Urban buying policy pays off for Arcadian
by Dominic Walsh
A year of "getting our portfolio sorted out" has enabled Robert Breare, chief executive of Arcadian International, to report a return to profits for the hotel and leisure group.
The whole company, including its project development and commercial property arms, made a pre-tax profit of £417,000 in 1994, compared to a loss of £471,000 in the last eight months of 1993 (the closest comparison after a change in the financial year-end).
Turnover for the hotels division last year was £12.5m, on which pre-tax profits were £1.3m. Net operating profits, which do not include central costs, depreciation, interest or tax, were £2.9m.
During that period the company's strategy was to sell off smaller properties in secondary locations and purchase larger hotels near major communications and population centres.
In 1994 Arcadian sold three smaller Clipper hotels bought in November 1993, while buying Ettington Park, near Stratford upon Avon, and the Priest House Hotel, Derby.
The process has continued this year with the disposal of a fourth ex-Clipper property, the Eastbury in Sherborne, Dorset, and the acquisition of the Haycock, Peterborough, and the Mollington Banastre, Chester.
Mr Breare said further acquisitions were possible to fill "a couple of glaring holes in our portfolio" in Edinburgh and the Leeds/Bradford area, but the emphasis would be on refurbishing existing properties from a £4.5m budget.
Another project is the second phase of development at the Malmaison hotel and brasserie in Glasgow, which opened last September in partnership with former Hotelier of the Year Ken McCulloch.
"We've got outline planning permission to take the number of bedrooms from 21 to 74," Mr Breare told Caterer.
He said the business had been taking £23,000-£25,000 a week since it opened, with occupancy so far this year averaging 75.6% off an achieved room rate of about £55.
