Hotel group hit by €27m losses

The group that operates the Gresham hotel in Dublin and the Metropole Hotel in Cork incurred combined losses of €27.4m over the past two years.

In figures just filed to the Companies Office for 2012 and 2011, they show that the chief factor behind the losses was a €21m property write-down in 2011.

The accounts for Precinct Investments Ltd shows that pre-tax losses narrowed sharply from €26.1m in 2011 to €1.26m last year.

The group last year recorded an operating profit of €4m and finance costs of €5.3m put the group into the red.

The group returned to operating profit in the 12 months to the end of Dec last after its revenues increased by 9% from €15m to €16.5m.

According to a note “the group has experienced an improvement in trade with the hotels continuing to trade ahead of their competitive set, however the group has incurred significant losses and cash outflows due to a high level of debt within the group following its privatisation in 2004 and recent asset devaluations”.

The note continues: “Cash flow from operations was positive in 2011 and 2012 and is expected to be positive for 2013... Trading to date in 2013 has been satisfactory and is in line with budget.”

The figures show that the group had a shareholders’ deficit of €110m at the end of December last.

The filings show that the group employs 184 with staff costs last year totalling €7.3m that included €217,000 in redundancy payments.

Directors’ remuneration for the year increased from €250,000 to €280,000 that was made up of €100,000 in fees and €180,000 in management services.