Macdonald Hotels has reported a profit after tax of £1.9m for the year ended 29 March 2012. This compares to a loss of £5.6m for the previous period to 31 March 2011, which was an 18 month period and included two winter trading periods which, due to the seasonality of the business, are the weaker trading months.
In the current year, MacDonalds is achieving further growth in the business and now seeing greater activity in both the commercial and conference sectors.
Commenting on the results, David Guile, chief executive, said:
“On a like for like comparison of our trading results, we increased our group turnover by 2% to £139.5m and our operating profit before interest by 3% to £13.7m, outperforming the market on both rooms yield and operating profit growth based on the TRI industry comparatives.
“In persistent challenging economic conditions this strong performance is due to the sheer hard work and dedication of all of our people throughout the business. We have continued to invest in our people, our IT and web infrastructure and our hotels. We are now seeing the benefits of this strategy, not only in our results, but also in continuing to improve the quality of our customer experience.
“We have achieved these results despite the increasing cost pressures on our business such as utility prices, national minimum wage, food costs and a staggering £360,000 of additional “tax” on our energy consumption paid to the Government in respect of the Carbon Reduction Commitment.
“During the year we invested nearly £8m in capital projects encompassing hotel refurbishments, central reservations and revenue management systems”.
Current trading
Commenting on hotels’ current trading David Guile, said:
“Building on our reported results for the year to March 2012, in the current year we are achieving further growth in the business and we are now seeing greater activity in both the commercial and conference sectors.
“We have invested a further £5m in capital projects including several bedroom refurbishments and the redesign and refurbishment of the ground floor public areas at the Macdonald Tickled Trout Hotel in Preston which has since been upgraded to 4 stars by the AA. We have also expanded the spa facilities and doubled the number of treatment rooms at the Macdonald Hill Valley Spa Hotel & Golf, Shropshire.”
Selected key highlights in the current year include:
- The Macdonald Windsor Hotel awarded 4 Red Star status by the AA.
- The group has the highest number of rosettes of any hotel group in the UK at 43.
- Awarded AA Eco Hotel Group of the Year for the Room 15 Environmental Policy”.
Gordon Fraser, group finance director, said:
“These results represent a strong financial performance with profit growth in the year to 29 March 2012 and for the first 8 months of the current financial year. We generated £13.4m of operating cash flow after interest enabling us to reinvest £8m of capital expenditure in the business and maintain good headroom in our banking facilities. Our current debt facilities expire in September 2013 and we are in advanced and positive discussions with Lloyds Banking Group regarding a longer term debt arrangement with an enhanced capital expenditure facility and we would expect to conclude these negotiations successfully in the new year”.