Supplier News
Isle of Man – Rescued group posts £10m profits
By Lewis - 27 June 2014
The Isle of Man’s Sefton Group, which was rescued last year thanks to a controversial government loan, has posted profits of £10m. The Sefton Group is a Manx company that owns the Sefton and the Palace Hotel Casino on Douglas promenade, along with the Sefton Express hotel near Ronaldsway airport.
An employer of 340 people and a supporter of 150 local companies, in April 2013 the Sefton Group received a government rescue package of £4.5m including a £1.3m loan, plus £3.2m to buy development land in Douglas. When scrutinised by independent lawyers the deal was later found to have been made “outside of government powers”. It was also heavily criticised by other hotel owners for creating “a biased and dysfunctional commercial environment, with unfair competition”.
At the time of the loan the hotel/casino group was facing debts of around £1.7m, with much of the debt owed to local businesses on the island. The Manx government said the funds had been granted under the Enterprise Act, which provided the group with a loan of £1.3m repayable after five years. When details of the arrangements were made public, politicians objected on the grounds that it put other hotel owners at a commercial disadvantage.
Sefton chairman Miles Walker told local press that the profits posted by the group “justify the intervention”. He added: “Bearing in mind that the Sefton Group is the employer of 340 people, the customer of 150 local companies and is owned predominantly by 550 local shareholders, the government deserves plaudits, not brickbats for supporting such a key player in the Isle of Man economy.”
However, such has been the fallout from the granting of the loan that the Manx economic development minister, John Shimmin, was forced to resign over the issue last week.
