Debt write-off helps Dunboyne Castle Hotel report €3.3m profit

A FOUR-STAR hotel owned by Menolly Homes boss Seamus Ross recorded an operating loss of €1.7 million in 2009.

However, new accounts just filed for the Dunboyne Castle Hotel and Spa in Co Meath show that the company recorded a pre-tax profit of €3.3m in the 12 months to the end of June 2009.

This followed Fylan Collection Ltd, that operates Dunboyne Castle, writing off a debt of €5.2m owed to Menolly Homes. Sister hotel, the five-star Dylan Hotel in Dublin, was also able to record a pre-tax profit in 2009 of €5m after a €7m debt to Menolly Homes was forgiven.

Accounts for Fylan Collection Ltd state that the results for the year “are in line with expectations”.

They state: “The economic downturn continues to affect the tourism sector and the slowdown has impacted on annual turnover.”

The numbers employed by Fylan Collection Ltd reduced last year from 165 to 147 with staff costs falling from €4.1m to €3.3m.

Auditors Deloitte & Touche state that the operating loss of €1.7m and net liabilities of €1.6m “indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern”.

However, a note attached to the accounts states that “the company requires the ongoing support of its lenders and other group companies to continue as a going concern.

“The company is in ongoing discussions with its lenders.”

The note adds: “Based on these discussions, the directors are of the opinion that the support of its lenders will continue for a period of not less than 12 months from the date the directors approve the financial statements.

“On the basis of this support, the directors are satisfied that it is appropriate to prepare the financial statements on a going concern basis.”

The figures in the abridged accounts show that the company’s gross profit in 2009 reduced from €3.4m to €3m.

The pre-tax profit of €3.3m after the debt forgiveness of €5.2m follows the company recording a pre-tax loss of €2m in 2008.

The debt forgiveness by Menolly Homes was part of a complex set of transactions between the Fylan Collection and related parties in 2009.

During the year Fylan Collection Ltd paid a management charge of €150,912 to Menolly Homes, while the company paid rent of €216,861 to Seamus Ross.

The company’s operating loss was recorded after charging the non-cash cost of €629,695 in depreciation.

Longford-born Mr Ross was a high-profile developer during the boom, focused largely on building new houses.

The group was once thestate’s largest house builders, constructing 20,000 houses.

Mr Ross was one of the so-called Anglo 10 group of developers that the bank loaned money to in order to buy Sean Quinn’s shares in Anglo Irish Bank.