Gresham Group plans disposal of assets as losses soar to €5.7m

THE Gresham Hotel Group plans to dispose of assets to reduce its level of debt as losses soar.

Its biggest assets include its hotels on O’Connell Street in Dublin and the Metropole Hotel in Cork.

Losses at the hotel group soared to €5.7 million last year following losses before tax in 2007 of €12.5m.

The latest accounts filed by the company are for 2007 but they include a lengthy up to date statement on a going concern which outlines that the group has incurred “significant losses and cash outflows due to a high level of debt within the group”.

It said that progress has been made on the financial restructuring of the group, whereby facilities with one of its two main banks were renegotiated in April this year.

“As part of the business strategy the group plans to dispose of certain of the assets to reduce the level of debt within the company during the next 12 months,” the accounts read.

A valuation of the company’s assets will be included in its 2008 accounts and the company said that as its properties are strategically located in major cities the directors anticipate a “significant writedown in value despite the fact the Gresham Hotels continue to trade at the top of their competitive set”.

It said a revaluation of the hotels will result in a shareholders’ deficit.

The directors note that availability of sufficient funds to the end of 2010 is dependent on the sale of an asset.

The latest set of accounts for the hotel group showed fixed assets to the value of €124.2m.

The accounts also showed turnover fell slightly from €36.1m to €30.8m in 2007.

The group’s Irish operation had a mixed performance in 2007, according to the accounts. The Gresham Hotel in Dublin performed strongly, due in part of the refurbishment of the hotel in 2006 and 2007.

The Gresham Metropole had a “satisfactory year” with the property benefiting from a refurbishment programme in early 2008.

Its other hotel, The Park Inn in Hyde Park, London, under the management of Rezidor SAS Park recorded an increase in turnover during the year.

The Gresham Group’s continental operations in Amsterdam, Hamburg and Brussels were sold in February 2007.

The Gresham chain is owned by Precinct Investments.

It said that since 2007 its three hotels have continued to trade satisfactorily in a “very challenging environment, ahead of their competitive set”. However it said the group has incurred significant losses and cash outflows due to a high level of debt within the group.

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