Sefton Group plc has today released its 2010 results. Overall performance for the year was adversely affected by one-off factors, with post-tax losses totalling ?7.76m. Trading Profits from continuing operations were close to those in the previous year (?3.72m v ?4.07m) and would have matched 2009 other than for the estimated ?0.3m loss caused by weather disruption. Overall losses in 2010 arose from ?8.36m of provisions related to the Group’s strategy of refocusing into its core hotel and leisure business, including the write-down of non-core assets, exit of non-core businesses and a change in accounting policy in respect of the Group’s interest rate swaps. Losses are provision-based, rather than cash outflows, so they have not adversely impacted on liquidity or future trading prospects. Trading conditions within the Isle of Man hospitality sector remain challenging. Sefton Hotel has performed well but Palace Hotel & Casino has had a more difficult time, moving from a fully-supported Hilton brand to an independent operation. The difficulties are now fully resolved and stronger performance is expected from the latter part of 2011. A number of improvements to the Palace will be introduced shortly to re-establish the complex as a first choice entertainment venue. In the last twelve months renewals of all of the Group’s required banking facilities have been completed. During 2010 net debt was reduced by ?7.2m. In 2011 there has been a further ?4.5m reduction, mainly via a sale and leaseback of the Palace Cinema site. A profit of ?2m was realised on the sale. As part of the ‘back to basics’ strategy the Group will be looking to sell down its investment properties over the medium term, thereby substantially de-gearing the Balance Sheet. The cornerstone of the Group’s strategy is the replacement of the Palace Hotel & Casino with a new hotel, casino and family leisure complex. The favoured location is the Group’s Middlemarch site in Douglas town centre. Stage one would cover the leisure elements, with a new hotel following on at a later date. The Government’s current aim of seeking to attract a second casino operator is a potential impediment to the Group’s redevelopment plans as the Isle of Man market is not big enough to sustain two casinos. An economic viability study is needed and the Group is urging Government to make this part of their process. In his Chairman’s Statement, Sir Miles Walker says: ‘Last year I concluded my statement by saying that your Group had some exciting opportunities as well as a number of challenges to face, and I believe this is still the case. Some of the immediate challenges are now behind us, including the renegotiation of our key banking facilities, but there are more to be faced, in particular the imperatives of completing the refocus into core activities and increasing our underlying profitability. ‘However, we have made good progress in the planning of our future strategy and we will be working hard over the coming year to bring the plans to fruition.’ ENDS