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Poor interim results at Peel Hotels as pre-tax profit falls 46.1%

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Poor interim results at Peel Hotels as pre-tax profit falls 46.1%

Increased wage costs and a slowdown in business due to the uncertainty of Brexit have been blamed for a “disappointing” set of interim results at regional group Peel Hotels.

Pre-tax profit dropped by 46.1% to £319,293, while sales decreased by 5.1% to £8.6m for the 28 weeks to 13 August.

Occupancy fell by 3.3% and revenue per available room (revpar) and average room rate decreased by 4.2% and 1% respectively.

The group, which owns and operates nine three- and four-AA-star hotels across the UK, including the Midland hotel in Bradford and the Norfolk Royale hotel in Bournemouth, saw its net debt decreased by £395,437 to £9.5m. On 19 September the company signed a £9.9m five-year-term loan facility with Allied Irish Bank.

Robert Peel, chairman of the company since founding Peel Hotels 20 years ago, said: “’It is difficult to move forward from an earnings point of view without sales growth; however, we continue to generate sufficient cash to continually decrease our net debt and to continue the reinvestment in our properties.”

Recent improvements include the spending of £369,516 on the refurbishment of three suites and the public areas at the Norfolk Royale and the refurbishment of 12 bedrooms at the King Malcolm hotel, Dunfermline. The refurbishment of the public areas and the ballroom at the Crown and Mitre in Carlisle was also completed.

A total of £700,000 will be spent this financial year by Peel Hotels on ongoing improvements across its portfolio.

Looking ahead, the group said that sales have now stabilised, revpar is currently growing (reversing the trend in the half-year) and costs are now under control.

Peel Hotels reports “very challenging” financial year >>

Peel Hotels announces strong results for year to February 2015 >>

Peel Hotels secures extended loan following modest rise in revpar and room rate >>

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