Macdonald Hotels started to reap the rewards of its programme to upgrade its estate last year as profits grew by almost a third.
The Bathgate-based firm, which is 100 per cent owned by its management following a deal with Lloyds Banking Group in March, secured a £70 million capital expenditure loan at the same time and is moving more hotels into the four- and five-star categories.
In the year to the end of March, group turnover was up 5 per cent at £145.5m, delivering a 29 per cent increase in profit before exceptional items, to £4.2m.
Gordon Fraser, deputy chairman and finance director, said he preferred to concentrate on the operating profit figure.
He added: “Hotel sales increased over the year by 5 per cent with growth from both the leisure and commercial segments driven primarily by a 4 percentage point growth in occupancy. This combined with a higher conversion of our sales to profit through cost efficiencies resulted in a 7 per cent increase in hotel operating profit.”
During the year, the group invested more than £14m in capital projects that included refurbishments at the Macdonald Holyrood in Edinburgh, the Macdonald Forest Hills in the Trossachs and the Macdonald Highlands in Aviemore.
Fraser said the capital spend this year would at least equal that, while trading should be ahead after a good Christmas.
The firm also plans to repay some of its bank debts by selling a golf course in Hampshire, which has planning permission for 1,500 houses.
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