Shelbourne profits up 44% in 2012

The five-star Shelbourne Hotel in Dublin, increased its operating profits by 44% to €4.5m in 2012.

The figure was revealed in accounts just filed with the Companies Office by Shelbourne Hotel Holdings Ltd, with a note stating that the hotel’s key performance indicators continued to improve during 2013.

In January this year, US property investment firm, Kennedy Wilson secured control of the 265 bedroom Shelbourne after acquiring its debt for $152m (€110m).

Kennedy Wilson Europe’s president and CEO, Mary Ricks, said at the time that the “iconic asset” has “significant value enhancement potential”.

The accounts — signed off on March 3 by the board — make no reference to the Kennedy Wilson deal.

The company increased its operating profits in 2012 after revenues increased by 12% going from €23.1m to €25.96m. However, interest payments totalling €4.1m resulted in a pre-tax profit of €437,941.

This followed the business recording a pre-tax loss of €2.53m in 2011.

According to the directors’ report, the directors are pleased with the performance of the company during the year and “the hotel continued to achieve improvements in its occupancy and room rates”.

The directors state that they “are optimistic that improvements in the operating profit of the hotel will continue, despite the poor economic conditions that prevail”.

Accumulated losses at Shelbourne Hotel Holdings Ltd stood at €211m at the end of December 2012 and the chief factor is a €155m writedown in the Shelbourne property recorded in 2008.

The write-down reduced the value of the property to €90m.

At the end of December 2012, Shelbourne Hotel Holdings Ltd owed €289.2m to creditors, including bank loans of €138m.

Prominent businessmen including Bernard McNamara, Bernard Doyle, Jerry O’Reilly, John Sweeney and the late David Courtney purchased the property for €140m in 2004 and spent millions on the hotel’s refurbishment.

All five advanced unsecured interest-free loans totalling €42m to Shelbourne Hotel Holdings Ltd that remained outstanding at the end of 2012.

The 2012 profit takes account of non-cash depreciation cost of €1.47m.