Leisure company G1 Group has hailed the results of a major revamp of Edinburgh’s Scotsman Hotel and flagged further acquisitions after pointing to “significant increases” in turnover and underlying profits.
The Glasgow-based group, which owns venues across the country including the Ghillie Dhu bar and Cabaret Voltaire nightclub in the capital, said the hotel sector had proved robust in the face of an increase in the supply of rooms and the “encroachment of AirBnB”.
It noted that the investment programme at the Scotsman Hotel, which the group acquired in 2017, had resulted in “excellent customer feedback” and industry awards. The overhaul at the iconic North Bridge hotel – the former home of The Scotsman newspaper – has led to new event facilities, as well as the creation of the Grand Cafe.
Chairman Brian McGhee said: “The refurbishment programme for the Scotsman Hotel has gone really well, with excellent customer feedback, and has also created some very attractive event spaces which are in strong demand.
“Alongside that, the group has created the spectacular surroundings of the Grand Cafe, which has been much admired, and very recently total renovation of the boutique Scotsman cinema. Perhaps no surprise that the hotel has received various accolades.”
Despite a solid financial outcome for the year, G1 warned of the impact of Brexit on investment plans and consumer behaviour. “The leisure and hospitality sector is not unaffected,” the group said. “There have been high-profile casualties – especially in casual dining, where highly leveraged, leasehold chains have suffered in particular.”
At £132.2 million, turnover increased by more than 5 per cent against the prior year, largely through organic growth.
This generated earnings before interest, tax, depreciation and amortisation (Ebitda) of £22.5m, up by more than 8 per cent on the year before, with growth noted across all areas of the business.
The group said it had been working to fully integrate the 101 convenience store chain acquired in the previous year.
“Investment in the people infrastructure of the 101 business, linked to restructuring of the supply chain, has allowed the business to look to broadening its base in Scotland, with the first 101 store in Edinburgh opening later in the year,” it added.
G1 said the most significant acquisition in the year was a group of apartments at George IV Bridge in Edinburgh, as an initial move into the serviced apartment sector, with “further projects underway”.
McGhee said: “As in 2017/2018, it is reassuring to see continued solid growth at G1 with significant increases in turnover, operating profit and Ebitda. Despite the challenges from rises in labour, rates and utility costs, a combination of targeted investment and careful management has enabled G1 to achieve strong results.
“The group has continued its solid progress in the 2019/2020 year, and is well positioned to look at further acquisitions which fit with the strategic footprint.”
The Murrayfield Hotel is among G1’s other assets.