The group, which operates 45 hotels across the UK and 10 resorts in the UK and Spain, saw sales rise by 5 per cent to £145.5m (£138.6m) in the year to 27 March 2014, delivering a 29 per cent increase in the group reported profit before exceptional items to £4.2m, while operating profit rose by 7 per cent.
The strong results continued in the latter part of 2014 with sales and profit growth of 5 per cent and 8 per cent respectively in the eight months to November – a performance that the company expected to continue until the year end.
Estate upgrade
Expenditure on capital projects in the new financial year was tracking the £14m invested the last year, said Gordon Fraser, deputy chairman and group finance director, with £9m invested in upgrading the hotel estate so far. This includes the refurbishment of the Macdonald Holyrood Hotel in Edinburgh, including the new Rocco restaurant, and a new £1.4m leisure club and spa at the Craxton Wood Hotel, Chester.
The refurbishment of the 98-bedroom Aviemore Highlands Hotel is also now complete, while the company is completely refurbishing the Aviemore Inn and the Academy Hotel.
Macdonald Hotels, which was set up by Donald Macdonald in 1990 and claims to be the largest privately owned hotel group in the UK, also completed a £1m project to provide free Wi-Fi to guests in 2013/14, and signed a five-year banking facility with Lloyds, including a £70m capital expenditure facility.
The group plans to significantly reduce its debt during the five year period by selling a 200-acre brown field site in Hampshire and evaluating the potential of other ‘non-hotel’ assets.
“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,” said Fraser.