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Turnover up £10m at Macdonald Hotels

Bank debt reduced by almost £100m at UK’s largest independent hotel group, but pre-tax profit fell more than £900k
04/12/2015

Pictured: Macdonald Bath Spa Hotel

Macdonald Hotels, the UK’s largest independent hotel group, has announced it has increased profits and turnover in the last financial year and reduced debt by almost £100 million. 

The group, which has 55 hotels and resorts in the UK, Ireland, Spain and Portugal, published its annual results for the year to 2 April 2015 which showed:    

Group turnover up 7 per cent (£10.2m) to £155.7m
Operating profit up 11 per cent (£1.6m) to £16.9m
Profit after tax up £2.5m to £6.1m
Bank debt effectively reduced by more than £96m at December 2015

However, pre-tax profit was £928k below last year, at £2.7m. The firm’s increase in profit after tax was thanks in part to a deferred tax credit of £3.3m.

Ruaridh Macdonald, deputy chief executive said: “We have enjoyed significant benefit from major events including The Ryder Cup, the Commonwealth Games, The Open Golf Championship and the Farnborough Air show, with like-for-like hotel sales up by 7 per cent and hotel operating profit up by 10 per cent. We have seen increases across our commercial, conference and leisure segments, resulting in a 2 percentage point growth in occupancy and a 6 per cent increase in average room rate.  

“Ensuring that our estate is continually refreshed is essential and during the year we invested a further £16m in capital projects, including refurbishing 261 bedrooms at our Macdonald Aviemore Resort, a new £1.8m leisure club and spa at the Macdonald Craxton Wood Hotel, Chester, as well as major bedroom refurbishment programmes at the Macdonald Holyrood Hotel, Edinburgh, the Macdonald Randolph Hotel, Oxford and the Macdonald Bath Spa Hotel, Bath.”

Gordon Fraser, deputy chairman and group finance director, said: “Profit before interest of £17.4m was £2.2m (15 per cent) above last year, however higher interest charges due to the accounting treatment of the Randolph finance lease (£2.3m) and a 1 per cent increase in our interest margin (£1.2m) resulted in a profit before tax of £2.7m, £928k below last year. 

“A deferred tax credit of £3.3m has been recognised this year due to the forecasted profits for the year ended March 2016 arising from the £58.8m gain from the disposal of land at Botley Park. In total, profit after tax of £6.1m is £2.5m above last year.”

Commenting on current trading, Ruaridh Macdonald said: “We are continuing to perform strongly in the current year, building on the growth in 2014/15 with like-for-like sales and profits up by 6 per cent and 7 per cent respectively. There has been continued growth from both the commercial and leisure segments, with occupancy up a further 3 percentage points and average room rates up by 5 per cent. It is particularly encouraging that, on both these measures, we are outstripping the industry comparatives by 2 per cent as reported by HOTSTATS Hospitality Intelligence.

“The group has continued its strong capital investment programme, with £9m already invested and a further £5m committed in capital projects in the current financial year, with continuing major bedroom refurbishment programmes at the Macdonald Randolph Hotel, Oxford, the Macdonald Bath Spa Hotel, Bath as well as at the Macdonald Bear Hotel at Woodstock. Over the last two years we have invested over £1m in our hotel IT infrastructure and in our website.” 


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