REG-Dalata Hotel Group PLC Dalata Hotel Group PLC: 2023 Preliminary Financial Results Announcement
29/02/2024 07:15
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Dalata Hotel Group PLC (DAL,DHG)
Dalata Hotel Group PLC: 2023 Preliminary Financial Results Announcement
29-Feb-2024 / 07:00 GMT/BST
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Dalata: The Heart of Hospitality
Record operating performance with Revenue up 18% and Adjusted EBITDA up 22%
ISE: DHG LSE: DAL
Dublin and London | 29 February 2024: Dalata Hotel Group plc (‘Dalata’ or the ‘Group’), the largest hotel operator
in Ireland, with a growing presence in the United Kingdom and Continental Europe, announces its results for the
year ended 31 December 2023.
2023
€million 2023 20222
vs 2022
Revenue 607.7 515.7 +18%
Adjusted EBITDA1 223.1 183.4 +22%
Profit before tax 105.5 109.7 -4%
Basic earnings per share (cents) 40.4 43.4 -7%
Adjusted basic earnings per share1 (cents) 41.7 31.7 +32%
Property, plant and equipment 1,684.8 1,427.4 +18%
Free Cashflow1 133.4 126.5 +5%
Free Cashflow per Share1 (cents) 59.7 56.8 +5%
Group key performance indicators (as reported)
RevPAR (€)1 114.67 102.23 +12%
Average room rate (ARR) (€)1 143.36 134.80 +6%
Occupancy % 80.0% 75.8%
Group key performance indicators (‘Like for like’ or ‘LFL’)
‘Like for like’ or ‘LFL’ RevPAR (€)1 116.69 105.17 +11%
PROVEN BUSINESS MODEL DELIVERING RECORD OPERATING PERFORMANCE
• Revenue of €607.7 million, up 18% on 2022
• Adjusted EBITDA1 of €223.1 million, up 22% on 2022
• ‘LFL’ 2023 RevPAR1 of €116.69, up 11% on 2022 with ARR1 up 6% and Occupancy of 81.0% in 2023
• ‘LFL’ Hotel EBITDAR margin1 of 42.3%, up on 2022 (41.7%), in line with 2019
• Profit before tax of €105.5 million, down due to reversal of previous period revaluation losses post Covid in
2022
• 2023 Free Cashflow1 of €133.4 million, up 5% on 2022
ANNOUNCING TODAY
• 216-bedroom extension at Clayton Hotel Manchester Airport (£40m), subject to planning
• The Board is proposing a final dividend of 8.0 cents per share, representing dividend payment of c. €18
million
EXECUTING AMBITIOUS GROWTH STRATEGY – CURRENT PIPELINE OVER 1,500 ROOMS
• Delivering growth through freehold acquisitions, leases and development opportunities with €156 million
deployed during 2023
• Invested £97.7 million (€112.3 million) in two strategic London assets, Maldron Hotel Finsbury Park (191
rooms) and Clayton Hotel London Wall (89 rooms), which began trading under Dalata ownership during the
year
• Second hotel in Continental Europe with €29.5 million leasehold acquisition of rebranded Clayton Hotel
Amsterdam American (173 rooms), which began trading under Dalata in 2023
• Invested £12.5 million (€14.4 million) in building conversion opportunity in Edinburgh with planning
lodged for office conversion to 167-bedroom hotel (14 additional rooms added through design
post-acquisition, subject to planning)
• Signed agreement for lease with the landlord of Clayton Hotel Manchester Airport to extend the current lease
term from the remaining 61 years to 200 years in total. The new lease is conditional on the receipt of a grant
of planning for a 216-bedroom extension to be developed by Dalata. The estimated investment of £40 million
also provides for the refurbishment of the ground floor and a portion of the bedrooms at the existing hotel,
as well as the upgrade to plant and machinery to improve the sustainability of the hotel. The project is
targeted for completion in H1 2027. The existing hotel will continue to trade through the development.
• UK rooms to exceed 5,000 by end of 2024 (+28% since end of 2022) with the opening of centrally located hotels
in London, Liverpool, Brighton and Manchester (together 834 rooms)
• Considerable firepower potential from ongoing cash flows to invest in further opportunities over the medium
term, underpinned by freehold estate of €1.7bn primarily located in Dublin and London while maintaining a
comfortable leverage of 2.0x to 2.5x Net Debt to EBITDA after rent1 (31 December 2023: Net Debt to EBITDA
after rent1 of 1.3x with cash and undrawn facilities of €283.5 million)
• Focussed on growing in 11 key cities in the UK and establishing a presence in targeted large European cities
with a strong mix of corporate and leisure demand
CREATING LONG-TERM VALUE, BALANCED WITH MAINTAINING FINANCIAL DISCPLINE
• Strong RevPAR1 growth and high Hotel EBITDAR margins1 from existing hotels, together with the impact from new
openings helped to deliver strong returns
• Continuing to use innovation to protect profitability and enhance employee and customer experience
• Normalised Return on Invested Capital1 of 13.8% (2022: 11.6%)
• Net property revaluation uplift of €94.1 million (+7% on hotel assets1 at 31 December 2022) with c. €0.5
billion uplift since IPO
• Excellent quality long-term leases with strong Rent Cover1 of 1.8x (weighted average lease term of 29.5 years
remaining)
• Fully hedged on £176.5 million term loan with interest rate swaps in place fixing the SONIA benchmark rate at
approximately 1.0% until 26 October 2024 and rent payments largely fixed until 2026
PUTTING PEOPLE AT THE HEART OF WHAT WE DO
• Achieved record engagement scores from employees across the Group and launched additional benefits programmes
• Received ‘Silver’ accreditation from Investors in Diversity and won our first Diversity and Inclusion Award at
annual Irish Published Accounts Awards
• Building a pipeline of talent for future growth with approx. 800 employees currently on or having completed
development programmes in 2023 (c. 15% of all employees) and 585 employees promoted in 2023
• Experienced hotel leadership - General Managers at our three hotel additions in 2023 have come through the
Dalata development pathway meaning our teams hit the ground running
FULLY INTEGRATED SUSTAINABILITY STRATEGY
• 27% reduction in Scope 1 & 2 carbon emissions per room sold achieved in 2023 versus 2019 (compared to a target
of 20% reduction on 2019 full year levels by 2026) due to increased sustainability focus and management
• Aim to commit to Science Based Targets initiative (SBTi), subject to receipt and review of final building
sector guidance. Regardless of outcome, Dalata continue to focus on broadly following the draft SBTi target
requirements, with ambition to target in-use operational emissions, embodied carbon emissions and Scope 3
emissions
• The building conversion opportunity in Edinburgh will be one of our first hotels to be designed with zero
on-site carbon emissions and significant potential for biodiversity gains. As a conversion scheme, external
consultants estimate that it has been designed with approximately 70% lower embodied carbon and 50% lower
whole lifecycle CO2e compared with a hypothetical new build structure
• Adherence to the Corporate Sustainability Reporting Directive (CSRD) from 2024 will provide a more robust and
transparent benchmark for our sustainability efforts
BRAND REFRESH
• Refreshed brands reflect our commitment to delivering value, building trust, and fostering meaningful
connections with our people and customers
• Launching corporate brand refresh today, Clayton and Maldron to follow in Q2 this year
• Supported by extensive consumer research to redefine where our brands operate and how best to meet our
customers’ expectations
• Consolidation of digital marketing and social media activities to increase direct bookings and achieve cost
efficiencies. 22% increase in ‘LFL’ direct room bookings in H2 2023 vs H2 2022
• Further investment to support the refresh of our brands expected over time, however, we will remain
disciplined in our approach and prioritise spend on the areas most impactful to customers and the business
OUTLOOK
The Group’s ‘like for like’ RevPAR1 was 4% behind 2023 for January / February. Corporate demand was ahead of 2023
levels. Our Regional Ireland and UK portfolio performed broadly in line with January / February 2023. RevPAR1 in
our Dublin portfolio was 11% behind last year for the same period. In these traditionally quieter months (January
and February represented approximately 11% of our room revenue in 2023), the Dublin market was impacted by the
additional supply of approximately 1,800 rooms compared to the same period last year due to the opening of new
hotels and some hotels returning from government use in Spring 2023. There was also a lower number of events
compared to 2023 affecting the leisure transient segment. RevPAR1 performance for our Dublin portfolio was in line
with the market for January.
Notwithstanding this and the ongoing uncertainty in the macro-economic environment, the Group remains optimistic
in its trading outlook for 2024 supported by future demand indicators across our markets, including growing air
traffic forecasts and strong event calendars for the remainder of the year. External research and surveys indicate
that travel remains a high priority for consumers while employment and consumer saving levels remain supportive of
trading. We also look forward to the greater contribution from the 10 hotels recently added to the portfolio as
they mature.
We remain attentive to the macro-economic backdrop and geopolitical environment for events which could impact the
business. As a priority, we are proactively addressing inflationary pressures, particularly payroll costs
following recent minimum wage and living wage increases in Ireland and the UK. Dalata have given increases in pay
rates ranging from 3.5%-10% in 2024. In 2023, we achieved ‘like for like’ Hotel EBITDAR margin1 in line with that
achieved in 2019 despite a 15% increase in minimum wage in Ireland and a 27% increase in living wage in the UK
since then along with elevated energy costs. We remain confident in our ability to continue to manage inflationary
pressures on the business through our ability to innovate and drive efficiencies across our portfolio.
The Group’s strong Free Cashflow1 generation, asset backed balance sheet with low gearing and proven decentralised
business model ensures it is well positioned to respond to the challenges and benefit from the opportunities that
may lie ahead.
DIVIDENDS
On 28 February 2024, the Board proposed a final dividend of 8.0 cents per share amounting to approximately €18
million. This proposed dividend is subject to approval by shareholders at the Annual General Meeting. The payment
date for the final dividend will be 1 May 2024 to shareholders registered on the record date of 5 April 2024.
DERMOT CROWLEY, DALATA HOTEL GROUP CEO, COMMENTED:
“I am delighted to announce that the Group has delivered another excellent set of results, reflecting a year that
has been highly successful in many ways. After exceeding revenue of €500 million in 2022, the Group has grown
revenues further to over €600 million in 2023. Our established hotels continue to drive revenue and convert
strongly to the bottom line underpinned by our decentralised model. We also added three hotels to the portfolio in
London (x2) and Amsterdam – two of Europe’s most attractive capital cities. I would like to thank all my
colleagues across our 53 hotels and at our central office for their hard work, dedication and professionalism – it
is through their efforts that we are able to announce such a positive set of results today.
Hospitality is all about people and, in Dalata, we have great people. Our commitment to inclusion and diversity
and our focus on well-being provides our employees with a rewarding and attractive place to work. Our wide breadth
of development programmes, together with our exciting expansion plans, provides excellent opportunities for career
development which in turn provides a pipeline of talent to open our new hotels and continue to deliver excellent
returns for shareholders.
We recognise the power inherent in our brands, and through focus and efforts, we are unlocking that power. As we
grow our scale and geographical footprint enhancing our brands becomes more important for maximising our
commercial potential. During 2023, we engaged a global marketing communications agency supported by extensive
customer research to refresh our brands. Today, we are launching the refreshed Dalata brand which reflects what
Dalata is all about – engaged teams passionate about our hospitality and customer service. This is best summed up
as “the heart of hospitality”. We will be launching the refresh of our Clayton and Maldron brands in the second
quarter of this year.
We are also seeing the benefits of our ongoing commitment to respond innovatively to the challenges and
opportunities facing our industry. We have achieved a notable increase in productivity by streamlining work
practices within our accommodation and kitchens which is critical given the significant increase in minimum wage
rates in Ireland and the UK. The productivity increases were achieved whilst also increasing employee satisfaction
levels in those departments. We will continue to use innovation and technology to find smarter ways to deliver
what our guests are looking for at our hotels. I am excited by the projects we are rolling out during 2024 and the
continued benefits from those commenced in 2023.
Our investment in green plant and machinery and strong focus on sustainability from our management teams has
delivered further utility consumption savings. The Group achieved a 27% reduction in our Scope 1 & 2 carbon
emissions per room sold in 2023 compared to 2019 (versus a target of 20% reduction by 2026).
Dalata’s growth strategy remains compelling. We combine our hotel operator and developer expertise, supported by a
strong financial position allowing us to be agile and capitalise on opportunities as they arise. 2024 will be
another exciting year at Dalata. The UK remains our key strategic priority as we open four hotels across that
market, which will be our most operationally sustainable new build hotels to date. I look forward to welcoming our
first guests in Liverpool and Brighton as we continue to grow our presence across the UK to over 5,000 rooms by
the end of 2024.
January and February in any year are two of the quieter months of the year – the impact of additional supply or
reduced demand can have a larger than normal percentage impact on RevPAR. The combination of an additional 1,800
rooms in supply and a reduced number of events has led to a fall in RevPAR1 in the Dublin market. We are reporting
a fall of 11% for the two-month period versus 2023. However, when I look forward at the strength of the calendar
of events for the balance of the year (especially from May onwards), the strong flight schedule at Dublin Airport
and the increase in corporate demand experienced in the year to date, I am optimistic as we look to the balance of
the year.”
ENDS
ABOUT DALATA
Dalata Hotel Group plc is a leading hotel operator backed by €1.7bn in freehold and long leasehold assets in
Ireland and the UK. Established in 2007, Dalata has become Ireland’s largest hotel operator with an ambitious
growth strategy to expand its portfolio further in excellent locations in select, large cities in the UK and
Continental Europe. The Group’s portfolio comprises 53 primarily four-star hotels operating through its two main
brands, Clayton and Maldron Hotels, with 11,413 rooms and a pipeline of over 1,500 rooms. For the year ended 31
December 2023, Dalata reported revenue of €607.7 million, basic earnings per share of 40.4 cent and Free Cashflow
per Share of 59.7 cent. Dalata is listed on the Main Market of Euronext Dublin (DHG) and the London Stock Exchange
(DAL). For further information visit: 1 www.dalatahotelgroup.com
CONFERENCE CALL AND WEBCAST DETAILS
Management will host a conference call and webcast for institutional investors and analysts at 08:30 today 29
February 2024.
• The webcast will be 2 available here
• For conference call details, 3 please register here
Please allow sufficient time for registration.
Contacts
Dalata Hotel Group plc investorrelations@dalatahotelgroup.com
Dermot Crowley, CEO Tel +353 1 206 9400
Carol Phelan, CFO
Niamh Carr, Head of Investor Relations
Joint Group Brokers
Davy: Anthony Farrell Tel +353 1 679 6363
Berenberg: Ben Wright Tel +44 20 3753 3069
Investor Relations and PR | FTI Consulting Tel +353 86 401 5250
Melanie Farrell 4 dalata@fticonsulting.com
NOTE ON FORWARD-LOOKING INFORMATION
This Announcement contains forward-looking statements, which are subject to risks and uncertainties because they
relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and
similar expressions concerning matters that are not historical facts. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or
achievements of the Group or the industry in which it operates, to be materially different from any future
results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking
statements referred to in this paragraph speak only as at the date of this Announcement. The Group will not
undertake any obligation to release publicly any revision or updates to these forward-looking statements to
reflect future events, circumstances, unanticipated events, new information or otherwise except as required by law
or by any appropriate regulatory authority.
2023 FINANCIAL PERFORMANCE
€million 2023 20222
Revenue 607.7 515.7
Hotel EBITDAR1 252.3 205.7
Hotel variable lease costs (3.7) (3.8)
Hotel EBITDA1 248.6 201.9
Other income (excluding gain on disposal of property, plant and equipment) 1.5 1.4
Central costs (21.1) (16.5)
Share-based payments expense (5.9) (3.4)
Adjusted EBITDA1 223.1 183.4
Adjusting items3 (2.9) 28.7
Group EBITDA1 220.2 212.1
Depreciation of property, plant and equipment and amortisation (33.4) (29.1)
Depreciation of right-of-use assets (30.7) (27.5)
Operating profit 156.1 155.5
Interest on lease liabilities (42.8) (38.1)
Other interest and finance costs (7.8) (7.7)
Profit before tax 105.5 109.7
Tax charge (15.3) (13.0)
Profit for the year 90.2 96.7
Earnings per share (cents) – basic 40.4 43.4
Adjusted earnings per share1 (cents) – basic 41.7 31.7
Hotel EBITDAR margin1 41.5% 39.9%
Group KPIs (as reported)
RevPAR (€) 114.67 102.23
Occupancy 80.0% 75.8%
Average room rate (ARR) (€) 143.36 134.80
‘Like for like’ Group KPIs1
RevPAR (€) 116.69 105.17
RevPAR growth on 2022 11%
Occupancy 81.0% 77.3%
Average room rate (ARR) (€) 143.99 136.12
Half-yearly ‘like for like’ Group KPIs1 H1 2023 H2 2023
RevPAR (€) 112.09 121.21
RevPAR growth on equivalent period in 2022 23% 2%
Occupancy 79.7% 82.4%
Average room rate (ARR) (€) 140.66 147.15
Summary of hotel performance
The Group delivered strong Adjusted EBITDA1 of €223.1 million in 2023, up 22% from €183.4 million in 2022. Strong
revenue conversion at existing hotels resulted in year-on-year growth of €38.6 million and hotel additions in 2022
and 20234 contributed a further €23.3 million of growth. Covid related government support totalling €15.2 million
was included in 2022 Adjusted EBITDA1.
The Group achieved revenue of €607.7 million for the year, representing an increase of 18% compared to 2022. This
increase was driven by strong underlying performance at the existing hotels (growth of €50.9 million) as well as
recent additions to the portfolio. The ten hotels added to the portfolio during 2022 and 2023, together
contributed a year-on-year increase of €45.7 million. This was partially offset by the disposal of Clayton Crown
Hotel, London in June 2022, which generated revenue of €2.2 million in that year.
‘Like for like’ Group RevPAR1 for the year was €116.69, up from €105.17 (+11%) in 2022 as the existing portfolio
returned to strong occupancy levels above 80% and achieved average room rate1 growth of 6%. The strong start to
2023, as the hotels benefitted from the recovery in Q1 2023 versus Q1 2022 (which had some Covid restrictions),
was followed by ongoing recovery in corporate demand and pricing, together with sustained leisure demand in our
markets. During 2023, the year-on-year growth rate moderated from ‘like for like’ RevPAR1 growth of 23% in H1 2023
to 2% in H2 2023 when compared to the equivalent period in 2022. In Ireland, the market was impacted by the
increase in the VAT rate of an additional 4.5% from 1 September 2023, a lower number of stadium events in Dublin
in Q4 2023 and lower demand around the Christmas period. Hotel room supply in Ireland remains constrained with a
significant number of rooms being used for the provision of emergency accommodation.
On a ‘like for like’ basis1, food and beverage revenues grew by €8.4 million to €101.6 million (2022: €93.2
million). Food and beverage revenue stabilised during 2023 and the Group made significant gains in profitability
supported by the rollout of the Dalata Signature Range.
The Group continues to proactively manage its cost base and respond to inflation. On a ‘like for like’ basis1,
hotel operating costs, defined as revenue less Hotel EBITDA1, increased by €12.3 million (+5%) to €296.2 million
in 2023. Costs were higher in the first half of 2023, with the comparative period in 2022 impacted by Covid
restrictions, while costs in the second half of 2023 were lower than the equivalent period in 2022.
The Group’s ongoing commitment to reduce energy consumption (down by 12% year-on-year per room sold) and a
reduction in gas and electricity pricing resulted in gas and electricity costs decreasing by €3.4 million to €23.4
million in 2023 versus 2022 on a ‘like for like’ basis1. The Group has either purchased or entered into fixed
pricing contracts until June 2025 for approximately 90% of its projected gas and electricity consumption until
December 2024 and 70% thereafter. Based on expected consumption levels, we estimate gas and electricity costs of
approximately €26 million for 2024 (2023: €28 million).
The Group has made significant progress on innovation projects this year to protect or enhance profitability and
customer and employee experience. Hotel payroll for the second half of 2023 was in line with the equivalent period
in 2022 on a ‘like for like’ basis1 despite the significant increases in minimum wage rates in Ireland and living
wage rates in the UK. On similar business levels, the Group has increased productivity, achieving a 10% decrease
in hours worked in the accommodation and food and beverage departments of ‘like for like’ hotels1 in the second
half of 2023. This was underpinned by the focus on innovation projects, notably the rooms accommodation efficiency
project and the roll out of the Dalata Signature Range. Also, direct bookings through our brand websites are
increasing and we are ambitious to improve this further supported by the refresh of our brands in 2024.
The Group remains focused on driving innovation and efficiencies across the business to offset the impact of
rising costs, particularly in payroll following increases in minimum wage rates again in 2024 in Ireland and the
UK. The rates increased by 15% and 27% respectively from 2019 to 2023. Despite this and significantly more
elevated energy costs in recent years, the Group’s Hotel EBITDAR margin1 for 2023 was in line with 2019 levels on
a ‘like for like’ basis1. The Group’s 'like for like’ Hotel EBITDAR margin1 of 42.3% in 2023 was 60 basis points
ahead of 2022 levels (41.7%) and 380 basis points ahead excluding Covid-19 related government support. With
minimum wage increases of 12% and 10% in Ireland and the UK in 2024 and payroll costs representing 41% of the
Group’s operating costs in 2023, it will be an ongoing challenge to protect margin percentages. However, Dalata’s
focus and successes to date mean we are well positioned to continue to respond.
€million Revenue Operating costs Adjusted EBITDA1
Year ended 31 December 2022 515.7 (332.3) 183.4
Movement at ‘like for like’ hotels1 50.9 (12.3) 38.6
Hotels added to the portfolio during either year4 45.7 (22.4) 23.3
2022 Covid-19 government support (now lapsed) - (15.2) (15.2)
Movement in other income and group expenses - (6.6) (6.6)
Hotel disposals (2.2) 2.5 0.3
Effect of FX (2.4) 1.7 (0.7)
Year ended 31 December 2023 607.7 (384.6) 223.1
PERFORMANCE REVIEW | SEGMENTAL ANALYSIS
The following section analyses the results from the Group’s portfolio of hotels in Dublin, Regional Ireland, the
UK and Continental Europe. In 2022, the operating performance of Clayton Hotel Düsseldorf was disclosed within the
Dublin segment due to being a single asset and its immateriality in the context of the overall Group. Following
the addition of Clayton Hotel Amsterdam American in October 2023, the Group’s Continental Europe portfolio is now
material enough to be presented separately. As a result, the 2022 operating performance for Dublin has been
amended to exclude Clayton Hotel Düsseldorf.
1. Dublin Hotel Portfolio
€million 2023 2022
Room revenue 216.9 190.1
Food and beverage revenue 51.3 45.3
Other revenue 17.9 15.2
Revenue 286.1 250.6
Hotel EBITDAR1 135.9 118.5
Hotel EBITDAR margin %1 47.5% 47.3%
Performance statistics (‘like for like’)5 2023 2022
RevPAR (€) 132.89 119.98
Occupancy 84.0% 80.9%
Average room rate (ARR) (€) 158.28 148.26
Dublin owned and leased portfolio 31 Dec 2023 31 Dec 2022
Hotels at year end 17 17
Room numbers at year end 4,439 4,437
The Dublin portfolio consists of eight Maldron hotels, seven Clayton hotels, The Gibson Hotel and The Samuel
Hotel. Ten hotels are owned and seven are operated under leases. The Group acquired two rooms at Clayton Hotel
Liffey Valley during the year.
The Dublin portfolio delivered Hotel EBITDAR1 of €135.9 million for the year, representing growth of 15% compared
to Hotel EBITDAR1 in the prior year of €118.5 million (which included Covid-19 related government support
totalling €9.2 million). The two new hotels opened during 2022, The Samuel Hotel and Maldron Hotel Merrion Road,
contributed an increase of €4.9 million. ‘Like for like’ Hotel EBITDAR margin1 was 47.6% in 2023, 360 basis points
ahead of 2022 levels (excluding Covid-19 related government support).
Revenue for the Dublin portfolio totalled €286.1 million in 2023, up €35.5 million (14%) on the prior year. ‘Like
for like’ hotels5 contributed €26.4 million of this increase, while the two new hotels opened during 2022 added a
further €9.1 million.
‘Like for like’ Dublin RevPAR5 for the year was €132.89, up from €119.98 (+11%) in 2022. The ‘like for like’
Dublin hotels5 returned to high occupancy levels achieving 84% in 2023, supported by the recovery in the first
quarter. Average room rate1 grew by 7% on a ‘like for like’ basis5. The Dublin hotels benefitted from a strong
return of corporate demand with conference and corporate business exceeding 2019 levels on a ‘like for like’
basis5. There were also a number of events in the city which drove strong leisure demand such as the Champions Cup
rugby final in May 2023 and the Aer Lingus College Football Classic in August 2023. Demand was softer in the final
quarter due to the lack of the Autumn Rugby Internationals as a result of the 2023 Rugby World Cup. There was also
a 4.5% increase in the VAT rate effective from 1 September 2023. Despite this, for the second half of 2023, ‘like
for like’ RevPAR5 was in line with the 2022 equivalent levels.
During 2023, the Dublin market also benefitted from strong visitor numbers with the volume of passengers
travelling through Dublin Airport broadly in line with 2019 levels and employment levels in the city remains high
with a strong presence from foreign direct investment. Hotel room supply remains constrained with a significant
number of rooms being used for the provision of emergency accommodation and external estimates suggest
approximately 10% of the total room supply in Dublin is currently out of use.
On a ‘like for like’ basis5, food and beverage revenues grew by €4.6 million to €48.3 million (2022: €43.7
million), supported by recovery in the first quarter. We are increasing earnings from our food and beverage
outlets through competitive pricing and driving efficiencies to enhance profitability. ‘Like for like’5 food and
beverage departmental margin increased to 30% in 2023 (+710 bps on 2022).
2. Regional Ireland Hotel Portfolio
€million 2023 2022
Room revenue 73.2 63.8
Food and beverage revenue 30.3 28.1
Other revenue 8.8 7.9
Revenue 112.3 99.8
Hotel EBITDAR1 37.0 31.7
Hotel EBITDAR margin %1 33.0% 31.8%
Performance statistics 2023 2022
RevPAR (€) 107.44 93.60
Occupancy 79.5% 74.6%
Average room rate (ARR) (€) 135.13 125.48
Regional Ireland owned and leased portfolio 31 Dec 2023 31 Dec 2022
Hotels at year end 13 13
Room numbers at year end 1,867 1,867
The Regional Ireland portfolio comprises seven Maldron hotels and six Clayton hotels primarily located in the
cities of Cork, Galway and Limerick. 12 hotels are owned and one is operated under a lease.
The Regional Ireland portfolio generated Hotel EBITDAR1 of €37.0 million in 2023, which was an increase of €5.3
million compared to 2022. Hotel EBITDAR1 of €31.7 million in 2022 included Covid-19 related government support of
€4.7 million. Hotel EBITDAR margin1 was 33.0% in 2023, 590 basis points ahead of 2022 levels (excluding Covid-19
related government support).
Revenue exceeded €100 million for the first time, growing by €12.5 million to €112.3 million in 2023 (2022: €99.8
million).
Room revenue growth of 15% benefitted from a continued increase in the number of international travellers visiting
Ireland as airline capacity returns to pre-pandemic levels. Occupancy was strong at 79.5% in 2023, up from 74.6%
in 2022, supported by a large growth in tour group and corporate business. The hotels continued to grow rates
across all customer categories with average room rates1 increasing by 8% on 2022 levels. Domestic leisure demand
also remained robust although travel patterns are normalising. Trade remained strong in the second half of 2023
with RevPAR1 growth of 7%, led by pricing. Similar to Dublin, the provision of emergency accommodation for
refugees is reducing hotel room supply in Regional Ireland.
Food and beverage revenues grew by 8% from €28.1 million in 2022 to €30.3 million in 2023, supported by recovery
in the first quarter. Strong focus on driving efficiencies resulted in food and beverage departmental margin
increasing to 27% in 2023 (+700 bps on 2022).
3. UK Hotel Portfolio
Local currency - £million 2023 2022
Room revenue 127.3 101.0
Food and beverage revenue 26.5 22.3
Other revenue 8.0 7.0
Revenue 161.8 130.3
Hotel EBITDAR1 62.2 45.8
Hotel EBITDAR margin %1 38.4% 35.2%
Performance statistics (‘like for like’)6 2023 2022
RevPAR (£) 86.11 77.95
Occupancy 77.8% 73.7%
Average room rate (ARR) (£) 110.68 105.79
UK owned and leased portfolio 31 Dec 2023 31 Dec 2022
Hotels at year end 18 16
Room numbers at year end 4,242 3,962
The UK hotel portfolio comprises 12 Clayton hotels and six Maldron hotels with four hotels situated in London, 11
hotels in regional UK, focussed on the large cities of Manchester, Glasgow, Birmingham and Bristol, and three
hotels in Northern Ireland. Seven hotels are owned, nine are operated under long-term leases and two hotels are
effectively owned through a 99-year lease and 122-year lease. Clayton Hotel London Wall (89 rooms) and Maldron
Hotel Finsbury Park (191 rooms) both commenced trading under Dalata ownership in July 2023.
The UK portfolio delivered Hotel EBITDAR1 of £62.2 million in 2023, growing £16.4 million (+36%) from £45.8
million in 2022 (which included Covid related government support of £1.1 million). This growth reflects an uplift
of £10.7 million relating to the full year impact of the four hotels added to the portfolio during 2022 and two
London hotels added during 20234. ‘Like for like’ Hotel EBITDAR margin1 was 39.4% for 2023, 260 basis points ahead
of 2022 levels (excluding Covid-19 related government support).
The four hotels added to the portfolio during 2022 performed strongly, achieving a Rent Cover1 of 1.7x despite
being only open for an average of 20 months at 31 December 2023.
Revenue for the UK portfolio totalled £161.8 million in 2023, up £31.5 million (24%) on the prior year. ‘Like for
like’6 hotels contributed £10.4 million of this increase, while the six new hotels added during 2022/2023 added a
further £23.0 million. These uplifts were partially offset by the sale of Clayton Crown Hotel in June 2022 which
reduced revenues by £1.9 million.
‘Like for like’ occupancy6 was strong at 77.8% in 2023, up from 73.7% in 2022. Our London hotels, which had been
slower to recover from the Covid-19 pandemic, rebounded strongly from the ongoing recovery in inbound leisure
travel and corporate business during 2023 with RevPAR1 17% ahead of 2022 levels on a ‘like for like’ basis6. ‘Like
for like’ RevPAR6 at our regional UK and Northern Ireland hotels was 9% ahead of 2022 levels driven by sustained
domestic demand, particularly within the corporate category. Trade remained strong in the second half of 2023 with
‘like for like’ UK RevPAR6 growth of 3%.
‘Like for like’6 food and beverage revenue for the year grew by £1.6 million (9%) to £19.9 million (2022: £18.3
million), supported by recovery in the first quarter. ‘Like for like’6 food and beverage departmental margin
increased to 28% in 2023 (+400 bps on 2022).
4. Continental Europe Hotel Portfolio
€million 2023 2022
Room revenue 16.4 9.8
Food and beverage revenue 4.9 2.4
Other revenue 1.7 0.7
Revenue 23.0 12.9
Hotel EBITDAR1 7.7 2.0
Hotel EBITDAR margin %1 33.6% 15.1%
Continental Europe leased portfolio 31 Dec 2023 31 Dec 2022
Hotels at year end 2 1
Room numbers at year end 566 393
The Continental Europe hotel portfolio includes Clayton Hotel Düsseldorf (393 rooms) which was added to the
portfolio in February 2022 and was disclosed within the Dublin portfolio in previous reporting periods due to its
size in the context of the overall Group. In October 2023, the Group added the leasehold interest in the Hard Rock
Hotel Amsterdam American (173 rooms) which was subsequently rebranded as Clayton Hotel Amsterdam American. Both
hotels are operated under leases.
