Group behind pizza chain sees €3.6m profit

The hospitality group that last year rescued Four Star Pizza recorded profits of €3.6m in 2010, reporting an increase in profitability for last year.

Accounts just filed by the Michael Holland-controlled Gonville Ltd to the Companies Office show that revenues at the group decreased by 35% from €48.3m to €31.3m in the 17 months to the end of December 2010.

The group owns the 5-star Fitzwilliam Hotel on Dublin’s Stephen’s Green that houses the Michelin-starred Thornton’s restaurant and last year the group purchased the Bailey Bar in Dublin city centre along with acquiring the Four Star Pizza master franchise for Ireland and Britain.

The drop in revenues in 2010 is mainly explained by the Dublin-based group selling off the Royal Dublin hotel in January 2009 and the prior period being for 19 months.

The directors report that “trading in 2011 has continued to show a strong increase in demand across all sectors with a corresponding increase in profitability”.

The profit of €3.1 million in 2010 follows the group recording a loss of €675,498 in 2009.

The directors’ report states that the directors “are satisfied with the group’s performance during the period, particularly given the financial turmoil which existed throughout the period. Future plans are to continue to operate profitably and to use the group’s strong cash-flow to reduce debt”.

Referring to the purchase of the Four Star Pizza franchise, the directors state that “significant progress has been achieved in stabilising this business with a particular emphasis being focused on the technology platform and online sales”.

The figures show that exceptional costs of €5.4m — that included a €3.4m write-down in investments, €1.7m in bad debts and €192,000 in exceptional legal fees — contributed to the group recording a pre-tax loss of €4.3m and this followed a pretax loss of €8.5m in 2009.

However, an €8.1m gain from “minority interests” resulted in a profit of €3.6m for 2010.

The directors state that the “iconic” Bailey Bar Café — purchased last July — “has exceeded trading forecasts” following a significant refurbishment.

The directors state that “the above developments are exciting and place the group in a strong financial position going forward”.

The group’s net assets at the end of 2010 stood at €50.9m.

The group had accumulated profits of €11.9m at the end of 2010. Shareholder funds totalled €28.5m that included €1.4m in cash.

The group had bank loans totalling €30m at the end of 2010 — bank interest charges came to €1m in 2010. Along with operating the Fitzwilliam Hotel, the Bailey and Four Star Pizza franchise, the group also operates a tour business, an investment and management firm and the provision of mezzanine finance and associated activities.

Numbers employed by the group declined in 2010 from 213 to 154 with staff costs decreasing from €9.8m to €6.3m.

The pretax loss in 2010 takes account of non-cash depreciation costs of €791,856 and goodwill amortisation of €122,228. Remuneration to the directors declined from €177,322 to €161,303.