De Vere talks up poor performance
De Vere Group's hotels are performing well despite a sharp drop in the company's overall sales and profits, says chief executive Paul Dermody.
As a result of the £1.14b sale in December 1999 of its pubs and restaurants division to Scottish & Newcastle, De Vere's turnover for the six months ended 26 March fell from£460m to £259m. Pre-tax profit was down from £46.4m to £16.9m.
But underlying sales in its core business of hotels and health clubs rose by 7.9% to £91.5m, and underlying operating profit was up by 4.1% to £19.9m, the company said.
Although the group has long been the subject of speculation that it will merge with or be taken over by another hotel company, Dermody insisted it could survive in its present form. "We've got excellent assets, strong brands and we're in a growth market," he said.
At De Vere hotels, occupancy was up slightly at 70.9%, against 70.3% during the same period last year. Average room rate was £73, up from £71.30 last year. This resulted in a 3.2% increase in revenue per available room to £51.70. Underlying operating profit also grew by 3.2% to £14.1m from £13.6m. Sales were up by 7.2% to £66.1m.
At the Village Leisure hotels, occupancy rose from 80.8% to 82.1%, and room rate from £47.40 to £47.70. Revpar increased by 2.1% to £39.10 and underlying operating profit grew by 4.3%.
The old Greenalls head office has been shut down, resulting in the loss of 150 jobs and a reduction in costs from more than £5m to £2m a year.