Losses at group operating Gresham and Metropole hotels rise to €27.4m
THE group that operates the Gresham Hotel in Dublin and the Metropole hotel in Cork incurred combined losses of €27.4m over the past two years.
Accounts just filed to the Companies Office for 2012 and 2011 show that the chief factor behind the losses was a €21m property writedown in 2011.
The accounts for Precinct Investments also show that pre-tax losses narrowed sharply from €26.1m in 2011 to €1.26m last year.
The group recorded an operating profit of €4m last year and finance costs of €5.3m put the group into the red. The group returned to operating profit in 2012 after its revenues increased by 9pc to €16.5m.
According to a note attached to the accounts "the group has experienced an improvement in trade with the hotels continuing to trade ahead of their competitive set, however the group has incurred significant losses and cash outflows due to a high level of debt within the group following its privatisation in 2004 and recent asset devaluations".
The note continues: "Cash flow from operations was positive in 2011 and 2012 and is expected to be positive for 2013 ... Trading to date in 2013 has been satisfactory and is in line with budget."
The group had a shareholders' deficit of €110m at the end of December. It employs 184 with staff costs totalling €7.3m, which included €217,000 in redundancy payments. Directors' pay for the year increased from €250,000 to €280,000, which was made up of €100,000 in fees and €180,000 in management services. The figures show the group had bank loans totalling €125.4m.
The group's bank borrowings have been transferred to NAMA and a note states that availability of sufficient funds in the year to the end of December 2013 "is dependent on the continued support of NAMA".
The note states: "The directors believe that NAMA will not, in the foreseeable future, call for repayment of the group's debt and will limit interest payments to the amount which the group can generate from its operations."
It states that on that basis and the continued positive trading of the group's hotels and the quality of the properties, the directors consider it appropriate that the financial statements are prepared on a going-concern basis.