Travelodge group pre-tax losses up threefold to €2.58m
Accounts just filed with the Companies Office show that Smorgs (Ireland) Ltd recorded the increased losses in spite of increasing its gross profit from €7.6m to €8.8m to the end of March this year.
However, the accounting period is for a 15-month period compared to a 12-month period the previous year.
Travelodge operates 11 budget hotels across the island with two in Dublin, two in Limerick and hotels in Belfast, Derry, Galway, Waterford and Cork.
The loss includes an exceptional cost where the company recorded a €898,167 loss on the sale of a fixed asset.
The company’s net operating expenses increased last year from €9m to €11.1m.
In addition to the gross profit, the company recorded other operating income of €608,975 that includes €338,975 in rental income and €270,000 in management fee income.
According to the directors’ report, they expect the company to continue trading at its current levels.
The company had shareholder funds totalling €17m at the end of March. Its cash during the period reduced from €313,699 to €6,500.
Auditors for the company, Cooney Carey, draw attention to a note in the accounts confirming the after-tax loss of €2.29m (company received tax credit of €291,862).
The note states that “continued loss-making by the company and/or failure to secure continued financial support assumed in the company’s forecasts, represent material uncertainties that may cast significant doubt on the company’s ability to continue as a going concern”.
The statement adds further that, “however, the directors are satisfied that the company will continue as a going concern. The company is owed an amount of €15.4m from group debtors and the directors are confident that these loans will be repaid in full and that no provision for impairment in the value of group debtors is required”.
The filings show that the numbers employed by the company last year increased from 121 to 139 with staff costs, including directors’ remuneration, increasing from €2.79m to €3.7m.
The figures show that directors’ remuneration, including pension contribution, last year increased from €326,779 to €441,086.
The profits take account of a non-cash depreciation charge of €351,634.
The accounts state that the company operates the Dublin Airport Hotel in Ballymun and that it has entered an agreement with Russki Developments on May 2008 to lease the hotel for €600,000 per annum and the lease expires on October 2012.
The note discloses that, under a put/call option agreement, Smorgs (Ireland) Ltd has the ability to purchase the hotel between October 2013 and October 2015 for €15m from BBT Developments Ltd.
The note states: “The directors are of the opinion that the company will exercise its rights under this Put/Call option in accordance with the terms and conditions of this agreement.”
