Five-star hotel group slips further into red despite 14% rise in revenue

A hotel group that operates two five-star hotels in Co Kerry plunged further into the red last year — in spite of a jump in revenues.

Killarney Hotels Ltd operates the award-winning five-star The Europe Hotel & Resort and the five-star 102-bedroom Dunloe Castle Hotel along with the four-star Hotel Ard na Sidhe.

Now, accounts just filed by the Swiss-owned firm to the Companies Office show that the group recorded a pre-tax loss of €7.6m last year.

This followed a pre-tax loss of €36.9m in 2012 that mainly arose from a €28m property writedown. Revenues at the hotel group last year increased by 14% from €10.69m to €12.18m.

Turnover at the group has increased by 43% since 2011 when revenues of €8.49m were recorded.

According to the directors’ report for 2013, they “consider the performance of the company to be unsatisfactory, although in line with expectation”.

A major contributor to the loss last year was a hefty non-cash depreciation charge of €6.95m.

The accounts show that the group recorded a gross loss last year of €4.24m after cost of sales amounted to €16.43m.

Losses were increased by €2m in ‘other operating expenses’, €569,832 in administration expenses and €746,240 in distribution expenses.

After a tax credit of €974,157, this resulted in a post-tax loss of €6.6m

The directors are listed as Michael Brennan, Gerry Browne and Adrian Stehr and remuneration for the directors last year jumped from €133,800 to €434,731.

The average numbers employed by the group increased from 125 to 143, with staff costs increasing from €5.6m to €6.17m.

In their directors’ report, they state that “though the Irish tourism sector is experiencing a revival, there continues to be challenges in the hotel industry in Ireland.”

The directors state that “although the company made a loss for the year of €6.6m, the directors have continued to prepare the statements on a ‘going concern’ basis, as they have received assurances from the company’s parent, Liebherr Hotels, that it will provide the company with funds as and when required — to enable it to continue trading for the foreseeable future”.

The firm’s shareholder funds at the end of last year totalled €14m.

The figures show that the group generated €11.6m of its revenues through its hotels and €498,225 through the operation of a 200-acre farm. The accounts show that Liebherr Hotels loans the firm an additional €1.5m during the year to bring to €45.5m owed by the firm to Liebherr Hotels.