Gleneagles posts £5m loss due to Covid

Alistair Dunsmuir
By Alistair Dunsmuir April 14, 2021 07:22

The host of the 2014 Ryder Cup, Gleneagles, has become the latest major golf resort to post a loss for the last financial year due to coronavirus.

It is the resort’s first loss in a decade.

In the 15 months ending just after the lockdown started in March 2020, it suffered a pre-tax loss of £5.2 million.

The Queen’s Course at Gleneagles on August 12, 2019 in Auchterarder, Scotland. (Photo by David Cannon/Getty Images)

Its financial report noted that the emergence of Covid-19 was hugely significant because it led to fewer bookings in the first quarter of 2020 – particularly from the group bookings the hotel is reliant on.

The resort received £5m from the Coronavirus Job Retention Scheme, along with a £3.9m loan from its parent company.

As a result, the directors have tested various models of the business to check how the pandemic has impacted cash flow.

One model showed that a strong summer performance would be enough to enable the hotel to operate for a year without additional funding being required.

The report stated that further lending will not be required within 12 months and its latest bank loan is not due for repayment until 2024, although the parent entity agreed to waive covenant reporting until the “economic conditions are likely to be less volatile”.

Managing director Conor O’Leary explained that the company had been well supported by its bank and was hopeful of better trading in 2021.

“During the summer of 2020 the hotel was able to achieve reasonable occupancy levels and operate profitably within the revised Covid-19 guidelines,” he wrote. “This gives the directors confidence over the company’s outlook for the remainder of 2021.

The Solheim Cup, PGA Centenary Course, Gleneagles Hotel, Scotland. 13-15 September 2019. Credit: Tristan Jones

“A multi-million pound investment programme is on-going, with new meeting and event spaces, the reopened Strathearn restaurant, upgrades to golf club facilities and redevelopment of the retail arcade.”

This comes just a few days after Lahinch Golf Club also reported a large but manageable loss due to Covid-19.

 

Alistair Dunsmuir
By Alistair Dunsmuir April 14, 2021 07:22
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