Britannia Hotels returns to profit

BRITANNIA Hotels, the Hale-based hotels group, has seen a return to profit as turnover increases and the benefits of its refurbishment programme are felt.

Pre-tax profit for the group, which employs around 1,400 staff, stood at £8.2m for the year to the end of March 2011 (2010: pre-tax loss of £6.4m), while the gross margin for the year equated to 56%, down slightly from last year.

“The additional competition from new hotels has again restricted the opportunity to increase average room rates in the short term. Nevertheless the programme of hotel refurbishment has enabled us to maintain turnover and improve profitability during the economic downturn,” finance director Robert Ferrari said in his report.

Turnover increased 6.1% to £55.4m (2010: £52.2m).

“This reflects the company’s successful approach in offering good value whilst improving levels of service and facilities in the hotels,” the report added.

Operating costs were reduced, as a recent programme of refurbishments meant repair costs were much lower.

Meanwhile, the treatment of onerous costs during the previous financial year (2010), coupled with The Britannia Country House and Britannia Wolverhampton becoming wholly owned subsidiaries within the group also helped reduce operating costs for 2011.

The company admitted the economic climate had place additional demands on the business, which has resulted in the need to maintain provision for onerous contracts relating to two hotels. It added it was also considering whether to write down the carrying value of other hotels.

Since the year end, the group has bought the Scarisbrick Hotel, on the main Lord Street promenade in Southport, from administrators.

It has picked up several assets from administration during the course of the recent property slump, including the Pontins holiday resort business and the 130-bed Russ Hill Hotel near Gatwick.

Britannia Hotels was founded in 1976 by current owner Alex Langsam after he bought the Britannia Country House hotel.