PROFITS at Glasgow travel business Minoan have halved to £233,000, partly due to a dispute with a back-office services provider. Management are hugely upbeat about the future, however, after planning permission was finally granted for a luxury development in Greece.
The Greek president green-lit the development last month when he issued a decree after years of delays.
It puts Minoan back on track after the costly dispute with a provider incurred costs of £410,000. In addition, it negatively affected revenue and restricted its expected expansion into foreign exchange.
The total impact of what chairman Christopher Egleton called a “completely unexpected and one-off event” was more than had initially been projected.
Managing director Duncan Wilson said: “From March to July 2015 there were all sorts of issues and we are very happy that it has now been resolved.”
He said that were it not for the dispute, profit before tax would have shown a “significant increase”. In spite of the positive outlook, shares closed down 11.6 per cent to 7.62.
The aim of the business this year is to grow revenue to more than £100 million — which would represent a 66 per cent year-on-year increase. “I hope that this time next year we are going to be in radically different shape,” said Mr Wilson. The company’s expansion has been hampered by the hold-up in developing a new "five star plus” facility on Crete.
Mr Wilson said the Itanos Gaia project had to be signed off by eight government departments including the Ministry of Defence — due to the 45km of coastline on the site — before being approved by the president. Mr Wilson said the group’s efforts would now focus on achieving the best outcome for all stakeholders in the project, including the local community.
The 6,000-acre site in the Cavo Sidero peninsula has been valued at €100 million and discussions with various potential partners, including hotel operators and investors, have begun.
“Our aim is to secure maximum value for the development and we are now in discussions with third parties,” said Mr Wilson. “With the land valued at €100 million and our market capitalisation being £15 million, the potential of the development has a significant upside.”
Mr Wilson expects the build cost to be around
$200 million to
$400 million. “There are very large international developers who specialise in this exact thing and our relationship with them will be crucial,” he said.
Mr Egelton called the planning decision pivotal to the company’s future.
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