Hotel chain defies sector’s struggle as it reveals profit up 3% at £13.7m

MACDONALD Hotels hailed a 3 per cent rise in like-for-like profits despite facing pressure from inflation and carbon taxes last year.

The Bathgate-headquartered company said it faced rising costs from food, utility prices, wages and a £360,000 “tax” on energy consumption through the UK government’s carbon reduction commitment.

Yesterday’s figures, which account for the fact Macdonald had a longer accounting period the previous year, show that revenues for the 12 months to the end of March were up 2 per cent at £139.5m. Operating profit was £13.7m as the firm made savings by careful staff management and cutting its energy usage.

Chief executive David Guile said the firm had outperformed the wider British hotel industry. He revealed that current trading was 1 per cent up on a year ago, but conditions remained challenging due to pressures on consumer spending power.

“We have prepared ourselves for a challenging 2013 and beyond,” he said.

The group has successfully targeted the conferences and events market, in which it has gained market share, and is also feeling the benefits of a loyalty card scheme introduced two years ago.

It invested nearly £8m in refurbishments and other improvements last year and a further £35m since the year end, paid for from cash flow.

The firm is currently negotiating with Lloyds over a new arrangement for its £320m debt facilities. Guile said he would like the opportunity to buy more hotels but the company cannot secure further financing.