Clayton Hotel Düsseldorf performed well during the year, despite the challenging backdrop of the German economy.
The Group continues to integrate the hotel into the Dalata portfolio and is already seeing tangible benefits of
our revenue management approach and relationships as the hotel outperformed in RevPAR1 growth against its
compset1. The Group is also pleased with the performance of Clayton Hotel Amsterdam American since its integration
into the portfolio. Both hotels in this region were cash positive for the year or period of trading since being
added to the portfolio.
Central costs and share-based payment expense
Central costs totalled €21.1 million during the year (2022: €16.5 million). This included the positive impact of
an insurance provision write-back and discount unwind of €1.3 million (2022: €0.7 million). Excluding the impact
of this, the increase of €5.2 million primarily relates to payroll costs due to additional headcount and pay
increases post pandemic era restrictions to support the growth of the Group and increases in performance-related
remuneration for executive directors. The Group also incurred additional costs in relation to strategic marketing
projects to support the brand refresh and consolidation of digital marketing and will continue to invest in the
refresh of its employer and consumer brands in 2024.
The Group’s share-based payment expense represents the accounting charge for the Group’s LTIP and SAYE share
schemes and increased to €5.9 million in 2023 (2022: €3.3 million) primarily based on the Group’s assessment of
non-market performance conditions of active LTIP award schemes. The Group also recognised an additional charge of
€0.9 million during the year on foot of the vesting of awards granted in March 2020.
Adjusting items to EBITDA
€million 2023 2022
Reversal of previous periods revaluation losses through profit or loss 2.0 21.2
Gain on disposal of Clayton Crown Hotel, London - 3.9
Income from the sale of Merrion Road residential units - 42.6
Release of costs capitalised for Merrion Road residential units - (41.0)
Hotel acquisition costs (4.4) -
Hotel pre-opening expenses (0.5) (2.7)
Net reversal of previous impairment charges of fixtures, fittings and equipment - 0.6
Net reversal of impairment of right-of-use assets - 4.1
Adjusting items1 (2.9) 28.7
The Group recorded a net revaluation gain of €94.1 million on the revaluation of its property assets at 31
December 2023 of which €2.0 million was recorded as the reversal of previous period revaluation losses through
profit or loss (2022: €21.2 million). There were no revaluation losses through profit or loss in the year (2022:
€nil). Further detail is provided in the ‘Property, plant and equipment’ section (note 15) of the financial
statements.
On 3 July 2023, the Group acquired the long leasehold interest and trade of Apex Hotel London Wall, now trading as
Clayton Hotel London Wall, for a total cash consideration of £53.4 million (€62.1 million). Acquisition-related
costs, primarily stamp duty, of £3.3 million (€3.8 million) were charged to administrative expenses in profit or
loss in respect of this business combination. Further detail is provided in the ‘Business combinations’ section
(note 13) of the financial statements.
On 3 October 2023, the Group acquired 100% of the share capital of American Hotel Exploitatie BV which holds the
operational lease of the Hard Rock Hotel Amsterdam American, now trading as Clayton Hotel Amsterdam American, for
a total cash consideration of €28.3 million (net working capital liabilities of €1.2 million were also assumed on
acquisition). Acquisition-related costs of €0.6 million were charged to administrative expenses in profit or loss
in respect of this business combination. Further detail is provided in the ‘Business combinations’ section (note
13) of the financial statements.
The Group incurred €0.5 million of pre-opening expenses during the year (2022: €2.7 million). These expenses are
related to the opening of Maldron Hotel Finsbury Park, London in July 2023.
In 2022, the Group completed the sale to Irish Residential Properties REIT (plc) (‘I-RES’) of the Merrion Road
residential units which had been developed by the Group on the site of the former Tara Towers Hotel. Total sales
proceeds of €42.6 million were recognised as income in profit or loss for the year ended 31 December 2022. The
related capitalised contract fulfilment costs of €41.0 million were released from the statement of financial
position to profit or loss and recognised within costs for the year ended 31 December 2022. Further detail is
provided in the ‘Contract fulfilment costs’ section (note 17) of the financial statements.
Depreciation of right-of-use assets
Under IFRS 16, the right-of-use assets are depreciated on a straight-line basis to the end of their estimated
useful life, typically the end of the lease term. The depreciation of right-of-use assets increased by €3.2
million to €30.7 million for the year ended 31 December 2023, primarily due to the full year impact of six leased
hotels added to the portfolio during 20227, and the impact of the lease of Clayton Hotel Amsterdam American, which
was added in October 2023.
Depreciation of property, plant and equipment and amortisation
Depreciation of property, plant and equipment and amortisation increased by €4.4 million to €33.4 million in 2023.
The increase primarily relates to the acquisition of two London hotel assets during the year, fixtures and
fittings acquired with the leasehold addition of Clayton Hotel Amsterdam American and the full year impact of the
depreciation of Maldron Hotel Merrion Road, Dublin which opened in August 2022.
Finance Costs
€million 2023 2022
Interest expense on bank loans and borrowings 15.6 7.9
Impact of interest rate swaps (6.9) (0.2)
Other finance costs 1.3 2.4
Net foreign exchange (gain)/loss on financing activities (0.2) 0.2
Finance costs before capitalised interest and excluding lease liability interest 9.8 10.3
Capitalised interest (2.0) (2.5)
Finance costs excluding lease liability interest 7.8 7.8
Interest on lease liabilities 42.8 38.1
Finance costs 50.6 45.9
Weighted average interest cost, including the impact of hedges
- Sterling denominated borrowings 3.2% 3.6%
- Euro denominated borrowings 4.2% 2.5%
Finance costs related to the Group’s loans and borrowings (before capitalised interest) amounted to €9.8 million
in 2023, decreasing from €10.3 million in 2022. Lower banking margins on the Group’s term loan and RCF drawn
amounts, which are set with reference to the Net Debt to EBITDA covenant levels, lower commitment fee charges,
which are calculated as a percentage of margin, and lower average borrowings were mostly offset by the impact of
IFRS 9 accounting adjustments recorded in 2022 which reduced finance costs in the prior year and a higher variable
interest cost on RCF drawn amounts.
During the year, interest on loans and borrowings of €2.0 million was capitalised to assets under construction,
relating to the construction of Maldron Hotel Shoreditch, London.
Interest on lease liabilities for the year increased from €38.1 million in 2022 to €42.8 million in 2023 primarily
due to the full year impact of six leased hotels added to the portfolio during 20227, and the impact of the lease
of Clayton Hotel Amsterdam American, which was added in October 2023.
Tax charge
The tax charge for the year ended 31 December 2023 of €15.3 million mainly relates to current tax in respect of
profits earned in Ireland during the year. The deferred tax charge of €0.5 million primarily relates to deferred
tax arising on revaluations of land and buildings through profit and loss. The Group’s effective tax rate
increased from 11.8% in 2022 to 14.5% in 2023, mainly due to the impact of non-taxable gains, such as the reversal
of previous periods revaluation losses through profit and loss, during the prior year that reduced the effective
tax rate in that year. At 31 December 2023, the Group has deferred tax assets of €18.1 million in relation to
cumulative tax losses and interest carried forward which can be utilised to reduce corporation tax payments in
future periods.
Earnings per share (EPS)
The Group’s profit after tax of €90.2 million for the year (2022: €96.7 million) represents basic earnings per
share of 40.4 cents (2022: 43.4 cents). The Group’s profit after tax decreased by 7% year on year, mainly due to
the impact of net property revaluation movements through profit and loss recorded in 2022, which increased profits
in that year. Excluding the impact of adjusting items1, adjusted basic earnings per share1 grew by 32% to 41.7
cents in 2023 (2022: 31.7 cents). Adjusting items1 in 2023 primarily related to acquisition costs of €4.4 million
and the reversal of previous period revaluation losses through profit or loss of €2.0 million.
STRONG CASHFLOW GENERATION
The Group continues to generate strong Free Cashflow1 to fund future acquisitions, development expenditure and
shareholder returns. In 2023, Free Cashflow1 totalled €133.4 million, up 5% on 2022 which benefitted from reduced
levels of corporation tax and refurbishment capital expenditure payments. At 31 December 2023, the Group’s Debt
and Lease Service Cover1 remains strong at 3.0x with cash and undrawn committed debt facilities of €283.5 million
(31 December 2022: cash and undrawn debt facilities of €455.7 million).
Free Cashflow1 2023 2022
Net cash from operating activities 171.4 207.9
Other interest and finance costs paid (8.7) (12.3)
Refurbishment capital expenditure paid1 (26.1) (15.9)
Fixed lease payments (53.5) (47.4)
Add back acquisition-related costs 4.4 -
Add back pre-opening costs 0.5 2.7
Exclude impact from net tax payments/(deferrals) under Debt Warehousing scheme 34.9 (8.5)
Exclude impact of 2022 corporation tax payments made during 2023 10.5 -
Free Cashflow1 133.4 126.5
Weighted average shares outstanding - basic (million) 223.3 222.9
Free Cashflow per Share1 (cent) 59.7c 56.8c
During the year, the Group paid corporation tax totalling €23.8 million, compared to a corporation tax refund of
€1.2 million received in 2022. This increase reflects both an increase in the Group’s taxable profit levels as
well as the normalisation of the timing of payments. Preliminary corporation tax is typically paid in the year the
charge arises however due to the pandemic impact on tax liabilities, the payment of the 2022 corporation tax
liabilities of €10.5 million did not fall due until 2023 when the 2023 preliminary tax payment was also made.
In April 2023, the Group fully repaid the tax deferrals under the Irish government’s Debt Warehousing scheme of
€34.9 million (2022: repaid Irish VAT and payroll tax liabilities totalling €2.5 million). Deferrals under the
Debt Warehousing scheme ended in May 2022 and as such no further amounts were deferred during the year (2022:
deferred Irish VAT and payroll tax liabilities totalling €11.0 million).
The Group made refurbishment capital expenditure payments totalling €26.1 million during the year (4.3% of 2023
revenues), compared to payments of €15.9 million in 2022 (3.1% of 2022 revenues). Completion of refurbishment
projects was impacted by supply chain disruptions, which reduced the value of payments during 2022. The Group
allocates approximately 4% of revenue to refurbishment capital expenditure projects.
At 31 December 2023, the Group has future capital expenditure commitments totalling €20.6 million, of which €9.6
million relates to the development of Maldron Hotel Shoreditch, London. The remaining balance of €11.0 million
primarily relates to future capital expenditure commitments at our existing hotels.
BALANCE SHEET | STRONG ASSET BACKING PROVIDES SECURITY, FLEXIBILITY AND THE ENGINE FOR FUTURE GROWTH
€million 31 Dec 2023 31 Dec 2022
Non-current assets
Property, plant and equipment 1,684.8 1,427.4
Right-of-use assets 685.2 658.1
Intangible assets and goodwill 54.1 31.1
Other non-current assets8 32.5 33.5
Current assets
Trade and other receivables and inventories 30.7 32.6
Cash and cash equivalents 34.2 91.3
Other current assets8 6.5 4.9
Total assets 2,528.0 2,278.9
Equity 1,392.9 1,222.8
Loans and borrowings at amortised cost 254.4 193.5
Lease liabilities 698.6 651.8
Trade and other payables 86.4 119.0
Other liabilities9 95.7 91.8
Total equity and liabilities 2,528.0 2,278.9
The Group’s balance sheet position remains robust through financial discipline with property, plant and equipment
of €1.7 billion in excellent locations and cash and undrawn debt facilities of €283.5 million, supported by a Net
Debt to EBITDA after rent1 of 1.3x.
Property, plant and equipment
Property, plant and equipment amounted to €1,684.8 million at 31 December 2023. The increase of €257.4 million
since 31 December 2022 is driven by additions of €118.3 million, acquisitions through business combinations of
€68.2 million, revaluation movements on property assets of €94.1 million, a foreign exchange gain on the
retranslation of Sterling-denominated assets of €7.3 million and capitalised borrowing and labour costs of €2.3
million, partially offset by a depreciation charge of €32.8 million for the year.
73% of the Group’s property, plant and equipment is located in Dublin and London. The Group revalues its property
assets, at owned and effectively owned trading hotels, at each reporting date using independent external
valuers. The principal valuation technique utilised is discounted cash flows which utilise asset-specific
risk-adjusted discount rates and terminal capitalisation rates. The independent external valuation also has regard
to relevant recent data on hotel sales activity metrics.
Weighted average terminal capitalisation rate 2023 2022
Dublin 7.40% 7.56%
Regional Ireland 9.06% 8.75%
UK 6.77% 6.97%
Group 7.47% 7.61%
Revaluation uplifts of €94.1 million were recorded on our property assets in the year ended 31 December 2023.
€92.1 million of the net gains are recorded as an uplift through the revaluation reserve. €2.0 million of the net
revaluation uplifts are recorded through profit or loss reversing revaluation losses from prior periods.
Additions through acquisitions and capital expenditure
2023 2022
€million
Total acquisitions and development capital expenditure 163.1 23.8
Total refurbishment capital expenditure1 23.4 16.1
Additions to property, plant and equipment 186.5 39.9
Acquisitions and development capital expenditure during the year mainly related to the:
• Acquisition of 107 year long-leasehold interest (effective freehold) of the newly rebranded Clayton Hotel
London Wall - £53.4 million (€62.1 million)
• Acquisition of freehold interest and development capital expenditure at Maldron Hotel Finsbury Park, London -
£49.5 million (€56.9 million), which included directly attributable transaction costs of £0.4 million (€0.5
million)
• Construction of Maldron Hotel Shoreditch, London, which is expected to open in Q3 2024 - £14.1 million (€16.2
million)
• Purchase of building conversion opportunity at 28 St. Andrew Square, Edinburgh - £13.3 million (€15.3
million), which included directly attributable transaction costs of £0.8 million (€0.9 million)
• Fixtures, fittings and equipment acquired with the leasehold addition of Clayton Hotel Amsterdam American -
€6.1 million
The Group incurred €23.4 million of refurbishment capital expenditure during the year which mainly related to the
refurbishment of 565 bedrooms across the Group, enhancements to food and beverage infrastructure, health and
safety upgrades and energy efficient plant upgrades. The Group allocates approximately 4% of revenue to
refurbishment capital expenditure.
Right-of-use assets and lease liabilities
At 31 December 2023, the Group’s right-of-use assets amounted to €685.2 million and lease liabilities amounted to
€698.6 million.
Lease Right-of-use
€million
liabilities assets
At 31 December 2022 651.8 658.1
Acquisitions through business combinations 43.4 43.4
Additions 0.4 0.4
Depreciation charge on right-of-use assets - (30.7)
Interest on lease liabilities 42.8 -
Remeasurement of lease liabilities 7.8 7.8
Lease payments (53.5) -
Translation adjustment 5.9 6.2
At 31 December 2023 698.6 685.2
Right-of-use assets are recorded at cost less accumulated depreciation and impairment. The initial cost comprises
the initial amount of the lease liability adjusted for lease prepayments and accruals at the commencement date,
initial direct costs and, where applicable, reclassifications from intangible assets or accounting adjustments
related to sale and leasebacks.
Lease liabilities are initially measured at the present value of the outstanding lease payments, discounted using
the estimated incremental borrowing rate attributable to the lease. The lease liabilities are subsequently
remeasured during the lease term following the completion of rent reviews, a reassessment of the lease term or
where a lease contract is modified. The weighted average lease life of future minimum rentals payable under leases
is 29.5 years (31 December 2022: 29.8 years). The Group acquired the following leases during the year:
• 18 year remaining lease for Clayton Hotel Amsterdam American in October 2023 – €41.0 million
• 107 year remaining ground lease for Clayton Hotel London Wall in July 2023 – £2.0 million (€2.3 million)
During the year ended 31 December 2023, a lease amendment, which was not included in the original lease agreement
was made to one of the Group’s leases. This has been treated as a modification of lease liabilities and resulted
in an increase in lease liabilities and the carrying value of the right-of-use asset of €4.5 million. Following
agreed rent reviews and rent adjustments, which formed part of the original lease agreements, certain of the
Group’s leases were reassessed during the year. This resulted in an increase in lease liabilities and related
right-of-use assets of €3.3 million.
Over 90% of lease contracts at currently leased hotels include rent review caps which limit CPI/RPI-related
payment increases to between 3% - 4% per annum.
Further information on the Group’s leases including the unwind of right-of-use assets and release of interest
charge is set out in note 16 to the financial statements.
Loans and borrowings
As at 31 December 2023, the Group had loans and borrowings at amortised cost of €254.4 million and undrawn
committed debt facilities of €249.3 million. Loans and borrowings increased from 31 December 2022 (€193.5 million)
mainly due to loan drawdowns during the year.
Sterling borrowings Euro borrowings
At 31 December 2023 Total borrowings €million
£million €million
Term Loan 176.5 - 203.1
Revolving credit facility:
- Drawn in Sterling 44.9 - 51.6
- Drawn in Euro - 4.0 4.0
External loans and borrowings drawn at 31 December 221.4 4.0 258.7
2023
Accounting adjustment to bring to amortised cost (4.3)
Loans and borrowings at amortised cost at 31 254.4
December 2023
The Group’s debt facilities consist of a €200.0 million term loan facility and a €304.9 million revolving credit
facility (‘RCF’), both with a maturity date of 26 October 2025. The Group’s other revolving credit facility of
€59.5 million matured on 30 September 2023.
The Group’s covenants comprising Net Debt to EBITDA (as defined in the Group’s bank facility agreement which is
equivalent to Net Debt to EBITDA after rent1) and Interest Cover1 were tested on 31 December 2023. At 31 December
2023, the Net Debt to EBITDA covenant limit is 4.0x and the Interest Cover minimum is 4.0x. The Group complied
with its covenants as at 31 December 2023.
The Group limits its exposure to foreign currency by using Sterling debt to act as a natural hedge against the
impact of Sterling rate fluctuations on the Euro value of the Group’s UK assets. The Group is also exposed to
floating interest rates on its debt obligations and uses hedging instruments to mitigate the risk associated with
interest rate fluctuations. This is achieved by entering into interest rate swaps which hedge the variability in
cash flows attributable to the interest rate risk. The term debt interest is fully hedged until 26 October 2024
with interest rate swaps in place to fix the SONIA benchmark rate to c. 1.0% on Sterling-denominated borrowings.
The variable interest rates on the Group’s revolving credit facilities were unhedged at 31 December 2023.
See Supplementary Financial Information which contains definitions and reconciliations of Alternative Performance
Measures (‘APM’) and other definitions.
2 The 2022 comparative figures include presentation amendments with no impact to basic or diluted earnings per
share. For further details, please refer to note 2 of the financial statements.
3 Adjusting items in 2023 include the net property revaluation gain of €2.0 million following the valuation of
property assets (2022: net revaluation gain of €21.2 million) less acquisition costs of €4.4 million (2022: nil).
Further detail on adjusting items is provided in the section titled ‘Adjusting items to EBITDA’.
4 The Group added ten hotels between January 2022 and October 2023. The Group added six hotels in the UK (Clayton
Hotel Manchester City Centre, Maldron Hotel Manchester City Centre, Clayton Hotel Bristol City and Clayton Hotel
Glasgow City in 2022 and Maldron Hotel Finsbury Park, London and Clayton Hotel London Wall in 2023), two hotels in
Dublin (The Samuel Hotel and Maldron Hotel Merrion Road, Dublin in 2022) and two hotels in Continental Europe
(Clayton Hotel Düsseldorf in 2022 and Clayton Hotel Amsterdam American in 2023).
5 The reference to ‘like for like’ hotels in Dublin for performance statistics comparing to 2022 excludes The
Samuel Hotel which is newly opened since April 2022 and Maldron Hotel Merrion Road which is newly opened since
August 2022.
6 The reference to ‘like for like’ hotels in the UK for performance statistics comparing to 2022 excludes Clayton
Hotel Manchester City Centre, Maldron Hotel Manchester City Centre, Clayton Hotel Bristol City and Clayton Hotel
Glasgow City as these only opened during 2022 and Maldron Hotel Finsbury Park and Clayton Hotel London Wall which
began trading during 2023. Clayton Crown Hotel, London is also excluded as it was sold in June 2022.
7 The six leased hotels added to the portfolio during 2022 were Clayton Hotel Manchester City Centre, Maldron
Hotel Manchester City Centre, Clayton Hotel Düsseldorf, Clayton Hotel Bristol City, The Samuel Hotel, Dublin and
Clayton Hotel Glasgow City.
8 Other non-current assets comprise deferred tax assets, investment property, non-current derivative assets and
other receivables (which include costs of €4.1 million associated with future lease agreements for hotels
currently being constructed or in planning (31 December 2022: €1.1 million)). Other current assets comprise
current derivative assets.
9 Other liabilities comprise deferred tax liabilities, provision for liabilities and current tax liabilities.
PRINCIPAL RISKS AND UNCERTAINTIES
Since the last report on principal risks in August 2023, there have been ongoing developments in our risk
environment. The principal risks and uncertainties now facing the Group are:
External, economic and geopolitical factors – Dalata operates in an open market, and its activities and
performance are influenced by uncertainty resulting from broader geopolitical and economic factors outside the
Group’s control. Nonetheless, these factors can directly or indirectly impact the Group’s strategy, future labour
and direct cost base, performance, and the economic environments in which the Group operates.
The Board and executive management team continuously focus on the impact of external factors on our business
performance. The Group has an experienced management team with functional expertise in relevant areas, supported
by modern and resilient information systems that provide up-to-date information to the Board.
Health, safety and security - The Group operates multiple hotels in Ireland, the UK and Continental Europe. Given
the nature of these operations, health, safety, and security concerns will always remain a key priority for the
Board and executive management. There is a risk that a material operational health and safety-related event, for
example, a fire, food safety event or public health event resulting in loss of life, injury or significant
property damage, occurs at a hotel and is not adequately managed.
We have a well-established health, safety and security framework in our hotels. There is ongoing capital
investment in hotel life, fire and safety systems and servicing and identified risks are remediated promptly.
External health and safety and food safety audits are conducted by statutory external bodies, new hotels are built
to high health and safety standards, and all refurbishments include health and safety as a principal
consideration.
Innovation - The hospitality market has seen ongoing change and innovation in its structure and how it delivers on
guest expectations. Technological advances in guest bookings, pricing and service delivery in hospitality will
continue. There is a risk that the Group does not consider and act, where necessary, to respond to changes in our
markets and customer behaviour and adapt to changes in the broader hospitality market.
Innovation is a core objective for senior leadership, with ongoing executive management focus on developing hotel
trends. The Group performs detailed research on customer wants and needs within our hotels, and reviews market
trends with feedback from customers and teams on initiatives taken. The Group allocates resources to develop and
implement business efficiencies and innovation and embraces enhanced use of business systems, new technologies and
information to support innovation.
Developing, recruiting and retaining our people – Our strategy is to develop our management and operational
expertise, where possible, from within our existing teams. This expertise can be deployed throughout our business,
particularly at management levels in our new hotels. We must also recruit and retain well-trained and motivated
people to deliver our desired customer service levels at our hotels. There is a risk that we cannot implement our
management development strategy as planned or recruit and retain sufficient resources to operate our business
effectively.
The Group invests in extensive development programmes, including hotel management and graduate development
programmes across various business-related areas. These programmes are continually reviewed to reflect growing
business needs and competencies. The Group is also focusing on the ongoing development of retention strategies
(such as employee benefits, workplace culture, training, employee development programmes, progression
opportunities and working conditions).
Cyber security, data and privacy – In the current environment, all businesses face heightened information security
risks associated with increasingly sophisticated cyber-attacks, ransomware attacks and those targeting data held
by companies. There is an ongoing risk that the Group’s information systems are subject to a material cyber event
that could have the potential for data loss or theft, denial of service or associated negative impact.
The ongoing security of our information technology platforms is crucial to the Board. The Group has invested in a
modern, standardised technology platform supported by trusted IT partners. Our Information Security Management
System is based on ISO27001 and audited twice annually. An established data privacy and protection structure,
including dedicated specialist resources, is operational across our business.
Expansion and development strategy – The Group’s strategy is to expand its activities in the UK and European
markets, adopting a predominately capital-light and long-term leasing model or by directly financing a project,
enabled by the Group’s financial position. There is a risk that as the development programme continues, fewer
viable opportunities could become available, or opportunities that do arise could have a higher risk profile.
Changes in the cost of financing, yields and the availability of investment funds could also impact the strategy.
The Group has extensive acquisitions and development expertise within its central office function to identify
opportunities and leverage its relationships, funding flexibility and financial position as a preferred partner.
The Board scrutinises all development projects before commencement and is regularly updated on the progress of the
development programme. Agreed financial criteria and due diligence are completed for all projects, including
specific site selection criteria, detailed city analysis and market intelligence.
Our culture and values – The rollout of our business model is dependent on the retention and growth of our strong
culture. There is a risk that the Group's continued expansion, in terms of the number of hotels and countries
where we operate, may dilute the culture that has been a key to the Group’s success.
We have defined Group values that are embedded in how we, as a Group and individuals, behave, which are set out in
the Group’s Code of Conduct. These are supported by internal structures that support and oversee expected
behaviours. We also use wide-ranging measures to assess and monitor our culture, which are reviewed with the Board
and management teams.
Climate change, ESG and decarbonisation strategy – The Board is keenly aware of the risks to society associated
with climate change and environmental matters. We are also aware that being a socially responsible business
supports our strategic objectives and benefits society and the communities in which we operate. There is a risk
that we will not meet stakeholder expectations in this regard, particularly concerning target setting,
environmental performance reporting and corporate performance.
The ESG Committee actively supports the Board in overseeing the development and implementation of the Group’s
strategy and targets in this area. A climate change and decarbonisation strategy is in place across our
businesses, with published environmental targets.
Statement of Directors’ Responsibilities
in respect of the Annual Report and the Financial Statements
The Directors are responsible for preparing the annual report and the consolidated and Company financial
statements, in accordance with applicable law and regulations.
Company law requires the Directors to prepare consolidated and Company financial statements for each financial
year. Under that law, the Directors are required to prepare the consolidated financial statements in accordance
with IFRS as adopted by the European Union and applicable law including Article 4 of the IAS Regulation. The
Directors have elected to prepare the Company financial statements in accordance with IFRS as adopted by the
European Union as applied in accordance with the provisions of the Companies Act 2014.
Under company law, the Directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the assets, liabilities and financial position of the Group and Company and of the
Group’s profit or loss for that year. In preparing the consolidated and Company financial statements, the
Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material departures disclosed
and explained in the financial statements;
• assess the Group’s and Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Group or Company or to
cease operations, or have no realistic alternative but to do so.
The Directors are also required by the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency
Rules of the Central Bank of Ireland to include a management report containing a fair review of the business and a
description of the principal risks and uncertainties facing the Group.
The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at
any time the assets, liabilities, financial position and profit or loss of the Company and which enable them to
ensure that the financial statements of the Company comply with the provisions of the Companies Act 2014. The
Directors are also responsible for taking all reasonable steps to ensure such records are kept by the Company’s
subsidiaries which enable them to ensure that the financial statements of the Group comply with the provisions of
the Companies Act 2014 and Article 4 of the IAS Regulation. They are responsible for such internal control as they
determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility for safeguarding the assets of the Company and the
Group, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are also responsible for preparing a Directors’ Report that complies with the requirements of the
Companies Act 2014.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Group’s and Company’s website www.dalatahotelgroup.com. Legislation in the Republic of Ireland
concerning the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
Responsibility statement as required by the Transparency Directive and UK Corporate Governance Code.
Each of the Directors, whose names and functions are listed in the Board of Directors section of this Annual
Report, confirm that, to the best of each person’s knowledge and belief:
• The consolidated financial statements, prepared in accordance with IFRS as adopted by the European Union, and
the Company financial statements, prepared in accordance with IFRS as adopted by the European Union as applied
in accordance with the provisions of the Companies Act 2014, give a true and fair view of the assets,
liabilities, and financial position of the Group and Company at 31 December 2023 and of the profit of the
Group for the year then ended;
• The Directors’ Report contained in the Annual Report includes a fair review of the development and performance
of the business and the position of the Group and Company, together with a description of the principal risks
and uncertainties that they face; and
• The Annual Report and financial statements, taken as a whole, provides the information necessary to assess the
Group’s performance, business model and strategy and is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company’s position and performance, business model and
strategy.
