A £100m reduction in debt and a restructuring of the management team at Malmaison and Hotel du Vin is expected to help the two hotel brands through a difficult year ahead, according to the half yearly report from parent company MWB Group Holdings.
Results for the company for the six months to 31 December 2011 are dominated by the sale and leaseback of five hotels and the refinancing of Malmaison and Hotel du Vin, resulting in a reduction in the company's debt to around £180m.
The growth in revenue across the two brands grew to £59.5m, from £58.8m during the same period in 2010. This was due partly to the additional turnover from the two new Bistro du Vin openings. Occupancy, revenue per available room (revpar) and food and beverage figures for the second half of 2011 were little changed on the same period in 2010, although average room rates rose to £108 from £107.
Earnings before interest, taxation, depreciation, amortisation and property impairment (EBITDA) were £10.7m. With adjustments for the properties sold and leased back, these amounted to £13.2m which compares with £16m for the equivalent period in 2010. The decline is partly attributable to Bistro du Vin's initial trading losses, one-off transaction costs and increased spending on property maintenance and IT, as refurbishment was delayed prior to the group's refinancing.
A strategic review of the business, which will lead to a more efficient operating structure, has been undertaken alongside the appointments of Gary Davis as chief executive and Paul Roberts as finance director.
Future development will include a new 91-bedroom Malmaison Dundee, following the signing of a 35-year lease agreement, with an option to extend for a further 35 years, within the city's Central Waterfront Development. The hotel is due to open in May 2013.
"Hotel and restaurant trading over the remainder of the current financial year is likely to be difficult," said MWB's chief executive, Richard Balfour-Lynn. "But we are confident that, with the operational initiatives being introduced by the new management team, we will maintain both occupancy and room rates and become more efficient as we drive to improve yields."
By Janet Harmer
E-mail your comments to Janet Harmer here.
Looking for a new job? Find your next job here with Catererandhotelkeeper.com jobs