.4m profit in 2011.
Turnover fell by £43.3m to £351.3m, largely because of a loss of revenue from Rangers Football Club, which had generated £53.6m before it was sold in 2011 to Craig Whyte.
In his chairman’s statement, Murray reiterated that he regretted selling the club to Whyte and that he was “continually staggered” at the revelations surrounding the club and “bitterly disappointed at the outcome of the administration”.
Murray said he was pleased with the first-tier tax tribunal’s judgment on Rangers, which ruled in favour of the club’s use of employee benefit trusts.
“Now that the tax case has been determined, it is absolutely evident that the club need not have gone into liquidation,” Murray said. “It is also abundantly clear that it would not have gone into administration or liquidation had the purchaser fulfilled its various contractual obligations and responsibilities.”
Accounts filed at Companies House also showed that following the cash write-off on the disposal of Rangers, the group undertook a further financial restructuring that saw banker Lloyds exchange around £117m of debt for non-voting equity.
The group had first agreed a £150m debt swap with Lloyds in 2010, which diluted the Murray family’s ownership of MIH from 88 per cent to 70 per cent.
The combination of asset sales and the financial restructuring saw net debt fall to £369.6m last year from £636.8m.
“Throughout the group’s restructuring, the combined approach of the group and Lloyds has remained one of mutual co-operation and pragmatism,” said Murray.
During the year, the group had put its metals division up for sale in the face of difficult trading, which had seen turnover fall to £121.3m from £150m.
A £14m management buy-out (MBO) of the steel plate and speciality metals company was completed along with the sale of the steel beams and sections operations in Middlesbrough and Northern Ireland for £4m.
The rest of the division’s operations ceased trading in May and have been wound down.
In December, Murray also sold Premier Hytemp, which makes parts for the oil and gas industry, in a £34.5m MBO that saw him part company with key lieutenant Donald Wilson.
MIH’s property arm, PPG, continued to sell assets with a further £164m worth sold during the year, up from £68.4m the previous year. Sales included sites in Edinburgh and London.
Its Response call centres division, which lost long-standing customer Sky in March last year, returned to profit with contract wins including a £20m deal with ScottishPower.
The total number of staff employed by the group fell to 1,975 from 2,657.
The highest-paid director at the company, thought to be Murray, received a total package, including pension contribution, of £813,000, up from £793,000.