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Cashflow problem? Headline that wasn’t predicted: ‘Unforeseen loss forces psychics into liquidation’

A liquidator has been appointed to the Irish company behind ‘Irish Psychics Live’ which was Ireland’s most high profile and controversial premium phone line service’.

Callers to the premium phone line were charged €2.40 per minute for ‘instant psychic readings’ and the website stated that it was “operated by genuine Celtic psychics, the most psychic race in the world. Only the most spiritually gifted individuals are selected to participate in this site”.

Cashed out at the right time

The premium phone line business was established in 1998 and built up a large cash pile over the years before the shareholders cashed out in 2009, sharing a dividend payout of €9 million and selling the company.

One of the original owners had declared his intention to be the first Irish person in space on board Richard Branson’s Virgin Galactic after paying $200,000 for the privilege.

Profits nose dived as income plummeted

The most recent figures show that following the sale, the company became loss-making, recording a pre-tax loss of €315,225 in 2010 after recording a post-tax profit of €1.1 million in 2009.

The loss arose as a result of plummeting income, with the abridged accounts for the 12 months to the end of April 30th 2010, showing its gross profit declined by 72 per cent from €4.27million to €1.19 million.

Cashflow problems

The figures also show that at the end of the period, €805,714 was owed to Revenue through €479,332 in corporation tax, €191,407 in VAT and €134,975 in PAYE/PRSI.

The firm had net liabilities totaling €809,956.

A note attached to the accounts states that “the net assets of the company are negative and the company has reported a loss in the year compared to profits in previous years back to 2003”.

Return to profitability envisaged using the power of.....

The note to the accounts also states: “In the subsequent period, the management accounts indicate a return to profitability, although the turnover has reduced substantially and the balance sheet remains insolvent. It is expected that the company will continue to be profitable and return to solvency in the 2011-2012 year.”

It is not known how the business performed since, as accounts have not filed in over two years, with the last accounts filed in December 2011.

It seems that despite the headline, the original owners may have had a better grasp on the future than you might have first thought?

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