Desmond's investment firm posts Eur3.7m loss

International Investment and Underwriting Ltd (IIU), the investment vehicle owned by financier Mr Dermot Desmond, reported a loss of €3.66 million during 2002.

Accounts for the company filed recently show it had investments listed on quoted stock exchanges worth €10 million as of December 31st, 2002, and had a further €6 million in cash.

Investments at the end of 2001 were valued at €11.7 million. The company's profit and loss account stood at a €2.96 million loss, having been €691,805 in profit the previous year. Called- up share capital was €2.5 million.

During the year a €5.1 million capital contribution was made to the company, which is 100 per cent owned by Mr Desmond. A €5.94 million debt owed to Mr Desmond at the end of 2001 was satisfied by end-2002.

Operating income for the year showed an unrealised loss of €19,917. Operating income represented income from trading activities and corporate finance services.

Trading income comprised realised and unrealised gains and losses on trading. Investments for trading purposes were given at balance sheet date with reference to quoted market prices. The company had loans out worth €4.3 million at end-2002.

The company is the owner of four other IIU companies: IIU Stockbrokers Ltd; IIU Corporate Finance Ltd; IIU Funds Management Ltd; and IIU Nominees Ltd. All but IIU Stockbroking were non-trading in 2002.

During the year IIU Ltd was paid €3.82 million for corporate advice given to Mr Desmond and companies, including a number in which he had an interest. At end-2002 the company was still due €3.8 million in relation to this activity.

IIU Stockbrokers Ltd, which made a profit before tax of €46,477 in 2002, acquired one million shares on the flotation of the London Stock Exchange. The market value of the shares at end- 2002 was €4.85 million, down from €6.9 million at end-2001.

All Mr Desmond's shares in IIU Ltd bar one are held by way of Line Nominees Ltd, of Gibraltar, where Mr Desmond resides.

Mr Desmond is one of the most successful investors of his generation. He told the Moriarty tribunal he made more than €100 million from Mr Denis O'Brien's Esat Digifone venture.

Last year was a difficult year for stock markets with prices being hit by economic gloom, fallout from the September 11th attacks on the US, corporate scandals and the collapse of new technology stocks.