Gresham checks out of 2003 €1.7m in profit

GRESHAM HOTEL GROUP, currently in the grip of another round of takeover talks, has announced it has boosted pre-tax profits by 40% to €1.7 million before exceptionals for last year.

This figure compares with the 11 months accounting period to end 2002.

Turnover was down however, from €50.7m to €47.9m due to the impact of the sale of the three Ryan hotels in Galway, Limerick and Killarney for more than €35m.

Net income rose to €2.14 million or 2.68 cents a share. That compares with just €216,000 or 0.24 cents a share in 2002.

The results were boosted overall by the sale of the hotels to the tune of €239,000 while the cash went to slash the debt-equity ratio in half to 27%.

Over the year, room occupancy was flat at 76, reflecting the weak economy and poor tourism, while the average room rate dropped slightly to €84.

Under the global circumstances the problems caused to the tourism industry by the Iraq war and the SARS epidemic, the group described the results as satisfactory.

From the markets' point of view they were in line with or a little bit ahead of some forecasts.

As disclosed earlier in the week critical talks are continuing with potential buyers on the possibility of a takeover of the business.

The consortium consists of property developer Bryan Cullen, solicitor David Coleman and builder JJ Murphy.

Earlier in the week they announced a reversal in the offer level from €1.45 to €1.35 per share which reverts back to the original offer price for the business now controlled by Red Sea.

Red Sea owns 28% of the Irish hotel chain.

The reduction followed a property price assessment in the group which the group said was worth less than they had anticipated.

The original price of €1.35 per share values the Gresham hotels chain at €107.3 million which is a cut of €8m in the package now on the table.

Following the SARS outbreak and fear of travelling generated by terrorism and the war in Iraq, tourism slumped and hotel values suffered from the sharp fall-off in demand.

The global terror and SARS scares impacted the industry and not just the Irish market.

Commenting on the outcome, Gresham chairman Harvey Soning said:

"The sale of these properties has placed the group in a very strong financial position."

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