Shares in the Gresham Hotel group slipped in value ahead of an extraordinary general meeting (e.g.m.) today as investors digested the profit warning from the besieged company.
The shares closed down 5 cents at 73 cents in Dublin yesterday as analysts prepared to reduce their forecasts for the hotel group for 2003.
Analysts are now waiting to meet Gresham's senior management before adjusting their profit forecasts for the group.
On Tuesday, Gresham issued a profits warning stating that the cost of requisitioning the e.g.m. together with weaker trading will depress its bottom-line performance.
The costs involved in defending a hostile takeover by Euro Sea have been estimated at between €0.5 million and €1 million. This includes the cost of convening the e.g.m., while the group has also hired AIB Corporate Finance to advise it.
Analysts and shareholders will be expecting to hear further details of these costs and the impact on the group at the meeting.
These costs are substantial enough to have a major impact on the hotel group's profits. Analysts had been forecasting pre-tax profits for 2003 of around €3.3 million.
The company has also suggested that its underlying trading performance will be weaker-than-expected.
The e.g.m. was called by the Israeli property and hotel group Euro Sea Hotels, which is seeking the removal of four of the board's directors, including chairman Mr Sean Henneberry. Gresham has appointed chief executive Mr Patrick Coyle as joint chairman to ensure the meeting's orderly conduct.
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