Noonan Group writes down Griffin Hotels investment by two-thirds
THE Dublin construction group that owns a little over one-third of Liam Griffin's hotel group has written down its investment in the group by two-thirds "in light of prevailing market conditions".
The Noonan Group has a long association with the Griffin Hotel Group, first joining forces to purchase the Ferrycarraig Hotel in Co Wexford in 1991.
However, accounts recently filed by Noonan Group Holdings show the construction group wrote down the value of its investment in the hotel group from €3.89m to €1.3m in the 12 months to the end of September.
The family-majority owned Griffin Hotel Group, led by Liam Griffin -- former All-Ireland hurling winning manager with Wexford -- operates the five-star Monart Spa Hotel in Co Kilkenny, the four-star Ferrycarraig Hotel and the four-star Hotel Kilkenny.
The most recent accounts filed by the hotel group are for the 12 months to the end of December 2010 when it recorded pre-tax losses of €1.5m after revenues declined by 11pc from €16.4m to €14.6m.
According to a note attached to Noonan Group Holdings, the directors of Noonan Group property investment subsidiary, Worldview Investments, "feel it is prudent to write down the investment in Griffin Group hotels by 65pc in light of prevailing market conditions".
The €2.5m writedown in Griffin hotels contributed to losses of €11.7m at the Noonan Group in the 12 months to the end of September.
This followed revenues at the group declining from €2.75m to €1.65m through the group recording a total of 10 house sales in Ireland -- down from 15 house sales in fiscal 2010 when losses of €16.3m were recorded.
The directors' report states that the €11m loss for 2011 "has been materially impacted by an impairment charge of €6.39m reflecting the fall in value of land".
The report states: "Our write-down is a very conservative view, but in current circumstances, it is a realistic measure. Even though we have never revalued our landbank higher than cost, we have now written our landbank down by over 45pc cumulatively since 2007."
The report continues: "During the year, we achieved low sales volumes in a difficult selling market. Further price discounts were introduced to entire potential buyer demand."