A prominent Scottish hotel chain has completed a major refinancing, and revealed it slumped to a multi-million-pound loss last year.
Bathgate-based Macdonald Hotels which counts the Rusacks in St Andrews and the major Aviemore Highland resort among its portfolio of 55 hotels in the UK and Spain reported a £3.3 million profit for the year to March 28, 2013.
The figure was £1.4m higher than the year previous and was achieved on marginally increased revenues of £138.6m.
However, the group’s bottom line was dragged to a £6.1m loss for the year by exceptional costs totalling £9.5m, of which £4.3m related to bank charges.
Despite the loss, the company was upbeat about its prospects yesterday as it revealed it had secured a new £299m five-year banking facility with long-term backers Lloyds Banking Group.
As part of the deal, senior management of the group which was founded in 1990 by Donald Macdonald, and whose family remain the majority shareholder have acquired the 50% of the group that had been under the bank’s control.
Finance director Gordon Fraser said the chain performed strongly in 2013 and further progress was made in the year just gone.
He said the new financial structure meant the firm was on a stable footing and had the means to continue investing in the business going forward. “Although it is our plan to reduce our debt further over the next few years, the new banking facilities allow for capital expenditure of over £70m over the five-year term,” Mr Fraser said.
“The trading results for the year to March 28 2013 represent another strong financial performance from the group, with £17m of cash generated from operating activities after interest payments giving us the headroom to further invest in our business.
“This performance has been bettered in the financial year to March 2014.
“We have tremendous latent investment potential within our existing estate, and we look forward to realising this over the term of the new banking facility and beyond.
“The business in its 24-year history has never been better placed in terms of its people, its product and its financial strength, giving the group the ideal platform for a successful future.”
Chief executive David Guile said: “Having reported last year an increase in both like-for-like hotel and resort sales and profit, I have to give credit to our loyal and hard-working staff that I am able to report the same again for the year to March 28 2013, with a 5% increase in hotel and resort operating profit to £14.7m from a marginal increase in turnover to £138.6m, the latter reflecting an increase in both commercial and conference sales.”
He added: “The result was rate driven by an increase in our average room rate of 4% combined with cost efficiencies resulting in a higher conversion of our sales to profit.”
The firm has invested millions in major capital programmes over the past two years, and Mr Guile said the investment had paid dividends over the past year.
“We have achieved continued sales and profit growth of 5% and 7% respectively this financial year to March 2014, driven primarily by a four-percentage-point growth in occupancy,” Mr Guile said.
“The commercial and leisure segments continue to grow. However, the conference market is still inconsistent.
“We have invested over £13m in capital projects, including further bedroom refurbishments.”