Sherry FitzGerald’s income rises 11% but CastleGate sale costs deliver a loss

Sherry FitzGerald, Ireland’s biggest estate agent, recorded a near 11 per cent increase in its revenues last year but posted a loss due to €3.6 million in once-off restructuring costs associated with the sale of the business to CastleGate Investments.

Accounts just filed for Sherry FitzGerald Group Ireland Holdings Ltd show it achieved turnover in 2022 of €35.3 million, up from €31.9 million in the previous year. But it recorded a pretax loss of €226,000 compared with a profit of almost €2.5 million in 2021 due to costs associated with its sale to CastleGate, an investment vehicle controlled by entrepreneur and eShopWorld founder Tommy Kelly.

The business was sold for a reported €50 million in May last year, with co-founder and chairman Mark FitzGerald stepping down from the board at the time of the deal.

Excluding the restructuring costs, Sherry FitzGerald posted an operating profit of €3.5 million for 2022, down from €3.7 million a year earlier. Its Ebitda (earnings before interest, tax, depreciation and amortisation) amounted to €4.8 million, down from €5.3 million.

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Sherry FitzGerald said it sold 8,600 homes last year with a capital value of €3.8 billion, of which 1,600 were new homes. That equated to an average of €441,860 per property.

The group had a 14 per cent share of the Irish residential market, in line with 2021. It employs more than 600 people across 103 offices, 29 of which it owns with the other 74 being run by franchisees.

The group closed the year with cash balances of €7 million, up from €4.2 million in 2021. Its bill for wages and salaries rose by 11 per cent to just over €21 million.

Commenting on the results, Sherry Fitz chief executive, Steven McKenna, said it was a “significant year” for the company given its change of ownership. “This acquisition is part of a broader investment strategy by CastleGate to support Sherry FitzGerald group’s ambitious growth strategy through innovative solutions and expansion into new markets and client service offerings.

“Looking to the future, the business continues to perform well despite the challenges facing the residential and commercial property sectors. We are actively pursuing multiple avenues for growth, including organic expansion and targeted acquisitions with the backing of our new owners, CastleGate Investments.”

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The directors’ report to the accounts noted that housing completions here grew by 46 per cent last year to 29,851. “However, demand for accommodation continued to outstrip supply due to the rising population, immigration and [the] growing economy with latest reports suggesting a requirement of over 50,000 new dwellings per annum.

“There remain several challenges to be overcome before a fully functioning property market is restored in Ireland. These include an excess of demand over supply, further potential interest rate rises, limited new housing stock, planning constraints and ongoing credit restraints.

“However, the group also recognises the ongoing progress made regarding the reform of Ireland’s national planning system and State intervention in support of the delivery of housing.”