Firm behind Shelbourne Hotel cuts losses
LOSSES at the company behind the landmark Shelbourne Hotel in Dublin narrowed in 2010, but the company remains saddled with a huge debt pile.
Accounts just filed for Shelbourne Hotel Holdings Limited for the year to December 31, 2010, show the company cut its loss after tax by more than 80pc to €900,631, but debts, while falling, are still high at €286.3m.
The company planned an extraordinary general meeting to discuss the financial situation of the business, but there is no suggestion the future of the hotel is under threat.
Prominent property developers including Bernard McNamara, David Courtney and Bernard Doyle purchased the property in 2004 for close to €140m and spent millions on its refurbishment, but accumulated losses at the hotel now top €209m. The 262-room venue is operated by the Marriot subsidiary Torriam on a day-to-day basis.
On the year, turnover fell marginally to €22.36m from €22.8m in 2009, while operating profit climbed by more than two-thirds to €3.15m.
The improved operating performance, however, was overshadowed by the debt. The outstanding bank loans fell marginally to €137m, while outstanding intercompany loans stood at €102.5m, compared with €103.8m in 2009.
During the year, the directors said the company was "presented with many challenges".
"The directors are disappointed with the company's results for the year [but] have noted improvements in the trading performance of the hotel and key performance indicators reported by the operator since the year end," they said.
The company's loan-facility letter expired in 2009 but the directors said they "have not been made aware of any cessation of these facilities and the banks have indicated their ongoing support of the business".
The company took a huge write-down on the hotel's value of €155m in 2008 and now values it at €90m.
The owners acknowledge that while "worldwide economic uncertainty, coupled with particular uncertainty in the Irish property and banking sectors, and the establishment of NAMA, made it difficult to establish any meaningful or appropriate independent valuations for property related assets in the current market", they do not see the need to revise their valuation of the hotel at this time.