The leadership at iNua Hospitality has announced 2023 as a prosperous year for the company. The success comes as the Irish hotel conglomerate’s earnings improved, recovering from the strain of Covid-19, coupled with achieving a key financial restructuring of their debt.
The post-tax shortfalls at iNua Hospitality Plc, which operates eight of iNua’s 20 properties scattered all over Ireland, rose to almost €6.3 million last year from €3.9 million, the recent filed accounts reveal. This escalation was fuelled by exceptional costs of over €3 million bonding with the debt restructure preceding the expiration of the existing financial provisions the previous summer.
Completed a year prior, the financial restructuring, backed by lenders such as AllianceBernstein and Earlsfort Capital Partners, was linked to the company’s borrowings against its portfolio of eight luxury hotels, incorporating the Radisson Blu Hotel & Spa, Limerick and the Muckross Park Hotel & Spa, Killarney, in Co Kerry.
Consequently, iNua, initiated by Paul Fitzgerald and Sean O’Driscoll through an iNua management acquisition in early 2020, found itself with a sum of €71.8 million in loans at the close of last year. The accounts imply that approximately €68.7 million of it will be payable in or after 2028. The group also cleared about €6 million in loan notes at the deal’s conclusion in the past August, as stated in the 2022 accounts.
In response to inquiries, Mr O’Driscoll stated that other charges accrued due to the refinancing pact included an exit fee on the prior loan, the standard legal, financial, and corporate finance costs linked to refinancing due diligence, alongside establishing an interest cap.
iNua achieved operational profits prior to the one-off €3 million costs associated with the refinancing, which boosted to €3.9 million in 2023 from €2.4 million on earnings of €72.8 million, up by 6.7 per cent from the previous year. The company’s turnover plummeted to nearly €22 million in 2020 as the industry was largely closed due to Covid-related health measures.
Mr O’Driscoll conveyed that combining the eight hotels under the group, the overall occupancy rate soared by 7.5 percentage points from 2022, reaching 83 per cent in 2023. The year also witnessed a rise of 6 per cent in mean room charges, notwithstanding the growth decelerated after the surge in the VAT rate to 13.5 per cent since the commencement of September 2023.
As noted in the report connected to iNua’s financial statements, the board of directors commended the 2023 performance, labelling it as “meeting the set expectations” and marking the year as “exceptionally victorious for the enterprise.” They mentioned this robust performance occurred while the hospitality industry was experiencing a revival in usual business operations sans the influence of Covid protocols.
The commencement of 2024 has witnessed sustained progress, stated Mr O’Driscoll, with the revenue matching 2023’s figures. He reported that, “The occupancy rate for the first half of the year was pegged at 81 per cent. Notwithstanding, there has been a conspicuous drop in the revenue of bars and restaurants post-Easter, apparently due to patrons reducing their visits.”
He commented that the year 2024 has brought its own set of trials for the overall hospitality sector, with VAT and minimum wage hikes contributing to an escalation in expenditure on wages. Given the current sentiment among consumers, he noted it was impractical to pass the VAT costs onto them, causing several hospitality ventures to bear this added expense.
Regardless of these challenges, he indicated that hotel demand is persistently robust. He holds an optimistic view for 2024, anticipating it to be “another year of strength” for the group.