Operating profits at Gresham Hotel jump to €3.4m as sale looms
Dublin's iconic Gresham Hotel saw its operating profit nearly double last year to €3.4m as an improving economy and higher visitor numbers helped to boost its performance.
The property, which is owned by Precinct Investments but controlled by Nama, is set to be put up for sale by the bad bank soon. It could fetch as much as €60m.
Newly-filed accounts for Precinct show that revenue at the hotel on O'Connell Street rose to €18.1m last year from €17.2m in 2013. Its operating profit in 2013 was €1.8m.
Precinct said that operating profit on continuing activities before non-recurring and exceptional items, depreciation, finance costs and tax was €3.9m last year, which was 34pc higher than in 2013.
But the bottom line figure at Precinct Investments was hit by almost €5.2m in interest payments it made during the year.
That put it in the red, and it posted a pre-tax loss of €1.75m.
Hotels in the capital have been enjoying hardening rates and high occupancy levels as the domestic economy recovers and tourist numbers increase. A weak euro is also helping business.
It's been widely anticipated for the past few months that the Gresham was about to be put on the market by Nama. However, it hasn't yet been formally put up for sale.
The chief executive of Ireland's biggest hotel group, Dalata, recently estimated that the Gresham would fetch as least €60m when it comes to the market. That easily makes it one of Ireland's most expensive hotel properties.
The hotel's existing management team, headed by Patrick Coyle, is likely to be among the interested bidders. Mr Coyle was uncontactable yesterday.
Precinct Investments, which is owned by builder Bryan Cullen, is the vehicle that was used to take the Gresham Hotel Group private in 2004 in a €117m deal. Precinct had net debt of €131m at the end of 2014.
Pat McCann, the chief executive of Dalata, has said that while the group will look at the Gresham when it comes up for sale, it won't pay over the odds for assets. "If it doesn't meet our investment criteria, we won't do it," he previously said.
"The question we'd ask ourselves is if there is hidden value in it. Because it's an older building, you'd have to look at how challenged it is in terms of refurb and structure."
The Gresham opened in 1817. It has over 300 bedrooms. It could present an opportunity for an upgrade to a five-star hotel, while other investors could see potential for the property as an office development.