Non-compete payment of €1m pushes Kilkenny Group company into loss

A €1 million non-compete clause payout due to the chief executive of the expanding Kilkenny Group, Marian O'Gorman last year contributed to the business recording a pretax loss of €287,465.

Last year, the newly formed holding company for the retailer, Clydaville Holdings Ltd, recorded an operating profit of €1.25 million.

Exceptional costs totalling €1.55 million concerning the group re-organisation was the main contributor to the pretax loss.

The company was incorporated on August 17th, 2018 and recorded revenues of €15.8 million in the five and a half months to January 27th this year.

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The €1 million payout by the group to Ms O’Gorman makes up the bulk of the €1.55 million group re-organisation costs, with professional fees associated with the re-organisation and one off items making up the remainder.

A note attached to the accounts states there was an agreement with Ms O’Gorman to the value of €1 million in relation to a non-compete clause.

The note states €387,540 was paid during the period, with the remaining amount provided for in the accounts.

A spokesman for the Kilkenny Group said the non-compete clause was entered into “as the company viewed it as a sensible precaution”.

Re-organisation costs

The re-organisation costs of €1.55 million follow a spend of €512,185 by Clydaville investments Ltd in the previous year under the same heading. That spend coincided with a legal row between Marian O’Gorman and her son, the group’s former marketing director, Greg O’Gorman.

The row was triggered when Ms O'Gorman sacked her son in 2016, while the High Court was told last year that the case was "resolved to the satisfaction of all parties".

At the end of January last, Clydaville Holdings Ltd had shareholder funds of €9.4 million, including cash of €3.9 million.