ONE OF the country’s largest hotel groups, Moran Hotels, suffered losses of €60 million last year, primarily due to an interest charge of €35 million. The company had €678 million of bank loans on its balance sheet as of January 31st, 2010.
TS Taverns, the company behind the Bewleys hotel chain and the Red Cow Inn, posted pretax losses of €46.7 million for the year ended January 31st, 2010, marginally lower than the €47.7 million loss posted the previous year. However, a €15.7 million property impairment charge pushed the total recognised losses to €60.1 million.
This compares to total losses of €101 million the previous year, which included a €32.7 million property writedown for that year.
While the company posted an operating profit of €24.8 million for the year, a number of multimillion-euro depreciation, amortisation and interest charges pushed the company €46.7 million into the red.
These costs included a €10.8 million depreciation charge on tangible assets, a €26 million amortisation charge and the company’s €34.7 million interest bill on bank loans and overdrafts.
As of January 31st last, the company had bank loans of €678 million which were repayable within five years. The company’s bankers are listed as Bank of Ireland, AIB, Bank of Scotland (Ireland) and Ulster Bank. The accounts, which were signed off on December 23rd, state that the company has recently negotiated a new three-year loan agreement with its lenders.
The Moran hotel group, led by Limerick-born Tom Moran, bought the Bewley’s hotel chain from Bert Allen in 2008 for an estimated €570 million.
The accounts show that turnover at the hotel chain fell by 13.5 per cent in the year, to €80.8 million compared with €92.6 million in 2009.
Operating profit was €24.8 million for the year, compared to €31.1 million the previous year.
The accounts for TS Taverns cover 10 hotels in the UK and Ireland: six Bewley hotels, with a total of 2,120 hotel rooms; and four Moran hotels, comprising 476 hotel rooms.
The group’s four UK properties now represent 40 per cent of the total operating profit.
The auditors’ report to the accounts states that the accounts for the group were prepared on a going-concern basis, with the auditors pointing to “the existence of a material uncertainty which may cast doubt about the group’s ability to continue as a going concern”.
However, the directors’ report highlights the fact that the group achieved €24.8 million in Ebitda (earnings before interest, tax, depreciation and amortisation), while it has negotiated a new three-year loan agreement with its lenders.
Pointing out that the hotel sector came under “severe pressure” during the year, the directors state that they “are satisfied that the group’s trading performance was robust relative to the market”.
They say that during the year the company focused on integrating the two hotel groups and continued the process of strengthening the two brands. The Irish market remains “challenging”, the accounts state.
While the accounts state that the value of the sterling exchange rate has adversely affected the reporting of UK profits, and the sterling exchange rate is cited as a risk factor for the business, the accounts show that the company’s profits were hit by only €480,000 last year, compared to a currency charge of €17.2 million the previous year, a key reason for the €101 million loss in 2009.
The company, whose shareholders are Tom and Sheila Moran, appointed two new directors during the financial year, Alf Smiddy and Tom Ward.
Directors remuneration increased to just over €1 million in the year from €862,000 in 2009.
Some 1,092 people were employed by the company during the year.