On behalf of the Board
John Hennessy Dermot Crowley
Chair Director
28 February 2024
Consolidated statement of profit or loss and other comprehensive income
for the year ended 31 December 2023
2023 2022
€’000 €’000
Note Restated (Note 2)
Continuing operations
Revenue 5 3 607,698 515,728
Cost of sales (214,509) (183,766)
Gross profit from hotel operations 393,189 331,962
Income from residential development activities 6 2, 7 17 - 42,532
Cost of residential development activities 8 2, 9 17 - (40,998)
Gross profit from residential development activities - 1,534
Total gross profit 393,189 333,496
Administrative expenses 10 5 (238,530) (183,206)
Other income 11 6 1,484 5,237
Operating profit 156,143 155,527
Finance costs 12 7 (50,611) (45,870)
Profit before tax 105,532 109,657
Tax charge 13 11 (15,310) (12,932)
Profit for the year attributable to owners of the Company 90,222 96,725
Other comprehensive income
Items that will not be reclassified to profit or loss
Revaluation of property 14 15 92,098 188,185
Related deferred tax 15 26 (10,451) (21,223)
81,647 166,962
Items that are or may be reclassified subsequently to profit or loss
Exchange gain/(loss) on translating foreign operations 11,396 (28,145)
(Loss)/gain on net investment hedge (6,343) 17,482
Fair value movement on cash flow hedges 16 25 1,753 12,093
Cash flow hedges – reclassified to profit or loss 17 25 (6,949) (179)
Related deferred tax 18 26 1,299 (2,929)
1,156 (1,678)
Other comprehensive income for the year, net of tax 82,803 165,284
Total comprehensive income for the year attributable to owners of the 173,025 262,009
Company
Earnings per share
Basic earnings per share 19 32 40.4 cents 43.4 cents
Diluted earnings per share 20 32 39.9 cents 43.2 cents
Consolidated statement of financial position
at 31 December 2023
2023 2022
€’000 €’000
Assets
Non-current assets
Intangible assets and goodwill 21 14 54,074 31,054
Property, plant and equipment 22 15 1,684,831 1,427,447
Right-of-use assets 23 16 685,193 658,101
Investment property 2,021 2,007
Derivative assets 24 25 - 6,825
Deferred tax assets 25 26 24,136 21,271
Other receivables 26 18 6,418 3,387
Total non-current assets 2,456,673 2,150,092
Current assets
Derivative assets 27 25 6,521 4,892
Trade and other receivables 28 18 28,262 30,263
Inventories 29 19 2,401 2,342
Cash and cash equivalents 30 20 34,173 91,320
Total current assets 71,357 128,817
Total assets 2,528,030 2,278,909
Equity
Share capital 31 21 2,235 2,229
Share premium 32 21 505,079 504,910
Capital contribution 33 21 25,724 25,724
Merger reserve 34 21 81,264 81,264
Share-based payment reserve 35 21 8,417 5,011
Hedging reserve 36 21 4,891 8,788
Revaluation reserve 37 21 461,181 379,534
Translation reserve 38 21 (12,182) (17,235)
Retained earnings 316,328 232,541
Total equity 1,392,937 1,222,766
Liabilities
Non-current liabilities
Loans and borrowings 39 24 254,387 193,488
Lease liabilities 40 16 686,558 641,444
Deferred tax liabilities 41 26 84,441 71,022
Provision for liabilities 42 23 6,656 7,165
Other payables 43 22 348 239
Total non-current liabilities 1,032,390 913,358
Current liabilities
Lease liabilities 44 16 12,040 10,347
Trade and other payables 45 22 86,049 118,818
Current tax liabilities 2,659 11,606
Provision for liabilities 46 23 1,955 2,014
Total current liabilities 102,703 142,785
Total liabilities 1,135,093 1,056,143
Total equity and liabilities 2,528,030 2,278,909
On behalf of the Board:
John Hennessy Dermot Crowley
Chair Director
Consolidated statement of changes in equity
for the year ended 31 December 2023
Attributable to owners of the Company
Share Share Capital Merger Share-based Hedging Revaluation Translation Retained
capital premium contribution reserve payment reserve reserve reserve earnings Total
reserve
€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000
At 1 January 2,229 504,910 25,724 81,264 5,011 8,788 379,534 (17,235) 232,541 1,222,766
2023
Comprehensive
income:
Profit for the - - - - - - - - 90,222 90,222
year
Other
comprehensive
income
Exchange gain
on translating - - - - - - - 11,396 - 11,396
foreign
operations
Loss on net
investment - - - - - - - (6,343) - (6,343)
hedge
Revaluation of
properties - - - - - - 92,098 - - 92,098
( 47 note 15)
Fair value
movement on
cash flow - - - - - 1,753 - - - 1,753
hedges
( 48 note 25)
Cash flow
hedges –
reclassified - - - - - (6,949) - - - (6,949)
to profit or
loss ( 49 note
25)
Related
deferred tax - - - - - 1,299 (10,451) - - (9,152)
( 50 note 26)
Total
comprehensive - - - - - (3,897) 81,647 5,053 90,222 173,025
income for the
year
Transactions
with owners of
the Company:
Equity-settled
share-based - - - - 5,910 - - - - 5,910
payments
( 51 note 9)
Transfer from
share-based
payment - - - - (2,504) - - - 2,504 -
reserve to
retained
earnings
Vesting of
share awards
and options 6 169 - - - - - - -
( 52 note 9)
175
Dividends paid - - - - - - - - (8,939) (8,939)
( 53 note 21)
Total
transactions 6 169 - - 3,406 - - - (6,435) (2,854)
with owners of
the Company
At 31 December 2,235 505,079 25,724 81,264 8,417 4,891 461,181 (12,182) 316,328 1,392,937
2023
Consolidated statement of changes in equity
for the year ended 31 December 2022
Attributable to owners of the Company
Share Share Capital Merger Share-based Hedging Revaluation Translation Retained
capital premium contribution reserve payment reserve reserve reserve earnings Total
reserve
€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000
At 1 January 2,229 504,895 25,724 81,264 3,085 (197) 212,572 (6,572) 134,413 957,413
2022
Comprehensive
income:
Profit for the - - - - - - - - 96,725 96,725
year
Other
comprehensive
income
Exchange loss
on translating - - - - - - - (28,145) - (28,145)
foreign
operations
Gain on net
investment - - - - - - - 17,482 - 17,482
hedge
Revaluation of
properties - - - - - - 188,185 - - 188,185
( 54 note 15)
Fair value
movement on
cash flow - - - - - 12,093 - - - 12,093
hedges
( 55 note 25)
Cash flow
hedges –
reclassified - - - - - (179) - - - (179)
to profit or
loss ( 56 note
25)
Related
deferred tax - - - - - (2,929) (21,223) - - (24,152)
( 57 note 26)
Total
comprehensive - - - - - 8,985 166,962 (10,663) 96,725 262,009
income for the
year
Transactions
with owners of
the Company:
Equity-settled
share-based - - - - 3,329 - - - - 3,329
payments
( 58 note 9)
Transfer from
share-based
payment - - - - (1,403) - - - 1,403 -
reserve to
retained
earnings
Vesting of
share awards - 15 - - - - - - 15
and options -
( 59 note 9)
Total
transactions - 15 - - 1,926 - - - 1,403 3,344
with owners of
the Company
At 31 December 2,229 504,910 25,724 81,264 5,011 8,788 379,534 (17,235) 232,541 1,222,766
2022
Consolidated statement of cash flows
for the year ended 31 December 2023
2023 2022
€’000 €’000
Cash flows from operating activities
Profit for the year 90,222 96,725
Adjustments for:
Depreciation of property, plant and equipment 32,791 28,426
Depreciation of right-of-use assets 30,663 27,503
Amortisation of intangible assets 650 610
Net revaluation movements through profit or loss (2,025) (21,166)
Net impairment reversal of fixtures, fittings and equipment - (624)
Net impairment reversal of right-of-use assets - (4,101)
Gain on disposal of property, plant and equipment - (3,877)
Income from sale of Merrion Road residential units - (42,532)
Release of costs capitalised for Merrion Road residential units - 40,998
Share-based payments expense 5,910 3,329
Interest on lease liabilities 42,751 38,101
Other interest and finance costs 7,860 7,769
Tax charge 15,310 12,932
224,132 184,093
(Decrease)/increase in trade and other payables and provision for liabilities (33,625) 37,168
Decrease/(increase) in current and non-current receivables 4,562 (13,912)
Decrease/(increase) in inventories 110 (677)
Tax (paid)/refunded (23,800) 1,188
Net cash from operating activities 171,379 207,860
Cash flows from investing activities
Purchase of property, plant and equipment (120,277) (40,315)
Contract fulfilment cost payments (1,965) (4,045)
Proceeds received from sale of Merrion road residential units - 41,868
Costs paid on entering new leases and agreements for leases (1,825) (9,810)
Proceeds from sale of Clayton Crown Hotel - 24,258
Acquisitions of undertakings through business combinations, net of cash acquired (90,294) -
Purchase of intangible assets (7) (202)
Net cash (used in)/from investing activities (214,368) 11,754
Cash flows from financing activities
Interest paid on lease liabilities (42,751) (38,101)
Other interest and finance costs paid (8,726) (12,233)
Receipt of bank loans 120,648 11,973
Repayment of bank loans (64,374) (117,838)
Repayment of lease liabilities (10,747) (9,324)
Proceeds from vesting of share awards and options 175 15
Dividends paid (8,939) -
Net cash used in financing activities (14,714) (165,508)
Net (decrease)/increase in cash and cash equivalents (57,703) 54,106
Cash and cash equivalents at the beginning of the year 91,320 41,112
Effect of movements in exchange rates 556 (3,898)
Cash and cash equivalents at the end of the year 34,173 91,320
Notes to the consolidated financial statements
forming part of the consolidated financial statements
1 Material accounting policies
General information and basis of preparation
Dalata Hotel Group plc (the ‘Company’) is a Company domiciled in the Republic of Ireland. The Company’s registered
office is Termini, 3 Arkle Road, Sandyford Business Park, Dublin 18. The consolidated financial statements of the
Company for the year ended 31 December 2023 include the Company and its subsidiaries (together referred to as the
‘Group’). The financial statements were authorised for issue by the Directors on 28 February 2024.
The consolidated financial statements have been prepared in accordance with IFRS, as adopted by the EU. In the
preparation of these consolidated financial statements the accounting policies set out below have been applied
consistently by all Group companies.
The preparation of financial statements in accordance with IFRS as adopted by the EU requires the Directors to
make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure
of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting year. Such estimates and judgements are based on historical experience
and other factors, including expectation of future events, that are believed to be reasonable under the
circumstances and are subject to continued re-evaluation. Actual outcomes could differ from those estimates.
In preparing these consolidated financial statements, the key judgements and estimates impacting these
consolidated financial statements were as follows:
Significant judgements
• Carrying value of property measured at fair value ( 60 note 15).
Key sources of estimation uncertainty
• Carrying value of property measured at fair value ( 61 note 15); and
• Carrying value of goodwill and right-of-use assets including assumptions underpinning value in use (‘VIU’)
calculations in the impairment tests ( 62 notes 12, 63 14, 64 16).
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of assets and liabilities at
fair value. When measuring the fair value of an asset or liability, the Group uses observable market data as far
as possible, with non-financial assets being measured on a highest and best-use basis. Fair values are categorised
into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Further information about the assumptions made in measuring fair values is included in 65 note 27 – Financial
instruments and risk management (in relation to financial assets and financial liabilities) and 66 note 15 –
Property, plant and equipment.
(i) Going concern
The year ended 31 December 2023 saw the Group trade strongly and continue the execution of its growth strategy.
The strong trade, the full year impact of hotels added during 2022 and the addition of three hotels during 2023
has led to an increase in Group revenue from hotel operations from €515.7 million to €607.7 million, as well as
net cash generated from operating activities in the year of €171.4 million (2022: €207.9 million).
The Group remains in a very strong financial position with significant financial headroom. The Group has cash and
undrawn loan facilities of €283.5 million (2022: €455.7 million).
The Group is in full compliance with its covenants at 31 December 2023. In accordance with the amended and
restated facility agreement entered into by the Group on 2 November 2021 with its banking club, the Group’s
banking covenants have reverted to Net Debt to EBITDA and Interest Cover from 30 June 2023. This replaces the Net
Debt to Value covenant and liquidity minimum covenants which were temporarily in place up to 30 June 2023. At 31
December 2023, the Net Debt to EBITDA covenant limit is 4.0x and the Interest Cover minimum is 4.0x. The Group’s
Net Debt to EBITDA, as defined in the Group's bank facility agreement which is equivalent to Net Debt to EBITDA
after rent, for the year ended 31 December 2023 is 1.3x (APM (xv)) and Interest Cover is 19.5x (APM (xvi)).
Current base projections show compliance with all covenants at all future testing dates and significant levels of
headroom.
The Directors have considered the above, with all available information, and the current liquidity and financial
position in assessing the going concern of the Group. On this basis, the Directors have prepared these
consolidated financial statements on a going concern basis. Furthermore, they do not believe there is any material
uncertainty related to events or conditions that may cast significant doubt on the Group’s ability to continue as
a going concern.
(ii) Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (‘IFRS’) and their interpretations issued by the International Accounting Standards Board (‘IASB’) as
adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS and
Article 4 of the IAS Regulation.
The following standards and interpretations were effective for the Group for the first time from 1 January 2023:
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of
Accounting policies (issued on 12 February 2021).
• Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates (issued on 12 February 2021).
• Amendments to IAS 12 Income taxes: International Tax Reform – Pillar Two Model Rules
• Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (issued on 7 May 2021).
• IFRS 17 Insurance Contracts (issued on 18 May 2017) including Amendments to IFRS 17 (issued on 25 June 2020).
• Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information
(issued on 9 December 2021).
With the exception of the above amendments to IAS 12 Income Taxes, the above standards, amendments and
interpretations have no material impact on the consolidated financial statements of the Group.
Accounting policies
The accounting policies applied in these consolidated financial statements are consistent with those applied in
the consolidated financial statements as at and for the year ended 31 December 2022, apart from the amendments to
IAS 12.
Amendments to IAS 12, effective for reporting periods beginning on or after 1 January 2023, clarify that the
initial recognition exemption of deferred tax assets and liabilities does not apply to transactions that give rise
to equal and offsetting temporary differences. The amendments require separate presentation of deferred tax assets
and liabilities arising on right-of-use assets and corresponding lease liabilities recognised under IFRS 16. The
comparative gross deferred tax assets and deferred tax liabilities for 2022 have been restated in the deferred tax
note in accordance with these amendments. The IAS 12 offsetting principle has been applied for deferred tax
balances shown on the face of the Consolidated Statement of Financial Position. The changes to the deferred tax
liabilities and deferred tax assets offset such that the net impact on the face of the Consolidated Statement of
Financial Position at 31 December 2022 and the net impact on retained earnings was nil. ( 67 note 2).
Prior period restatement
Certain comparative amounts in the Consolidated Statement of Profit or Loss and Other Comprehensive Income have
been re-presented as a result of a prior period restatement ( 68 note 2).
Standards issued but not yet effective
The following amendments to standards have been endorsed by the EU, are available for early adoption and are
effective from 1 January 2024. The Group has not adopted these amendments to standards early, and instead intends
to apply them from their effective date as determined by the date of EU endorsement. The potential impact of these
amendments to standards on the Group is under review:
• Amendments to IAS 1 Classification of Liabilities as Current or Non-Current, and Non-current Liabilities with
Covenants.
• Amendments to IFRS 16 Lease Liability in a Sale and Leaseback.
The following standards and interpretations are not yet endorsed by the EU. The potential impact of these
standards on the Group is under review:
• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance
Arrangements. IASB effective date 1 January 2024
• Amendments to IAS 21 Lack of exchangeability. IASB effective date 1 January 2025.
• Amendments to IFRS 10 Consolidated Financial Statements and IAS28 Investments in Associates and Joint Ventures
for sale or contribution of Assets between an Investor and its Associate or Joint Venture. Effective date
deferred indefinitely.
(iii) Functional and presentation currency
These consolidated financial statements are presented in Euro, being the functional currency of the Company and
the majority of its subsidiaries. All financial information presented in Euro has been rounded to the nearest
thousand or million and this is clearly set out in the financial statements where applicable.
(iv) Basis of consolidation
The consolidated financial statements include the financial statements of the Company and all of its subsidiary
undertakings.
Business combinations
The Group accounts for business combinations using the acquisition method when control is transferred to the
Group.
The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net
assets acquired. Any goodwill that arises is tested at least annually for impairment. Any gain on a bargain
purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if
related to the issue of debt or equity securities.
When an acquisition does not represent a business, it is accounted for as a purchase of a group of assets and
liabilities, not as a business combination. The cost of the acquisition is allocated to the assets and liabilities
acquired based on their relative fair values, and no goodwill is recognised. Where the Group solely purchases the
freehold interest in a property, this is accounted for as an asset purchase and not as a business combination on
the basis that the asset(s) purchased do not constitute a business. Asset purchases are accounted for as additions
to property, plant and equipment.
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that control ceases. Intra-group balances
and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated.
(v) Revenue recognition
Revenue represents sales (excluding VAT) of goods and services net of discounts provided in the normal course of
business and is recognised when services have been rendered.
Revenue is derived from hotel operations and includes the rental of rooms, food and beverage sales, car park
revenue and leisure centre membership in leased and owned hotels operated by the Group. Revenue is recognised when
rooms are occupied and food and beverages are sold. Car park revenue is recognised when the service is provided.
Leisure centre membership revenue is recognised over the life of the membership.
Management fees are earned from hotels managed by the Group. Management fees are normally a percentage of hotel
revenue and/or profit and are recognised when earned and recoverable under the terms of the management agreement.
Management fee income is included within other income.
Rental income from investment property is recognised on a straight-line basis over the term of the lease and is
included within other income.
(vi) Sales discounts and allowances
The Group recognises revenue on a gross revenue basis and makes various deductions to arrive at net revenue as
reported in profit or loss. These adjustments are referred to as sales discounts and allowances.
(vii) Income from residential development activities
Income in respect of a contract with a customer for the sale of residential property is recognised when the
performance obligations inherent in the contract are completed. In 2022, the income related to the contract for
the sale of the Merrion Road residential units which the Group developed as part of the overall development of the
new Maldron Hotel Merrion Road on the site of the former Tara Towers hotel. Where there is variable consideration
in the form of withheld retention receipts included in the transaction price, income is recognised for this
variable consideration to the extent that it is highly probable it is receivable and is measured based on the most
likely outcome.
Income from residential development activities has been presented within gross profit, separately from revenue
from hotel operations ( 69 note 2).
(viii) Government grants and government assistance
Government grants represent the transfers of resources to the Group from the governments in Ireland and the UK in
return for past or future compliance with certain conditions relating to the Group’s operating activities.
Income-related government grants are recognised in profit or loss on a systematic basis over the periods in which
the Group recognises, as expenses, the related costs for which the grants are intended to compensate. The Group
accounts for these government grants in profit or loss via offseting against the related expenditure.
Government assistance is action by a government which is designed to provide an economic benefit specific to the
Group or subsidiaries who qualify under certain criteria. Government assistance received by the Group includes a
waiver of commercial rates for certain hotel properties and also the deferral of payment of payroll taxes and VAT
liabilities and has been disclosed in these consolidated financial statements.
(ix) Leases
At inception of a lease contract, the Group assesses whether a contract is, or contains, a lease. If the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration, it
is recognised as a lease.
To assess the right to control, the Group assesses whether:
• the contract involves the use of an identified asset;
• the Group has the right to obtain substantially all of the economic benefits from the use of the asset; and
• the Group has the right to direct the use of the asset.
A lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. The Group uses its incremental borrowing rate as the discount
rate, which is defined as the estimated rate of interest that the lessee would have to pay to borrow, over a
similar term and with a similar security, the funds necessary to obtain an asset of a similar value to the
right-of-use asset in a similar economic environment. The incremental borrowing rate is calculated for each
individual lease.
The estimated incremental borrowing rate for each leased asset is derived from country-specific risk-free interest
rates over the relevant lease term, adjusted for the finance margin attainable by each lessee and asset-specific
adjustments designed to reflect the underlying asset’s location and condition.
Lease payments included in the measurement of the lease liability comprise the following:
• fixed payments (including in-substance fixed payments) less any lease incentives receivable;
• variable lease costs that depend on an index or a rate, initially measured using the index or rate as at the
commencement date;
• amounts expected to be payable under a residual value guarantee;
• the exercise price under a purchase option that the Group is reasonably certain to exercise; and
• penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
Variable lease costs linked to future performance or use of an underlying asset are excluded from the measurement
of the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period
in which the event or condition that triggers those payments occurs and are included in administrative expenses in
profit or loss.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease
liability (using the effective interest method) and by reducing the carrying amount to reflect lease payments.
The Group remeasures the lease liability where lease payments change due to changes in an index or rate, changes
in expected lease term or where a lease contract is modified. When the lease liability is remeasured, a
corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss
if the carrying amount of the right-of-use asset has been reduced to zero.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred
and an estimate of any costs to dismantle and remove the underlying asset or to restore the underlying asset or
the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use asset, or a component thereof, or the end of the
lease term. Right-of-use assets are reviewed on an annual basis or whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. The Group applies IAS 36 Impairment of Assets to
determine whether a cash-generating unit with a right-of-use asset is impaired and accounts for any identified
impairments through profit or loss. The right-of-use asset is periodically reduced by impairment losses, if any,
and adjusted for certain remeasurements of the lease liability. The Group also applies IAS 36 Impairment of Assets
to any cash-generating units, which have right-of-use assets which were previously impaired, to assess whether
previous impairments should be reversed. A reversal of a previous impairment charge is accounted for through
profit or loss and only increases the carrying amount of the right-of-use asset to a maximum of what it would have
been if the original impairment charges had not been recognised in the first place.
The Group applies the fair value model in IAS 40 Investment Property to right-of-use assets that meet the
definition of investment property.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of
fixtures, fittings and equipment that have a lease term of 12 months or less and leases of low-value assets.
Assets are considered low value if the value of the asset when new is less than €5,000. The Group recognises the
lease payments associated with these leases as an expense on a straight-line basis over the lease term.
(x) Share-based payments
The grant date fair value of equity-settled share-based payment awards and options granted to employees is
recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards and
options.
This incorporates the effect of market-based conditions, where applicable, and the estimated fair value of
equity-settled share-based payment awards issued with non-market performance conditions.
The amount recognised as an expense is adjusted to reflect the number of awards and options for which the related
service and any non-market performance conditions are expected to be met, such that the amount ultimately
recognised is based on the number of awards that met the related service and non-market performance conditions at
the vesting date. The amount recognised as an expense is not adjusted for market conditions not being met.
On vesting of the equity-settled share-based payment awards and options, the cumulative expense recognised in the
share-based payment reserve is transferred directly to retained earnings. An increase in ordinary share capital
and share premium, in the case where the price paid per share is higher than the cost per share, is recognised
reflecting the issuance of shares as a result of the vesting of the awards and options.
The dilutive effect of outstanding awards is reflected as additional share dilution in calculating diluted
earnings per share.
(xi) Tax
Tax charge or credit comprises current and deferred tax. Tax charge or credit is recognised in profit or loss
except to the extent that it relates to a business combination or items recognised directly in other comprehensive
income or equity.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year using tax rates
enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous
years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and amounts used for taxation purposes except for the initial
recognition of goodwill and other assets and liabilities that do not affect accounting profit or taxable profit at
the date of recognition and at the time of the transaction, do not give rise to taxable and deductible temporary
differences.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable
entity, or on different entities, but they intend to settle current tax liabilities and assets on a net basis or
their tax assets and liabilities will be realised simultaneously.
Deferred tax liabilities are recognised where the carrying value of land and buildings for financial reporting
purposes is greater than their tax cost base.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences
to the extent that it is probable future taxable profits will be available against which the temporary difference
can be utilised.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised. Such reductions are reversed when the probability of
future taxable profits improves.
(xii) Earnings per share (‘EPS’)
Basic earnings per share is calculated based on the profit or loss for the year attributable to owners of the
Company and the basic weighted average number of shares outstanding. Diluted earnings per share is calculated
based on the profit or loss for the year attributable to owners of the Company and the diluted weighted average
number of shares and potential shares outstanding.
Shares are only treated as dilutive if their dilution results in a decreased earnings per share or increased loss
per share.
Dilutive effects arise from share-based payments that are settled in shares. Conditional share awards to employees
have a dilutive effect when the average share price during the period exceeds the exercise price of the awards and
the market or non-market conditions of the awards are met, as if the current period end were the end of the
vesting period. When calculating the dilutive effect, the exercise price is adjusted by the value of future
services that have yet to be received related to the awards.
(xiii) Property, plant and equipment
Land and buildings are initially stated at cost, including directly attributable transaction costs, (or fair value
when acquired through business combinations) and subsequently at fair value.
Assets under construction include sites where new hotels are currently being developed and significant development
projects at hotels which are currently operational. These sites and the capital investment made are recorded at
cost. Borrowing costs incurred in the construction of major assets or development projects which take a
substantial period of time to complete are capitalised in the financial period in which they are incurred. Once
construction is complete and the hotel is operating, the assets will be transferred to land and buildings and
fixtures, fittings and equipment at cost. The land and buildings element will subsequently be measured at fair
value. Depreciation will commence when the assets are available for use.
Fixtures, fittings and equipment are stated at cost, less accumulated depreciation and any impairment provision.
Cost includes expenditure that is directly attributable to the acquisition of property, plant and equipment unless
it is acquired as part of a business combination under IFRS 3 Business Combinations, where the deemed cost is its
acquisition date fair value. In the application of the Group’s accounting policy, judgement is exercised by
management in the determination of fair value of land and buildings at each reporting date, residual values and
useful lives.
Depreciation is charged through profit or loss on the cost or valuation less residual value on a straight-line
basis over the estimated useful lives of the assets which are as follows:
Buildings 50 years
Fixtures, fittings and equipment 3 – 15 years
Land is not depreciated.
Residual values and useful lives are reviewed and adjusted if appropriate at each reporting date.
Land and buildings are revalued by qualified valuers on a sufficiently regular basis using open market value
(which reflects a highest and best-use basis) so that the carrying value of an asset does not materially differ
from its fair value at the reporting date. External revaluations of the Group’s land and buildings have been
carried out in accordance with the Royal Institution of Chartered Surveyors (RICS) Valuation Standards and IFRS 13
Fair Value Measurement.
Surpluses on revaluation are recognised in other comprehensive income and accumulated in equity in the revaluation
reserve, except to the extent that they reverse impairment losses previously charged to profit or loss, in which
case the reversal is recorded in profit or loss. Decreases in value are charged against other comprehensive income
and the revaluation reserve to the extent that a previous gain has been recorded there, and thereafter are charged
through profit or loss.
Fixtures, fittings and equipment are reviewed for impairment when events or changes in circumstances indicate that
the carrying value may not be recoverable. Assets that do not generate independent cash flows are combined into
cash-generating units. If carrying values exceed estimated recoverable amounts, the assets or cash-generating
units are written down to their recoverable amount. Recoverable amount is the greater of fair value less costs to
sell and VIU. VIU is assessed based on estimated future cash flows discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to
the asset.
The Group also applies IAS 36 Impairment of Assets to any cash-generating units, with fixtures, fittings and
equipment which were previously impaired and which are not revalued, to assess whether previous impairments should
be reversed. A reversal of a previous impairment charge is accounted for through profit or loss and only increases
the carrying amount of the fixtures, fittings and equipment to a maximum of what it would have been if the
original impairment charges had not been recognised in the first place.
(xiv) Investment property
Investment property is held either to earn rental income, or for capital appreciation, or for both, but not for
sale in the ordinary course of business.
Investment property is initially measured at cost, including transaction costs, (or fair value when acquired
through business combinations) and subsequently revalued by professional external valuers at their respective fair
values. The difference between the fair value of an investment property at the reporting date and its carrying
value prior to the external valuation is recognised in profit or loss.
The Group’s investment properties are valued by qualified valuers on an open market value basis in accordance with
the Royal Institution of Chartered Surveyors (RICS) Valuation Standards and IFRS 13 Fair Value Measurement.
(xv) Goodwill
Goodwill represents the excess of the fair value of the consideration for an acquisition over the Group’s interest
in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. Goodwill
is the future economic benefits arising from other assets in a business combination that are not individually
identified and separately recognised.
Goodwill is measured at its initial carrying amount less accumulated impairment losses. The carrying amount of
goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate that
it might be impaired. For the purposes of impairment testing, assets are grouped together into the smallest group
of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other
assets or groups of assets (the ‘cash-generating unit’).
The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to
cash-generating units that are expected to benefit from the synergies of the combination.
The recoverable amount of a cash-generating unit is the greater of its VIU and its fair value less costs to sell.
In assessing VIU, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects a current market assessment of the time value of money and the risks specific to the asset.
An impairment loss is recognised in profit or loss if the carrying amount of a cash-generating unit exceeds its
estimated recoverable amount. Impairment losses recognised in respect of cash-generating units are allocated first
to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the
other assets in the units on a pro-rata basis. Impairment losses of goodwill are not reversed once recognised.
The impairment testing process requires management to make significant judgements and estimates regarding the
future cash flows expected to be generated by the cash-generating unit. Management evaluates and updates the
judgements and estimates which underpin this process on an ongoing basis.
The impairment methodology and key assumptions used by the Group for testing goodwill for impairment are outlined
in notes 70 12 and 71 14.
The assumptions and conditions for determining impairment of goodwill reflect management’s best estimates and
judgements, but these items involve significant inherent uncertainties, many of which are not under the control of
management. As a result, accounting for such items could result in different estimates or amounts if management
used different assumptions or if different conditions occur in the future.
(xvi) Intangible assets other than goodwill
An intangible asset is only recognised where the item lacks a physical presence, is identifiable, non-monetary,
controlled by the Group and expected to provide future economic benefits to the Group.
Intangible assets are measured at cost (or fair value when acquired through business combinations), less
accumulated amortisation and impairment losses.
Intangible assets are amortised over the period of their expected useful lives by charging equal annual
instalments to profit or loss. The useful life used to amortise intangible assets relates to the future
performance of the asset and management’s judgement as to the period over which economic benefits will be derived
from the asset. The estimated total useful life of the Group’s intangible assets is 5 years.
(xvii) Inventories
Inventories are stated at the lower of cost (using the first-in, first-out (FIFO) basis) and net realisable value.
Inventories represent assets that are sold in the normal course of business by the Group and consumables.
(xviii) Contract fulfilment costs
Contract fulfilment costs are stated at the lower of cost or recoverable amount. Contract fulfilment costs
represent assets that are to be sold by the Group but do not form part of the primary trading activities. Costs
capitalised as contract fulfilment costs include costs incurred in fulfilling the specific contract. The costs
must enhance the asset, be used in order to satisfy the obligations inherent in the contractual arrangement and
should be recoverable. Costs which are not recoverable are written off to profit or loss as incurred. Contract
fulfilment costs are released to profit or loss on completion of the sale to which the contract relates.
(xix) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less, which
are carried at amortised cost.
(xx) Trade and other receivables
Trade and other receivables are stated initially at their fair value and subsequently at amortised cost, less any
expected credit loss provision. The Group applies the simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowance for all trade receivables. Bad debts are written off to profit or
loss on identification.
(xxi) Trade and other payables
Trade and other payables are initially recorded at fair value, which is usually the original invoiced amount. Fair
value for the initial recognition of payroll tax liabilities is the amount payable stated on the payroll
submission filed with the tax authorities. Fair value for the initial recognition of VAT liabilities is the net
amount of VAT payable to, and recoverable from, the tax authorities. Trade and other payables are subsequently
carried at amortised cost using the effective interest method. Liabilities are derecognised when the obligation
under the liability is discharged, cancelled or expired.
(xxii) Finance costs
Finance costs comprise interest expense on borrowings and related financial instruments, commitment fees and other
costs relating to financing of the Group.
Interest expense on loans and borrowings is recognised using the effective interest method. The effective interest
rate of a financial liability is calculated on initial recognition of a financial liability. In calculating
interest expense, the effective interest rate is applied to the amortised cost of the liability.
If a financial liability is deemed to be non-substantially modified (less than 10 percent different) (see policy
(xxvii)), the amortised cost of the liability is recalculated by discounting the modified cash flows at the
original effective interest rate and the resulting modification gain or loss is recognised in finance costs in
profit or loss. For floating-rate financial liabilities, the original effective interest rate is adjusted to
reflect the current market terms at the time of the modification.
Finance costs incurred for qualifying assets, which take a substantial period of time to construct, are added to
the cost of the asset during the period of time required to complete and prepare the asset for its intended use or
sale. The Group uses two capitalisation rates being the weighted average interest rate after the impact of hedging
instruments for Sterling borrowings which is applied to UK qualifying assets and the weighted average interest
rate for Euro borrowings which is applied to Republic of Ireland qualifying assets. Capitalisation commences on
the date on which the Group undertakes activities that are necessary to prepare the asset for its intended use.
Capitalisation of borrowing costs ceases when the asset is ready for its intended use.
Finance costs also include interest on lease liabilities.
(xxiii) Foreign currency
Transactions in currencies other than the functional currency of a Group entity are recorded at the rate of
exchange prevailing on the date of the transactions. Monetary assets and liabilities denominated in foreign
currencies at the reporting date are retranslated into the respective functional currency at the relevant rates of
exchange ruling at the reporting date. Foreign exchange differences arising on translation are recognised in
profit or loss.
The assets and liabilities of foreign operations are translated into Euro at the exchange rate ruling at the
reporting date. The income and expenses of foreign operations are translated into Euro at rates approximating the
exchange rates at the dates of the transactions.
Foreign exchange differences arising on the translation of foreign operations are recognised in other
comprehensive income and are included in the translation reserve within equity.
(xxiv) Provisions and contingent liabilities
A provision is recognised in the statement of financial position when the Group has a present legal or
constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will
be required to settle the obligation. If the effect is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money
and, where appropriate, the risks specific to the liability.
The provision in respect of self-insured risks includes projected settlements for known claims and incurred but
not reported claims.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated
reliably, the obligation is disclosed as a contingent liability, unless the probability of an outflow of economic
benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or
non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability
of an outflow of economic benefits is remote.
(xxv) Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of ordinary
shares are recognised as a deduction from equity, net of any tax effects. Merger relief is availed of by the Group
where possible.
(xxvi) Loans and borrowings
Loans and borrowings are recognised initially at the fair value of the consideration received, less directly
attributable transaction costs. Subsequent to initial recognition, loans and borrowings are stated at amortised
cost with any difference between cost and redemption value being recognised in profit or loss over the period of
the borrowings on an effective interest rate basis. Directly attributable transaction costs are amortised to
profit or loss on an effective interest rate basis over the term of the loans and borrowings. This amortisation
charge is recognised within finance costs. Commitment fees incurred in connection with loans and borrowings are
expensed as incurred to profit or loss.
(xxvii) Derecognition of financial liabilities
The Group removes a financial liability from its statement of financial position when it is extinguished (when its
contractual obligations are discharged, cancelled, or expire).
