McKillen hotel group makes nearly £8m profit

Developer Paddy McKillen's upscale London hotel company Coroin made profits of £7.78 million (€9.8 million) last year, according to accounts filed with the UK authorities.

Together with its three hotels, Claridge's, the Connaught and the Berkeley, Coroin is at the centre of a bitter court battle between Mr McKillen and British property magnates David and Frederick Barclay.

The London-registered group has just filed accounts with the UK companies’ office showing that its pretax profit hit £7.78 million last year, compared with a loss of £18.56 million in 2012. Those losses resulted from a once-off, £21.7 million interest and penalty payment for renegotiating and extending part of its £540 million-plus bank debt.

This left it with a total £60 million bill for servicing those liabilities in 2012. In contrast, it paid its lenders £37.4 million in interest last year. Coroin’s operations generated profits of £44.33 million, almost 6 per cent more than the £41.73 million it made in 2012, which was a strong year for the hotels as London hosted the Olympics.

The accounts show that, on December 31st, it owed its banks £547 million but £18.2 million of this was offset. Total long-term debt was £604 million, which included £64 million in convertible loan stock. There were £376 million in short-term debt due to its subsidiaries.

Improvement

Shareholders’ funds, the group’s book value assuming all assets had been cashed in and all liabilities cleared, stood at £151.9 million on December 31st, a 5.7 per cent improvement on 12 months earlier when the figure was £143.73 million.

Revenues dipped last year to £142.52 million from £144.6 million in 2012, when the directors note that the London Olympics led to a spike in sales in the final quarter.

Coroin’s revenues come solely from the sale of hotel rooms, restaurant turnover and other associated sources.

The directors' report, signed by finance chief, Carole Walker, states that the average room rate grew 1 per cent in the year, but it also notes that revenue per room slipped 2 per cent, but the group maintained strong margins.

Coroin employed 1,278 people last year and paid them £35.39 million in wages, social security and pensions. Directors earned £1 million.