BUDGET HOTEL chain Jurys Inns made a loss of £86 million (€101 million) last year as a result of large interest payments on its debt, a writedown in the value of some properties and a break fee on the renegotiation of currency hedging contracts.
Accounts for Vesway Ltd and Subsidiaries, which have been provided to The Irish Times, show the three-star hotel chain made an operating profit of £4.4 million in 2009.
This compared with an operating surplus of £20.4 million in the previous year.
But interest charges and hefty once-off exceptional items dragged the hotel group into the red.
Vesway took an impairment charge of £20.6 million on the value of five of its 30 inns – thought to be primarily in Ireland.
It also paid £36.9 million in interest costs on its bank loans and paid a £30.8 million break fee to renegotiate interest rate swap contracts.
The company’s net debt stood at £616 million at year end, up from £598 million 12 months earlier.
On the plus side, the new swap contracts will yield the company a saving of £15 million a year. And the timeframe for repaying its debt has been extended to December 2014 from June 2012.
Vesway also had £31 million in cash on its balance sheet at the end of December.
The hotel group last year secured £30 million in new funding from its shareholders – Dublin-based finance group Avestus and the Oman Investment Fund – and raised the same amount in bank debt. This was used to fund the refurbishment of some properties and its expansion in Britain.
Turnover was flat in 2009 at £131 million, in spite of the company opening seven new inns – at Sheffield, Watford, Exeter, Swindon, Derby and Aberdeen in Britain, and Prague in the Czech Republic.
This reflects the tough trading environment in Britain and Ireland, with heavy discounting of room rates in the recession.
The company’s Ebitda (earnings before interest, tax, depreciation and amortisation) fell to £28 million last year from £43.4 million in 2008.
Speaking to The Irish Timesyesterday, Jurys Inns finance director Cormac Ó Tighearnaigh said the group's Ebitda had increased by 10 per cent so far in 2010. This increase is expected to be maintained for the full year.
“We’re seeing an improved trading performance both in the top line and in Ebitda,” he said. In the past six months, online corporate bookings have risen 20 per cent and RevPar – revenue per available room – has been “steadily improving”, he added. Trading in London is “particularly strong” while the UK regional inns are “doing well”.
But the Irish market, which represents 15 per cent of its rooms and revenue, “remains difficult”.
Jurys, which is led by chief executive John Brennan, has opened a £20 million Inn in Bradford this year, while work on a 150-bed extension to its Islington hotel in London will begin shortly.
About £9 million has been spent refurbishing Inns this year.
Mr Ó Tighearnaigh said Jurys Inns centralised its finance functions, saving £500,000 a year.
“We’ve also invested £2 million in a new IT platform, which centrally handles the reservations and the revenue management side of our business,” he added.
Jurys Inns was bought by Quinlan Private (now known as Avestus) for €1.166 billion in 2007 from the Jurys Doyle chain.