The Group also derecognises a financial liability when the terms and the cash flows of a modified liability are
substantially different. The terms are substantially different if the discounted present value of the cash flows
under the new terms, discounted using the original effective interest rate, including any fees paid to lenders net
of any fees received, is at least 10 percent different from the discounted present value of the remaining cash
flows of the original financial liability, discounted at the original effective interest rate, (the ‘10% test’).
In addition, a qualitative assessment is carried out of the new terms in the new facility agreement to determine
whether there is a substantial modification.
If the financial liability is deemed substantially modified, a new financial liability based on the modified terms
is recognised at fair value. The difference between the carrying amount of the financial liability derecognised
and consideration paid is recognised in profit or loss.
If the financial liability is deemed non-substantially modified, the amortised cost of the liability is
recalculated by discounting the modified cash flows at the original effective interest rate and the resulting
modification gain or loss is recognised in profit or loss. Any costs and fees directly attributable to the
modified financial liability are recognised as an adjustment to the carrying amount of the modified financial
liability and amortised over its remaining term by re-computing the effective interest rate on the instrument.
(xxviii) Derivative financial instruments
The Group’s borrowings expose it to the financial risks of changes in interest rates. The Group uses derivative
financial instruments such as interest rate swap agreements to hedge these exposures.
Interest rate swaps convert part of the Group’s Sterling denominated borrowings from floating to fixed interest
rates. The Group does not use derivatives for trading or speculative purposes.
Derivative financial instruments are recognised at fair value on the date a derivative contract is entered into
plus directly attributable transaction costs and are subsequently re-measured at fair value. Derivatives are
carried as assets when the fair value is positive and as liabilities when the fair value is negative.
The full fair value of a hedging derivative is classified as a non-current asset or non-current liability if the
remaining maturity of the hedging instrument is more than twelve months and as a current asset or current
liability if the remaining maturity of the hedging instrument is less than twelve months.
The fair value of derivative instruments is determined by using valuation techniques. The Group uses its judgement
to select the most appropriate valuation methods and makes assumptions that are mainly based on observable market
conditions (Level 2 fair values) existing at the reporting date.
The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging
instrument, and if so, the nature of the item being hedged.
(xxix) Cash flow hedge accounting
Cash flow hedge accounting is applied in accordance with IFRS 9 Financial Instruments. For those derivatives
designated as cash flow hedges and for which hedge accounting is desired, the hedging relationship is documented
at its inception. This documentation identifies the hedging instrument, the hedged item or transaction, the nature
of the risk being hedged and its risk management objectives and strategy for undertaking the hedging transaction.
The Group also documents its assessment, both at hedge inception and on a semi-annual basis, of whether the
derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of
hedged items.
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised
asset or liability, the effective part of any gain or loss on the derivative financial instrument is recognised in
other comprehensive income and accumulated in equity in the hedging reserve. Any ineffective portion is recognised
immediately in profit or loss as finance income or costs. The amount accumulated in equity is retained in other
comprehensive income and reclassified to profit or loss in the same period or periods during which the hedged item
affects profit or loss.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised, or no
longer qualifies for hedge accounting or the designation is revoked. At that point in time, any cumulative gain or
loss on the hedging instrument recognised in equity remains in equity and is recognised when the forecast
transaction is ultimately recognised in profit or loss. However, if a hedged transaction is no longer anticipated
to occur, the net cumulative gain or loss accumulated in equity is reclassified to profit or loss.
(xxx) Net investment hedges
Where relevant, the Group uses a net investment hedge, whereby the foreign currency exposure arising from a net
investment in a foreign operation is hedged using borrowings held by a Group entity that is denominated in the
functional currency of the foreign operation.
Foreign currency differences arising on the retranslation of a financial liability designated as a hedge of a net
investment in a foreign operation are recognised directly in other comprehensive income in the foreign currency
translation reserve, to the extent that the hedge is effective. To the extent that the hedge is ineffective, such
differences are recognised in profit or loss. When the hedged part of a net investment is disposed of, the
associated cumulative amount in equity is reclassified to profit or loss.
(xxxi) Adjusting items
Consistent with how business performance is measured and managed internally, the Group reports both statutory
measures prepared under IFRS and certain alternative performance measures (‘APMs’) that are not required under
IFRS. These APMs are sometimes referred to as ‘non-GAAP’ measures and include, amongst others, Adjusted EBITDA,
Free Cashflow per Share, and Adjusted EPS.
The Group believes that the presentation of these APMs provides useful supplemental information which, when viewed
in conjunction with the financial information presented under IFRS, provides stakeholders with a meaningful
understanding of the underlying financial and operating performance of the Group.
Adjusted measures of profitability represent the equivalent IFRS measures adjusted to show the underlying
operating performance of the Group and exclude items which are not reflective of normal trading activities or
distort comparability either year on year or with other similar businesses.
2 Prior period restatements
Restatement of the Consolidated Statement of Profit or Loss and Other Comprehensive Income
During 2022, the Group completed the sale to Irish Residential Properties REIT (plc) (‘I-RES’) of the Merrion Road
residential units which had been developed by the Group on the site of the former Tara Towers Hotel. Proceeds from
the sale of these units were presented as revenue in the Consolidated Financial Statements for the year ended 31
December 2022. The related costs were presented as cost of sales.
The Financial Reporting Supervision Unit of IAASA subsequently reviewed the presentation and, in their judgement,
determined that, whilst inextricably linked to the normal activity of hotel development, the residential unit
development was not part of the Group’s ordinary activities and therefore should not be presented as Revenue as
defined by IFRS 15 Revenue Recognition.
As there is no IFRS that covers this specific type of transaction (i.e. the transaction to build and sell
residential units to a third party where they had been developed in conjunction with a hotel for own use) the
Group had looked to the hierarchy in IAS 8.11 to select the most relevant and reliable accounting policy. IFRS 15
would be the standard typically used for the sale of inventories, therefore the Group determined that IFRS 15
would be the most appropriate standard to be used, by analogy, for the forward sale of the residential units and
the ultimate completion of that sale.
The comparative figures as presented in the Consolidated Statement of Profit or Loss and Other Comprehensive
Income have been amended for the following presentation corrections.
2022
€’000
Restated
Decrease in revenue (42,532)
Increase in income from residential development activities 42,532
Decrease in cost of sales 40,998
Increase in cost of residential development activities (40,998)
Total impact on profit before tax -
As this is a correction to the presentation of the above items within the Consolidated Statement of Profit or Loss
and Other Comprehensive Income only, there are no corrections required to basic or diluted earnings per share nor
are there any corrections to the Consolidated Statement of Financial Position at the beginning of the current or
prior year.
Restatement of the deferred tax note
Amendments to IAS 12, effective for reporting periods beginning on or after 1 January 2023, clarify that the
initial recognition exemption of deferred tax assets and liabilities does not apply to transactions that give rise
to equal and offsetting temporary differences. The IAS 12 amendments require separate presentation of deferred tax
assets and liabilities arising on right-of-use assets and corresponding lease liabilities recognised under IFRS
16, in the deferred tax note, with retroactive effect from 1 January 2022. These are offset on an individual
entity basis and presented net in the statement of financial position.
The comparative gross deferred tax assets and deferred tax liabilities for 2022 have been restated in the deferred
tax note in accordance with these amendments. The changes to the deferred tax liabilities and deferred tax assets
offset such that the net impact on the face of the Consolidated Statement of Financial Position at 31 December
2022 and the net impact on retained earnings was nil ( 72 note 26).
2022
€’000
Restated
Increase in deferred tax assets 36,235
Increase in deferred tax liabilities (36,235)
Total net impact on deferred tax note -
3 Operating segments
The Group’s segments are reported in accordance with IFRS 8 Operating Segments. The segment information is
reported in the same way as it is reviewed and analysed internally by the chief operating decision makers,
primarily, the Executive Directors.
In the 2022 financial statements, the results of Clayton Hotel Düsseldorf were disclosed as part of the Dublin
segment due to their immateriality in the context of group results (less than 3% of total segmental revenue). Due
to additions to the Group’s Continental Europe portfolio in 2023, the Continental Europe segment is now to be
presented separately below. The 2022 results of Clayton Hotel Düsseldorf have been reflected in the Continental
Europe segment below to improve comparability.
The Group segments its leased and owned business by geographical region within which the hotels operate being
Dublin, Regional Ireland, the UK and Continental Europe. These comprise the Group’s four reportable segments.
Dublin, Regional Ireland, the UK and Continental Europe segments
These segments are concerned with hotels that are either owned or leased by the Group. As at 31 December 2023, the
Group owns 28 hotels (31 December 2022: 27 hotels) and has effective ownership of two further hotels which it
operates (31 December 2022: one hotel). It also owns the majority of one further hotel it operates (31 December
2022: one hotel). The Group also leases 19 hotel buildings from property owners (31 December 2022: 18 hotels) and
is entitled to the benefits and carries the risks associated with operating these hotels.
The Group’s revenue from leased and owned hotels is primarily derived from room sales and food and beverage sales
in restaurants, bars and banqueting. The main costs arising are payroll, cost of goods for resale, commissions
paid on room sales, utilities, other operating costs, and, in the case of leased hotels, variable lease costs
(where linked to turnover or profit) payable to lessors.
2023 2022
€’000 €’000
Restated
Revenue
Dublin 286,130 250,586
Regional Ireland 112,317 99,752
UK 186,292 152,481
Continental Europe 22,959 12,909
Total revenue 607,698 515,728
Segmental revenue for each of the geographical locations represents the operating revenue (room revenue, food and
beverage revenue and other hotel revenue) from leased and owned hotels situated in the Group’s four reportable
segments.
The year ended 31 December 2023 saw the Group trade strongly and continue the execution of its growth strategy.
The strong trade, the full year impact of hotels added during 2022 and the addition of three hotels during 2023
has led to an increase in Group revenue from hotel operations from €515.7 million to €607.7 million.
2022
2023
€’000
€’000
Restated
Segmental results - EBITDAR
Dublin 135,883 118,505
Regional Ireland 37,018 31,689
UK 71,658 53,574
Continental Europe 7,707 1,955
EBITDAR for reportable segments 252,266 205,723
Segmental results – EBITDA
Dublin 133,750 116,485
Regional Ireland 36,889 31,576
UK 71,082 52,955
Continental Europe 6,915 892
EBITDA for reportable segments 248,636 201,908
Reconciliation to results for the year
Segmental results – EBITDA 248,636 201,908
Other income (excluding gain on disposal of property, plant and equipment) 1,484 1,360
Central costs (21,102) (16,509)
Share-based payments expense (5,910) (3,329)
Adjusted EBITDA 223,108 183,430
Adjusting items
Reversal of previous periods revaluation losses through profit or loss 2,025 21,166
Net reversal of previous impairment charges of right-of-use assets - 4,101
Net reversal of previous impairment charges of fixtures, fittings and equipment - 624
Income from sale of Merrion Road residential units - 42,532
Release of costs capitalised for Merrion Road residential units - (40,998)
Gain on disposal of property, plant and equipment - 3,877
Hotel pre-opening expenses (497) (2,666)
Acquisition-related costs (4,389) -
Group EBITDA 220,247 212,066
Depreciation of property, plant and equipment (32,791) (28,426)
Depreciation of right-of-use assets (30,663) (27,503)
Amortisation of intangible assets (650) (610)
Interest on lease liabilities (42,751) (38,101)
Other interest and finance costs (7,860) (7,769)
Profit before tax 105,532 109,657
(15,310) (12,932)
Tax charge
Profit for the year attributable to owners of the Company 90,222 96,725
Group EBITDA represents earnings before interest on lease liabilities, other interest and finance costs, tax,
depreciation of property, plant and equipment and right-of-use assets and amortisation of intangible assets.
Adjusted EBITDA is presented as an alternative performance measure to show the underlying operating performance of
the Group excluding items which are not reflective of normal trading activities or distort comparability either
year on year or with other similar businesses. Consequently, Adjusted EBITDA represents Group EBITDA before:
• Net property revaluation movements through profit or loss ( 73 note 5);
• Net reversal of previous impairment charges of right-of-use assets ( 74 note 16);
• Net reversal of previous impairment charges of fixtures, fittings, and equipment ( 75 note 15);
• Income from sale of Merrion Road residential units ( 76 note 17);
• Release of costs capitalised for Merrion Road residential units ( 77 note 17);
• Gain on disposal of property, plant and equipment ( 78 note 6, 79 15);
• Hotel pre-opening expenses, which relate primarily to payroll expenses, sales and marketing costs and training
costs of new staff, that are incurred by the Group in advance of new hotel openings ( 80 note 5); and
• Acquisition-related costs ( 81 note 5).
The line item ‘central costs’ includes costs of the Group’s central functions including operations support,
technology, sales and marketing, human resources, finance, corporate services and business development. Also
included in central costs is the unwinding of the discount on insurance provisions of €0.3 million (2022: €0.7
million) and the reversal of prior period insurance provisions of €0.9 million (2022: €Nil) ( 82 note 23).
Share-based payments expense is presented separately from central costs as this expense relates to employees
across the Group ( 83 note 9).
‘Segmental results – EBITDA’ for Dublin, Regional Ireland, the UK and Continental Europe represents the ‘Adjusted
EBITDA’ for each geographical location before central costs, share-based payments expense and other income. It is
the net operational contribution of leased and owned hotels in each geographical location.
‘Segmental results – EBITDAR’ for Dublin, Regional Ireland, the UK and Continental Europe represents ‘Segmental
results – EBITDA’ before variable lease costs.
Disaggregated revenue information
Disaggregated segmental revenue is reported in the same way as it is reviewed and analysed internally by the chief
operating decision makers, primarily, the Executive Directors. The key components of revenue reviewed by the chief
operating decision makers are:
• Room revenue which relates to the rental of rooms in each hotel. Revenue is recognised when the hotel room is
occupied, and the service is provided;
• Food and beverage revenue which relates to sales of food and beverages at the hotel property. Revenue is
recognised at the point of sale; and
• Other revenue includes revenue from leisure centres, car parks, meeting room hire and other revenue sources at
the hotels. Leisure centre revenue is recognised over the life of the membership while the other items are
recognised when the service is provided.
2022
2023
Revenue review by segment – Dublin €’000
€’000
Restated
Room revenue 216,948 190,056
Food and beverage revenue 51,263 45,304
Other revenue 17,919 15,226
Total revenue 286,130 250,586
2023 2022
Revenue review by segment – Regional Ireland
€’000 €’000
Room revenue 73,218 63,784
Food and beverage revenue 30,336 28,107
Other revenue 8,763 7,861
Total revenue 112,317 99,752
2023 2022
Revenue review by segment – UK
€’000 €’000
Room revenue 146,584 118,157
Food and beverage revenue 30,491 26,167
Other revenue 9,217 8,157
Total revenue 186,292 152,481
2022
2023
Revenue review by segment – Continental Europe €’000
€’000
Restated
Room revenue 16,353 9,820
Food and beverage revenue 4,935 2,395
Other revenue 1,671 694
Total revenue 22,959 12,909
Other geographical information
2023 2022
Republic of UK Continental Total Republic of UK Continental Total
Ireland Europe Ireland Europe
€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000
Restated Restated Restated
Revenue
Owned hotels 276,188 92,682 - 368,870 241,972 81,400 - 323,372
Leased 122,259 93,610 22,959 238,828 108,366 71,081 12,909 192,356
hotels
Total 398,447 186,292 22,959 607,698 350,338 152,481 12,909 515,728
revenue
Republic of UK Continental Europe Total Republic of UK Continental Total
Ireland Ireland Europe
€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000
Restated Restated Restated
EBITDAR
Owned hotels 118,632 37,284 - 155,916 102,398 31,409 - 133,807
Leased hotels 54,269 34,374 7,707 96,350 47,796 22,165 1,955 71,916
Total EBITDAR 172,901 71,658 7,707 252,266 150,194 53,574 1,955 205,723
Republic of UK Continental Total Republic of UK Continental Total
Ireland Europe Ireland Europe
€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000
Restated Restated Restated
Other information
Variable lease costs 2,262 576 792 3,630 2,133 619 1,063 3,815
Depreciation of property, plant 20,500 11,732 559 32,791 18,753 9,643 30 28,426
and equipment
Depreciation of right-of-use 16,036 11,225 3,402 30,663 15,108 10,017 2,378 27,503
assets
Interest on lease liabilities 17,797 21,048 3,906 42,751 17,194 18,134 2,773 38,101
Assets and liabilities
2023 2022
Republic of UK Continental Total Republic of UK Continental Total
Ireland Europe Ireland Europe
€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000
Restated Restated Restated
Assets
Intangible assets and 18,826 11,823 23,425 54,074 19,469 11,585 - 31,054
goodwill
Property, plant and 1,100,355 577,936 6,540 1,684,831 1,035,055 391,959 433 1,427,447
equipment
Right-of-use assets 296,774 306,381 82,038 685,193 307,832 305,865 44,404 658,101
Investment property 1,625 396 - 2,021 1,575 432 - 2,007
Other non-current 3,287 3,131 - 6,418 3,103 284 - 3,387
receivables
Other current assets 35,033 23,388 6,415 64,836 76,180 45,823 1,922 123,925
Total assets excluding
derivatives and deferred tax 1,455,900 923,055 118,418 2,497,373 1,443,214 755,948 46,759 2,245,921
assets
Derivative assets 6,521 11,717
Deferred tax assets 24,136 21,271
Total assets 2,528,030 - 2,278,909
Liabilities
Loans and borrowings 4,000 250,387 - 254,387 - 193,488 - 193,488
Lease liabilities 300,157 310,697 87,744 698,598 303,968 300,336 47,487 651,791
Trade and other payables 55,063 24,985 6,349 86,397 93,667 22,093 3,297 119,057
Total liabilities excluding
provision for liabilities 359,220 586,069 94,093 1,039,382 397,635 515,917 50,784 964,336
and tax liabilities
Provision for liabilities 8,611 9,179
Current tax liabilities 2,659 11,606
Deferred tax liabilities 84,441 71,022
Total liabilities 1,135,093 1,056,143
Revaluation reserve 386,450 74,731 - 461,181 328,896 50,638 - 379,534
The above information on assets, liabilities and revaluation reserve is presented by region as it does not form
part of the segmental information routinely reviewed by the chief operating decision makers.
Loans and borrowings are categorised according to their underlying currency. The amortised cost of loans and
borrowings was €254.4 million at 31 December 2023 (31 December 2022: €193.5 million). Drawn loans and borrowings
consist of Euro Revolving Credit Facility (“RCF”) borrowings of €4.0 million (2022: €Nil) and Sterling denominated
borrowings of £221.4 million (€254.7 million) which are classified as liabilities in the UK (31 December 2022:
£176.5 million (€199.0 million)). All of the Sterling borrowings act as a net investment hedge as at 31 December
2023 (31 December 2022: £176.5 million (€199.0 million)) ( 84 note 24).
4 Statutory and other information
2023 2022
€’000 €’000
Depreciation of property, plant and equipment 32,791 28,426
Depreciation of right-of-use assets 30,663 27,503
Variable lease costs: land and buildings 3,630 3,815
Hotel pre-opening expenses 497 2,666
Hotel pre-opening expenses relate to costs incurred by the Group in advance of opening new hotels. In 2023, this
related to Maldron Hotel Finsbury Park, London, a new hotel that opened during 2023. In 2022, this related to
seven hotels, that opened throughout 2022. These costs primarily relate to payroll expenses, sales and marketing
costs and training costs of new staff.
Variable lease costs relate to lease payments linked to performance which are excluded from the measurement of
lease liabilities as they are not related to an index or rate or are not considered fixed payments in substance.
Auditor’s remuneration
2023 2022
€’000 €’000
Audit of Group, Company and subsidiary financial statements 470 395
Other assurance services 32 32
Other non-audit services 37 -
Tax services - 35
539 462
Auditor’s remuneration for the audit of the Company financial statements was €20,000 (2022: €15,000). Other
assurance services primarily relate to the review of the interim condensed consolidated financial statements.
Directors’ remuneration
2023 2022
€’000 €’000
Salary and other emoluments 3,575 2,242
Gains on vesting of awards granted under the 2020 LTIP 230 -
Fees 496 511
Pension costs – defined contribution 72 66
Transactions with past directors 225 131
Good leaver vesting of shares granted under Share Scheme 2020 for former directors - 15
4,598 2,965
Transactions with past directors in 2023 relate to gains associated with the shares issued on vesting of awards
under the 2020 LTIP. This gain represents the difference between the quoted share price per ordinary share and the
exercise price on the vesting date (note 9).
Retired director Stephen McNally received payment in lieu of annual leave upon cessation of employment on 28
February 2022, this sum is included in payments of €0.1 million to past directors reported in 2022.
Good leaver vesting of shares granted under Share Scheme 2020 for former directors in 2022 relates to 6,359 shares
issued to two former directors. The weighted average share price at the date of exercise for the options exercised
was €2.28
Details of the directors’ remuneration, interests in conditional share awards and compensation of former directors
are set out in the Remuneration Committee report.
5 Administrative expenses
2023 2022
€’000 €’000
Other administrative expenses 126,155 102,408
Depreciation and amortisation ( 85 note 14, 86 15, 87 16) 64,104 56,539
Commercial rates 14,924 12,013
Utilities – electricity and gas 27,783 31,656
Reversal of previous periods revaluation losses through the profit or loss ( 88 note 15) (2,025) (21,166)
Net reversal of previous impairment charges ( 89 note 15, 90 16) - (4,725)
Variable lease costs ( 91 note 16) 3,630 3,815
Acquisition-related costs 4,389 -
Hotel pre-opening expenses 497 2,666
Reversal of prior period insurance provisions ( 92 note 23) (927) -
238,530 183,206
Other administrative expenses include costs related to payroll, marketing and general administration.
Commercial rates for the year ended 31 December 2023 are €14.9 million, net of a waiver of €0.3 million. As a
result of the impact of Covid-19, commercial rates for the year ended 31 December 2022 of €12.0 million were net
of a waiver of €3.0 million ( 93 note 10).
Net property revaluation movements through profit or loss relate to the net reversal of revaluation losses of €2.0
million through
profit or loss ( 94 note 15).
6 Other income
2023 2022
€’000 €’000
Gain on disposal of property, plant and equipment - 3,877
Income from managed hotels 1,099 968
Rental income from investment property 385 392
1,484 5,237
On 21 June 2022, the Group completed the sale of Clayton Crown Hotel, London, for net proceeds of £20.7 million
(€24.1 million). As a result, the hotel property and related fixtures, fittings and equipment of £17.4 million
(€20.2 million) were derecognised from the statement of financial position. A gain on disposal of £3.3 million
(€3.9 million) was recognised in profit or loss for the year ended 31 December 2022 ( 95 note 15).
Income from managed hotels represents the fees and other income earned from services provided in relation to
partner hotels which are not owned or leased by the Group.
Rental income from investment property relates to the following properties:
• Two commercial properties which are leased to third parties for lease terms of 25 and 30 years;
• A sub-lease of part of Clayton Hotel Cardiff, which is leased to a third party for a lease term of 20 years,
with 9 years remaining at 31 December 2023; and
• A sub-lease of part of Clayton Hotel Düsseldorf, which is leased to a third party for a rolling lease term.
The fair value of the investment properties at 31 December 2023 is €2.0 million (2022: €2.0 million).
7 Finance costs
2023 2022
€’000 €’000
Interest on lease liabilities ( 96 note 16) 42,751 38,101
Interest expense on bank loans and borrowings 15,665 7,937
Cash flow hedges – reclassified from other comprehensive income (6,949) (179)
Other finance costs 1,332 2,351
Net foreign exchange (gain)/loss on financing activities (180) 168
Interest capitalised to property, plant and equipment ( 97 note 15) (2,008) (2,151)
Interest capitalised to contract fulfilment costs ( 98 note 17) - (357)
50,611 45,870
The Group uses interest rate swaps to convert the interest rate on part of its debt from floating rate to fixed
rate (note 25). The cash flow hedge amount reclassified from other comprehensive income is shown separately within
finance costs and primarily represents the additional interest received or paid by the Group as a result of the
interest rate swaps. As at 31 December 2023, the Group has recognised derivative assets, in relation to these
interest rate swaps, of €6.5 million (31 December 2022: €11.7 million). The derivative assets are due to the
Group’s fixed interest rates being forecast to be lower than the variable interest rates forward curve applicable
on sterling borrowings. Margins on the Group’s borrowings are set with reference to the Net Debt to EBITDA
covenant levels and ratchet up or down accordingly.
Other finance costs include commitment fees and other banking and professional fees. Net foreign exchange gains or
losses on financing activities relate principally to loans which did not form part of the net investment hedge
( 99 note 25).
Interest on loans and borrowings amounting to €2.0 million was capitalised to assets under construction on the
basis that these costs were directly attributable to the construction of qualifying assets (note 15) (2022: €2.2
million). There was no interest on loans and borrowings capitalised for contract fulfilment costs in 2023 (2022:
€0.4 million) ( 100 Note 17). The capitalisation rates applied by the Group, which were reflective of the weighted
average interest cost in respect of Euro denominated borrowings and Sterling denominated borrowings for the
relevant capitalisation period, were 4.2% (2022: 2.5%) and 3.2% (2022: 3.6%) respectively.
8 Personnel expenses
The average number of persons (full-time equivalents) employed by the Group (including Executive Directors),
analysed by category, was as follows:
2023 2022
Administration 886 707
Other 3,110 2,694
3,996 3,401
Full-time equivalents split by geographical region was as follows:
2023 2022
Dublin (including the Group’s central functions) 1,854 1,653
Regional Ireland 978 910
UK 1,013 808
Continental Europe 151 30
3,996 3,401
The aggregate payroll costs of these persons were as follows:
2023 2022
€’000 €’000
Wages and salaries 140,674 120,895
Social welfare costs 14,187 11,788
Pension costs – defined contribution 1,702 1,799
Share-based payments expense 5,910 3,329
Severance costs - 97
162,473 137,908
Payroll costs of €0.5 million (2022: €0.4 million) relating to the Group’s internal development employees were
capitalised as these costs are directly related to development, lease and other construction work completed during
the year ended 31 December 2023.
There were no wage subsidies received by the Group from the Irish and UK governments during the year ended 31
December 2023. During the year ended 31 December 2022, the Group availed of wage subsidies of €10.5 million from
the Irish government ( 101 note 10).
9 Share-based payments expense
The total share-based payments expense for the Group’s employee share schemes charged to profit or loss during the
year was €5.9 million (2022: €3.3 million), analysed as follows:
2023 2022
€’000 €’000
Long Term Incentive Plans 5,580 3,242
Share Save schemes 330 87
5,910 3,329
Details of the schemes operated by the Group are set out below:
Long Term Incentive Plans
During the year ended 31 December 2023, the Board approved the conditional grant of 1,552,080 ordinary shares
(‘the Award’) pursuant to the terms and conditions of the Group’s 2017 Long Term Incentive Plan (‘the 2017 LTIP’).
The Award was granted to senior employees across the Group (120 in total). Vesting of the Award is based on two
independently assessed performance targets, 50% based on total shareholder return (‘TSR’) and 50% based on Free
Cashflow Per Share (‘FCPS’). The performance period of this award is 1 January 2023 to 31 December 2025.
Threshold performance for the TSR condition, which is a market-based condition, is a performance measure against a
bespoke comparator group of 21 listed peer companies in the travel and leisure sector, with threshold 25% vesting
if the Group’s TSR over the performance period is ranked at the median compared to the TSR of the comparator
group. If the Group’s TSR performance is at or above the upper quartile compared to the comparator group, the
remaining 75% of the award will vest, with pro-rata vesting on a straight-line basis for performance in between
these thresholds.
Threshold performance (25% vesting) for the FCPS condition, which is a non-market-based performance condition, is
based on the achievement of FCPS of €0.498, as disclosed in the Group’s 2025 audited consolidated financial
statements, with 100% vesting for FCPS of €0.608 or greater. The FCPS based awards will vest on a straight-line
basis for performance between these points. FCPS targets may be amended in restricted circumstances if an event
occurs which causes the Remuneration Committee to determine an amended or substituted performance condition would
be more appropriate and not materially more or less difficult to satisfy. Participants are also entitled to
receive a dividend equivalent amount in respect of their awards.
In addition to the above, the Board approved the conditional grant of 22,719 shares pursuant to the terms and
conditions of the 2017 LTIP in May 2023. Performance criteria in relation to this additional award is the same as
that originally set out for the awards granted on 2 March 2022.
Movements in the number of share awards are as follows:
2023 2022
Awards Awards
Outstanding at the beginning of the year 4,837,170 4,344,481
Granted during the year 1,574,799 1,443,764
Forfeited during the year (52,901) (128,294)
Lapsed unvested during the year (1,733,533) (822,781)
Exercised during the year (535,634) -
Outstanding at the end of the year 4,089,901 4,837,170
2023 2022
Awards Awards
Grant date
March 2020 - 2,022,523
March 2021 1,099,661 1,115,183
December 2021 - 255,700
March 2022 1,427,175 1,443,764
March 2023 1,540,346 -
May 2023 22,719 -
Outstanding at the end of the year 4,089,901 4,837,170
Awards vested
During the year ended 31 December 2023, the Company issued 281,734 ordinary shares on foot of the vesting of
awards granted in March 2020 under the terms of the 2017 LTIP. In order to ensure a like-for-like assessment with
the basis on which the targets were set at the start of 2020, the Company assessed EPS performance a) excluding
the number of shares issued as part of the placing in September 2020 and b) including the impact of the interest
charge that would have accrued if the placing was excluded. Adjusted EPS performance was accordingly determined to
be €0.458, resulting in a vesting outcome of 37.27% for the portion of the award based on adjusted performance
(i.e. 18.64% of the overall award). This resulted in an additional charge of €0.9 million recognised in the year
ended 31 December 2023.
The Company also considered shareholder guidance in relation to 'windfall gains'. The LTIP awards granted in 2020
were granted at a price of €2.4375, which compares to a price of €5.9775 for the 2019 awards. The Company did not
make a reduction on the award to reflect this lower share price during the performance period but committed to
reviewing the outcome at vesting.
The Company judged that it would be appropriate to exercise its discretion to reduce the level of vesting by 25%
from 18.64% to 14%. This has been accounted for as a modification under IFRS 2 Share-based Payment. As a result,
no adjustment has been made to the calculation of the share-based payment charge in relation to this reduced level
of vesting and the Group continued to recognise the full cost of the related share-based payment charge in profit
or loss.
In total, 281,734 ordinary shares were issued in relation to the vesting of the March 2020 awards. The weighted
average share price at the date of exercise of these awards was €4.22.
During the year ended 31 December 2023, the Company issued 253,900 ordinary shares on foot of the vesting of
awards granted in December 2021. This award was conditional on relevant employees being in employment at 31 March
2023. The weighted average share price at the date of exercise for these awards was €4.54.
Measurement of fair values
The fair value, at the grant date, of the TSR-based conditional share awards was measured using a Monte Carlo
simulation model. Non-market-based performance conditions attached to the awards were not taken into account in
measuring fair value at the grant date.
The valuation and key assumptions used in the measurement of the fair values of awards at the grant date were as
follows:
March 2023 March 2022 March 2021
Fair value at grant date for TSR-based awards €2.93 €2.60 €2.40
Fair value at grant date for FCPS-based awards €4.29 €3.89 €3.83
Share price at grant date €4.30 €3.90 €3.84
Exercise price €0.01 €0.01 €0.01
Expected volatility for TSR-based awards 54.83% p.a. 53.0% p.a. 52.01% p.a.
Performance period 3 years 3 years 3 years
Risk-free rate 2.78% (0.31%) (0.76%)
Dividend equivalents accrue on awards that vest up to the time of vesting under the LTIP schemes, and therefore
the dividend yield has been set to zero to reflect this. Such dividend equivalents will be released to
participants in the form of additional shares on vesting subject to the satisfaction of performance criteria. In
the absence of available market-implied and observable volatility, the expected volatility has been estimated
based on the historic share price over a three-year period.
