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Published on : Thursday, July 30, 2015
A report in The Telegraph says the company, which is run by husband and wife team Tim and Kit Kemp, took a £27.9 million exceptional charge after it cancelled hedging contracts when it refinanced its loans.
Tim Kemp told The Telegraph the derivatives had been taken out with Barclays and that Firmdale took legal action to reclaim the money last year: “We had four swaps as part of our hedging policy that we took out in 2006 and 2007. In order to refinance we found we had to pay the swaps off. I think we’re going to get this money back.”
The exceptional resulted in Firmdale recording a £35.3 million pre-tax loss for the 12 months to the end of January 2015, while turnover rose to a record £99.6 million, boosted by the opening of the Ham Yard Hotel in June 2014.
Firmdale has eight sites in London and one in New York, with a second Manhattan hotel due to open next year. Kemp said he was negotiating on two more sites and hopes to reach agreement on the London site by September.
Responding to speculation about a stock market flotation for the company, Kemp said that “nothing’s out of the question. I’m approached pretty well all the time by sovereign funds and people”. He estimated the business, which has net assets of £388.6 million, was worth between £500 million and £600 million.
A spokesman for Barclays said it will be “vigorously” defending the Firmdale case. Banks have paid out £1.8 billion through a redress scheme to around 11,000 businesses who suffered losses after being mis-sold complex hedging products.