Macdonald Hotels & Resorts has secured financial stability for the next five years following backing from the Lloyds Banking Group to the tune of £299m.
Extra cash has also been raised by the sale-and-lease back of the Randolph hotel in Oxford and the sale of development land in Hampshire for £55m.
However the group, which operates 45 hotels in the UK, has also reported a £6.1m loss after exceptional bank charges and asset impairment charges of £9.5m on a turnover of £138.6m for the year ending 28 March 2013. Operating profit increased 7% to £14.9m.
A marginal increase in turnover is said to reflect an improvement in commercial and conference sales and a 4% growth in average room rates, combined with increased cost efficiencies.
David Guile, chief executive of Macdonald Hotels & Resorts (pictured), which was named AA Hotel Group of the Year 2014, said that £8.7m was invested during the year, while the increased operating profit was mainly been achieved from those hotels in which the company has invested, such as the Inchyra Hotel and Spa near Falkirk, the Randolph hotel and the Aviemore Resort.
With regards trading for the financial year to March 2014, the company has achieved sales and profit growth of 5% and 7% respectively, driven primarily by a four percentage point growth in occupancy, while a further £13m has been invested in capital projects. "The commercial and leisure segments continue to grow, however the conference market is still inconsistent," explained Guile.
Gordon Fraser, group finance director, said securing the new five year banking facility will provide greater financial stability for the group.
Meanwhile, the sale and leaseback of the five-star, 151-bedroom Randolph hotel will allow the company to operate the hotel under a 60 year lease with a tenant's only break at 35 years.
"Although it is our plan to reduce our debt further over the next few years the new banking facilities allow for capital expenditure of over £70m over the 5 year term," explained Fraser.