All active awards include FCPS-related performance conditions which are non-market-based performance conditions
that do not impact the fair value of the award at the grant date, which equals the share price less exercise
price. Instead, an estimate is made by the Group as to the number of shares which are expected to vest based on
satisfaction of the FCPS-related performance condition, where applicable, and this, together with the fair value
of the award at grant date, determines the accounting charge to be spread over the vesting period. The estimate of
the number of shares which are expected to vest over the vesting period of the award is reviewed in each reporting
period and the accounting charge is adjusted accordingly.
Share Save schemes
The Remuneration Committee of the Board of Directors approved the granting of share options under the UK and
Ireland Share Save schemes (the ‘Schemes’) for all eligible employees across the Group from 2016 to 2022. Each
Scheme is for three years and employees may choose to purchase shares over the six month period following the end
of the three year period at the fixed discounted price set at the start of the three year period. The share price
for the Schemes has been set at a 25% discount for Republic of Ireland based employees and 20% for UK based
employees in line with the maximum amount permitted under tax legislation in both jurisdictions.
During the year ended 31 December 2023, 47,488 ordinary shares were issued on maturity of the share options
granted as part of the Share Save scheme in 2019. The weighted average exercise price at the date of exercise for
options exercised during the year ended 31 December 2023 was €3.57.
Movements in the number of share options and the related weighted average exercise price (‘WAEP’) are as follows:
2023 2022
WAEP WAEP
Options € per share Options € per share
Outstanding at the beginning of the year 1,695,307 2.53 1,859,309 2.59
Granted during the year - - 253,795 2.68
Forfeited during the year (167,520) 2.78 (411,438) 2.71
Exercised during the year (47,488) 3.46 (6,359) 2.28
Outstanding at the end of the year 1,480,299 2.39 1,695,307 2.53
The weighted average remaining contractual life for the share options outstanding at 31 December 2023 is 0.8 years
(31 December 2022: 1.8 years).
10 Government grants and government assistance
Government grants
During the year ended 31 December 2023, the Group availed of the Temporary Business Energy Support Scheme (TBESS)
for energy costs in the Republic of Ireland. These grants, which totalled €0.7 million, have been offset against
the related costs in administrative expenses in profit or loss (2022: €1.2 million).
During the year ended 31 December 2022, the Group availed of payroll-related grants for EWSS (Employment Wage
Subsidy Scheme) of €10.5 million and other grant schemes related to income (including the Covid Restrictions
Support Schemes and the Failte Ireland Tourism Accommodation Providers Continuity Scheme) totalling €2.9 million.
No such grants were available in 2023.
Government assistance
In the UK, the Group benefitted from a commercial rates waiver of £0.2 million (€0.3 million) for the year ended
31 December 2023 (2022: £1.0 million (€1.2 million)). Additionally, under the Energy Business Relief Scheme, the
Group benefitted from discounted energy prices of £0.2 million (€0.2 million) for the year ended 31 December 2023
(2022: £0.7 million (€0.8 million)).
The Group did not avail of any commercial rates waiver in Ireland during the year ended 31 December 2023 (2022:
€1.8 million).
Under the warehousing of tax liabilities legislation introduced by the Financial Provisions (Covid-19) (No. 2) Act
2020 and Finance Act 2020 (Act 26 of 2020) and amended by the Finance (Covid-19 and Miscellaneous Provisions) Act
2021, Irish VAT liabilities of €11.7 million and payroll tax liabilities of €23.2 million were deferred as at 31
December 2022. These liabilities were paid in full during the year ended 31 December 2023.
11 Tax charge
2023 2022
€’000 €’000
Current tax
Irish corporation tax charge 15,377 11,654
Irish corporation tax – losses incurred in 2020 carried back to 2019 - (1,457)
Foreign corporation tax charge 33 7
Over provision in respect of prior years (560) (136)
14,850 10,068
Deferred tax charge ( 102 note 26) 460 2,864
15,310 12,932
The tax assessed for the year differs from the standard rate of corporation tax in Ireland for the year. The
differences are explained below.
2023 2022
€’000 €’000
Profit before tax 105,532 109,657
Tax on profit at standard Irish corporation tax rate of 12.5% 13,192 13,707
Effects of:
Income taxed at a higher rate 1,131 -
Expenses not deductible for tax purposes 1,556 606
Impact of revaluation gains not subject to tax (108) (2,054)
Foreign losses taxed at higher rate (1,137) (262)
Over provision in respect of current tax in prior periods (560) (136)
Over provision in respect of deferred tax in prior periods (893) (548)
Impact of differing rates between current tax and deferred tax 991 465
Foreign tax losses not recognised as deferred tax assets - 442
Gain on disposal not subject to tax - (485)
Other differences 1,138 1,197
15,310 12,932
The Group has recognised a tax charge of €15.3 million for the year ended 31 December 2023 (2022: €12.9 million).
The tax charge primarily relates to current tax in respect of profits earned in Ireland during the year of €15.4
million (2022: €11.7 million).
The deferred tax charge for the year ended 31 December 2023 of €0.5 million (2022: €2.9 million) primarily relates
to deferred tax arising on revaluations of land and buildings through profit and loss. The 2022 deferred tax
charge primarily related to the reversal of impairments of the fair value of land and buildings and the carry back
of losses incurred in 2020, in respect of which a deferred tax asset had previously been recognised at 31 December
2021, against prior periods, generating cash refunds.
During the year ended 31 December 2021, the UK government substantively enacted an increase in the corporation tax
rate from 19% to 25%, with effect from 1 April 2023. The UK deferred tax assets and liabilities which were
forecasted to reverse after 1 April 2023 were remeasured at the 25% corporation tax rate during 2021. As the 25%
corporation tax rate came into effect during the year ended 31 December 2023, all UK deferred tax assets and
liabilities are recognised at the 25% tax rate as at 31 December 2023.
12 Impairment
At 31 December 2023, as a result of the carrying amount of the net assets of the Group being more than its market
capitalisation, the Group tested each cash generating unit (‘CGU’) for impairment as this was deemed to be a
potential impairment indicator. Impairment arises where the carrying value of the CGU (which includes, where
relevant, revalued properties and/or right-of-use assets, allocated goodwill, fixtures, fittings and equipment)
exceeds its recoverable amount on a value in use (‘VIU’) basis.
At 31 December 2023, the market capitalisation of the Group (€1,032 million) was lower than the net assets of the
Group (€1,393 million) (market capitalisation is calculated by multiplying the share price on that date by the
number of shares in issue). Market capitalisation can be influenced by a number of different market factors and
uncertainties. In addition, share prices reflect a discount due to lack of control rights. The Group as a whole is
not considered to be a CGU for the purposes of impairment testing and instead each hotel operating unit is
considered as a CGU as it is the smallest identifiable group of assets that generates cash inflows that are
largely independent of the cash inflows from other assets or groups of assets.
At 31 December 2023, the recoverable amounts of the Group’s CGUs were based on VIU, determined by discounting the
estimated future cash flows generated from the continuing use of these hotels. VIU cash flow projections are
prepared for each CGU and then compared against the carrying value of the assets, including goodwill, properties,
fixtures, fittings and equipment and right-of-use assets, in that CGU. The Group has not yet committed to a
decarbonisation pathway and therefore the impact on cashflows of any possible commitment is not included.
The VIU estimates were based on the following key assumptions:
• Cash flow projections are based on operating results and forecasts prepared by management covering a ten year
period in the case of freehold properties. This period was chosen due to the nature of the hotel assets and is
consistent with the valuation basis used by independent external property valuers when performing their hotel
valuations ( 103 note 15). For CGUs with right-of-use assets, the lease term was used;
• Revenue and EBITDA for 2024 and future years are based on management’s best estimate projections as at 31
December 2023. Forecasted revenue and EBITDA are based on expectations of future outcomes taking into account
the macro-environment, current earnings, past experience and adjusted for anticipated revenue and cost growth;
• Cash flow projections assume a long-term compound annual growth rate post 2028 of 2% (2022: 2%) in EBITDA for
CGUs in the Republic of Ireland, 2% in the UK (2022: 2.5%) and 2% in Continental Europe (2022: 2%);
• Cash flows include an average annual capital outlay on maintenance for the hotels dependent on the condition
of the hotel or typically 4% of revenues but assume no enhancements to any property;
• In the case of CGUs with freehold properties, the VIU calculations also include a terminal value based on
terminal (year ten) capitalisation rates consistent with those used by the external property valuers which
incorporates a long-term growth rate of 2% (2022: 2%) for Irish and 2% (2022: 2.5%) for UK properties;
• The cash flows are discounted using a risk adjusted discount rate specific to each property. Risk adjusted
discount rates of 8.5% to 11.35% for Dublin assets (31 December 2022: 8.5% to 11.25%), 10% to 12.75% for
Regional Ireland assets (31 December 2022: 9.75% to 12.5%), 7.4% to 11.5% for UK assets (31 December 2022:
7.5% to 13%), 7.5% to 8% for Continental Europe assets (31 December 2022: 8.25%) have been used; and
• The values applied to each of these key assumptions are derived from a combination of internal and external
factors based on historical experience of the valuers and of management and taking into account the stability
of cash flows typically associated with these factors.
Following the impairment assessments carried out on the Group’s CGUs at 31 December 2023, the recoverable amount
was not deemed lower than the carrying amount for any of the Group’s CGUs. No impairment charge relating to
right-of-use assets ( 104 note 16), allocated goodwill ( 105 note 14) and fixtures, fittings and equipment
( 106 note 15) has therefore been recognised in profit or loss for the year ended 31 December 2023.
At 31 December 2023, impairment reversal assessments were carried out on the Group’s CGUs where there had been a
previous impairment of fixtures, fittings and equipment. Following this assessment, no impairment reversals of
previous impairments were noted (2022: €4.1 million on right-of-use assets and €0.6 million on fixtures, fittings
and equipment).
If the 2024 EBITDA forecasts used in cashflow in VIU estimates for impairment testing as at 31 December 2023 had
been forecast 10% lower, there would still have been no impairment for the year ended 31 December 2023 for
right-of-use assets and fixtures, fittings and equipment and allocated goodwill.
13 Business combinations
Acquisition of Clayton Hotel London Wall
On 3 July 2023, the Group acquired the long leasehold interest and trade of Apex Hotel London Wall, now trading as
Clayton Hotel London Wall, for cash consideration of £53.4 million (€62.1 million).
The Group became party to a ground lease as part of the acquisition and recognised lease liabilities and
right-of-use assets of £2.0 million (€2.3 million). The ground lease has a remaining life of 107 years. This
exceeds the estimated useful life of the building as at the acquisition date and hence the building is accounted
for as an owned hotel.
The fair value of the identifiable assets and liabilities acquired were as follows:
3 July 2023 3 July 2023
Fair value Fair value
£’000 €’000
Recognised amounts of identifiable assets acquired and liabilities assumed
Non-current assets
Hotel property 51,366 59,742
Fixtures, fittings and equipment 2,034 2,365
Right-of-use asset 2,017 2,346
Current assets
Net working capital liabilities (21) (24)
Non-current liabilities
Lease liability (1,997) (2,323)
Current liabilities
Lease liability (20) (23)
Total identifiable net assets 53,379 62,083
Total cash consideration 53,379 62,083
The acquisition method of accounting has been used to consolidate the business acquired in the Group’s
consolidated financial statements. No goodwill has been recognised on acquisition as the fair value of the net
assets acquired equated to the consideration paid.
Acquisition-related costs of £3.3 million (€3.8 million) were charged to administrative expenses in profit or loss
in respect of this business combination.
Acquisition of Clayton Hotel Amsterdam American
On 3 October 2023, the Group acquired 100% of the share capital of American Hotel Exploitatie BV which holds the
operational lease of the Hard Rock Hotel Amsterdam American, now trading as Clayton Hotel Amsterdam American, for
cash consideration of €28.3 million and assumed net working capital liabilities of €1.2 million.
The remaining lease term is 18 years, with two 5-year tenant extension options. This resulted in the recognition
of a lease liability of €41.0 million and a right-of-use asset of €41.0 million.
The fair value of the identifiable assets and liabilities acquired were as follows:
3 October 2023
Fair value
€’000
Recognised amounts of identifiable assets acquired and liabilities assumed
Non-current assets
Right-of-use asset 41,036
Fixtures, fittings and equipment 6,065
Deferred tax asset 10,587
Current assets
Trade and other receivables 974
Stock 98
Cash 8
Non-current liabilities
Deferred tax liability (10,587)
Lease liability (40,066)
Current liabilities
Trade and other payables (1,962)
Lease liability (970)
Accruals (264)
Total identifiable net assets 4,919
Total cash consideration 28,344
Goodwill 23,425
Goodwill of €23.4 million has been recognised due to the acquisition of Clayton Hotel Amsterdam American, as the
consideration exceeded the fair value of the identifiable net assets acquired.
The goodwill acquired as part of this transaction comprises certain intangible assets that cannot be separately
identified. This includes future trading and the future growth opportunities the business provides to the Group’s
operations due to the geographical location of the hotel, access to the Amsterdam market, which restricts new
hotel developments, and the skills and experience of an assembled workforce.
Acquisition-related costs of €0.6 million were charged to administrative expenses in profit or loss in respect of
this business combination.
Impact of new acquisitions on trading performance
The post-acquisition impact of the acquisitions completed during 2023 on the Group’s profit for the financial year
ended 31 December 2023 was as follows:
2023
€’000
Revenue 7,671
Loss before tax and acquisition-related costs (1,044)
The Group has limited access to the pre-acquisition books and records of the acquired businesses, and as such it
is impracticable to determine the impact to the Group if the acquisitions had occurred on 1 January 2023.
These two transactions have added to the scale of the Group with the acquisition of Clayton Hotel London Wall and
Clayton Hotel Amsterdam American increasing the geographical spread of the Group in line with the Group’s strategy
of expanding across larger UK cities and further entry into Continental Europe.
14 Intangible assets and goodwill
Other
Goodwill intangible Total
assets
€’000 €’000 €’000
Cost or valuation
Balance at 1 January 2023 79,106 2,797 81,903
Additions 23,425 7 23,432
Effect of movements in exchange rates 238 - 238
Balance at 31 December 2023 102,769 2,804 105,573
Balance at 1 January 2022 79,716 2,517 82,233
Additions - 280 280
Effect of movements in exchange rates (610) - (610)
Balance at 31 December 2022 79,106 2,797 81,903
Accumulated amortisation and impairment losses
Balance at 1 January 2023 (48,947) (1,902) (50,849)
Amortisation of intangible assets - (650) (650)
Balance at 31 December 2023 (48,947) (2,552) (51,499)
Balance at 1 January 2022 (48,947) (1,292) (50,239)
Amortisation of intangible assets - (610) (610)
Balance at 31 December 2022 (48,947) (1,902) (50,849)
Carrying amounts
At 31 December 2023 53,822 252 54,074
At 31 December 2022 30,159 895 31,054
Goodwill
Goodwill is attributable to factors including expected profitability and revenue growth, increased market share,
increased geographical presence, the opportunity to develop the Group’s brands and the synergies expected to arise
within the Group after acquisition.
Additions to goodwill during 2023 include €23.4 million attributable to the acquisition of Clayton Hotel Amsterdam
American ( 107 note 13) (2022: €Nil).
As at 31 December 2023, the goodwill cost figure includes €11.8 million (£10.3 million) which is attributable to
goodwill arising on acquisition of foreign operations denominated in sterling. Consequently, such goodwill is
subsequently retranslated at the closing rate. The retranslation at 31 December 2023 resulted in a foreign
exchange gain of €0.2 million and a corresponding increase in goodwill. The comparative retranslation at 31
December 2022 resulted in a foreign exchange loss of €0.6 million.
Number of cash-generating units
At 31 December 2023 2023 2022
Carrying amount of goodwill allocated €’000 €’000
Moran Bewley Hotel Group (i) 7 24,725 24,500
Other acquisitions (i) 3 1,327 1,314
2007 Irish hotel operations acquired (ii) 3 4,345 4,345
Clayton Hotel Amsterdam American (iii) 1 23,425 -
14 53,822 30,159
The above table represents the number of CGUs to which goodwill was allocated at 31 December 2023.
Annual goodwill testing
The Group tests goodwill annually for impairment and more frequently if there are indications that goodwill might
be impaired. Due to the Group’s policy of revaluation of land and buildings, and the allocation of goodwill to
individual CGUs, impairment of goodwill can occur for CGUs where the Group owns the freehold as the Group realises
the profit and revenue growth and synergies which underpinned the goodwill. As these materialise, they are
recorded as revaluation gains to the carrying value of the property and consequently, elements of goodwill may be
required to be written off if the carrying value of the CGU (which includes revalued property and allocated
goodwill) exceeds its recoverable amount on a VIU basis. The impairment of goodwill is recorded through profit or
loss though the revaluation gains on property are taken to reserves through other comprehensive income provided
there were no previous impairment charges through profit or loss.
Following an impairment review of the CGUs containing goodwill at 31 December 2023, no goodwill was required to be
impaired (2022: €Nil).
Future under-performance in any of the Group’s major CGUs may result in a material write-down of goodwill which
would have a substantial impact on the Group’s results and equity.
(i) Moran Bewley Hotel Group and other single asset acquisitions
For the purposes of impairment testing, goodwill has been allocated to each of the hotels acquired as CGUs. The
freehold interest in the property is owned by the Group and therefore these hotel properties are valued annually
by independent external valuers. As such the recoverable amount of each CGU is based on a fair value less costs of
disposal estimate, or where this value is less than the carrying value of the asset, the VIU of the CGU is
assessed.
Costs of acquisition of a willing buyer which are factored in by external valuers when calculating the fair value
price of the asset are significant for these assets (2023: Ireland 9.96%, UK 6.8%, 2022: Ireland 9.96%, UK 6.8%).
Purchasers’ costs are a key difference between VIU and fair value less costs of disposal as prepared by external
valuers.
At 31 December 2023, the recoverable amounts of the ten CGUs were based on VIU, determined by discounting the
future cash flows generated from the continuing use of these hotels. Following the impairment assessment carried
out at 31 December 2023, there was no impairment relating to the CGUs. 108 Note 12 details the assumptions used
in the VIU estimates for impairment testing.
(ii) 2007 Irish hotel operations acquired
For the purposes of impairment testing, goodwill has been allocated to each of the CGUs representing the Irish
hotel operations acquired in 2007. Eight hotels were acquired at that time but only four of these hotels had
goodwill associated with them. The goodwill related to one of these CGUs was fully impaired (€2.6 million) during
the year ended 31 December 2020. The remaining three of these hotels are valued annually by independent external
valuers, as the freehold interest in the property is now also owned by the Group. Where hotel properties are
valued annually by independent external valuers, the recoverable amount of each CGU is based on a fair value less
costs of disposal estimate, or where this value is less than the carrying value of the asset, the VIU of the CGU
is assessed. The recoverable amount at 31 December 2023 of each of these CGUs which have associated goodwill is
based on VIU. VIU is determined by discounting the future cash flows generated from the continuing use of these
hotels. Following the impairment assessment carried out at 31 December 2023, there was no impairment of goodwill
relating to these CGUs.
Costs of acquisition of a willing buyer which are factored in by external valuers when calculating the fair value
price of the assets are significant for these assets (2023: 9.96%, 2022: 9.96%). Purchaser’s costs are a key
difference between VIU and fair value less costs of disposal as prepared by external valuers. 109 Note 12 details
the assumptions used in the VIU estimates.
The key judgements and assumptions used in estimating the future cash flows in the impairment tests are subjective
and include projected EBITDA (as defined in 110 note 3), discount rates and the duration of the discounted cash
flow model. Expected future cash flows are inherently uncertain and therefore liable to change materially over
time ( 111 note 12).
(iii) Clayton Hotel Amsterdam American
Goodwill of €23.4 million has been recognised due to the acquisition of Clayton Hotel Amsterdam American, as the
consideration exceeded the fair value of the identifiable net assets acquired.
The goodwill acquired as part of this transaction comprises certain intangible assets that cannot be separately
identified. This includes future trading and the future growth opportunities the business provides to the Group’s
operations due to the geographical location of the hotel, access to the Amsterdam market, which restricts new
hotel developments, and the skills and experience of an assembled workforce.
For the purposes of impairment testing, goodwill has been allocated to the CGU, representing Clayton Hotel
Amsterdam American’s operations, acquired in 2023. The recoverable amount at 31 December 2023 of this CGU is based
on VIU. VIU is determined by discounting the estimated future cash flows generated from the continuing use of the
hotel. Following the impairment assessment carried out at 31 December 2023, there was no impairment of goodwill
relating to this CGU.
Other intangible assets
Other intangible assets of €0.3 million at 31 December 2023 (2022: €0.9 million) primarily represent a software
licence agreement entered into by the Group in 2019. This software licence will run to 31 May 2024 and is being
amortised on a straight-line basis over the life of the asset.
The Group reviews the carrying amounts of other intangible assets annually to determine whether there is any
indication of impairment. If any such indicators exist, then the asset’s recoverable amount is estimated.
At 31 December 2023, there were no indicators of impairment present and the Directors concluded that the carrying
value of other intangible assets was not impaired at 31 December 2023.
15 Property, plant and equipment
Land and buildings Assets under Fixtures, fittings Total
construction and equipment
€’000 €’000 €’000 €’000
At 31 December 2023
Valuation 1,478,636 - - 1,478,636
Cost - 101,703 187,951 289,654
Accumulated depreciation (and impairment charges) * - - (83,459) (83,459)
Net carrying amount 1,478,636 101,703 104,492 1,684,831
At 1 January 2023, net carrying amount 1,281,344 64,556 81,547 1,427,447
Acquisitions through business combinations 59,742 - 8,430 68,172
Additions through capital expenditure 50,351 33,892 34,038 118,281
Capitalised labour costs 120 142 66 328
Capitalised borrowing costs ( 112 note 7) - 2,008 - 2,008
Revaluation gains through OCI 92,098 - - 92,098
Reversal of revaluation losses through profit or loss 2,020 - - 2,020
Depreciation charge for the year (12,769) - (20,022) (32,791)
Translation adjustment 5,730 1,105 433 7,268
At 31 December 2023, net carrying amount 1,478,636 101,703 104,492 1,684,831
The equivalent disclosure for the prior year is as
follows:
At 31 December 2022
Valuation 1,281,344 - - 1,281,344
Cost - 64,556 153,879 218,435
Accumulated depreciation (and impairment charges) * - - (72,332) (72,332)
Net carrying amount 1,281,344 64,556 81,547 1,427,447
At 1 January 2022, net carrying amount 1,088,847 79,094 75,961 1,243,902
Additions through capital expenditure 31 18,732 21,165 39,928
Reclassification from assets under construction to
land and buildings and fixtures, fittings and 28,627 (31,796) 3,169 -
equipment for assets that have come into use
Capitalised labour costs 52 32 79 163
Capitalised borrowing costs ( 113 note 7) 1,088 1,063 - 2,151
Disposals (19,008) - (1,204) (20,212)
Revaluation gains through OCI 188,185 188,185
Reversal of revaluation losses through profit or loss 21,234 - - 21,234
Reversal of previous impairment charges of fixtures, - - 624 624
fittings and equipment
Depreciation charge for the year (11,237) - (17,189) (28,426)
Translation adjustment (16,475) (2,569) (1,058) (20,102)
At 31 December 2022, net carrying amount 1,281,344 64,556 81,547 1,427,447
* Accumulated depreciation of buildings is stated after the elimination of depreciation, revaluation, disposals
and impairments.
The carrying value of land and buildings (revalued at 31 December 2023) is €1,478.6 million (2022: €1,281.3
million). The value of these assets under the cost model is €959.9 million (2022: €855.4 million). In 2023,
unrealised revaluation gains of €92.1 million have been reflected in other comprehensive income and in the
revaluation reserve in equity (2022: €188.2 million). Reversal of previous periods revaluation losses of €2.0
million have been reflected in administrative expenses through profit or loss (2022: €21.2 million).
Included in land and buildings at 31 December 2023 is land at a carrying value of €521.9 million (2022: €463.7
million) which is not depreciated. There are €13.5 million of fixtures, fittings and equipment which have been
depreciated in full but are still in use at 31 December 2023 (31 December 2022: €3.3 million).
Acquisitions through business combinations relate to the acquisition of Clayton Hotel London Wall of £53.4 million
(€62.1 million) and Clayton Hotel Amsterdam American of €6.1 million during the year ( 114 note 13).
Additions to assets under construction during the year end 31 December 2023 primarily relate to development
expenditure incurred on the construction of Maldron Hotel Shoreditch in London and the purchase of a building
conversion opportunity in Edinburgh.
Other additions through capital expenditure primarily relate to the acquisition of and further investment in
Maldron Hotel Finsbury Park, London, which totalled £49.5 million (€56.9 million).
Capitalised labour costs of €0.3 million (2022: €0.2 million) relate to the Group’s internal development team and
are directly related to asset acquisitions and other construction work completed in relation to the Group’s
property, plant and equipment.
Impairment assessments were carried out on the Group’s CGUs at 31 December 2023. No impairment charge has been
recorded as the recoverable amount was deemed higher than the carrying amount for all the Group’s CGUs.
At 31 December 2023, impairment reversal assessments were carried out on the Group’s CGUs where there had been a
previous impairment of fixtures, fittings and equipment. Following this assessment, no impairment reversals of
previous impairments were necessary (2022: €4.7 million) ( 115 note 12).
At 31 December 2023, property, plant and equipment, including fixtures, fittings and equipment in leased
properties, with a carrying amount of €1,368.3 million (2022: €1,217.0 million) were pledged as security for loans
and borrowings.
On 21 June 2022, the Group completed the sale of Clayton Crown Hotel, London, for net proceeds of £20.7 million
(€24.1 million). As a result, the hotel property and related fixtures, fittings and equipment of £17.4 million
(€20.2 million) were derecognised from the statement of financial position. A gain on disposal of £3.3 million
(€3.9 million) was recognised in profit or loss for the year ended 31 December 2022 ( 116 note 6).
The Group operates the Maldron Hotel Limerick and, since the acquisition of Fonteyn Property Holdings Limited in
2013, holds a secured loan over that property. The loan is not expected to be repaid. Accordingly, the Group has
the risks and rewards of ownership and accounts for the hotel as an owned property, reflecting the substance of
the arrangement.
The value of the Group’s property at 31 December 2023 reflects open market valuations carried out as at 31
December 2023 by independent external valuers having appropriate recognised professional qualifications and recent
experience in the location and value of the property being valued. The external valuations performed were in
accordance with the Royal Institution of Chartered Surveyors (RICS) Valuation Standards.
Measurement of fair value
The fair value measurement of the Group’s own-use property has been categorised as a Level 3 fair value based on
the inputs to the valuation technique used. At 31 December 2023, 31 properties were revalued by independent
external valuers engaged by the Group (31 December 2022: 29).
The principal valuation technique used by the independent external valuers engaged by the Group was discounted
cash flows. This valuation model considers the present value of net cash flows to be generated from the property
over a ten year period (with an assumed terminal value at the end of year 10). Valuers’ forecast cash flow
included in these calculations represents the expectations of the valuers for EBITDA (driven by average room rate
(‘ARR’) (calculated as total revenue divided by total rooms sold) and occupancy) for the property and also takes
account of the expectations of a prospective purchaser. It also includes their expectation for capital expenditure
which the valuers, typically, assume as approximately 3%-4% of revenue per annum, dependent on the extent of hotel
facilities. This does not always reflect the profile of actual capital expenditure incurred by the Group. On
specific assets, refurbishments are, by nature, periodic rather than annual. Valuers’ expectations of EBITDA are
based off their trading forecasts (benchmarked against competition, market and actual performance). The expected
net cash flows are discounted using risk adjusted discount rates. Among other factors, the discount rate
estimation considers the quality of the property and its location. The final valuation also includes a deduction
of full purchaser’s costs based on the valuers’ estimates at 9.96% for assets located in the Republic of Ireland
(31 December 2022: 9.96%) and 6.8% for assets located in the UK (31 December 2022: 6.8%).
The valuers use their professional judgement and experience to balance the interplay between the different
assumptions and valuation influences. For example, initial discounted cash flows based on individually reasonable
inputs may result in a valuation which challenges the price per key metrics (value of hotel divided by room
numbers) in recent hotel transactions. This would then result in one or more of the inputs being amended for
preparation of a revised discounted cash flow. Consequently, the individual inputs may change from the prior
period or may look individually unusual and therefore must be considered as a whole in the context of the overall
valuation.
It was noted by the independent valuers that climate risk and ESG considerations have had little or no impact on
valuations at 31 December 2023.
The significant unobservable inputs and drivers thereof are summarised in the following table:
Significant unobservable inputs
31 December 2023
Dublin Regional Ireland UK Total
Number of hotel assets
RevPar (Revenue per available room)
€75-€100/£75-£100 - - 2 2
€100-€125/£100-£125 2 7 4 13
>€125/£125 8 5 3 16
10 12 9 31
Terminal (Year 10) capitalisation rate
<8% 7 - 5 12
8%-10% 3 8 4 15
>10% - 4 - 4
10 12 9 31
Price per key*
< €150k/£150k 1 9 4 14
€150k-€250k/£150k-£250k 1 2 1 4
€250k-€350k/£250k-£350k 5 1 2 8
> €350k/£350k 3 - 2 5
10 12 9 31
31 December 2022
Dublin Regional Ireland UK Total
Number of hotel assets
RevPar (Revenue per available room)
< €75/£75 1 6 5 12
€75-€100/£75-£100 4 5 3 12
€100-€125/£100-£125 4 1 - 5
9 12 8 29
Terminal (Year 10) capitalisation rate
<8% 7 2 2 11
8%-10% 3 8 4 15
>10% - 2 1 3
10 12 7 29
Price per key*
< €150k/£150k 1 9 5 15
€150k-€250k/£150k-£250k 1 3 - 4
€250k-€350k/£250k-£350k 7 - 1 8
> €350k/£350k 1 - 1 2
10 12 7 29
* Price per key represents the valuation of a hotel divided by the number of rooms in that hotel.
The significant unobservable inputs are:
• Valuers’ forecast cash flows.
• Risk adjusted discount rates and terminal (Year 10) capitalisation rates are specific to each property;
Dublin assets:
• Risk adjusted discount rates range between 8.50% and 11.35% (31 December 2022: 8.50% and 11.25%).
• Weighted average risk adjusted discount rate is 9.40% (31 December 2022: 9.56%).
• Terminal capitalisation rates range between 6.50% and 9.35% (31 December 2022: 6.50% and 9.25%).
• Weighted average terminal capitalisation rate is 7.40% (31 December 2022: 7.56%).
Regional Ireland:
• Risk adjusted discount rates range between 10.0% and 12.75% (31 December 2022: 9.75% and 12.50%).
• Weighted average risk adjusted discount rate is 11.06% (31 December 2022: 10.75%).
• Terminal capitalisation rates range between 8.0% and 10.75% (31 December 2022: 7.75% and 10.50%).
• Weighted average terminal capitalisation rate is 9.06% (31 December 2022: 8.75%).
UK:
• Risk adjusted discount rates range between 7.40% and 11.50% (31 December 2022: 7.50% and 13.00%).
• Weighted average risk adjusted discount rate is 8.77% (31 December 2022: 9.47%).
• Terminal capitalisation rates range between 5.40% and 9.50% (31 December 2022: 5.00% and 10.50%).
• Weighted average terminal capitalisation rate is 6.77% (31 December 2022: 6.97%).
The estimated fair value under this valuation model may increase or decrease if:
• Valuers’ forecast cash flow was higher or lower than expected; and/or
• The risk adjusted discount rate and terminal capitalisation rate was lower or higher.
Valuations also had regard to relevant price per key metrics from hotel sales activity.
