MacDonald posted a turnover of £138.6m with an original group profit of £3.3, but bank charges (£4.3m) and asset impairment charges (£5.2m) resulted in a £6.1 loss on the final figure.
Chief executive David Guile said: “The result was rate driven by an increase in our average room rate of 4 per cent combined with cost efficiencies resulting in a higher conversion of our sales to profit.”
The group, whose shares are now 100 per cent-owned by its executives, has also signed a five-year, £299m refinancing facility with Lloyds Banking Group. “The securing of the new five-year banking facilities provides greater financial stability for the group and enables further revenue enhancing capital investment in the estate,” said finance director Gordon Fraser.
Macdonald has completed the sale and leaseback of its Randolph Hotel in Oxford, and will continue to operate it under a 60-year lease with a tenant’s only break at 35 years, a move which forms part of its debt reduction strategy. It is also working on a planning application for 1,400 houses on a 200 acre Brownfield site in Hampshire, which is expected to create a turnover of £55m to be used to further reduce debt. “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 five-year term,” added Fraser.
The group posted continued sales and profit growth of 5 per cent and 7 per cent respectively in the year to March 2014, driven primarily by a 4 per cent growth in occupancy, and expects to announce increased profits for that year. “The commercial and leisure segments continue to grow, however the conference market is still inconsistent,” Guile commented.
Last year Macdonald invested £8.7m bedroom refurbishments at the Randolph Hotel, Oxford and the Rusacks Hotel, St Andrews. New spa treatment rooms were also added at the Hill Valley Hotel and Spa, Shropshire and the public areas at the Tickled Trout Hotel, Preston were redeveloped.
“The increased operating profit on last year has mainly been achieved from those hotels in which we have recently invested, such as the Macdonald Inchyra Hotel and Spa near Falkirk, as well as from the 5-star Macdonald Randolph Hotel and the Macdonald Aviemore Resort which is going from strength to strength and which will be the subject of a £5m investment programme in the year ahead,” Guile added.
Macdonald has invested over £13m in further bedroom refurbishments at the Holyrood Hotel, Edinburgh, Forest Hills Hotel, Stirling and the Marine Hotel, North Berwick, public area refurbishments including the new Rocca restaurant and bar at the Holyrood Hotel, Edinburgh and the building of a new clubhouse at the Spey Valley Championship Golf Course in Aviemore.
Earlier this year, the £1.4m upgrade of the spa facilities at Craxon Wood Hotel in Chester and the refurbishment of the Alveston Manor Hotel in Stratford-upon-Avon were also announced.
The group introduced free Wi-Fi in its hotels at the end of 2013 through a £1m deal with The Cloud.