Losses soar for firm behind Gresham
Pre-tax losses at Precinct Investments, the company behind the iconic Gresham Hotel in Dublin, widened to €39.8m in 2008 from €4m in 2007 as the firm incurred a massive property devaluation in the period, according to new accounts filed for the business.
Gross profit at the group fell 33pc in 2008 to just under €11m, while turnover was down nearly 23pc to slightly below €23m. The accounts also note that the hotel group has notched up a further €7m loss in 2009.
The figures include operations at the Metropole hotel in Cork, which is also owned by the group, as well as the Park Inn in London, which was sold by Precinct during the summer for an estimated £35m (€40.5m).
However, the value of the three hotels in the group at the end of 2008 was slashed by more than a third -- from €177.7m in December 2007 to €107.4m at the end of 2008, although property firm CB Richard Ellis Gunne revalued them again at the end of 2009 at €116.4m.
Precinct is solely owned by builder Bryan Cullen and the company was used to take the Gresham Hotel group private in 2004 in a €117m deal.
The accounts note that some of Mr Cullen's unrelated property loans have now been transferred to the National Asset Management Agency (NAMA).
The financial statements also acknowledge that the group has incurred "significant losses and cash outflows due to a high level of debt and asset revaluations". They warn that its bank facilities -- which are held with Anglo Irish Bank and Bank of Ireland -- all have to be renegotiated by the end of this year.
"The directors would highlight that the asset disposals form a central part of the strategic plan of the group to restructure its financing and there is no guarantee that future funding will be available on commercially acceptable basis or at all," according to the accounts.
Chief executive Patrick Coyle was not contactable for comment yesterday.