Macdonald Hotels has announced its results for year ended 28 March 2013 and confirmed a new 5 year banking facility totaling £299m with Lloyds Banking Group.  As part of the refinancing the Executives now own 100% of the share capital. 

Group turnover of £138.6m resulted in an increase in operating profit to £14.9m (£13.8m) an increase of 7%. Group profit increased to £3.3m (£1.9m) a 69% uplift before exceptional items which consisted of £4.3m in exceptional bank charges and asset impairment charges of £5.2m reducing profit from £3.3m to a £6.1m loss. The hotel group was also recently awarded AA Hotel Group of the Year (for the second time in 5 years),

David Guile, chief executive, said:

"Having reported last year an increase in both like for like hotel and resort sales and profit (which excludes residential trading), I have to give credit to our loyal and hard-working staff that I am able to report the same again for the year to 28 March 2013 with a 5% increase in hotel and resort operating profit to £14.7m from a marginal increase in turnover to £138.6m, the latter reflecting an increase in both commercial and conference sales. The result was rate driven by an increase in our average room rate of 4% combined with cost efficiencies resulting in a higher conversion of our sales to profit.

"Our results have been underpinned by our continued commitment to enhancing the quality of our service to our customers and the quality of our product which have once again been recognised with the award of the AA Hotel Group of the Year 2013/14."

"During the year we invested a further £8.7m in capital projects, largely focused on selected bedroom refurbishments across the hotel portfolio including at the Macdonald Randolph Hotel, Oxford and the Macdonald Rusacks Hotel, St Andrews.  In addition, new spa treatment rooms were added at the Macdonald Hill Valley Hotel and Spa, Shropshire and the public areas at the Macdonald Tickled Trout Hotel, Preston were extensively redeveloped. 

"There was also a significant investment in energy saving initiatives in support of our Room 15 environmental policy. We were recently presented with The Green Apple Award for 2013 by the Green Organisation adding to the award in 2012/13 of the AA Eco Hotel Group of the Year.

"The increased operating profit on last year has mainly been achieved from those hotels in which we have recently invested, such as the Macdonald Inchyra Hotel and Spa near Falkirk, as well as from the 5 star Macdonald Randolph Hotel and the Macdonald Aviemore Resort which is going from strength to strength and which will be the subject of a £5m investment program in the year ahead".  The Aviemore Resort achieved a profit before tax of £0.6m compared to a loss of £0.2m in the previous year from turnover of £9.5m up 8% reflecting growth in both the leisure and conference segments".

Commenting on hotels' current trading David Guile, said:

"We have achieved continued sales and profit growth of 5% and 7% respectively this financial year to March 2014, driven primarily by a 4 percentage point growth in occupancy.  The commercial and leisure segments continue to grow, however the conference market is still inconsistent.

"We have invested over £13m in capital projects, including further bedroom refurbishments at the Macdonald Holyrood Hotel, Edinburgh, Macdonald Forest Hills Hotel, Stirling and the Macdonald Marine Hotel, North Berwick and the Macdonald Highlands Hotel, Aviemore and selected public area refurbishments including the new Rocca restaurant and bar at the Macdonald Holyrood Hotel, Edinburgh as well as the building of a new clubhouse at a cost of £1m at the Macdonald Spey Valley Championship Golf Course in Aviemore.  We also continue to invest in our IT systems, particularly our website and revenue management systems and we have made a £1m investment commitment over a 3 year period enabling us to offer free WiFi to all of our customers powered by The Cloud, a BSkyB company". 

Gordon Fraser, group finance director, said:

"The securing of the new 5 year banking facilities marks another significant milestone for Macdonald Hotels which provides greater financial stability for the Group and enables further revenue enhancing capital investment in the estate.

"We have also just completed the sale and leaseback of the Macdonald Randolph Hotel in Oxford which we will continue to operate under a 60 year lease with a tenant's only break at 35 years which creates additional value for us, as part of our debt reduction strategy.

"For the past 5 years the Group has been working on a planning application for 1,400 houses on a 200 acre Brownfield site in Hampshire.  Planning permission has now been granted subject, however to the outcome of a judicial review raised by a local action group.  This development will realise cash in excess of £55m which will be used to further reduce our debt.

"Although it is our plan to reduce our debt further over the next few years the new banking facilities allow for capital expenditure of over £70m over the 5 year term.

"The trading results for the year to 28 March 2013 represent another strong financial performance from the Group with £17m of cash generated from operating activities after interest payments giving us the headroom to further invest in our business. This performance has been bettered in the financial year to March 2014.

"We have tremendous latent investment potential within our existing estate and we look forward to realising this over the term of the new banking facility and beyond.  The business in its 24 year history has never been better placed in terms of its people, its product and its financial strength giving the Group the ideal platform for a successful future".