Hotel Merrion, the operating company behind the five-star Dublin hotel co-owned by ESB chairman Lochlann Quinn and billionaire industrialist Martin Naughton, held its profits steady last year at just over €1.4 million.
Interest charges on the hotel's property loans, however, resulted in a small after-tax loss for Landmark Investment Company, the Merrion's parent entity and the landlord to the operating division. It finished the 12 months to the end of last October €60,000 in the red, a reduction in its losses of €220,000 from the previous year.
The operating company generated revenues of €16.8 million over the year, up 3.3 per cent, as a nascent recovery took hold in the sector. That works out at about €120,000 in revenues generated for each of its 140 rooms, also taking account of its food and beverage sales.
Hotel Merrion has accumulated profits of almost €2 million. The hotel, which is 50 per cent owned by Mr Naughton and Mr Quinn, with the other half owned by the Hastings hotel group, employs almost 280 staff, according to its accounts.
Mini revamp
Its owners invested almost €1 million in a mini revamp over the year, according to the figures.
According to Landmark’s accounts, the hotel building is valued by its owners at about €43 million. With the market for Irish hotel assets heating up and strong demand from foreign investors, the Merrion, one of the city’s best-located hotels, would likely fetch well in excess of this figure were it to hit the open market.
Landmark has total debts of more than €59 million, including €27.9 million in subordinated loans from its shareholders and €31.3 million in bank loans, for which it has breached attached covenants.
Landmark agreement
“The group is in breach of its capital expenditure covenant specified in the loan agreement and therefore the bank has the right to call in the loan at any time. As terms have been agreed . . . to extend the loan to November 2016, the directors do not believe the bank will enforce this,” the accounts state.
The hotel is planning a significant extension, with demolition work due to begin next January. The project involves the levelling of an adjacent office block, and the construction of 20 new suits over three floors, as well as a new hotel restaurant and an extension to Restaurant Patrick Guilbaud, the two-star Michelin eatery that resides within the hotel as a tenant.
