Surging interest charges of €759,575 hit profits at the entity that operates three of Charlie Chawke’s pubs including Ireland’s most expensive pub, The Old Orchard in Rathfarnham.
Latest consolidated accounts filed by Milltown Inns and subsidiaries for the Old Orchard and the Dropping Well pubs in Dublin and Aunty Lena’s bar in Adare, Co Limerick show that they recorded a combined 11 per cent increase in revenues from €10.2 million to €11.3 million in the 12 months to the end of October last.
However, the directors state that profitability was hit by “higher than anticipated” interest charges of €759,575, which were up on the €292,023 recorded in 2022. This reduced its pretax profit to €137,617.
The group recorded a €1 million pretax loss in the prior year but this was due to a non-cash write down of €2 million.
Commenting on the performance, Mr Chawke said: “We were hit badly last year by the interest and energy costs.”
He confirmed that the interest costs were mainly connected to the Old Orchard purchase in 2005 when he paid out a record €22 million for the pub.
Mr Chawke said that the current 13.5 per cent VAT rate for hospitality “is the killer”.
“We hope that, please God, the Minister will do something for us in the VAT and take back that horrible VAT increase and we might get back to making money again. Surely to God they can see that in every street in Dublin there is someone closing down every other week.”
“Business is very difficult now to tell you the truth. How can we survive with all the increased charges against us?””
The directors for Milltown Inns state that before the interest charges are taken into account the underlying business operations remained robust with steady revenue across key segments. The group’s Ebitda (earnings before interest, tax, depreciation and amortisation) was €1.42 million “which represents strong earnings on the group’s turnover”.
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They state that they are in advanced discussions with alternative bankers to refinance the group’s existing bank loans and they are confident that the group will be able to secure the necessary financing. The group’s bank loans totalled €14.5 million at the end of October last.
Staff numbers increased from 143 to 169 as employee costs totalled €4.4 million. Shareholder funds totalled €4.12 million at the year end.
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