Write-down sees hotel operator dive deeper into red with €6.4m losses

The firm that operates the four-star Rochestown Park hotel in Cork went further into the red in 2012 to record losses of €6.4m.

According to accounts filed by Windsor Surprise Ltd with the Companies Office, the firm recorded the losses in 2012 chiefly arising from a write-down in property of €6.1m.

The firm recorded the loss in spite of revenues increasing by 7% from €8.5m to €9m.

The directors’ report confirms the company’s land and buildings were independently valued by Dominic Daly in May 2013 at €26.5m — down from the value of €32.7m at the end of December 2012.

The report states that the “directors have considered it appropriate to carry these premises at valuation in the financial statements, and not to provide for depreciation in the current year”.

The loss in 2012 follows the firm recording a loss of €620,758 in 2011. According to the directors’ report “the company will continue to consolidate its market share given the economic downturn facing the hotel sector”.

A note points out that the firm’s earnings before interest, tax, depreciation, and amortisation was €1.3m compared to €1m for 2011 “and is meeting its repayment obligations under its present banking facilities which were renewed on January 2013 on a rolling basis every 11 months, six months”.

The note adds: “The directors have prepared financial projections for the years to December 31, 2014, which demonstrate continued positive trading. These positive projections coupled with the continued banking support have led the directors to consider it appropriate to prepare the financial statements on a going concern basis.”

The business recorded a gross profit of €7.19m that followed a gross profit of €6.8m in 2011. However, administration expenses of €6.58m and loan interest charges of €812,501 contributed to the loss.

The average number of employees at the hotel in 2012 increased from 168 to 189. Staff costs rose from €3.62m to €3.74m in 2012. The firm has bank term loans totalling €20.8m and the amount owed to directors in 2012 stood at €520,000.

The loss reduced the firm’s accumulated profits from €7.9m to €1.5m.