Richard Branson sells island dream

By : David Robertson / The Times

December 24. 2010

Moskito in the British Virgin Islands was sold for $US20.5 million ($20.4m) in August, new financial information has revealed. Sir Richard bought the island for $US13.2m in 2007 with plans to turn it into an upmarket ecotourism resort.

The 124-acre Moskito is only a mile from Necker, Sir Richard’s home in the Caribbean. The billionaire said at the time: “I was terrified Moskito would end up in the wrong hands and be ruined. I want to start from scratch and create the most ecologically friendly island in the world. Come back in five years and you’ll find a mini-Bali with a rainforest in the Caribbean.”

The sale was disclosed in the 2010 financial accounts for Virgin Holdings, one of several entities that control Sir Richard’s global business interests.

There has been speculation that his plans for Moskito had been derailed by the British Virgin Islands government.

But Sir Richard will be able to console himself with a 55 per cent return on his investment in just three years.

The entrepreneur’s relationship with the Caribbean dates back to 1979 when he bought Necker for just ₤180,000 ($276,500). In addition to being Sir Richard’s home, the island hosts guests at its ultra-exclusive resort, where the cheapest room costs $US26,495 per week.

The main assets owned by Virgin Holdings are Sir Richard’s stakes in Virgin Atlantic and Virgin Rail. He owns 51 per cent of both.

The accounts show that Virgin Holdings slumped to a ₤103.2m loss in the year to the end of March, against a profit of ₤53m the year before.

This was partly a result of difficulties faced by Virgin Atlantic amid the turmoil in the aviation market. It lost ₤132m last year compared with a profit of ₤68.4m the year before.

The carrier reported turnover down 8.6 per cent to ₤2.3 billion and exceptional costs of ₤57.7m stemming from 1046 voluntary redundancies.

It also made a ₤25.2m provision against continuing investigations into alleged price fixing.

During the year, Virgin Holdings disposed of a number of companies as part of a wider Virgin Group strategy of focusing on core businesses such as money, health clubs and travel.

Virgin Holdings sold its stake in Virgin Mobile Canada to Bell Canada, netting a profit of ₤83.5m. It made a further ₤300,000 selling Virgin Limousines (California) and ₤900,000 from the disposal of Virgin Wines Online, which was actually sold in 2005 to Direct Wines.

The financial accounts also reveal that Virgin Drinks, which sells colas and vodka, is facing legal action in China and South Africa.

The dispute in China follows the collapse of a franchise agreement. Virgin Holdings said it was unclear how far the dispute would go but admitted that its proposed Chinese partner had threatened litigation against it.

In South Africa, a distributor for Virgin Drinks has demanded payment of 8m rand ($1.12m), but the company said it would defend itself against this claim.