The resurgence of Macdonald Hotels has continued apace with steady growth at the group and a significant reduction in debt.
Speaking exclusively to Caterer about the private company's performance in the year to 28 September 2006, executive chairman Donald Macdonald said heavy investment was now paying off with average hotel room rate up to £80 (2005: £73).
"We are now locked into a virtuous circle," he said. "We feel it important to add value to the property as long-term this drives further value to it."
Macdonald Hotels, which has 43 properties, invested £42m in its portfolio during 2006 and has £50m earmarked for 2007.
"The key to creating long term and sustainable profit lies with the development of both our people and products," said Macdonald.
One of the investment triumphs was the upgrading of the Macdonald Randolph hotel in Oxford to five-star status this January.
Macdonald also confirmed the company's first joint-partnership restaurant deal at the Compleat Angler in Marlow, Buckinghamshire, would not be its last.
Financial results at a glance:
- Turnover increased 16% in the year to £194.7m.
- Operating profit 37% ahead of last year at £24.7m, which includes a £15.1m depreciation charge.
- With capital expenditure, bank and interest fees factored in, as well as a £12m one-off arrangement fee, Macdonald's made a loss of £23.6m in 2006 (although it is now cash positive to the tune of £6m).
- The sale in January of 24 hotels to Moorfield Real Estate, which Macdonald made £360m from, enabled debt to be cut from £577m (in 2006) to just north of £217m.
By Chris Druce
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