Friday, September 23, 2011

Is Turnstone Estates in trouble?

The St Neots cinema project, on land behind Lidl, is as only as good as developer. So how good are Turnstone Estates group financials?

The last three years accounts are here:  2010, 2009 and 2008.

The profits/losses for the last 3 years are:

2007 = £11,921 profit
2008 = £976,049 loss
2009 = £14,747 profit
2010 = £275,876 loss

So not a massively profitable group. In fact over the last 4 years the group has lost £1.2 million.

The net assets of the group has fallen from £7,464,622 in 2007 to £5,754,285 in 2010. Of course there is a recession on and what do I expect?

The key to all this are the loans and the interest rates payable on those loans. 

In 2007 the loans stood at £8,530,000. In 2008 the loans stood at £19,893,418. In 2009 the loans stood at £23,893,359. In 2010 the loans stood at £32,078,149.

This is a big leap in a time of recession.

The 2010 accounts also have a warning as to whether Turnstone Estates is a going concern. The warning says:
If the loans aren't renewed the business may not be a going concern.

The Auditors also pointed out in the 2010 accounts:
There are problems with some of the trading subsidiaries and participating interests.

According to the 2010 accounts the only new project is the Cinema. 

I'm not an accountant of any sort. HDC should have all this information and they have the expertise or can call on the expertise to look at the viability of the cinema development. HDC decided to go with Turnstone Estates. If the group becomes unable to fulfill this development, due to one or all of the "emphasis of matter", this is something HDC knew or should have known when they took the decision to go with Turnstone Estates. 

If the development fails because the company fails HDC shouldn't be able to wash it hands of blame.

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