Hotels group to build third Manchester site and raises €94.4m in share placing

Irish hotels group Dalata unveiled plans today to open a new hotel in Manchester, and also raised €94.4m in a share placing

The group is already developing a £47m, 278-bedroom Maldron hotel in Manchester’s Charles Street and last December announced it had signed a deal to build a new Liverpool site in Park Lane, next to the Liverpool One retail centre.

Its Manchester Charles Street hotel was one of two Dalata-branded properties expected to open in the city, with a Clayton hotel already operating at Manchester Airport.

Now, the group has today announced plans for a third Manchester site, along with plans to develop a facility in Brighton.

The group revealed its development plans alongside results for the six months to June 30, which showed static turnover of €80.8m, and a pre-tax loss of €70.9m, compared with a pre-tax profit of €37.8m the previous year.

However, the group said it has a strong balance sheet which provides it with stability and opportunity.

Cash/available facilities increased by €13m from €162m in December 2019 to €175m in June 2020.

It also had cash of €110m and undrawn committed debt facilities of €111m at the end of August.

It enjoys an asset backed balance sheet with hotel assets of €1.2bn in prime locations.

Today it also announced plans for a share placing to raise more funds, representing up to approximately 19.9% of the company’s existing issued share capital.

This afternoon it announced that a total of 37,000,000 new ordinary shares were placed by J&E Davy and Joh. Berenberg, Gossler & Co, London branch at a price of €2.55 per placing share, raising gross proceeds of €94.4m.

All its hotels have reopened and are operating under the accredited Dalata Keep Safe Programme.

The group also said 2020 started positively with encouraging trading in January and February.

However, record low occupancies followed during the remainder of the six-month period due to the COVID-19 pandemic.

Chief executive, Pat McCann, said: “In over 50 years of working in this industry, I never previously had to close a hotel. The impact of the pandemic has been felt by all of the Dalata team since early March. However, I have been greatly heartened by the positive reaction of all of our people.”

“I remain excited about Dalata’s opportunities for growth.

“In 2014, we identified a unique opportunity to assemble a portfolio of outstanding hotel assets in the early stages of recovery following the global financial crisis.

“The impact of the current crisis is likely to present fresh opportunities for us in the coming year. I am very pleased that we have managed to secure opportunities to lease new hotels in prime areas of Brighton and Manchester.

“Since we reopened all of our hotels to the public we have launched new marketing campaigns targeting the domestic visitor in Ireland and the UK with a strong focus on value pricing.

“The introduction of the Dalata Keep Safe Programme across all hotels, comprising advanced sanitisation procedures, new technologies, and effective physical distancing measures, has been well received by our corporate and leisure guests, employees and suppliers.”