Auditor has De Vere Group concerns
Fri, 24th October 2014

Auditor has De Vere Group concerns

By Laurence Kilgannon, Assistant Digital News Editor

The auditor of one of the UK's best-known hospitality and leisure groups has emphasised the existence of material uncertainties which cast doubt over its ability to continue as a going concern despite a year of strong trading.

But De Vere Group, which has a number of venues across the Midlands and a luxury hotel in Grantham, Belton Woods, is confident that a well-progressed asset sell-off will allow it to pay off bank debts which total more than £1bn or that new repayment schedules can be agreed if the disposals do not complete.

De Vere Group Ltd is currently looking to sell its luxury hotel division and its Village Urban Resorts operation, with deals expected to go through in the final quarter of this year.

In March, the business sold its venues division to Starwood Capital, with the £232m raised going towards bank debt. De Vere Group has also offloaded other assets, with the £50m disposal of the Grand in Brighton in April perhaps the most high-profile.

Loans of more than £1.1bn with Lloyds are due for repayment by 30 June 2015 and, in accounts filed at Companies House, the group expresses its confidence that these can be repaid if the asset sales complete.

If the deals have not gone through, the group also expresses its belief that appropriate support will be provided by the bank.

Auditors from EY have, however, emphasised the existence of material uncertainties which may cast "significant doubt" about the group's ability to continue as a going concern, and said the financial statements do not include the adjustments that would result if the group and company were unable to continue as a going concern.

The group's continuing divisions – incorporating seven luxury hotels and 25 Village Urban Resorts – are said to be trading well and positioned to take advantage of an improving economy.

For the 12 months to 31 December 2013, the group generated £359.8m of sales and operating profits of £33.3m. After taking fixed asset impairments and discontinued operations into account, it made an operating loss of £48m.

category Midlands  |  source Insider Media