Dolphin Cove deal with Reserve Investments still on the cards
Published:Friday | December 31, 2021 | 12:09 AM
Dolphin Cove’s deal with Reserve Investments Limited has been on pause for almost a year due to COVID-related disruptions, but on Wednesday, Chairman and CEO Stafford Burrowes reassured shareholders that the sale of the 23-property it owns is still on the cards.
Reserve Investments is to continue leasing the property in Hanover for another year, effective December 2021, while it seeks approval for the development of a hotel there.
Dolphin Cove subsidiary, Dolphin Cove (Negril) Limited, struck a deal with Reserve Investments on March 3, 2020, under which the foreign company would develop a hotel on the 23-acre site.
Dolphin Cove now operates a marine park on a section of the property under the name Dolphin Cove Montego Bay, and will continue to do so after the hotel is built.
The arrangement allowed for Reserve Investments to lease the Hanover site up to March 2, 2021, for US$100,000, pending planning approvals for the hotel, which, once obtained, will see the hotel developer purchasing the property.
“The lease arrangement that they had has expired, and so they were given an extension at about half the cost of the first arrangement. We have put together new documents for Reserve to lease to the property for another year,” Burrowes told the Financial Gleaner on Wednesday following the company’s annual general meeting.
“The documents were sent to them about a week ago, and so we are awaiting a signature,” he said.
Large family resort
The planned hotel development has been described as a large family resort that will be built around the marine park. Dolphin Cove will continue operating the marine park at the site.
“We have already received some estimates on the cost to build, and so we expect things to progress smoothly over the next year,” Burrowes added.
The pandemic has also blown other expansion activity off course, inclusive of the roll-out of the marine park operator’s plans for St Lucia, where it previously made a 40 per cent deposit on the construction of a new encounter park; and for Turks & Caicos, where it is also setting up a marine attraction.
“We’ve lost almost two years from the pandemic. At the moment, we are watching what will happen with this new strain virus before making any more decisions,” Burrowes said, referring to the omicron variant of COVID-19.
Dolphin Cove closed its September quarter with US$1.03 million in earnings, compared to losses of US$590.473 for the comparative period of 2020. Quarterly revenue also jumped US$2.2 million year-over-year, from nearly US$320,000 to US$2.57 million, on the return of cruise ships to the island’s shores after a 17-month hiatus and the relaxation of social distancing measures.
Over nine months, sales rose from $3.6 million to $5.44 million, while earnings swung from a loss of more than US$863,000 to profit of US$2.11 million.
The company has been using the downtime from the outbreak to upgrade some of its properties.
To date, Dolphin Cove has utilised US$1 million from a credit line of US$2 million from Sagicor Bank. Of that, US$200,000 has been pumped into increasing capacity at Yaaman Adventure park, through the acquisition of eight new buggies and three ATVs to meet demand.