Property developer Paddy McKillen earned a management fee of £3.75 million (€4.4 million) from the Maybourne hotel group last year, according to accounts recently filed in England for its holding company, Coroin.
The Maybourne group is made up of luxury London hotels, Claridge’s, the Berkeley and the Connaught, as well as the Maybourne Beverly Hills Hotel in Los Angeles.
The latest accounts for Coroin, for 2020, show Hume Street Management Consultants, which is controlled by Mr McKillen, received a payment of £3.75 million for acting as consultants for the hotel group during the year.
The accounts also show that the group was “severely impacted” by the Covid-19 pandemic, suffering an impairment charge of £30.2 million.
“The outbreak of the Covid-19 pandemic and subsequent government restrictions have severely impacted the results,” the directors said. The Maybourne Beverly Hills Hotel was closed from March 21st, while Claridge’s was closed from March 24th.
Covid-19 supports
Turnover at the group halved from £58 million in 2019 to £29.7 million last year as it suffered an operating loss of £40.6 million against an operating profit of £3.4 million the year before.
Losses before tax ballooned to £102.9 million as against £19.4 million the year before. The group received £4.6 million in Covid-19 supports from the UK government.
The directors said the group was loss-making predominantly due to the impact of the pandemic and interest payable on its borrowings.
The group’s projections for this year and next show it is dependent on financial support from its ultimate beneficial owner, Sheikh Hamad bin Khalifa al-Thani, who was the ruling emir of Qatar from 1995 until 2013 when he abdicated the throne and surrendered power to his son.
The group said the sheikh’s support was required to meet its operating capital expenditure obligations, and that he had pledged to continue to support the company in meeting its ongoing working capital requirements up to December 31st, 2022.
Debt servicing
The group also requires support for the servicing of debt, and said it had started discussions with lenders with a view to refinancing loans.
Despite the ongoing nature of the pandemic, the directors said group management was confident the travel and leisure market would recover following the implementation of a successful vaccination programme. It said it expected governments to pursue policies that focus on “living with the virus” rather than imposing restrictions on individuals and businesses.
The average number of people employed by the group in 2020 was 617, up from 524 the year before. Staff costs amounted to £22.4 million, compared to £15.6 million in 2019.
Despite the challenging conditions, the hotels underwent major refurbishment campaigns during 2020.
