British hotel and leisure operator De Vere Group remains upbeat about its performance, despite increasing energy costs, which are set to rise by £3.5m.
Chief executive Carl Leaver said: "Despite ongoing cost pressures we're cautiously optimistic for the current year. We'll have to be creative in how we maintain margins in this kind of cost environment."
The company posted a 7.8% dip in full-year pre-tax profits last week after being hit by a £2.3m rise in utility costs and business rates in 2005.
Operational performance was more positive, with De Vere hotels achieving a like-for-like increase of 5.2% in revenue per available room (revpar).
Leaver said the company was still implementing 3m of cost efficiencies announced 18 months ago. More savings would come through purchasing strategies, food and beverage management and payroll control.
He added that the group was looking abroad to expand its golf resort management business, having recently landed its second Spanish contract, and was now looking for other resorts in Portugal and Ireland.