This rise in turnover has resulted in a 29 per cent increase in the Group reported profit before exceptional items to £4.2m.
“Hotel sales increased over the year by five per cent with growth from both the leisure and commercial segments driven primarily by a four percentage point growth in occupancy,” says deputy chairman and group finance director, Gordon Fraser. “This combined with a higher conversion of our sales to profit through continued cost efficiencies resulted in a seven per cent increase in hotel operating profit.”
Macdonald Hotels invested over £14m in capital projects during the year that included major refurbishments at the Macdonald Holyrood Hotel, Edinburgh, the Macdonald Forest Hills Hotel, the Trossachs and the MacDonald Highlands Hotel, Aviemore. The group also completed a £1m investment to enable it to offer free Wi-Fi to guests.
Fraser says the five-year banking facility signed in March 2014 with Lloyds Banking Group, which includes a £70m capital expenditure facility marked another “significant milestone for Macdonald Hotels and provides even greater financial stability for the Group and enables substantial revenue enhancing capital investment in the estate”.
The Group plans to significantly reduce its debt during the five-year term of its current banking facility through measures including the sale of a 200-acre brown field site in Hampshire, which the group hopes will realise over £60m in profit to go towards debt reduction.
“The continued strong trading performance, our substantial continued investment in the estate, the good headroom on our £300m banking facility and our ability to reduce our debt continue to underline the financial strength of the business,” says Fraser.
“We have achieved further sales and profit growth of five per cent and eight per cent respectively in the eight months to November 2014 and I expect this to continue to the year end.”
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