The property revaluation exercise carried out by the Group’s external valuers is a complex exercise, which not
only takes into account the future earnings forecast for the hotels, but also a number of other factors, including
and not limited to, market conditions, comparable hotel sale transactions, inflation and the underlying value of
an asset. As a result, it is not possible, for the Group to perform a quantitative sensitivity for a change in the
property values. A change in an individual quantitative variable would not necessarily lead to an equivalent
change in the overall outcome and would require the application of judgement of the valuers in terms of how the
variable change could potentially impact on overall valuations.
16 Leases
Group as a lessee
The Group leases property assets, which includes land and buildings and related fixtures and fittings, and other
equipment, relating to vehicles, machinery and IT equipment. Information about leases for which the Group is a
lessee is presented below:
Right-of-use assets
Property assets Other equipment Total
€’000 €’000 €’000
Net book value at 1 January 2023 657,790 311 658,101
Acquisitions through business combinations 43,382 - 43,382
Additions - 375 375
Depreciation charge for the year (30,570) (93) (30,663)
Remeasurement of lease liabilities 7,808 - 7,808
Translation adjustment 6,190 - 6,190
Net book value at 31 December 2023 684,600 593 685,193
Net book value at 1 January 2022 491,832 37 491,869
Additions 195,167 330 195,497
Depreciation charge for the year (27,447) (56) (27,503)
Remeasurement of lease liabilities 10,441 - 10,441
Reversal of previous impairment charges 4,101 - 4,101
Translation adjustment (16,304) - (16,304)
Net book value at 31 December 2022 657,790 311 658,101
Right-of-use assets comprise leased assets that do not meet the definition of investment property.
Lease liabilities
2023 2022
€’000 €’000
Current 10,347 10,049
Non-current 641,444 471,877
Lease liabilities at 1 January 651,791 481,926
Additions 375 185,061
Acquisitions through business combinations 43,382 -
Interest on lease liabilities ( 117 note 7) 42,751 38,101
Lease payments (53,498) (47,425)
Remeasurement of lease liabilities 7,808 10,427
Translation adjustment 5,989 (16,299)
Lease liabilities at 31 December 698,598 651,791
Current 12,040 10,347
Non-current 686,558 641,444
Lease liabilities at 31 December 698,598 651,791
Acquisitions through business combinations during the year ended 31 December 2023 relate to:
• In July 2023, the Group acquired the ground lease of the Apex Hotel London Wall, which was subsequently
re-branded Clayton Hotel London Wall, with 107 years remaining on the lease. This resulted in the recognition
of a lease liability of €2.3 million (£2.0 million) and a right-of-use asset of €2.3 million (£2.0 million).
• In October 2023, the Group acquired 100% of the share capital of American Hotel Exploitatie BV which held the
operational lease of the Hard Rock Hotel Amsterdam American, now trading as Clayton Hotel Amsterdam American.
The lease term remaining is 18 years, with two 5-year tenant extension options. This resulted in the
recognition of a lease liability of €41.0 million and right-of-use asset of €41.0 million.
Additions during the year ended 31 December 2022 related to:
• In February 2022, the Group entered into a 35 year lease of Maldron Hotel Manchester City Centre. This
resulted in the recognition of a lease liability of €32.3 million (£27.1 million) and a right-of-use asset of
€37.2 million (£31.3 million), which included lease prepayments and initial direct costs of €4.9 million (£4.2
million).
• In February 2022, the Group entered a new operating lease of Clayton Hotel Düsseldorf, Germany with a lease
term of 20 years, and two 5 year tenant extension options. This resulted in the recognition of a lease
liability of €49.6 million and right-of-use asset of €50.1 million, which included €0.5 million of initial
direct costs.
• In March 2022, the Group entered into a 35 year lease of Clayton Hotel Bristol City. This resulted in the
recognition of a lease liability of €32.4 million (£27.0 million) and a right-of-use asset of €35.3 million
(£29.4 million), which included lease prepayments and initial direct costs of €2.9 million (£2.4 million).
• In April 2022, the Group entered into a 35 year lease of The Samuel Hotel, Dublin. This resulted in the
recognition of a lease liability of €37.9 million and a right-of-use asset of €38.3 million, which included
initial direct costs of €0.4 million.
• In July 2022, the Group entered into a new lease for its central office headquarters with a lease term of 15
years and a break option after 10 years. This resulted in the recognition of a lease liability of €3.3 million
and a right-of-use asset of €3.3 million.
• In October 2022, the Group entered into a 35 year lease of Clayton Hotel Glasgow. This resulted in the
recognition of a lease liability of €29.6 million (£25.6 million) and a right-of-use assets of €31.0 million
(£26.9 million), which included initial direct costs of €1.4 million (£1.3 million).
The weighted average incremental borrowing rate for leases acquired or newly entered into during the year ended 31
December 2023 is 8.8% (2022: 7.5%).
During the year ended 31 December 2023, a lease amendment, which was not included in the original lease agreement
was made to one of the Group’s leases. This has been treated as a modification of lease liabilities and resulted
in an increase in lease liabilities and the carrying value of the right-of-use asset of €4.5 million.
Following agreed rent reviews and rent adjustments, which formed part of the original lease agreements, certain of
the Group’s leases were reassessed during the year. This resulted in an increase in lease liabilities and related
right-of-use assets of €3.3 million.
During the year ended 31 December 2022, lease amendments, which were not included in the original lease agreements
were made to three of the Group’s leases. These were treated as a modification of lease liabilities and resulted
in a decrease in lease liabilities of €2.8 million and a €2.8 million decrease in the carrying value of the
right-of-use assets. Following agreed rent reviews and rent adjustments, which formed part of the original lease
agreements, certain of the Group’s leases were reassessed during the year. This resulted in an increase in lease
liabilities and related right-of-use assets of €13.4 million. In addition, the termination of one of the Group’s
leases resulted in a decrease in lease liabilities and related right-of-use assets of €0.2 million.
Variable lease costs which are linked to an index rate or are considered fixed payments in substance are included
in the measurement of lease liabilities. These represent €61.2 million of lease liabilities at 31 December 2023
(31 December 2022: €63.8 million).
Non-cancellable undiscounted lease cash flows payable under lease contracts are set out below:
At 31 December 2023
Republic of Ireland Continental Europe UK Total
€’000 €’000 £’000 €’000
During the year 2024 26,283 8,780 19,588 57,603
During the year 2025 26,475 8,827 19,660 57,924
During the year 2026 24,577 8,827 19,753 56,133
During the year 2027 24,419 8,827 20,211 56,502
During the years 2028 24,500 8,827 20,327 56,717
During the years 2029 – 2038 235,934 88,268 211,761 567,872
During the years 2039 – 2048 147,009 27,948 230,195 439,838
From 2049 onwards 71,432 - 168,646 265,490
580,629 160,304 710,141 1,558,079
At 31 December 2022
Republic of Ireland Continental Europe UK Total
€’000 €’000 £’000 €’000
Year ended 31 December 2023 26,517 3,537 19,267 51,777
During the year 2024 24,096 4,386 19,208 50,139
During the year 2025 23,986 4,433 19,280 50,157
During the year 2026 24,089 4,433 19,373 50,365
During the year 2027 24,369 4,433 19,831 51,161
During the years 2028 24,467 4,433 19,945 51,387
During the years 2029 – 2038 235,808 44,330 207,880 514,521
During the years 2039 – 2048 147,003 13,669 226,213 415,723
From 2049 onwards 71,432 - 152,399 243,259
601,767 83,654 703,396 1,478,489
Sterling amounts have been converted using the closing foreign exchange rate of 0.86905 as at 31 December 2023
(0.88693 as at 31 December 2022).
The actual cash flows will depend on the composition of the Group’s lease portfolio in future years and is subject
to change, driven by:
• commencement of new leases;
• modifications of existing leases; and
• reassessments of lease liabilities following periodic rent reviews.
It excludes leases on hotels for which an agreement for lease has been signed.
The weighted average lease life of future minimum rentals payable under leases is 29.5 years (31 December 2022:
29.8 years). Lease liabilities are monitored within the Group’s treasury function.
For the year ended 31 December 2023, the total fixed cash outflows relating to property assets and other equipment
amounted to €53.5 million (31 December 2022: €47.4 million).
Unwind of right-of-use assets and release of interest charge
The unwinding of the right-of-use assets as at 31 December 2023 and the release of the interest on the lease
liabilities as at 31 December 2023 through profit or loss over the terms of the leases have been disclosed in the
following tables:
Depreciation of right-of-use assets
Republic of Ireland Continental Europe UK Total
€’000 €’000 £’000 €’000
During the year 2024 16,185 4,437 9,877 31,987
During the year 2025 16,092 4,749 9,866 32,194
During the year 2026 14,109 4,749 9,521 29,814
During the year 2027 13,634 4,749 9,301 29,085
During the year 2028 13,461 4,749 9,147 28,735
During the year 2029 13,240 4,474 8,487 27,480
During the years 2030-2039 121,287 44,492 83,002 261,288
During the years 2040-2049 63,889 9,639 82,892 168,910
From 2050 onwards 24,877 - 44,167 75,700
296,774 82,038 266,260 685,193
Interest on lease liabilities
Republic of Ireland Continental Europe UK Total
€’000 €’000 £’000 €’000
During the year 2024 17,723 6,534 18,511 45,557
During the year 2025 17,167 6,249 18,441 44,636
During the year 2026 16,630 6,054 18,364 43,815
During the year 2027 16,174 5,844 18,265 43,035
During the year 2028 15,680 5,618 18,133 42,163
During the year 2029 15,152 5,374 17,989 41,226
During the years 2030-2039 117,821 35,356 166,772 345,079
During the years 2040-2049 54,650 1,531 116,420 190,143
From 2050 onwards 9,475 - 47,235 63,827
280,472 72,560 440,130 859,481
Sterling amounts have been converted using the closing foreign exchange rate of 0.86905 as at 31 December 2023.
The actual depreciation and interest charge through profit or loss will depend on the composition of the Group’s
lease portfolio in future years and is subject to change, driven by:
• commencement of new leases;
• modifications of existing leases;
• reassessments of lease liabilities following periodic rent reviews; and
• impairments and reversals of previous impairment charges of right-of-use assets.
Impairment assessments were carried out on the Group’s CGUs at 31 December 2023. No impairment charge has been
recorded as the recoverable amount was deemed higher than the carrying amount for all the Group’s CGUs (31
December 2022: impairment reversals of €4.1 million) ( 118 note 12).
Leases of property assets
The Group leases properties for its hotel operations and office space. The leases of hotels typically run for a
period of between 25 and 35 years and leases of office space for 10 years.
Some leases provide for additional rent payments that are based on a percentage of the revenue/EBITDAR that the
Group generates at the hotel in the period. The Group sub-leases part of two of its properties to a tenant under
an operating lease.
Variable lease costs based on revenue
These variable lease costs link rental payments to hotel cash flows and reduce fixed payments. Variable lease
costs which are considered fixed in substance are included as part of lease liabilities and not in the following
table.
Variable lease costs based on revenue for the year ended 31 December 2023 are as follows:
Variable lease costs element Estimated impact on variable lease costs of 5%
increase in revenue/EBITDAR
€’000 €’000
Leases with lease payments based 3,630 782
on revenue
Variable lease costs based on revenue for the year ended 31 December 2022 are as follows:
Variable lease costs Estimated impact on variable lease costs of 5% increase in
element revenue/EBITDAR
€’000 €’000
Leases with lease payments based 3,815 519
on revenue
Extension options
As at 31 December 2023, the Group, as a hotel lessee, has two hotels which each have two 5-year extension options.
The Group assesses at lease commencement whether it is reasonably certain to exercise the options and reassesses
if there is a significant event or change in circumstances within its control. At 31 December 2023, the Group has
assessed that it is not reasonably certain that the options will be exercised. The relative magnitude of optional
lease payments to lease payments is as follows:
Lease liabilities recognised (discounted) Potential future lease payments not included in lease
liabilities (discounted)
€’000 €’000
Hotel leases 87,850 13,274
Termination options
The Group holds a termination option in an office space lease. The Group assesses at lease commencement whether it
is reasonably certain not to exercise the option and reassesses if there is a significant event or change in
circumstances within its control. At 31 December 2023, the Group has assessed that it is not reasonably certain
that the option will not be exercised. The relative magnitude of optional lease payments to lease payments is as
follows:
Lease liabilities recognised (discounted) Potential future lease payments not included in lease
liabilities (discounted)
€’000 €’000
Office building 3,579 1,372
Leases not yet commenced to which the lessee is committed
The Group has multiple agreements for lease at 31 December 2023 and details of the non-cancellable lease rentals
and other contractual obligations payable under these agreements are set out hereafter. These represent the
minimum future lease payments (undiscounted) in aggregate that the Group is required to make under the agreements.
An agreement for lease is a binding agreement between external third parties and the Group to enter into a lease
at a future date. The dates of commencement of these leases may change based on the hotel opening dates. The
amounts payable may also change slightly if there are any changes in room numbers delivered through construction.
At 31 December 2023 At 31 December 2022
€’000 €’000
Agreements for lease
Less than one year 9,503 -
One to two years 5,745 10,178
Two to three years 7,991 5,629
Three to five years 16,389 15,737
Five to fifteen years 86,181 81,307
Fifteen to twenty five years 92,658 87,473
After twenty five years 107,305 109,229
Total future lease payments 325,772 309,553
Included in the above table are future lease payments for agreements for lease, with a lease term of 35 years with
the expected opening dates as follows: Maldron Hotel Cathedral Quarter Manchester (Q2 2024), Maldron Hotel
Liverpool City (Q2 2024), Maldron Hotel Brighton (Q3 2024) and Maldron Hotel Croke Park, Dublin (H1 2026).
Other leases
The Group has applied the short-term and low-value exemptions available under IFRS 16 where applicable and
recognises lease payments associated with short-term leases or leases for which the underlying asset is of
low-value as an expense on a straight-line basis over the lease term. Where the exemptions were not available,
right-of-use assets have been recognised with corresponding lease liabilities.
2023 2022
€’000 €’000
Expenses relating to short-term leases recognised in administrative expenses 174 204
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets, 365 237
recognised in administrative expenses
539 441
For the year ended 31 December 2023, cash outflows relating to fixtures, fittings and equipment, for which the
Group has availed of the IFRS 16 short-term and low-value exemptions, amounted to €0.5 million (31 December 2022:
€0.4 million).
Group as a lessor
Lease income from lease contracts in which the Group acts as lessor is outlined below:
2023 2022
€’000 €’000
Operating lease income ( 119 note 6) 385 392
The Group leases its investment property and has classified these leases as operating leases because they do not
transfer substantially all of the risks and rewards incidental to ownership of these assets to the lessee.
Operating lease income from sub-leasing right-of-use assets for the year ended 31 December 2023 amounted to €0.2
million (31 December 2022: €0.2 million).
The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments
receivable:
2023 2022
€’000 €’000
Less than one year 364 375
One to two years 303 335
Two to three years 303 335
Three to four years 262 335
Four to five years 248 293
More than five years 767 1,102
Total undiscounted lease payments receivable 2,247 2,775
Sterling amounts have been converted using the closing foreign exchange rate of 0.86905 as at 31 December 2023 (31
December 2022: 0.88693).
17 Contract fulfilment costs
2023 2022
€’000 €’000
At 1 January - 36,255
Costs incurred in fulfilling contract in the year - 4,386
Capitalised borrowing costs ( 120 note 7) - 357
Release of costs to profit or loss on sale - (40,998)
At 31 December - -
During 2022 contract fulfilment costs related to the Group’s contractual agreement with Irish Residential
Properties REIT plc (‘I-RES’), entered into on 16 November 2018, for I-RES to purchase a residential development
on completion of its construction by the Group (comprising 69 residential units) on the site of the former Tara
Towers Hotel.
The Group completed the sale of these residential units to I-RES on 11 August 2022. Income and the associated
costs were recognised on this contract in profit or loss when the performance obligation in the contract was met.
Based on the terms of the contract, this was the legal completion of the contract which occurred on practical
completion of the development project, 11 August 2022. As a result, the income was recognised at a point in time
when the performance obligation was met, rather than over time.
The income from the sale of the residential units was €42.5 million of which €41.8 million was received on
completion. €0.7 million has been withheld as a retention payment and included in contract assets ( 121 note 18).
The full receipt of these funds is expected in 2024.Total sales proceeds of €42.5 million were recognised as
income from residential development activities in profit or loss for the year ended 31 December 2022.
The related capitalised contract fulfilment costs of €41.0 million were released from the statement of financial
position to profit or loss and recognised within cost of residential development activities in profit of loss for
the year ended 31 December 2022.
18 Trade and other receivables
2023 2022
€’000 €’000
Non-current assets
Other receivables 2,328 2,314
Prepayments 4,090 1,073
6,418 3,387
Current assets
Trade receivables 10,830 13,816
Prepayments 9,251 8,003
Contract assets 4,612 4,465
Accrued income 3,069 2,309
Other receivables 500 1,670
28,262 30,263
Total 34,680 33,650
Non-current assets
Included in non-current other receivables at 31 December 2023 is a rent deposit of €1.4 million paid to the
landlord on the sale and leaseback of Clayton Hotel Charlemont (31 December 2022: €1.4 million). This deposit is
repayable to the Group at the end of the lease term. Also included is a deposit paid as part of another hotel
property lease contract of €0.9 million (2022: €0.9 million) which is interest-bearing and refundable at the end
of the lease term.
Included in non-current prepayments at 31 December 2023 are costs of €4.1 million (31 December 2022: €1.1 million)
associated with future lease agreements for hotels which are currently being constructed or in planning. The
increase at 31 December 2023 is as a result of a rise in expenses related to projects due to complete in 2024.
When these leases are signed, these costs will be reclassified to right-of-use assets.
Current assets
Current other receivables at 31 December 2023 of €0.5 million (2022: €1.7 million) have decreased by €1.2 million
as the amounts for government grants relating to the Temporary Energy Business Support Scheme (TBESS) for energy
costs were received in full during 2023 and the scheme has now ceased ( 122 note 10).
Included in current contract assets is €0.7 million (2022: €0.7 million) which relates to a retention payment,
details of which are included in 123 note 17.
Trade receivables are subject to the expected credit loss model in IFRS 9 Financial Instruments. The Group applies
the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance
for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on
shared credit risk characteristics and the number of days past due.
Aged analysis of trade receivables
Expected Net
Gross receivables Impairment provision
credit loss receivables
2023 Rate 2023 2023
€’000 2023 €’000 €’000
Not past due 5,984 0.0% - 5,984
Past due < 30 days 2,804 0.0% - 2,804
Past due 30 – 60 days 1,337 0.0% - 1,337
Past due 60 – 90 days 147 0.0% - 147
Past due > 90 days 883 36.8% (325) 558
11,155 (325) 10,830
Expected
Gross receivables Impairment provision Net receivables
credit loss
2022 Rate 2022 2022
€’000 2022 €’000 €’000
Not past due 6,840 0.0% - 6,840
Past due < 30 days 3,207 0.0% - 3,207
Past due 30 – 60 days 1,596 0.0% - 1,596
Past due 60 – 90 days 1,046 0.0% - 1,046
Past due > 90 days 1,746 35.5% (619) 1,127
14,435 (619) 13,816
Management does not expect any significant losses from trade receivables that have not been provided for as shown
above, contract assets, accrued income or other receivables. Details are included in the credit risk section in
124 note 27.
19 Inventories
2023 2022
€’000 €’000
Goods for resale 1,882 1,863
Consumable stores 519 479
2,401 2,342
Inventories recognised as cost of sales during the year amounted to €33.6 million (2022: €30.7 million).
20 Cash and cash equivalents
2023 2022
€’000 €’000
Cash at bank and in hand 34,173 91,320
34,173 91,320
21 Capital and reserves
Share capital and share premium
At 31 December 2023
Number €’000
Authorised share capital 10,000,000,000 100,000
Ordinary shares of €0.01 each
Number €’000
Allotted, called-up and fully paid shares 223,454,844 2,235
Ordinary shares of €0.01 each
Share premium 505,079
At 31 December 2022
Number €’000
Authorised share capital
Ordinary shares of €0.01 each 10,000,000,000 100,000
Number €’000
Allotted, called-up and fully paid shares
Ordinary shares of €0.01 each 222,871,722 2,229
Share premium 504,910
All ordinary shares rank equally with regard to the Company’s residual assets.
During the year ended 31 December 2023, the Company issued 535,634 shares of €0.01 per share at par, following the
vesting of Awards granted in relation to the 2020 LTIP scheme and the December 2021 LTIP issue ( 125 note 9).
During the year ended 31 December 2023, 47,488 ordinary shares were issued on maturity of the share options
granted as part of the Share Save scheme in 2019. The weighted average exercise price at the date of exercise for
options exercised during the year ended 31 December 2023 was €3.57 (2022: €2.28).
Dividends
On 6 October 2023, an interim dividend of 4 cents per share was paid at a total cost of €8.9 million (year ended
31 December 2022: €Nil).
On 28 February 2024, the Board proposed a final dividend of 8 cents per share. Based on shares in issue at 31
December 2023, the amount of dividends proposed is €17.9 million. This proposed dividend is subject to approval by
the shareholders at the Annual General Meeting. The payment date for the final dividend will be 1 May 2024 to
shareholders registered on the record date 25 April 2024. These consolidated financial statements do not reflect
this dividend.
Nature and purpose of reserves
(a) Capital contribution and merger reserve
As part of a Group reorganisation in 2014, the Company became the ultimate parent entity of the then existing
Group, when it acquired 100% of the issued share capital of DHGL Limited in exchange for the issue of 9,500
ordinary shares of €0.01 each. By doing so, it also indirectly acquired the 100% shareholdings previously held by
DHGL Limited in each of its subsidiaries. As part of that reorganisation, shareholder loan note obligations
(including accrued interest) of DHGL Limited were assumed by the Company as part of the consideration paid for the
equity shares in DHGL Limited.
The fair value of the Group (as then headed by DHGL Limited) at that date was estimated at €40.0 million. The fair
value of the shareholder loan note obligations assumed by the Company as part of the acquisition was €29.7 million
and the fair value of the shares issued by the Company in the share exchange was €10.3 million.
The difference between the carrying value of the shareholder loan note obligations (€55.4 million) prior to the
reorganisation and their fair value (€29.7 million) at that date represents a contribution from shareholders of
€25.7 million which has been credited to a separate capital contribution reserve. Subsequently, all shareholder
loan note obligations were settled in 2014, in exchange for shares issued in the Company.
The insertion of Dalata Hotel Group plc as the new holding company of DHGL Limited in 2014 did not meet the
definition of a business combination under IFRS 3 Business Combinations, and, as a consequence, the acquired
assets and liabilities of DHGL Limited and its subsidiaries continued to be carried in the consolidated financial
statements at their respective carrying values as at the date of the reorganisation. The consolidated financial
statements of Dalata Hotel Group plc were prepared on the basis that the Company is a continuation of DHGL
Limited, reflecting the substance of the arrangement.
As a consequence, a merger reserve of €10.3 million (negative) arose in the consolidated statement of financial
position. This represents the difference between the consideration paid for DHGL Limited in the form of shares of
the Company, and the issued share capital of DHGL Limited at the date of the reorganisation which was a nominal
amount of €95.
In September 2020, the Company completed a placing of new ordinary shares of €0.01 each in the share capital of
the Company. 37.0 million ordinary shares were issued at €2.55 each which raised €92.0 million after costs of €2.4
million. The Group availed of merger relief to simplify future distributions and as a result, €91.6 million was
recognised in the merger reserve being the difference between the nominal value of each share (€0.01 each) and the
amount paid (€2.55 per share) after deducting costs of the share placing of €2.4 million.
(b) Share-based payment reserve
The share-based payment reserve comprises amounts equivalent to the cumulative cost of awards by the Group under
equity-settled share-based payment arrangements, being the Group’s Long Term Incentive Plans and the Share Save
schemes. On vesting, the cost of awards previously recognised in the share-based payments reserve is transferred
to retained earnings. Details of the share awards, in addition to awards which vested during the current year, are
disclosed in 126 note 9 and in the Remuneration Committee report.
(c) Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging
instruments used in cash flow hedges, net of deferred tax.
(d) Revaluation reserve
The revaluation reserve relates to the revaluation of land and buildings in line with the Group’s policy to fair
value these assets at each reporting date ( 127 note 15), net of deferred tax.
(e) Translation reserve
The translation reserve comprises all foreign currency exchange differences arising from the translation of the
financial statements of foreign operations, as well as the effective portion of any foreign currency differences
arising from hedges of a net investment in a foreign operation ( 128 note 27).
22 Trade and other payables
2023 2022
€’000 €’000
Non-current liabilities
Other payables 348 239
348 239
Current liabilities
Trade payables 16,724 17,645
Accruals 45,839 45,821
Contract liabilities 13,459 14,265
Value added tax 4,957 15,040
Payroll taxes 3,641 26,047
Tourist taxes 1,429 -
86,049 118,818
Total 86,397 119,057
Accruals at 31 December 2023 include €6.2 million related to amounts not yet invoiced for capital expenditure and
costs incurred on entering new leases and agreements for lease (31 December 2022: €9.1 million).
Value added tax and payroll taxes
Under the warehousing of tax liabilities legislation introduced by the Financial Provisions (Covid-19) (No. 2) Act
2020 and Finance Act 2020 (Act 26 of 2020) and amended by the Finance (Covid-19 and Miscellaneous Provisions) Act
2021, Irish VAT liabilities of €11.7 million and payroll tax liabilities of €23.2 million were deferred as at 31
December 2022. These liabilities were paid in full during the year ended 31 December 2023 ( 129 note 10).
Tourist taxes
Tourist taxes of €1.4 million are tax liabilities due relating to the Clayton Hotel Amsterdam American (2022:
€Nil). The tourist tax is a charge on overnight visitors staying in hotels in the city charged at a rate of
12.5%.
23 Provision for liabilities
2023 2022
€’000 €’000
Non-current liabilities
Insurance provision 6,656 7,165
Current liabilities
Insurance provision 1,955 2,014
8,611 9,179
The reconciliation of the movement in the provision during the year is as follows:
2023 2022
€’000 €’000
At 1 January 9,179 8,188
Provisions made during the year – charged to profit or loss 2,500 2,500
Utilised during the year (1,815) (859)
Impact of discounting – credited to profit or loss (326) (650)
Reversed to profit or loss during the year (927) -
At 31 December 8,611 9,179
This provision relates to actual and potential obligations arising from the Group’s insurance arrangements where
the Group is self-insured. The Group has third party insurance cover above specific limits for individual claims
and has an overall maximum aggregate payable for all claims in any one year. The amount provided is principally
based on projected settlements as determined by external loss adjusters. The provision also includes an estimate
for claims incurred but not yet reported and incurred but not enough reported.
The utilisation of the provision is dependent on the timing of settlement of the outstanding claims. The Group
expects the majority of the insurance provision will be utilised within five years of the period end date,
however, due to the nature of the provision, there is a level of uncertainty in the timing of settlement as the
Group generally cannot precisely determine the extent and duration of the claim process. The provision has been
discounted to reflect the time value of money.
The self-insurance programme commenced in July 2015 and increasing levels of claims data is becoming available.
Claim provisions are assessed in light of claims experience and amended accordingly to ensure provisions reflect
recent experience and trends. There has been a reversal of €0.9m in the year ended 31 December 2023 of provisions
made in prior periods (2022: €Nil).
24 Loans and borrowings
Non-current liabilities
2023 2022
€’000 €’000
Bank borrowings 254,387 193,488
Total loans and borrowings 254,387 193,488
The amortised cost of loans and borrowings at 31 December 2023 is €254.4 million (31 December 2022: €193.5
million). The drawn loan facility at 31 December 2023 is €258.7 million (31 December 2022: €199.0 million). This
consists of Sterling term borrowings of £176.5 million (€203.1 million) at 31 December 2023 (2022: £176.5 million
(€199.0 million)), Sterling Revolving Credit Facility (‘RCF’) borrowings of £44.9 million (€51.6 million) and Euro
RCF borrowings of €4.0 million. The drawn RCF borrowings at 31 December 2023 were primarily utilised to fund
business combinations ( 130 note 13) completed during the year ended 31 December 2023.
The undrawn loan facilities as at 31 December 2023 were €249.3 million (2022: €364.4 million). The decrease in the
undrawn facilities during the year ended 31 December 2023 relates to the drawn RCF borrowings at 31 December 2023
of €55.6 million (2022: €Nil) and the expiry of €59.5 million of RCF on 30 September 2023.
As at 31 December 2023, the Group’s debt facilities consist of a €200.0 million term loan facility and a €304.9
million RCF, both with a maturity date of 26 October 2025.
In accordance with the amended and restated facility agreement entered into by the Group on 2 November 2021 with
its banking club, the Group’s banking covenants have reverted to Net Debt to EBITDA, as defined in the Group’s
bank facility agreement which is equivalent to Net Debt to EBITDA after rent (APM (xv)), and Interest Cover (APM
(xvi)) from 30 June 2023. This replaces the Net Debt to Value covenant and liquidity minimum covenants which were
temporarily in place up to 30 June 2023. At 31 December 2023, the Net Debt to EBITDA covenant limit is 4.0x and
the Interest Cover minimum is 4.0x. The Group’s Net Debt to EBITDA for the year ended 31 December 2023 is 1.3x and
Interest Cover is 19.5x. The Group is in compliance with its banking covenants as at 31 December 2023.
At 31 December 2023, property, plant and equipment, including fixtures, fittings and equipment in leased
properties, with a carrying amount of €1,368.3 million (2022: €1,217.0 million) were pledged as security for loans
and borrowings ( 131 note 15).
Reconciliation of movements of liabilities to cash flows arising from financing activities for the year ended 31
December 2023.
Liabilities Equity
Loans and Lease Trade and Derivatives Share Share
borrowings liabilities other (net) capital premium Total
payables
€’000 €’000 €’000 €’000 €’000 €’000 €’000
Balance as at 31 December 2022 193,488 651,791 119,057 (11,717) 2,229 504,910 1,459,758
Changes from financing cash flows
Vesting of share awards and options - - - - 6 169 175
Other interest and finance costs paid (14,414) - (1,261) 6,949 - - (8,726)
Receipt of bank loans 120,648 - - - - - 120,648
Repayment of bank loans (64,374) - - - - - (64,374)
Interest on lease liabilities - (42,751) - - - - (42,751)
Repayment of lease liabilities - (10,747) - - - - (10,747)
Total changes from financing cash flows 41,860 (53,498) (1,261) 6,949 6 169 (5,775)
Liability-related other changes
The effect of changes in foreign exchange 3,448 5,989 (480) - - - 8,957
rates
Changes in fair value - - - (1,753) - - (1,753)
Interest expense on bank loans and 15,665 - - - - - 15,665
borrowings
Other movements in loans and borrowings (74) - 1,152 - - - 1,078
Other movements in trade and other payables - - (32,071) - - - (32,071)
Additions to lease liabilities during the - 375 - - - - 375
year
Acquisition of lease liabilities through - 43,382 - - - - 43,382
business combinations
Interest on lease liabilities - 42,751 - - - - 42,751
Remeasurement of lease liabilities - 7,808 - - - - 7,808
Total liability-related other changes 19,039 100,305 (31,399) (1,753) - - 86,192
Balance as at 31 December 2023 254,387 698,598 86,397 (6,521) 2,235 505,079 1,540,175
Dividends paid of €8.9 million are excluded from financing cash flows in the above table and have no impact on
opening or closing liabilities.
Reconciliation of movements of liabilities to cash flows arising from financing activities for the year ended 31
December 2022.
