'Hard work' pays off at Macdonald Hotels as 2012 profit rises to £1.9m

By Emma Eversham

- Last updated on GMT

Related tags: Lloyds banking group, Minimum wage, Investment, Macdonald hotels

Macdonald Hotels, which added the Donnington Grove Country Club to its portfolio last year, moved into profit for the year ending 29 March 2012
Macdonald Hotels, which added the Donnington Grove Country Club to its portfolio last year, moved into profit for the year ending 29 March 2012
Business improved substantially for Macdonald Hotels last year with profit after tax reaching £1.9m for the year ending 29 March 2012, compared to a loss of £5.6m for the previous year. 

Despite investing almost £8m in refurbishments, new central reservation and revenue management systems over the course of the year, the Scotland-based hotel group saw operating profit before interest rise 3 per cent to £13.7m compared to the previous period, which spanned 18 months, to 31 March 2011. 

Chief executive David Guile said the 52-strong hotel group, which is currently in 'advanced and positive' talks with lender Lloyds Banking Group over the refinancing of its £314m debt facility before it expires in September, had outperformed the market on both rooms yield and operating profit growth, crediting 'sheer hard work and dedication' from everyone across the business for the rise. 

"We have continued to invest in our people, our IT and web infrastructure and our hotels. We are now seeing the benefits of this strategy, not only in our results, but also in continuing to improve the quality of our customer experience. 

"We have achieved these results despite the increasing cost pressures on our business such as utility prices, national minimum wage, food costs and a staggering £360,000 of additional 'tax' on our energy consumption paid to the Government in respect of the Carbon Reduction Commitment." 

Further growth

Guile said there had been 'further growth' for the group throughout the rest of 2012 with a noticeable uplift in bookings from the conference and commercial sectors. 

He said investment would continue to be made across the estate to 'improve the quality of our customer experience'. Last year a further £5m was invested the refurbishment of rooms and public areas at the Tickled Trout in Preston and in the expansion of the spa at the Hill Valley Spa Hotel & Golf in Shropshire. 

Looking ahead, executive chairman Donald Macdonald said trade was still difficult but the company was well-placed to survive. 

He said: "Current trading conditions are the most difficult any of us can remember and we have to assume that this will continue for a number of years. I make no apology for repeating what I have said on many occasions that I believe the strength of our management team, the quality of our people and the quality and potential of our assets are amongst the very best in the industry. I believe our company has a very positive future." 

Related topics: Business & Legislation, Openings, Hotel

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