THE Sefton Group has recorded post-tax losses of £7.76 million ahead of its annual general meeting which takes place today (Wednesday).
According to the group trading conditions within the Isle of Man hospitality sector remain "challenging" and a number of "one off factors" have adversely affected the results for 2010.
Overall losses in 2010 arose from £8.36 million of provisions related to the group's strategy of refocusing its core hotel and leisure business.
The group say the Sefton Hotel performed well over the period but the Palace Hotel and Casino has had a "more difficult time" moving from a fully supported Hilton brand to an independent operation.
£300,000 was also lost due to weather disruption meaning trading profits from continuing operations were down on the previous year.
Losses are provision-based, rather than cash outflows, so the group says they have not adversely impacted on liquidity or future trading prospects.
During 2010 net debt was reduced by £7.2 million and this year there has been a further reduction of £4.5 million which was created by the sale and leaseback of the Palace Cinema site.
In response to these results the Sefton Group says it will undertake a "back to basics strategy" and will look to sell down its investment properties over the medium term.
The cornerstone of this strategy is the replacement of the Palace Hotel and Casino with a new hotel, casino and family leisure complex – with the favoured location being the Middlemarch site in Douglas town centre.
The group has also said the Isle of Man Government's current aim to attract a second casino to the Island is a "potential impediment to the group's redevelopment plans" as the market is not big enough to sustain two casinos.
Chairman Sir Miles Walker said: "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."
The Sefton Group's 87th annual general meeting will be held at 12pm today (Wednesday) at the Sefton Hotel.