Liabilities Equity
Loans and Lease Trade and Derivatives Share Share
borrowings liabilities other (net) capital premium Total
payables
€’000 €’000 €’000 €’000 €’000 €’000 €’000
Balance as at 31 December 2021 313,533 481,926 84,688 197 2,229 504,895 1,387,468
Changes from financing cash flows
Vesting of share awards and options - - - - - 15 15
Other interest and finance costs paid (9,974) - (2,438) 179 - - (12,233)
Receipt of bank loans 11,973 - - - - - 11,973
Repayment of bank loans (117,838) - - - - - (117,838)
Interest on lease liabilities - (38,101) - - - - (38,101)
Repayment of lease liabilities - (9,324) - - - - (9,324)
Total changes from financing cash flows (115,839) (47,425) (2,438) 179 - 15 (165,508)
Liability-related other changes
The effect of changes in foreign exchange (12,290) (16,299) (787) (10) - - (29,386)
rates
Changes in fair value - - - (12,083) - - (12,083)
Interest expense on bank loans and 7,937 - - - - - 7,937
borrowings
Other movements in loans and borrowings 147 - - - - - 147
Other movements in trade and other payables - - 37,594 - - - 37,594
Additions to lease liabilities during the - 185,061 - - - - 185,061
year
Interest on lease liabilities - 38,101 - - - - 38,101
Remeasurement of lease liabilities - 10,427 - - - - 10,427
Total liability-related other changes (4,206) 217,290 36,807 (12,093) - - 237,798
Balance as at 31 December 2022 193,488 651,791 119,057 (11,717) 2,229 504,910 1,459,758
Net debt is calculated in line with banking covenants and includes external loans and borrowings drawn and owed to
the banking club as at 31 December 2023 (rather than the amortised cost of the loans and borrowings) less cash and
cash equivalents. The below table also includes a reconciliation to net debt and lease liabilities.
Reconciliation of movement in net debt for the year ended 31 December 2023
Sterling facility Sterling facility Euro facility Total
£’000 €’000 €’000 €’000
Loans and borrowings – drawn amounts
At 1 January 2023 176,500 199,001 - 199,001
Cash flows
Facilities drawn down 72,882 84,648 36,000 120,648
Loan repayments (28,015) (32,374) (32,000) (64,374)
Non-cash changes
Effect of foreign exchange movements - 3,448 - 3,448
At 31 December 2023 221,367 254,723 4,000 258,723
Cash and cash equivalents
At 1 January 2023 91,320
Movement during the year (57,147)
At 31 December 2023 34,173
Net debt at 31 December 2023 224,550
Reconciliation of net debt and lease liabilities
Net debt at 31 December 2023 224,550
Lease liabilities as at 1 January 2023 651,791
Acquisitions through business combinations 43,382
Additions 375
Interest on lease liabilities 42,751
Lease payments (53,498)
Remeasurement of lease liabilities 7,808
Translation adjustment 5,989
Lease liabilities at 31 December 2023 ( 132 note 16) 698,598
Net debt and lease liabilities at 31 December 2023 923,148
Reconciliation of movement in net debt for the year ended 31 December 2022
Sterling facility Sterling facility Euro facility Total
£’000 €’000 €’000 €’000
Loans and borrowings – drawn amounts
At 1 January 2022 266,500 317,156 - 317,156
Cash flows
Facilities drawn down 10,000 11,973 - 11,973
Loan repayments (100,000) (117,838) - (117,838)
Non-cash changes
Effect of foreign exchange movements - (12,290) - (12,290)
At 31 December 2022 176,500 199,001 - 199,001
Cash and cash equivalents
At 1 January 2022 41,112
Movement during the year 50,208
At 31 December 2022 91,320
Net debt at 31 December 2022 107,681
Reconciliation of net debt and lease liabilities
Net debt at 31 December 2022 107,681
Lease liabilities as at 1 January 2022 481,926
Additions 185,061
Interest on lease liabilities 38,101
Lease payments (47,425)
Remeasurement of lease liabilities 10,427
Translation adjustment (16,299)
Lease liabilities at 31 December 2022 ( 133 note 16) 651,791
Net debt and lease liabilities at 31 December 2022 759,472
25 Derivatives
The Group has entered into interest rate swaps with a number of financial institutions in order to manage the
interest rate risks arising from the Group’s borrowings ( 134 note 24). Interest rate swaps are employed by the
Group to partially convert the Group’s Sterling denominated borrowings from floating to fixed interest rates.
As at 31 December 2023, the Group holds four interest rate swaps which became effective on 26 October 2023 and
will mature on 26 October 2024. These swaps hedge the SONIA benchmark rate on the Sterling term denominated
borrowings of £176.5 million, fixing the SONIA benchmark rate between 0.95% and 0.96%.
The interest rate swaps that became effective on 26 October 2023 replaced four interest rate swaps which
previously hedged the Sterling term denominated borrowings until their maturity date on 26 October 2023 as
follows:
• Two interest rate swaps with an effective date of 3 February 2020 which hedged the SONIA benchmark rate on
£101.5 million of the Sterling denominated borrowings for the period to the original maturity of the term
borrowings on 26 October 2023. These swaps fixed the SONIA benchmark rate to 1.39%.
• Two interest rate swaps with an effective date of 26 October 2018 and a maturity date of 26 October 2023 which
hedged the SONIA benchmark rate on £75.0 million of the entirety of the Sterling denominated borrowings. These
swaps fixed the SONIA benchmark rate to 1.27% on a notional of £63.0 million and to 1.28% on a notional of
£12.0 million of Sterling denominated borrowings.
As at 31 December 2023, the interest rate swaps cover 100% of the Group’s term Sterling denominated borrowings of
£176.5 million for the period to 26 October 2024. The extended year of the term debt, to 26 October 2025, is
currently unhedged. All derivatives have been designated as hedging instruments for the purposes of IFRS 9.
Fair value
2023 2022
€’000 €’000
Non-current assets
Derivative assets - 6,825
Current assets
Derivative assets 6,521 4,892
Total derivative assets 6,521 11,717
2023 2022
€’000 €’000
Included in other comprehensive income
Fair value gain on interest rate swaps 1,753 12,093
Reclassified to profit or loss ( 135 note 7) (6,949) (179)
(5,196) 11,914
The amount reclassified to profit or loss primarily represents the additional interest received by the Group as a
result of the interest rate actual SONIA rates being higher than the swap rates.
26 Deferred tax
2023 2022
€’000 €’000
Deferred tax assets 24,136 21,271
Deferred tax liabilities (84,441) (71,022)
Net deferred tax liabilities (60,305) (49,751)
2023 2022
€’000 €’000
Movements in year
At 1 January – net liability (49,751) (22,735)
Charge for year – to profit or loss ( 136 note 11) (460) (2,864)
Charge for year – to other comprehensive income (9,152) (24,152)
Acquired net deferred tax liabilities (942) -
At 31 December – net liability (60,305) (49,751)
Amendments to IAS 12, effective for reporting periods beginning on or after 1 January 2023, clarify that the
initial recognition exemption of deferred tax assets and liabilities does not apply to transactions that give rise
to equal and offsetting temporary differences. The IAS 12 amendments require separate presentation of deferred tax
assets and liabilities arising on right-of-use assets and corresponding lease liabilities recognised under IFRS
16, with retroactive effect from 1 January 2022 (note 2). The impact of the amendments increases the gross
deferred tax liabilities recognised in respect of ROU assets from €3.8 million to €61.1 million (2022: €3.5
million to €39.7 million) and the gross deferred tax assets recognised in respect of lease liabilities from €4.9
million to €62.2 million (2022: €2.6 million to €38.8 million). The changes to the deferred tax liabilities and
deferred tax assets offset such that the net impact on the face of the Consolidated Statement of Financial
Position and the net impact on retained earnings is nil. The deferred tax assets and liabilities related to leases
are offset on an individual entity basis and presented net in the statement of financial position.
The majority of the deferred tax liabilities result from the Group’s policy of ongoing revaluation of land and
buildings. Where the carrying value of a property in the financial statements is greater than its tax base cost,
the Group recognises a deferred tax liability. This is calculated using applicable Irish and UK corporation tax
rates. The use of these rates, in line with the applicable accounting standards, reflects the intention of the
Group to use these assets for ongoing trading purposes. Should the Group dispose of a property, the actual tax
liability would be calculated with reference to rates for capital gains on commercial property.
The net deferred tax liabilities have increased from €71.0 million at 31 December 2022 to €84.4 million at 31
December 2023. This relates primarily to an increase in taxable gains recognised on properties held through other
comprehensive income and other temporary differences on assets through profit or loss during the year ended 31
December 2023.
A deferred tax asset of €18.1 million (2022: €17.7 million) has been recognised in respect of cumulative tax
losses and interest carried forward at 31 December 2023 of €73.7 million (31 December 2022: €75.4 million). The
tax losses can be carried forward indefinitely for offset against future taxable profits and cannot be carried
back for offset against profits earned in earlier periods.
The increase in the deferred tax asset recognised on tax losses and interest carried forward from €17.7 million at
31 December 2022 to €18.1 million at 31 December 2023, relates to the increase in foreign tax losses and interest
recognised during the year ended 31 December 2023 partially offset by losses utilised in Ireland. The increase in
the deferred tax asset recognised despite the decrease in the gross tax losses and interest carried forward is
because a greater proportion of the losses are recognised at higher foreign tax rates in 2023. The Group utilised
Irish tax losses carried forward of €6.2 million (tax impact €0.8 million) against profits arising during the year
ended 31 December 2023.
Included within the €73.7 million tax losses and interest carried forward at 31 December 2023, is a balance of
€30.8 million (31 December 2022: €27.1 million) relating to interest expenses carried forward in the UK. In the
UK, there is a limit on corporation tax deductions taken each year for interest expense incurred. The unused
interest expense carried forward by the UK Group companies at 31 December 2023 can be carried forward indefinitely
and offset against future taxable profits.
A deferred tax asset has been recognised in respect of Irish and foreign tax losses and interest, to the extent
that it is probable that, after the carry back of tax losses to earlier periods, there will be sufficient taxable
profits in future periods to utilise the carried forward tax losses and interest.
In considering the available evidence to support the recognition of the deferred tax asset, the Group takes into
consideration the impact of both positive and negative evidence including historical financial performance,
projections of future taxable income and the enacted tax legislation.
In preparing forecasts to determine future taxable profits, there are a number of positive factors underpinning
the recoverability of the deferred tax assets:
• Prior to the Covid-19 pandemic, the Group displayed a history of profit growth every year. When normal trading
resumed in 2022 the Group returned to profitability and currently forecasts that taxable profits will continue
to be earned in future years against which losses can be offset
• The Group is confident that it is well positioned to take advantage of opportunities that will arise during
2024 and into the future, including the opening of a large pipeline of new hotels which will contribute
particularly to the utilisation of UK tax losses, which can be carried forward and utilised on a Group basis.
The Group added three hotels in 2023 (two in the UK and one in the Netherlands). The Group has six new hotels
in the pipeline (five in the UK, one in Ireland), which will contribute to future growth.
• The absence of expiry dates for carrying forward foreign and Irish tax losses.
The Group also considered the relevant negative evidence in determining the recoverability of deferred tax assets:
• The quantum of profits required to be earned to utilise the tax losses carried forward; and
• Forecasts of future taxable profitability are subject to inherent uncertainty which is heightened due to the
ongoing impact of operating cost increases, in particular payroll costs, and external geopolitical and
economic factors outside of the Group’s control.
Based on the Group’s financial projections, the deferred tax asset of €0.4 million in respect of gross Irish tax
losses carried forward of €2.8 million is estimated to be recovered in full by the year ending 31 December 2024.
The deferred tax asset of €17.7 million in respect of gross foreign tax losses and interest expense carried
forward of €71.4 million is estimated to be recovered in full by the year ending 31 December 2030, with the
majority being recovered by the end of the year ending 31 December 2027.
The total tax losses on which deferred tax is not recognised at 31 December 2023 is €9.1 million (2022: €12.9
million). The tax effect of these unrecognised tax losses at 31 December 2023 is €2.3 million (2022: €3.3
million). These specific losses are not permitted to be group relieved and there is uncertainty over sufficient
future profits arising in the respective Group companies to utilise the losses not recognised.
Deferred tax arises from temporary differences relating to:
Net balance Recognised Recognised Acquired net Net Deferred Deferred tax
at 1 in profit or in OCI deferred tax deferred tax assets liabilities
January loss liabilities tax
2023 2023 2023 2023 2023 2023 2023
€’000 €’000 €’000 €’000 €’000 €’000 €’000
Property, plant and equipment (63,563) (2,954) (10,451) (942) (77,910) 1,081 (78,991)
Leases (969) 2,109 - - 1,140 62,243 (61,103)
Tax losses and interest carried 17,710 385 - - 18,095 18,095 -
forward
Hedging reserve (2,929) - 1,299 - (1,630) - (1,630)
Deferred tax (49,751) (460) (9,152) (942) (60,305) 81,419 (141,724)
(liabilities)/assets
Offsetting of temporary
differences related to ROU - - - - - (57,283) 57,283
assets and lease liabilities on
individual entity basis
Net deferred tax
(liabilities)/assets per (49,751) (460) (9,152) (942) (60,305) 24,136 (84,441)
statement of financial position
Net balance Recognised Recognised Acquired Net Deferred Deferred tax
at 1 in profit or in OCI deferred tax deferred tax assets liabilities
January loss liabilities tax
2022 2022 2022 2022 2022 2022 2022
€’000 €’000 €’000 €’000 €’000 €’000 €’000
Restated Restated
Property, plant and equipment (38,424) (3,916) (21,223) - (63,563) 1,025 (64,588)
Leases (1,287) 318 - - (969) 38,771 (39,740)
Tax losses and interest carried 16,976 734 - - 17,710 17,710 -
forward
Hedging reserve - - (2,929) - (2,929) - (2,929)
Deferred tax (22,735) (2,864) (24,152) - (49,751) 57,506 (107,257)
(liabilities)/assets
Offsetting of temporary
differences related to ROU - - - - - (36,235) 36,235
assets and lease liabilities on
individual entity basis
Net deferred tax
(liabilities)/assets per (22,735) (2,864) (24,152) - (49,751) 21,271 (71,022)
statement of financial position
The Group has multiple legal entities across the UK and Ireland that will not settle current tax liabilities and
assets on a net basis and their assets and liabilities will not be realised on a net basis. Therefore, deferred
tax assets and liabilities are recognised on an individual entity basis and are not offset on a Group or
jurisdictional basis.
27 Financial instruments and risk management
Risk exposures
The Group is exposed to various financial risks arising in the normal course of business. Its financial risk
exposures are predominantly related to the creditworthiness of counterparties and risks relating to changes in
interest rates and foreign currency exchange rates.
The Group uses financial instruments throughout its business: loans and borrowings and cash and cash equivalents
are used to finance the Group’s operations; trade and other receivables, trade and other payables and accruals
arise directly from operations; and derivatives are used to manage interest rate risks and to achieve a desired
profile of borrowings. The Group uses a net investment hedge with Sterling denominated borrowings to hedge the
foreign exchange risk from investments in certain UK operations. The Group does not trade in financial
instruments.
The following tables show the carrying amount of Group financial assets and liabilities including their values in
the fair value hierarchy for the year ended 31 December 2023. The tables do not include fair value information for
financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable
approximation of fair value. A fair value disclosure for lease liabilities is not required.
Financial assets Financial assets Total carrying
measured at fair measured at amount Level 1 Level 2 Level 3 Total
value amortised cost
2023 2023 2023 2023 2023 2023 2023
€’000 €’000 €’000 €’000 €’000 €’000 €’000
Financial assets
Derivatives ( 137 note 25) - 6,521 - 6,521 6,521 6,521
hedging instruments
Trade and other receivables
excluding prepayments ( 138 note - 21,339 21,339
18)
Cash at bank and in hand ( 139 note - 34,173 34,173
20)
6,521 55,512 62,033
Financial
liabilities Financial Total carrying
measured at liabilities measured amount Level 1 Level 2 Level 3 Total
at amortised cost
fair value
2023 2023 2023 2023 2023 2023 2023
€’000 €’000 €’000 €’000 €’000 €’000 €’000
Financial liabilities
Bank loans ( 140 note 24) - (254,387) (254,387) (254,387) (254,387)
Trade and other payables and - (62,911) (62,911)
accruals ( 141 note 22)
- (317,298) (317,298)
The following tables show the carrying amount of Group financial assets and liabilities including their values in
the fair value hierarchy for the year ended 31 December 2022. The tables do not include fair value information for
financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable
approximation of fair value. A fair value disclosure for lease liabilities is not required.
Financial assets Financial assets Total carrying
measured at fair measured at amount Level 1 Level 2 Level 3 Total
value amortised cost
2022 2022 2022 2022 2022 2022 2022
€’000 €’000 €’000 €’000 €’000 €’000 €’000
Financial assets
Derivatives ( 142 note 25) - 11,717 - 11,717 11,717 11,717
hedging instruments
Trade and other receivables
excluding prepayments ( 143 note - 24,574 24,574
18)
Cash at bank and in hand - 91,320 91,320
( 144 note 20)
11,717 115,894 127,611
Financial
liabilities Financial Total carrying
measured at liabilities measured amount Level 1 Level 2 Level 3 Total
at amortised cost
fair value
2022 2022 2022 2022 2022 2022 2022
€’000 €’000 €’000 €’000 €’000 €’000 €’000
Financial liabilities
Bank loans ( 145 note 24) - (193,488) (193,488) (193,488) (193,488)
Trade and other payables and - (63,705) (63,705)
accruals ( 146 note 22)
- (257,193) (257,193)
Fair value hierarchy
The Group measures the fair value of financial instruments based on the degree to which inputs to the fair value
measurements are observable and the significance of the inputs to the fair value measurements. Financial
instruments are categorised by the type of valuation method used. The valuation methods are as follows:
• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: Inputs other than quoted prices included in Level 1 that are observable for the financial instrument,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: Inputs for the financial instrument that are not based on observable market data (unobservable
inputs).
The Group’s policy is to recognise any transfers between levels of the fair value hierarchy as of the end of the
reporting period during which the transfer occurred. During the year ended 31 December 2023, there were no
reclassifications of financial instruments and no transfers between levels of the fair value hierarchy used in
measuring the fair value of financial instruments.
Estimation of fair values
The principal methods and assumptions used in estimating the fair values of financial assets and liabilities are
explained hereafter.
Cash at bank and in hand
For cash at bank and in hand, the carrying value is deemed to reflect a reasonable approximation of fair value.
Derivatives
Discounted cash flow analyses have been used to determine the fair value of the interest rate swaps, taking into
account current market inputs and rates (Level 2).
Receivables/payables
For the receivables and payables with a remaining term of less than one year or on demand balances, the carrying
value net of impairment provision, where appropriate, is a reasonable approximation of fair value. The non-current
receivables and payables carrying value is a reasonable approximation of fair value.
Bank loans
For bank loans, the fair value was calculated based on the present value of the expected future principal and
interest cash flows discounted at interest rates effective at the reporting date. The carrying value of floating
rate interest-bearing loans and borrowings is considered to be a reasonable approximation of fair value. There is
no material difference between margins available in the market at year end and the margins that the Group was
paying at the year end.
(a) Credit risk
Exposure to credit risk
Credit risk is the risk of financial loss to the Group arising from granting credit to customers and from
investing cash and cash equivalents with banks and financial institutions.
Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
Group is due €0.5 million (2022: €0.5 million) from a key institutional landlord under a contractual agreement
where the landlord reimburses the Group for certain amounts spent on capital expenditure in that specific
property. Non-current receivables include rent deposits of €2.3 million (2022: €2.3 million) owed by two landlords
at the end of the lease term ( 147 note 18). Other than this, there is no concentration of credit risk or
dependence on individual customers due to the large number of customers. Management has a credit policy in place
and the exposure to credit risk is monitored on an ongoing basis. Outstanding customer balances are regularly
monitored and reviewed for indicators of impairment (evidence of financial difficulty of the customer or payment
default). The maximum exposure to credit risk is represented by the carrying amount of each financial asset.
The ageing profile of trade receivables at 31 December 2023 is provided in 148 note 18. Management does not
expect any significant losses from trade receivables, apart from those provided for in 149 note 18, contract
assets, accrued income or other receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and give rise to credit risk on the amounts held with
counterparties. The maximum credit risk is represented by the carrying value at the reporting date. The Group’s
policy for investing cash is to limit risk of principal loss and to ensure the ultimate recovery of invested funds
by limiting credit risk.
The Group reviews regularly the credit rating of each bank and, if necessary, takes action to ensure there is
appropriate cash and cash equivalents held with each bank based on their credit rating. During the year ended 31
December 2023, cash and cash equivalents were held in line within predetermined limits depending on the credit
rating of the relevant bank or financial institution.
The carrying amount of the following financial assets represents the Group’s maximum credit exposure. The maximum
exposure to credit risk at year end was as follows:
Carrying amount Carrying amount
2023 2022
€’000 €’000
Trade receivables 10,830 13,816
Other receivables 2,828 3,984
Contract assets 4,612 4,465
Accrued income 3,069 2,309
Cash at bank and in hand 34,173 91,320
55,512 115,894
(b) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its
financial liabilities. In general, the Group’s approach to managing liquidity risk is to ensure as far as possible
that it will always have sufficient liquidity, through a combination of cash and cash equivalents, cash flows and
undrawn credit facilities to:
• Fund its ongoing activities;
• Allow it to invest in hotels that may create value for shareholders; and
• Maintain sufficient financial resources to mitigate against risks and unforeseen events.
The year ended 31 December 2023 saw the Group trade strongly and continue the execution of its growth strategy.
The strong trade, the full year impact of hotels added during 2022 and the addition of three hotels during 2023
has led to an increase in Group revenue from hotel operations from €515.7 million to €607.7 million, as well as
net cash generated from operating activities in the year of €171.4 million (2022: €207.9 million).
The Group remains in a very strong financial position with significant financial headroom. The Group is in full
compliance with its covenants at 31 December 2023. The key covenants relate to Net Debt to EBITDA, as defined in
the Group’s bank facility agreement which is equivalent to Net Debt to EBITDA after rent, (see APM (xv) in
Supplementary Financial Information section) and Interest Cover (see APM (xvi) in Supplementary Financial
Information section). As per the amended and restated facility agreement of 2 November 2021, the Group was tested
under Net Debt to Value and minimum liquidity covenants at 31 December 2022 but reverted to the Net Debt to EBITDA
(as defined in the Group’s bank facility agreement which is equivalent to Net Debt to EBITDA after rent) and
Interest Cover covenants for testing from 30 June 2023. The Net Debt to EBITDA covenant limit is 4.0 times and the
Interest Cover minimum is 4.0 times. At 31 December 2023, Net Debt to EBITDA after rent for the Group is 1.3x and
Interest Cover is 19.5 times ( 150 note 24).
During the year ended 31 December 2023, the Group incurred expenditure in completing the acquisitions of Clayton
Hotel London Wall and Clayton Hotel Amsterdam American ( 151 note 13), the freehold interest of the newly built
Maldron Hotel Finsbury Park, London, and a building conversion opportunity in Edinburgh. The Group utilised a
mixture of funds generated from Free Cashflow and RCF borrowings to finance these acquisitions. RCF borrowings
increased to €55.6 million as at 31 December 2023 (31 December 2022: €Nil) and cash at bank and in hand decreased
to €34.2 million as at 31 December 2023 (31 December 2022: €91.3 million) which partially relates to the
expenditure incurred on completion of these acquisitions during the year ( 152 note 24).
The Group monitors its Debt and Lease Service Cover (see APM (xiii) in Supplementary Financial Information
section), which is 3.0 times for the year ended 31 December 2023 (31 December 2022: 3.1 times), in order to
monitor gearing and liquidity taking into account both bank and lease financing. The Group have prepared financial
projections and subjected them to scenario testing which also supports ongoing liquidity risk assessment and
management. Further detail of this is disclosed in the Viability Statement.
The following are the contractual maturities of the Group’s financial liabilities at 31 December 2023, including
estimated undiscounted interest payments. In the below table, bank loans are repaid in line with their maturity
dates, even though the Group has the flexibility to repay and draw the RCF throughout the term of the facilities
which would improve its liquidity position. The non-cancellable undiscounted lease cashflows payable under lease
contracts are set out in 153 note 16.
Contractual cashflows
Carrying value Total 6 months 6 – 12 1 – 2 2 – 5
2023 2023 or less months years years
€’000 €’000 €’000 €’000 €’000 €’000
Bank loans (254,387) (281,042) (8,347) (7,978) (264,717) -
Trade and other payables and accruals (62,911) (62,911) (62,563) - (348) -
(317,298) (343,953) (70,910) (7,978) (265,065) -
The equivalent disclosure for the prior year is as follows:
Contractual cashflows
Carrying value Total 6 months 6 – 12 1 – 2 2 – 5
2022 2022 or less months years years
€’000 €’000 €’000 €’000 €’000 €’000
Bank loans (193,488) (221,630) (3,977) (4,042) (8,041) (205,570)
Trade and other payables and accruals (63,705) (63,705) (63,466) - (239) -
(257,193) (285,335) (67,443) (4,042) (8,280) (205,570)
(c) Market risk
Market risk is the risk that changes in market prices and indices, such as interest rates and foreign exchange
rates, will affect the Group’s income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.
(i) Interest rate risk
The Group is exposed to floating interest rates on its debt obligations and uses hedging instruments to mitigate
the risk associated with interest rate fluctuations. The Group has entered into interest rate swaps ( 154 note 25)
which hedge the variability in cash flows attributable to interest rate risk. All such transactions are carried
out within the guidelines set by the Board. The Group seeks to apply hedge accounting to manage volatility in
profit or loss.
The Group determines the existence of an economic relationship between the hedging instrument and the hedged item
based on the reference interest rates, maturities and notional amounts. The Group assesses whether the derivative
designated in each hedging relationship is expected to be effective in offsetting changes in cash flows of the
hedged item using the hypothetical derivative method.
As at 31 December 2023, the interest rate swaps cover 100% of the Group’s term Sterling denominated borrowings of
£176.5 million for the period to 26 October 2024. The extended year of the term debt, to 26 October 2025, is
currently unhedged.
The interest rate profile of the Group’s interest-bearing financial liabilities as reported to the management of
the Group is as follows:
Nominal amount
2023 2022
€’000 €’000
Variable rate instruments
Financial liabilities – borrowings 258,723 199,001
Effect of interest rate swaps (203,095) (199,001)
55,628 -
These interest-bearing financial liabilities do not equate to amortised cost of loans and borrowings and instead
represent the drawn amounts of loans and borrowings which are owed to external lenders.
The weighted average interest rate for 2023 was 3.20% (2022: 3.61%), of which 1.46% (2022: 2.38%) related to
margin.
The interest expense for the year ended 31 December 2023 has been sensitised in the following tables for a
reasonably possible change in variable interest rates.
In relation to the upward sensitivity, the Group believes that a reasonable change in the Sterling variable
interest rate would be an uplift in the SONIA rate plus spread to 5.3% and for the Euro variable interest rate an
uplift in the EURIBOR rate to 3.9%.
In relation to the downward sensitivity, the Group has used an interest rate of zero as there is a floor embedded
in the loan facilities, which prevents the Group from benefiting from any reduction in rates sub-zero, however, it
results in an additional interest cost for the Group on hedged loans.
At 31 December 2023, all Sterling term borrowings (£176.5 million) up to 26 October 2024 were hedged with interest
rate swaps. The Group does not currently hedge its variable interest rates on its Sterling RCF or Euro RCF.
The following table shows the sensitised weighted average interest rates where the variable rate is sensitised
upwards or downwards. The weighted average interest rate includes the impact of hedging on hedged portions of the
underlying loans. Changes in SONIA rates have had a minimal impact due to the majority of Sterling borrowings
being hedged ( 155 note 24). The impact on profit or loss is shown hereafter. This analysis assumes that all other
variables, in particular foreign currency exchange rates, remain constant.
2023 actual weighted average Sensitised weighted average as Sensitised weighted average as a
variable benchmark rate a result of upward sensitivity result of downward sensitivity
Euro variable rate 3.02% 3.93% 0.00%
Sterling variable 1.72% 1.74% 1.14%
rate
2022 actual weighted average Sensitised weighted average as Sensitised weighted average as a
variable benchmark rate a result of upward sensitivity result of downward sensitivity
Sterling variable 1.23% 2.02% 1.08%
rate
Cash flow sensitivity analysis for variable rate instruments
Effect on profit or loss
Increase in rate Decrease in rate
€’000 €’000
2023
(Increase)/decrease in interest on loans and borrowings (71) 1,487
Decrease/(increase) in tax charge 9 (186)
(Decrease)/increase in profit (62) 1,301
2022
(Increase)/decrease in interest on loans and borrowings (2,551) 484
Decrease/(increase) in tax charge 319 (60)
(Decrease)/increase in profit (2,232) 424
Contracted maturities of estimated interest payments from swaps
The following table indicates the periods in which the cash flows associated with the interest rate swaps are
expected to occur and the carrying amounts of the related hedging instruments for the year ended 31 December 2023.
A positive cash flow in the below table indicates the variable rate for interest rate swaps, based on current
forward curves, is forecast to be higher than fixed rates. The below amounts only refer to the undiscounted
interest forecasted to be incurred under the interest rate swap assets.
31 December 2023
Carrying amount Total 12 months or less More than 1 year
€’000 €’000 €’000 €’000
Interest rate swaps
Assets 6,521 7,573 7,573 -
The following table indicates the periods in which the cash flows associated with cash flow hedges are expected to
impact profit or loss and the carrying amounts of the related hedging instruments for the year ended 31 December
2023. A positive cash flow in the table indicates the variable rate for interest rate swaps, based on current
forward curves, is forecast to be higher than fixed rates. The below amounts only refer to the undiscounted
interest forecasted to be incurred under the interest rate swap assets.
31 December 2023
Carrying amount Total 12 months or less More than 1 year
€’000 €’000 €’000 €’000
Interest rate swaps
Assets 6,521 7,573 7,573 -
The following table indicates the periods in which the cash flows associated with the interest rate swaps are
expected to occur and the carrying amounts of the related hedging instruments for the year ended 31 December 2022:
31 December 2022
Carrying amount Total 12 months or less More than 1 year
€’000 €’000 €’000 €’000
Interest rate swaps
Assets 11,717 12,672 7,050 5,622
The following table indicates the periods in which the cash flows associated with cash flow hedges are expected to
impact profit or loss and the carrying amounts of the related hedging instruments for the year ended 31 December
2022:
31 December 2022
Carrying amount Total 12 months or less More than 1 year
€’000 €’000 €’000 €’000
Interest rate swaps
Assets 11,717 12,672 7,050 5,622
(ii) Foreign currency risk
As per the Risk Management section of the annual report, the Group is exposed to fluctuations in the Euro/Sterling
exchange rate.
The Group is exposed to transactional foreign currency risk on trading activities conducted by subsidiaries in
currencies other than their functional currency and to foreign currency translation risk on the retranslation of
foreign operations to Euro.
The Group’s policy is to manage foreign currency exposures commercially and through netting of exposures where
possible. The Group’s principal transactional exposure to foreign exchange risk relates to interest costs on its
Sterling borrowings. This risk is mitigated by the earnings from UK subsidiaries which are denominated in
Sterling.
The Group’s gain or loss on retranslation of the net assets of foreign currency subsidiaries is taken directly to
the translation reserve.
The Group limits its exposure to foreign currency risk by using Sterling debt to hedge part of the Group’s
investment in UK subsidiaries. The Group financed certain acquisitions and developments in the UK by obtaining
funding through external borrowings denominated in Sterling. These borrowings amounted to £221.4 million (€254.7
million) at 31 December 2023 (2022: £176.5 million (€199.0 million)) and are designated as net investment hedges.
The net investment hedge was fully effective during the year.
This enables gains and losses arising on retranslation of those foreign currency borrowings to be recognised in
Other Comprehensive Income, providing a partial offset in reserves against the gains and losses arising on
translation of the net assets of those UK operations.
