The owner of the popular Auckland bar Danny Doolans is putting all nine of its establishments up for sale following a strategic review.
Good Spirits Hospitality (GSH) owns the well-known Irish pub, as well as the Cav, Citizen Park, Union Park, The Fox, The Cellar Bar, Botany Commons, the Doolan Brothers venue and the Cock & Bull in Hamilton.
In a statement, GSH said the sales come after a strategic review.
They said that while the businesses have been affected by limited hours due to staffing shortages, they were still profitable.
The revenue from the nine bars was $10.7 million in the first five months of this financial year, GSH said. GSH expects revenue from the venues to be $25.5 million by June 30 2023.
On 22 November of this year, at the GSH annual shareholders meeting, chairman Matt Adams said that the effects of Covid-19 have caused damage to the company's revenue.
“The Delta lockdown in Auckland from August 2021 to December 2021 forced the mandated closure of all Auckland venues for a period of 107 days, which materially impacted our revenue and placed the Group under severe cash flow pressure,” Adams said.
He said that Covid related lockdowns impacted earnings by $9.8 million, with the group reporting a net loss of $6.6 million by June 2022.
Adams said the loss came from due diligence and other transaction costs like the failed Nourish group acquisition, non-cash goodwill impairments and non-cash right-of-use asset impairments. The Nourish group acquisition cost GSH $1.5 million.
The company did a bit better in 2022’s financial year, with operating revenue decreasing 17.7% to $17.7 million.
“That being said, the company now finds itself at a crossroads,” Adams said.
“Whilst the board and management have, for the last few years, sought to restructure, refocus and improve the underlying performance of the business, the debt levels we inherited, together with the forced closures and restricted trading of our venues and resulting losses, has been difficult and taken an enormous effort from everyone involved in this company as well as the support of our bankers simply to keep the company afloat.”
The only venue not being sold is the Doolan Brothers bar in Newmarket, which is currently closed.
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