Northern Ireland family firm McKeever Hotels saw turnover soar by 17% in 2015 but profit margins fell in the same period due to the cost of extensive refurbishment.
Reporting its results for the year to 30 September 2015, the company said turnover rose to £7.6m from £6.5m in the previous year. However, while gross profit at the firm, which owns four hotels, rose by 16% to £5.6m from £4.8m in 2014, pre-tax profits fell from £0.9m to £0.7m in the same period.
The firm said £1.5m of refurbishment work on the 57 bedroom and 26 apartment Dillon's hotel in Letterkenny in the Republic of Ireland, which the firm bought in 2014, had impacted on profits.
According to a report, filed at Companies House, UK turnover on its three Northern Ireland hotels - the Dunsilly Hotel in Antrim, Corrs Corner hotel in Newtownabbey and Adair Arms in Ballymena - rose from £6.3m in 2014 to £6.07m in 2015, with turnover from Dillon's hotel in Letterkenny delivering £1.2m of turnover, up from £436,895 in the previous year.
Looking ahead, the directors' report said the firm continued to face a range of challenges including the continuing instability of the local economy, which is depressing the corporate market; rising food and energy costs and increasing competition from new hotels.
The report added that plans to mitigate the challenges include growing the firm's accommodation, conferencing and banqueting business and concluded that McKeever Hotels is "well positioned to continue to grow turnover in the coming years".