Sensitivity analysis on transactional risk
The Group performed a sensitivity analysis on the impact on the Group’s profit after tax and equity had foreign
exchange rates been different. The Group has reviewed the historical average monthly Euro/Sterling foreign
exchange rates for the previous fifteen years. The lowest average foreign exchange rate of 0.71 has been used in
calculating the impact of Euro weakening against Sterling as it is reflective of a period of market volatility due
to strong economic growth. On the upward sensitivity, due to volatility in the market, the Group have used a
Euro/Sterling foreign exchange rate of 1 (parity) in the sensitivity.
Profit Equity
Weakening of Weakening of
Strengthening of Euro Strengthening of Euro
Euro Euro
€’000 €’000 €’000 €’000
Decrease/(increase) in interest costs on 1,138 (1,885) 1,138 (1,885)
Sterling loans
Impact on tax charge (142) 236 (142) 236
Increase/(decrease) in profit 996 (1,649)
Increase/(decrease) in equity 996 (1,649)
(d) Capital management
The Group’s policy is to maintain a strong capital base to preserve investor, creditor and market confidence and
to sustain future development of the business. Management monitors the return on capital to ordinary shareholders.
The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher
levels of borrowings and the advantages and security afforded by a sound capital position. The Group’s target is
to achieve a pre-tax leveraged internal rate of return of at least 15% on investments and typically a rent cover
of 1.85 times in year three for leased assets.
Typically, the Group monitors capital using a ratio of Net Debt to EBITDA after rent which excludes the effects of
IFRS 16, in line with its banking covenants. This is calculated based on the prior 12-month period. The Net Debt
to EBITDA after rent as at 31 December 2023 is 1.3 times (31 December 2022: 0.8 times).
The Group also monitors Net Debt and Lease Liabilities to Adjusted EBITDA which, at 31 December 2023, is 4.1x (31
December 2022: 4.1x) (APM (viii)).
The Group’s approach to capital management has ensured that it continues to maintain a very strong financial
position and an appropriate level of gearing.
28 Commitments
Section 357 Companies Act 2014
Dalata Hotel Group plc, as the parent company of the Group and for the purposes of filing exemptions referred to
in Section 357 of the Companies Act 2014, has entered into guarantees in relation to the liabilities and
commitments of the Republic of Ireland registered subsidiary companies which are listed below:
Suvanne Management Limited Candlevale Limited
Carasco Management Limited DHG Arden Limited
Heartside Limited Merzolt Limited
Palaceglen Limited Pondglen Limited
Songdale Limited Lintal Commercial Limited
Amelin Commercial Limited Pillo Hotels Limited
DHG Burlington Road Limited Loadbur Limited
Dalata Support Services Limited DHG Cordin Limited
Bernara Commercial Limited Leevlan Limited
Adelka Limited Fonteyn Property Holdings Limited
DS Charlemont Limited DHG Dalton Limited
DHG Barrington Limited DHG Glover Limited
Fonteyn Property Holdings No. 2 Limited DHG Harton Limited
DHG Eden Limited DHG Indigo Limited
Galsay Limited DHG Fleming Limited
Williamsberg Property Limited
Capital commitments
The Group has the following commitments for future capital expenditure under its contractual arrangements.
2023 2022
€’000 €’000
Contracted but not provided for 20,569 24,875
This relates primarily to the construction of a new hotel in Shoreditch, London (€9.6 million) which is
contractually committed. It also includes committed capital expenditure at other hotels in the Group.
The Group has further commitments in relation to fixtures, fittings and equipment in some of its leased hotels.
Under certain lease agreements, the Group has committed to spending a percentage of turnover on capital
expenditure in respect of fixtures, fittings and equipment in the leased hotels over the life of the lease. The
Group has estimated this commitment to be €77.3 million (31 December 2022: €71.2 million) spread over the life of
the various leases with the majority ranging in length from 18 years to 34 years. The turnover figures used in
this estimate are based on 2024 budgeted revenues.
29 Related party transactions
Under IAS 24 Related Party Disclosures, the Group has related party relationships with Shareholders and the
Executive Directors of the Company.
Remuneration of key management
Key management is defined as the Directors of the Company and does not extend to any other members of the
Executive Management Team. The compensation of key management personnel is set out in the Remuneration Committee
report. In addition, the share-based payments expense for key management in 2023 was €0.9 million (2022: €0.8
million).
There are no other related party transactions requiring disclosure in accordance with IAS 24 in these consolidated
financial statements.
30 Subsequent events
On 28 February 2024, the Board proposed a final dividend of 8 cents per share. Based on shares in issue at 31
December 2023, the amount of dividends proposed is €17.9 million. This proposed dividend is subject to approval by
the shareholders at the Annual General Meeting. The payment date for the final dividend will be 1 May 2024 to
shareholders registered on the record date 25 April 2024. These consolidated financial statements do not reflect
this dividend.
On 16 February 2024, the Group signed an agreement for lease with the landlord of Clayton Hotel Manchester Airport
to extend the current lease term from the remaining 61 years to 200 years in total. The new lease is conditional
on the receipt of a grant of planning permission for a 216 bedroom extension to be developed by the Group.
31 Subsidiary undertakings
A list of all subsidiary undertakings at 31 December 2023 is set out below:
Ownership
Subsidiary undertaking Country of Incorporation Activity Direct Indirect
DHG Glover Limited1 Ireland Holding company 100% -
DHG Fleming Limited1 Ireland Financing company 100% -
DHG Harton Limited1 Ireland Holding company 100% -
DHGL Limited1 Ireland Holding company - 100%
Dalata Limited1 Ireland Holding company - 100%
Hanford Commercial Limited1 Ireland Hotel and catering - 100%
Anora Commercial Limited1 Ireland Hotel and catering - 100%
Ogwell Limited1 Ireland Hotel and catering - 100%
Caruso Limited1 Ireland Hotel and catering - 100%
C I Hotels Limited1 Ireland Hotel and catering - 100%
Tulane Business Management Limited1 Ireland Hotel and catering - 100%
Dalata Support Services Limited1 Ireland Hotel management - 100%
Fonteyn Property Holdings Limited1 Ireland Hotel management - 100%
Fonteyn Property Holdings No. 2 Limited1 Ireland Hotel and catering - 100%
Suvanne Management Limited1 Ireland Hotel and catering - 100%
Carasco Management Limited1 Ireland Hotel and catering - 100%
Amelin Commercial Limited1 Ireland Hotel and catering - 100%
Lintal Commercial Limited1 Ireland Hotel and catering - 100%
Bernara Commercial Limited1 Ireland Property investment - 100%
Pillo Hotels Limited1 Ireland Dormant company - 100%
Loadbur Limited1 Ireland Hotel and catering - 100%
Heartside Limited1 Ireland Hotel and catering - 100%
Pondglen Limited1 Ireland Hotel and catering - 100%
Candlevale Limited1 Ireland Hotel and catering - 100%
Songdale Limited1 Ireland Hotel and catering - 100%
Palaceglen Limited1 Ireland Hotel and catering - 100%
Adelka Limited1 Ireland Property holding company - 100%
Leevlan Limited1 Ireland Hotel and catering - 100%
DHG Arden Limited1 Ireland Hotel and catering - 100%
DHG Barrington Limited1 Ireland Hotel and catering - 100%
DHG Cordin Limited1 Ireland Hotel and catering - 100%
DS Charlemont Limited1 Ireland Hotel and catering - 100%
Galsay Limited1 Ireland Hotel and catering - 100%
Merzolt Limited1 Ireland Hotel and catering - 100%
DHG Burlington Road Limited1 Ireland Hotel and catering - 100%
DHG Eden Limited1 Ireland Hotel and catering - 100%
DHG Dalton Limited1 Ireland Property holding company - 100%
Williamsberg Property Limited1 Ireland Hotel and catering - 100%
DHG Indigo Limited1 Ireland Holding company - 100%
DHG Belfast Limited2 N Ireland Hotel and catering - 100%
DHG Derry Limited2 N Ireland Hotel and catering - 100%
DHG Derry Commercial Limited2 N Ireland Dormant company - 100%
DHG Brunswick Limited2 N Ireland Hotel and catering - 100%
Dalata UK Limited3 UK Holding company - 100%
Dalata Cardiff Limited3 UK Hotel and catering - 100%
Trackdale Limited3 UK Hotel and catering - 100%
Islandvale Limited3 UK Dormant company - 100%
Crescentbrook Limited3 UK Hotel and catering - 100%
Hallowridge Limited3 UK Hotel and catering - 100%
Rush (Central) Limited3 UK Property holding company - 100%
Hotel La Tour Birmingham Limited3 UK Hotel and catering - 100%
SRD (Trading) Limited3 UK Hotel and catering - 100%
SRD (Management) Limited3 UK Hotel and catering - 100%
DHG Finsbury Park Limited3 UK Hotel and catering - 100%
DHG Castle Limited3 UK Hotel and catering - 100%
DHG Phoenix Limited3 UK Property holding company - 100%
Hintergard Limited4 Jersey Property holding company - 100%
Dalata Deutschland Holding GmbH5 Germany Holding company - 100%
Dalata Deutschland Hotelbetriebs GmbH5 Germany Hotel and catering - 100%
American Hotel Exploitatie B.V. 6 Netherlands Hotel and catering - 100%
DHG Amsterdam B.V. 6 Netherlands Holding company - 100%
1. The registered address of these companies is Termini, 3 Arkle Road, Sandyford Business Park, Dublin 18,
D18C9C5.
2. The registered address of these companies is Butcher Street, Londonderry, County Derry BT48 6HL, UK.
3. The registered address of these companies is St Mary Street, Cardiff, Wales, CF10 1GD, UK.
4. The registered address of this company is 12 Castle Street, St Helier Jersey, JE2 3RT.
5. The registered address of this company is Thurn-und-Taxis-Platz 6, 60313 Frankfurt am Main, Germany.
6. The registered address of this company is Leidsekade 97, 1017 PN Amsterdam, Netherlands.
During the 2023 year the registered address for the Irish subsidiary undertakings was changed from 4th Floor,
Burton Court, Burton Hall Drive, Sandyford, Dublin 18 to Termini, 3 Arkle Road, Sandyford Business Park, Dublin
18.
32 Earnings per share
Basic earnings per share is computed by dividing the profit for the year available to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the year. Diluted earnings per share is computed by
dividing the profit for the year available to ordinary shareholders by the weighted average number of ordinary
shares outstanding and, when dilutive, adjusted for the effect of all potentially dilutive shares.
The following table sets out the computation for basic and diluted earnings per share for the years ended 31
December 2023 and 31 December 2022.
2023 2022
Profit attributable to shareholders of the parent (€’000) – basic and diluted 90,222 96,725
Adjusted profit attributable to shareholders of the parent (€’000) – basic and diluted 93,213 70,557
Earnings per share – Basic 40.4 cents 43.4 cents
Earnings per share – Diluted 39.9 cents 43.2 cents
Adjusted earnings per share – Basic 41.7 cents 31.7 cents
Adjusted earnings per share – Diluted 41.2 cents 31.5 cents
Weighted average shares outstanding – Basic 223,299,760 222,867,676
Weighted average shares outstanding – Diluted 226,396,287 223,849,560
The difference between the basic and diluted weighted average shares outstanding for the year ended 31 December
2023 is due to the dilutive impact of the conditional share awards granted in 2020, 2021, 2022 and 2023. For the
year ended 31 December 2022, the difference between basic and diluted EPS is due to the dilutive impact of the
conditional share awards granted in 2020, 2021 and 2022.
Adjusted earnings per share (basic and diluted) are presented as alternative performance measures to show the
underlying performance of the Group excluding the tax adjusted effects of items considered by management to not
reflect normal trading activities or distort comparability either year on year or with other similar businesses
( 156 note 3).
2023 2022
€’000 €’000
Reconciliation to adjusted profit for the year
Profit before tax 105,532 109,657
Adjusting items ( 157 note 3)
Net property revaluation movements through profit or loss (2,025) (21,166)
Net reversal of previous impairment charges of right-of-use assets - (4,101)
Net reversal of previous impairment charges of fixtures, fittings and equipment - (624)
Income from sale of Merrion Road residential units - (42,532)
Release of costs capitalised for Merrion Road residential units - 40,998
Gain on disposal of property, plant and equipment - (3,877)
Hotel pre-opening expenses 497 2,666
Acquisition-related costs 4,389 -
Adjusted profit before tax 108,393 81,021
Tax charge ( 158 note 11) (15,310) (12,932)
Adjusting items in tax charge
Tax adjustment for adjusting items 130 2,468
Adjusted profit for the year 93,213 70,557
33 Approval of the financial statements
The financial statements were approved by the Directors on 28 February 2024.
Supplementary Financial Information
Alternative Performance Measures (‘APMs’) and other definitions
The Group reports certain alternative performance measures (‘APMs’) that are not defined under International
Financial Reporting Standards (‘IFRS’), which is the framework under which the consolidated financial statements
are prepared. These are sometimes referred to as ‘non-GAAP’ measures.
The Group believes that reporting these APMs provides useful supplemental information which, when viewed in
conjunction with the IFRS financial information, provides stakeholders with a more comprehensive understanding of
the underlying financial and operating performance of the Group and its operating segments.
These APMs are primarily used for the following purposes:
• to evaluate underlying results of the operations; and
• to discuss and explain the Group’s performance with the investment analyst community.
The APMs can have limitations as analytical tools and should not be considered in isolation or as a substitute for
an analysis of the results in the consolidated financial statements which are prepared under IFRS. These
performance measures may not be calculated uniformly by all companies and therefore may not be directly comparable
with similarly titled measures and disclosures of other companies.
The definitions of and reconciliations for certain APMs are contained within the consolidated financial
statements. A summary definition of these APMs together with the reference to the relevant note in the
consolidated financial statements where they are reconciled is included below. Also included below is information
pertaining to certain APMs which are not mentioned within the consolidated financial statements but which are
referred to in other sections of this report. This information includes a definition of the APM, in addition to a
reconciliation of the APM to the most directly reconcilable line item presented in the consolidated financial
statements. References to the consolidated financial statements are included as applicable.
i. Adjusting items
Items which are not reflective of normal trading activities or distort comparability either year on year or with
other similar businesses. The adjusting items are disclosed in note 3 and note 32 to the consolidated financial
statements. Adjusting items with a cash impact are set out in APM xi below.
ii. Adjusted EBITDA
Adjusted EBITDA is an APM representing earnings before interest on lease liabilities, other interest and finance
costs, tax, depreciation of property, plant and equipment and right-of-use assets and amortisation of intangible
assets, adjusted to show the underlying operating performance of the Group and excludes items which are not
reflective of normal trading activities or which distort comparability either year on year or with other similar
businesses.
Reconciliation: Note 3
iii. EBITDA and Segmental EBITDA
EBITDA is an APM representing earnings before interest on lease liabilities, other interest and finance costs,
tax, depreciation of property, plant and equipment and right-of-use assets and amortisation of intangible assets.
Also referred to as Group EBITDA.
Reconciliation: Note 3
Segmental EBITDA represents ‘Adjusted EBITDA’ before central costs, share-based payments expense and other income
for each of the reportable segments: Dublin, Regional Ireland, the UK and Continental Europe. It is presented to
show the net operational contribution of leased and owned hotels in each geographical location. Also referred to
as Hotel EBITDA.
Reconciliation: Note 3
iv. EBITDAR and Segmental EBITDAR
EBITDAR is an APM representing earnings before interest on lease liabilities, other interest and finance costs,
tax, depreciation of property, plant and equipment and right-of-use assets, amortisation of intangible assets and
variable lease costs.
Segmental EBITDAR represents Segmental EBITDA before variable lease costs for each of the reportable segments:
Dublin, Regional Ireland, the UK and Continental Europe. It is presented to show the net operational contribution
of leased and owned hotels in each geographical location before lease costs. Also referred to as Hotel EBITDAR.
Reconciliation: Note 3
v. Adjusted earnings per share (EPS) (basic and diluted)
Adjusted EPS (basic and diluted) is presented as an APM to show the underlying performance of the Group excluding
the tax adjusted effects of items considered by management to not reflect normal trading activities or which
distort comparability either year on year or with other similar businesses.
Reconciliation: Note 32
vi. Net Debt
Net Debt is calculated in line with banking covenants and includes external loans and borrowings drawn and owed to
the banking club as at year end (rather than the amortised cost of the loans and borrowings), less cash and cash
equivalents.
Reconciliation: Refer below
vii. Net Debt and Lease Liabilities
Net Debt (see definition vi) plus Lease Liabilities at year end.
Reconciliation: Refer below
viii. Net Debt and Lease Liabilities to Adjusted EBITDA
Net Debt and Lease Liabilities (see definition vii) divided by the ‘Adjusted EBITDA’ (see definition ii) for the
year. This APM is presented to show the Group’s financial leverage after including the accounting estimate of
lease liabilities following the application of IFRS 16 Leases.
Reconciliation: Refer below
ix. Net Debt to Value
Net Debt (see definition vi) divided by the valuation of property assets as provided by external valuers at year
end. This APM is presented to show the gearing level of the Group.
Reconciliation: Refer below
Reconciliation of Net Debt APMs - definitions (vi), Reference in financial 31 Dec 2023 31 Dec 2022
(vii), (viii), (ix) statements
€’000 €’000
Loans and borrowings at amortised cost Statement of financial position 254,387 193,488
Accounting adjustment to bring to amortised cost 4,336 5,513
External loans and borrowings drawn Note 24 258,723 199,001
Less cash and cash equivalents Statement of financial position (34,173) (91,320)
Net Debt (APM vi) A Note 24 224,550 107,681
Lease Liabilities - current and non-current Statement of financial position 698,598 651,791
Net Debt and Lease Liabilities (APM vii) B Note 24 923,148 759,472
Adjusted EBITDA (APM ii) C Note 3 223,108 183,430
Net Debt and Lease Liabilities to Adjusted EBITDA (APM B/C 4.1x 4.1x
viii)
Valuation of property assets as provided by external D 1,545,314 1,337,088
valuers1
Net Debt to Value (APM ix) A/D 14.5% 8.1%
1 Property assets valued exclude assets under construction and fixtures, fittings and equipment in leased hotels.
x. Lease Modified Net Debt to Adjusted EBITDA
Lease Modified Net Debt, defined as Net Debt (see definition vi) plus eight times the Group’s lease cash flow
commitment, divided by ‘Adjusted EBITDA’ (see definition ii) for the year. The Group’s lease cash flow commitment
is based on its non-cancellable undiscounted lease cash flows payable under existing lease contracts for the next
financial year as presented in note 16.
Reconciliation: Refer below
Reconciliation of Lease Modified Net Debt to Adjusted EBITDA Reference in financial 31 Dec 2023 31 Dec 2022
APM - definition (x) statements
€’000 €’000
Non-cancellable undiscounted lease cash flows payable under A Note 16 57,603 51,777
lease contracts in the next financial year
Modified Lease Debt B=A*8 460,824 414,216
Net Debt (APM vi) C 224,550 107,681
Lease Modified Net Debt D=B+C 685,374 521,897
Adjusted EBITDA (APM ii) E Note 3 223,108 183,430
Lease Modified Net Debt to Adjusted EBITDA (APM x) D/E 3.1x 2.8x
xi. Free Cashflow
Net cash from operating activities less amounts paid for interest, finance costs, refurbishment capital
expenditure, fixed lease payments and after adding back the cash paid in respect of items that are deemed one-off
and thus not reflecting normal trading activities or distorting comparability either year on year or with other
similar businesses (see definition i). This APM is presented to show the cash generated from operating activities
to fund acquisitions, development expenditure, repayment of debt and dividends.
Reconciliation: Refer below
xii. Free Cashflow per Share (FCPS)
Free Cashflow (see definition xi) divided by the weighted average shares outstanding - basic. This APM forms the
basis for the performance condition measure in respect of share awards made after 3 March 2021.
FCPS for LTIP performance measure purposes has been adjusted to exclude the impact of items that are deemed
one-off and thus not reflecting normal trading activities or distorting comparability either year on year or with
other similar businesses. The Group takes this approach to encourage the vigorous pursuit of opportunities, and by
excluding certain one-off items, drive the behaviours we seek from the executives and encourage management to
invest for the long-term interests of shareholders.
Reconciliation: Refer below
xiii. Debt and Lease Service Cover
Free Cashflow (see definition xi) before payment of lease costs, interest and finance costs divided by the total
amount paid for lease costs, interest and finance costs. This APM is presented to show the Group’s ability to meet
its debt and lease commitments.
Reconciliation: Refer below
Reference in financial 2023 2022
Reconciliation of APMs (xi), (xii), (xiii) statements
€’000 €’000
Net cash from operating activities Statement of cash flows 171,379 207,860
Other interest and finance costs paid Statement of cash flows (8,726) (12,233)
Refurbishment capital expenditure paid (26,050) (15,836)
Fixed lease payments:
- Interest paid on lease liabilities Statement of cash flows (42,751) (38,101)
- Repayment of lease liabilities Statement of cash flows (10,747) (9,324)
83,105 132,366
Exclude adjusting items with a cash effect:
Net impact from tax deferrals from government Covid-19 Note 22 34,917 (8,531)
support schemes1
2022 corporation tax payment in 20232 10,451 -
Acquisition-related costs Note 3 4,389 -
Pre-opening costs Note 3 497 2,666
Free Cashflow (APM xi) A 133,359 126,501
Weighted average shares outstanding – basic B Note 32 223,299,760 222,867,676
Free Cashflow per Share (APM xii) – cents A/B 59.7 56.8
Total lease costs paid3 57,373 48,537
Other interest and finance costs paid Statement of cash flows 8,726 12,233
Total lease costs, interest and finance costs paid C 66,099 60,770
Free Cashflow before lease and finance costs D=A+C 199,458 187,271
Debt and Lease Service Cover (APM xiii) D/C 3.0x 3.1x
1 During the year, the Group paid deferred VAT and payroll tax liabilities totalling €34.9 million under the Debt
Warehousing scheme in the Republic of Ireland. This non-recurring initiative was introduced under Irish government
Covid-19 support schemes and allowed the temporary retention of an element of taxes collected between March 2020
and May 2022 to assist businesses who experienced cashflow and trading difficulties during the pandemic.
2 During the year, the Group paid €10.5 million of Irish corporation tax relating to the 2022 financial year due
to available payment schedule following pandemic losses.
3 Total lease costs paid comprises payments of fixed and variable lease costs during the year.
xiv. Normalised Return on Invested Capital
Adjusted EBIT after rent divided by the Group’s average normalised invested capital. The Group defines normalised
invested capital as total assets less total liabilities at the year end and excludes the accumulated revaluation
gains/losses included in property, plant and equipment, loans and borrowings, cash and cash equivalents,
derivative financial instruments and taxation related balances. The Group also excludes the impact of deferred VAT
and payroll tax liabilities which were payable at prior year end as these were quasi-debt in nature, and the
investment in the construction of future assets. The Group’s net assets are adjusted to reflect the average level
of acquisition investment spend and the average level of working capital for the accounting period. In most years,
the average normalised invested capital is the average of the opening and closing normalised invested capital for
the year.
Adjusted EBIT after rent represents the Group’s operating profit for the year restated to remove the impact of
adjusting items (see definition i) and to replace depreciation of right-of-use assets with fixed lease costs and
amortisation of lease costs.
The Group presents this APM to provide stakeholders with a meaningful understanding of the underlying financial
and operating performance of the Group.
Reconciliation: Refer below
2023 2022
Reconciliation of APM (xiv) Reference in financial statements
€’000 €’000
Operating profit Statement of comprehensive income 156,143 155,527
Add back/(less):
Total adjusting items as per the financial statements Note 3 2,861 (28,636)
Depreciation of right-of-use assets Note 3 30,663 27,503
Movement in amortisation of intangible assets if IAS 17 5 (46)
still applied
Fixed lease costs (see glossary) (53,531) (46,330)
Amortisation of lease costs (813) (757)
Adjusted EBIT after rent A 135,328 107,261
Net assets at balance sheet date Statement of financial position 1,392,937 1,222,766
Add back
Loans and borrowings Statement of financial position 254,387 193,488
Deferred tax liabilities Statement of financial position 84,441 71,022
Current tax liabilities Statement of financial position 2,659 11,606
Deferred VAT and payroll tax liabilities Note 22 - 34,790
Less
Revaluation uplift in property, plant and equipment1 Note 15 (518,770) (425,974)
Cash and cash equivalents Statement of financial position (34,173) (91,320)
Deferred tax assets Statement of financial position (24,136) (21,271)
Derivative assets Statement of financial position (6,521) (11,717)
Invested capital B 1,150,824 983,390
Average invested capital C 1,067,107 993,715
Return on Invested Capital A/C 12.7% 10.8%
Assets under construction at year end D Note 15 (101,703) (64,556)
Normalised invested capital B-D 1,049,121 918,834
Average normalised invested capital E 983,978 921,890
Normalised Return on Invested Capital (APM xiv) A/E 13.8% 11.6%
1 Includes the combined net revaluation uplift included in property, plant and equipment since the revaluation
policy was adopted in 2014 or in the case of hotel assets acquired after this date, since the date of acquisition.
The carrying value of land and buildings, revalued at 31 December 2023, is €1,478.6 million (31 December 2022:
€1,281.3 million). The value of these assets under the cost model is €959.9 million (31 December 2022: €855.4
million). Therefore, the revaluation uplift included in property, plant and equipment is €518.8 million (31
December 2022: €426.0 million). Refer to note 15 to the financial statements.
xv. Net Debt to EBITDA after rent (banking covenant)
Net Debt (see definition vi) divided by EBITDA after rent for the year. EBITDA after rent is defined as Adjusted
EBITDA (see definition ii) less fixed lease costs (see definition in glossary) calculated in line with banking
covenants which specify the inclusion of pre-opening expenses and exclusion of share-based payment expense.
This APM is presented to show the Group’s financial leverage before the application of IFRS 16 Leases, in line
with banking covenants.
Reconciliation: Refer below
xvi. Interest Cover (banking covenant)
EBITDA after rent (see definition xv) divided by interest and other finance costs paid or payable during the year.
The calculation excludes professional fees paid or payable during the year in line with banking covenants.
Reconciliation: Refer below
2023 2022
Reconciliation of banking covenants APMs (xv), (xvi) Reference in financial statements
€’000 €’000
Operating profit Statement of comprehensive income 156,143 155,527
Add back/(less):
Total adjusting items as per the financial statements Note 3 2,861 (28,636)
Depreciation of property, plant and equipment Note 3 32,791 28,426
Depreciation of right-of-use assets Note 3 30,663 27,503
Amortisation of intangible assets Note 3 650 610
Share-based payment expense Note 3 5,910 3,329
Fixed lease costs (see glossary) (53,531) (46,330)
Pre-opening costs Note 3 (497) (2,666)
EBITDA after rent A 174,990 137,763
Net Debt (APM vi) B Note 24 224,550 107,681
Net Debt to EBITDA after rent (APM xv) B/A 1.3x 0.8x
Interest and other finance costs paid Statement of cashflows 8,726 12,233
Interest and other finance costs accrued but not yet paid 258 -
Interest and other finance costs per banking covenants C 8,984 12,233
Interest Cover (APM xvi) A/C 19.5x 11.3x
xvii. Hotel EBITDA (after rent) from leased portfolio
‘Segmental EBITDAR’ (see definition iv) from leased hotels less the sum of variable lease costs and fixed lease
costs relating to leased hotels. This excludes variable lease costs and fixed lease costs relating to effectively,
or majority owned hotels. This APM is presented to show the net operational contribution from the Group’s leased
hotel portfolio after lease costs.
Reconciliation: Refer below
xviii. Rent Cover
‘Segmental EBITDAR’ (see definition iv) from leased hotels divided by the sum of variable lease costs and fixed
lease costs relating to leased hotels. This excludes variable lease costs and fixed lease costs that do not relate
to fully leased hotels. This APM is presented to show the Group’s ability to meet its lease commitments through
the net operational contribution from its leased hotel portfolio.
Reconciliation: Refer below
2023 2022
Reconciliation of APMs (xvii), (xviii) Reference in financial statements
€’000 €’000
‘Segmental EBITDAR’ from leased hotels A Note 3 96,350 71,916
Variable lease costs Note 3 3,630 3,815
Fixed lease costs 53,531 46,330
Total variable and fixed lease costs 57,161 50,145
Exclude variable and fixed lease costs not relating to fully (2,576) (2,642)
leased hotels
Variable and fixed lease costs from leased hotels B 54,585 47,503
Hotel EBITDA (after rent) from leased portfolio (APM xvii) A-B 41,765 24,413
Rent Cover (APM xviii) A/B 1.8x 1.5x
xix. Modified EBIT
For the purposes of the annual bonus evaluation, EBIT is modified to remove the effect of fluctuations between the
annual and budgeted EUR/GBP exchange rate and other items which are considered, by the Remuneration Committee, to
fall outside of the framework of the budget target set for the year. Foreign exchange movements represent the
difference on converting EBIT from UK hotels at actual foreign exchange rates during 2023 versus budgeted foreign
exchange rates. The budgeted EUR/GBP exchange rate was 0.90 in 2023 (2022: 0.90).
Reconciliation: Refer below
2023 2022
Reconciliation of APM (xix) Reference in financial statements
€’000 €’000
Operating profit Statement of comprehensive income 156,143 155,527
Remove impact of:
Adjusting items Note 3 2,861 (28,636)
Foreign exchange movements (1,766) (2,720)
Modified EBIT (APM xix) 157,238 124,171
Glossary
Revenue per available room (RevPAR)
Revenue per available room is calculated as total rooms revenue divided by the number of available rooms, which is
also equivalent to the occupancy rate multiplied by the average daily room rate achieved. This is a commonly used
industry metric which facilitates comparison between companies.
Average Room Rate (ARR) - also Average Daily Rate (ADR)
ARR is calculated as rooms revenue divided by the number of rooms sold. This is a commonly used industry metric
which facilitates comparison between companies
‘Like for like’ hotels
‘Like for like’ or ‘LFL’ analysis excludes hotels that newly opened or ceased trading under Dalata during the
comparative periods. For newly acquired, previously operating hotels, where pre-acquisition data is available,
these hotels are included on a ‘like for like’ basis for analysis. ‘Like for like’ metrics are commonly used
industry metrics and provide an indication of the underlying performance.
Segmental EBITDAR margin
Segmental EBITDAR margin represents ‘Segmental EBITDAR’ as a percentage of revenue for the following Group
segments: Dublin, Regional Ireland, the UK and Continental Europe. Also referred to as hotel EBITDAR margin.
Effective tax rate
The Group’s tax charge for the year divided by the profit before tax presented in the consolidated statement of
comprehensive income.
Fixed lease costs
Fixed costs incurred by the lessee for the right to use an underlying asset during the lease term as calculated
under IAS 17 Leases.
Hotel assets
Hotel assets represents the value of property, plant and equipment per the consolidated statement of financial
position at 31 December 2023.
Refurbishment capital expenditure
The Group typically allocates approximately 4% of revenue to refurbishment capital expenditure to ensure the
portfolio remains fresh for its customers and adheres to brand standards.
Balance Sheet Net Asset Value (NAV) per Share
Balance Sheet NAV per Share represents net assets per the consolidated statement of financial position divided by
the number of shares outstanding at year end.
Competitive Set (compset)
A Competitive Set (compset) is a group of hotels that a hotel property competes against for business. These hotels
are typically located in the same geographic area and offer similar services and amenities.
══════════════════════════════════════════════════════════════════════════════════════════════════════════════════
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The issuer is solely responsible for the content of this announcement.
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ISIN: IE00BJMZDW83, IE00BJMZDW83
Category Code: ACS
TIDM: DAL,DHG
LEI Code: 635400L2CWET7ONOBJ04
OAM Categories: 1.1. Annual financial and audit reports
Sequence No.: 306659
EQS News ID: 1847833
End of Announcement EQS News Service
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