Qawra Palace plc closed its financial year ended 31st March 2025 with a net profit of €4.3 million, down from €5.3 million the previous year, according to its latest Financial Analysis Summary.

The decline was primarily attributed to lower fair value gains on the company’s investment property – the Qawra Palace Hotel – and higher deferred tax charges. The hotel’s revaluation delivered a €5.4 million uplift in FY25, compared to €4.7 million in FY24, while the company also recognised a €503,000 impairment reversal linked to intra-group loans.

Revenue and operating performance

The issuer’s revenues, derived from rental income paid by operating company Mallard Co. Ltd (MCL), remained stable at €2.45 million. EBITDA increased marginally to €2.34 million, while finance income fell to €280,000 due to a lower volume of outstanding loans.

After accounting for €1.3 million in finance costs, profit before tax stood at €6.96 million, compared to €6.23 million in the prior year.

Qawra Palace’s balance sheet remains equity-heavy, with total assets rising to €98.5 million. Investment property accounted for the bulk of this, valued at €94.4 million. Shareholder equity increased to €63.2 million, representing nearly two-thirds of the balance sheet, while gearing ratios improved modestly, with net debt to equity at 37.9 per cent. 

Cash flow generation proved more subdued than the previous year. Free cash flow dropped sharply to €666,000, from €10.0 million in FY24, reflecting the one-off release of trustee-held funds in the prior period. However, management forecasts free cash flow to rebound to over €4 million in FY26.

For FY26, the company anticipates a much lower net profit of €535,000, as no fair value gains are expected to be booked on its hotel property. Nevertheless, retained earnings are forecast to continue growing, with equity projected to climb above €64 million.