Profits slump at Peel Hotels
PEEL HOTELS, the owner of two Yorkshire hotels, has blamed the soaring cost of energy for a drop in profits of more than 40%.
The group owns the Midland in Bradford and the Golden Lion in Leeds and is run by former Thistle Hotels chief executive Robert Peel.
Work is underway to upgrade 26 bedrooms at the Midland and to renovate the outside of the building.
Mr Peel said: “The impact of the huge increase in the cost of energy affects almost everything to do with everyday business life and therefore our domestic market is being challenged and one would expect this to continue for a year or so.”
Pre-tax profits slumped to £437,832 for the 28 weeks ended August 24, down from £755,226 the previous year. Profit after tax down was 7.9% to £521,430 from £566,420.
Turnover decreased by 22.2% to £6.81m, of which £1.75m was in respect of the Avon Gorge Hotel which was sold in August 2007 for £15.5m.
Mr Peel added: “In spite of disappointing interim results our revpar (revenue per available room) is similar to the comparative period and if we can grow this in the full year we will be better able to absorb increased costs. Our overall debt level is low and we are in a good position to take advantage of any beneficial acquisition opportunities should they arise in the future.”
The decrease in like for like sales from the AIM-listed group’s hotels over the period was 2.6% with overall costs increasing by 2.7%.
The group, which has eight hotels in its portfolio, said its resilts were impacted by combined losses at the Strathdon in Nottingham and the King Malcolm in Dunfermline of £165,826.
Energy costs increased to £300,410 from £197,586 and food and drink margins were increased through factors including the high cost of energy and currency fluctuation and Mr Peel said it was not feasible to pass these increases on to its guests.
Peel Hotels has maintained its interim dividend at 2p per share.
