Following a year of upheaval, CHE Hotel Group has announced an £7.9m loss after tax for 2006.
The group achieved revenue of £79.8m for the year ended 31 December 2006, but made an operating loss of £2.8m, down from £4.6m the previous year. The group's £7.9m loss after taxation was down from a profit of £600,000 in 2005.
Chairman, said the results were less than acceptable and could "only be described as very disappointing."
He admitted: "I have no doubt about the task that I and the management team face in bringing this business to the levels of performance rightfully expected of it and I assure shareholders that we will spare no effort nor tolerate any delay in so doing.
He added the equity raised during the year was now in place to produce returns with 90% of the equity needed to upgrade the existing estate having been raised.
"We continue to eliminate marginal businesses and focus our efforts on building a superior operating business on high quality assets." he said.
The results follow a profit warning in January after the group exited from the underperforming European Master Franchise Agreement in November. Since then, the group's management team has undergone "significant restructuring and strengthening".
However, trading in the first quarter of 2007 had been encouraging, he added, and includes the opening of two new Sleep Inns with further openings planned for properties in London, Birmingham, Glasgow, Sheffield, Stansted, Chester and Doncaster.
The group, whose brands include Sleep Inn, Comfort Inn, Quality Hotel and Clarion Hotel, plans to have 60 Sleep Inns by 2011.
CHE operates 64 owned, leased or managed hotels in the UK, France, Germany and Belgium. In addition it holds the Master Franchise for Choice Hotels' brands in the UK and Ireland, amounting to 73 franchises, and operates the New Connaught Rooms in London.
By Emily Manson
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