The Galway-based Flannery-owned hotel group provided for a €42.49 million cost in purchasing shares from former shareholders in a deal to resolve a family dispute over how the family’s hotels were run, its latest account show.
The Flannery-owned Foxfield Inns DAC owns the Imperial Hotel in Galway, the Ashling Hotel in Dublin along with a hostel, a restaurant and a direct provision centre. The group also owns a number of rental properties from which it earns rental income.
The family dispute reached the Commercial Court in January 2021 and was resolved in June 2022 after the other shareholders sold their shareholdings back to the company.
The accounts put a €42.49 million cost on the share purchase deal and “was financed from retained earnings, and was paid for by raising additional finance”.
The note said the borrowing commitment was “well within the group’s repayment ability and the finance was based on an up-to-date valuation of the group’s real estate assets”.
The note added that in June 2022, as part of the strategic plan, Foxfield Inns DAC established new subsidiary companies and it “transferred relevant fixed tangible property assets and the related trade into each of the new subsidiaries”.
The net €41.99 million provision for the purchase of shares resulted in the group’s accumulated profits reducing from €49.86 million to €8.75 million in 2021, offset by the post-tax profit of €886,373 for that year.
The group also incurred a €3 million exceptional cost arising from the deal when the group “entered into an agreement with certain minority shareholders to settle their legal challenges and dispute, which had been ongoing for some time, in order to protect the group’s assets and its underlying businesses”.
Separate documents lodged with the Companies Office show that shareholdings owned by Andrena Flannery and Mary Flannery were purchased by the company on June 24th, 2022 and the two resigned from the company’s board the same day.
Two Flannerys, Kevin and Frank, remain on the board and the two approved the accounts on June 24th this year.
A note states that “there are excellent occupancy levels in the group’s hotels and hostel, and there is a strong performance in food and beverage activities”.
It added that “the group has experienced strong growth overall and that allowed the directors to undertake the strategic corporate restructuring in 2022”.
It further stated that the financial statements of the group and its newly constituted subsidiary undertakings for the years 2022 and 2023 “will show healthy trading profits and a very strong financial position”.
Pre-Covid, the hotel group recorded revenues of €22 million in 2019 and revenues for the Covid-19 hit 2021 show revenues of €9.09 million.
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