Macdonald Hotels has said it expects to report a 12% jump in earnings this year after wiping out nearly £700 million of net bank debt.
The group – whose luxury hotels include Norwood Hall, in Aberdeen, Drumossie, in Inverness, and Pittodrie House, near Inverurie – also reported a return to the black.
Reporting figures for the year to September 29 2022, for which it has just lodged accounts at Companies House, the company said it had made a strong post-Covid recovery.
Pre-tax profits for the 2020-21 trading year came in at £44.5 million, compared with losses of £15.2m a year earlier.
Macdonald’s recovery gathered momentum as Covid restrictions eased
Macdonald reported operating profits of £3.3m for the latest period, against losses of £12.2m in the previous year. Turnover for 2021-22 totalled £121.9m, up from £66.8m previously.
Staff numbers swelled to 2,482, on average last year, from 1,817 in 2020-21.
The firm said the results reflected a “challenging” first half of the year, due to Covid restrictions imposed in December 2021, wiping out the important Christmas period.
These restrictions continued into both January and February 2022.
Chief Financial Officer Hugh Gillies said: “This contrasted with strong staycation demand throughout the summer of 2022 and the welcome return of corporate business, a market which has continued to strengthen in the current financial year.”
Macdonald hailed its performance on net bank debt reduction, saying it had successfully slashed the total to £32m from a peak of £700m.
The 2021-22 results included a boost from the sale of the group’s Holyrood and Manchester hotels, in November 2021, which reduced bank debt by £98m and generated a balance sheet gain of £46m.
The February 2023 sale of Ansty Hall hotel in the Midlands realised a further £8m.
The group has never been in a stronger financial position.”
Hugh Gillies, Macdonald Hotels
This was closely followed by Macdonald securing a new five-year banking facility of £51.3m, with Royal Bank of Scotland and Barclays.
The company said proceeds from the sale of non-core assets were being reinvested in the portfolio.
Mr Gillies added: “The group has never been in a stronger financial position, which gives us the platform to continue our strategy of selective non-core asset disposals, such as Ansty Hall, to provide funds for investing in our core assets without the need to increase debt.
“Despite continued cost pressures, particularly across payroll, food and utilities, the period to September 2023 is expected to see Ebitda (earnings before interest, taxes, depreciation, and amortisation) further improve, increasing by 12% on a like-for-like basis, achieved predominately through improved sales across our hotels and resorts.”
What other hotels does Macdonald have in its portfolio?
Bathgate-based Macdonald is one of the UK’s largest independent hotel groups. Its portfolio boasts many operations in the Highlands.
These include Aviemore Resort, comprising Morlich Hotel, Aviemore Hotel, Highlands Hotel and woodland lodges.
Macdonald’s Spey Valley Resort, in Aviemore, Lochanhully Resort, in Carrbridge, and Ness Side Estate, near Inverness, all offer self-catering accommodation.
The hotel chain is majority-owned by Donald Macdonald and his family.
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