Jarvis profits remain static

Increased leisure trade helped hotels group Jarvis to offset the sector-wide downturn in business and commercial trade, the company said today.

Jarvis warned in February that its profits might dip below those of last year because of the weak commercial market, but in the event pre-tax profits for the year to 29 March, stripping out one-off items, came in at £17m, the same as the year before.

Headline pre-tax profits, including one-off items, came in at £58.4m, up a whopping 265%. But this increase was largely down to an exceptional profit from the £150m sale and leaseback during the year of nine hotels to a consortium of private investors.

The company now operates 21 hotels on a sale-and-leaseback basis, owns 42 on a freehold basis and has five under occupational leases.

Reflecting the switch away from the more lucrative business trade, average room rates fell by 2.7% to £51.92 from £53.34, but occupancy levels rose 0.6% to 65.9%.

Revenue per available room slipped 2% to £34.20, from £ 34.91 reported at the same point last year.

Chairman John Jarvis said it was the second difficult year in succession for the group.

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John Jarvis: difficult year

"Our early decision to support occupancy levels through a series of marketing and sales initiatives in the UK leisure market enabled us to maintain trading profits in line with last year on a like-for-like basis, even though there was continuing weakness in UK commercial business," he added. Total turnover for the year was £162.4m, compared with £162.6m the year before, with leisure rooms turnover up by 12.8%, offsetting a 3.8% decline in commercial markets. As a result, there was little difference in performance between London and the regions, said Jarvis. Food and beverage turnover was 2.2% below the same point last year, although varying products and prices and effective merchandising had helped to protect margins, he added. Costs had also been screwed down as far as possible, with all but essential capital projects put on hold. "However, substantial sums are being committed to meet the requirements of disabled visitors to our hotels," said Jarvis. As for the coming year, Jarvis predicted times would remain tough, with commercial trade continuing to weaken, again offset by stronger leisure business. by Nic Paton