Fall from Grace clips Peel's profits

07 October 2004
Fall from Grace clips Peel's profits

Independent hotel company Peel Hotels today reported a 14.1% fall in half-year pre-tax profits, partly because of a decline in income from management contracts.

In 1999 the company took over the management of 29 former Thistle Hotels on behalf of the Grace Hotels chain.

But as these have gradually been sold off the income from them has diminished, and the contract will end as soon as the last ones are sold.

The final four were put on the market by owner Lehman Brothers, the investment bank, in June.

In the six months to 29 August income from Peel's management contracts fell to £149,789, compared with £291,417 at the same point last year.

However, turnover as a whole rose by 4.7% to £6.8m, up from £6.5m. Turnover from Peel's six owned hotels was up by 7.2%, to £6.2m.

Revenue per available room was ahead by a healthy 9.3%, added chairman Robert Peel.

Overall, pre-tax profits at the group fell to £776,467, against £903,956 last time around.

Peel stressed the decline in management contract income had been expected.

"The company exceeded its budget in the period and it is pleasing to report total sales in the six owned hotels, excluding management contract income, grew by 7.2% and accommodation revenue per available room increased 9.3%, with average room rate up by 4.5% and occupancy up by 4.6%," he said.

During the six-month period, £491,794 was spent on the company's hotels, the majority of it on doubling the size of the Billabong Bar at the 89-bedroom Caledonian Hotel in Newcastle.

Three bedrooms were redeveloped at the Midland Hotel in Bradford and £150,094 was spent at the Avon Gorge Hotel in Bristol.

One disappointment was the fact that the company had been refused planning permission to build 24 new bedrooms and a leisure complex at the Caledonian, said Peel.

by Nic Paton

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