Buckingham hit by write-downs

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The Independent Online
Another round of heavy writedowns on property values has plunged the Buckingham International hotels group into a pounds 104m loss for the year to 31 October.

After wiping pounds 59m off European asset values in the first half, it erased pounds 46m from the worth of its nine US hotels in the second.

The balance sheet now shows shareholders' funds of just pounds 3m, down from pounds 112.6m. Operating profits rose from pounds 5.7m to pounds 6.6m, but were still insufficient to meet interest payments of pounds 8m. Buckingham agreed an eight-month support plan, involving an agreement to sell assets, with its banks in February.

John Clark, drafted in as chief executive last September, said selling assets was the only way forward for the group. He admitted that this was easier said than done.

'The problem is if assets require investment and the returns do not justify the investment,' he said. 'We are looking at how we can get the hell out of them.'

The biggest headache was a luxury apartment development in Portugal. Construction ceased last summer due to a planning dispute, delay in obtaining local finance and the group's own funding problems.

Two of the group's six hotels in Orlando, Florida, are for sale as is one of the three owned in Texas. Three hotels in Portugal are also on the market.