Queens Moat struggles to profit

MAGNUS GRIMOND

Queens Moat Houses, the hugely-indebted hotel group, continues to struggle towards recovery, returning to the black last year for the first time since 1990. But Stanley Metcalfe, chairman, presented a decidedly cautious view of the future as he announced the results yesterday.

"At this early stage in the current year, I can report that trading has been satisfactory," he said. Economic growth was a major factor in the company's revenue growth, and while he was "cautiously optimistic about the trading environment for the UK in 1996," prospects for growth in Germany and France were not good, particularly against a background of intense competition.

Pre-tax profits of pounds 42.4m in the year to December replaced a deficit of pounds 95.2m last time, but the group still faces a mountain of debt and would have been in loss but for pounds 48.8m of interest waived under last year's pounds 1.3bn capital restructuring. Borrowings stood at pounds 1.02bn at the end of December, down from pounds 1.28bn the previous year.

The group made another small inroad into that yesterday when it was announced that Stakis, the Scottish hotels and casinos group had paid pounds 3.4m for the Europa, near Newcastle-upon-Tyne. The hotel, to be known as the Stakis Tyneside in future, brings to three the number of Queens Moat's County hotels sold since the beginning of the year, following the disposal of eight in 1995.

These country-house hotels are deemed not to fit into the group's core Moat House brand, situated on main arterial routes within or on the edge of towns, and a further 27 have been earmarked for sale in the future.

The news left the shares unchanged at 22p yesterday - although they have soared since being re-listed at 3p last May after being suspended for more than two years.

Mr Metcalfe said that the further improvement in the group's trading performance anticipated at the half year results in September was evident in the full year figures. Operating profits rose from pounds 35.2m to pounds 44.7m. After adjusting for the effects of the restructuring - principally higher operating rentals - the underlying increase was 54 per cent.

Andrew Coppel, chief executive, said trading conditions had continued to improve in the UK, although there was stronger activity in the south of England than in the north.

Occupancy rates improved 4.7 percentage points to 66.8 per cent, still some way short of the market average of 71 or 72 per cent, but average room rates grew pounds 1.29 to pounds 42.29. That meant the rise in the yield -occupancy multiplied by average room rate - was ahead of the market, Mr Coppel said. In the Moat House division, yields were nearly 12 per cent up, but still below market levels.

The figures were boosted by a pounds 25.1m profit on asset sales and pounds 3.4m taken to the profit and loss account from the revaluation of the group's hotels.

This review, which was carried out by Jones Lang Wootton, showed the properties had fallen to pounds 891m at the year end, but stripping out disposals made in 1994, the portfolio increased from pounds 838m.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Adviser - OTE £24,500

£22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...

Recruitment Genius: Business Development Executive / Sales - OTE £40,000

£18000 - £40000 per annum: Recruitment Genius: This fast growing Insurance Bro...

Guru Careers: Research Associate / Asset Management Research Analyst

£40 - 45k (DOE) + Benefits: Guru Careers: A Research Associate / Research Anal...

The Green Recruitment Company: Graduate Energy Analyst

£20000 Per Annum: The Green Recruitment Company: Summary: The Green Recruitm...

Day In a Page

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

Our choice is years of Tory rule under Corbyn or a return to a Labour government

Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'
Singapore's domestic workers routinely exploited and often abused in the service of rich nationals

Singapore's hidden secret of domestic worker abuse

David Cameron was shown the country's shiniest veneer on his tour. What he didn't see was the army of foreign women who are routinely exploited and often abused in the service of rich nationals
Showdown by Shirley Jackson: A previously unpublished short story from the queen of American Gothic

Showdown, by Shirley Jackson

A previously unpublished short story from the queen of American Gothic
10 best DSLRs

Be sharp! 10 best DSLRs

Up your photography game with a versatile, powerful machine
Solved after 200 years: the mysterious deaths of 3,000 soldiers from Napoleon's army

Solved after 200 years

The mysterious deaths of 3,000 soldiers from Napoleon's army
Every regional power has betrayed the Kurds so Turkish bombing is no surprise

Robert Fisk on the Turkey conflict

Every regional power has betrayed the Kurds so Turkish bombing is no surprise
Investigation into wreck of unidentified submarine found off the coast of Sweden

Sunken sub

Investigation underway into wreck of an unidentified submarine found off the coast of Sweden
Instagram and Facebook have 'totally changed' the way people buy clothes

Age of the selfie

Instagram and Facebook have 'totally changed' the way people buy clothes
Not so square: How BBC's Bloomsbury saga is sexing up the period drama

Not so square

How Virginia Woolf saga is sexing up the BBC period drama
Rio Olympics 2016: The seven teenagers still carrying a torch for our Games hopes

Still carrying the torch

The seven teenagers given our Olympic hopes
The West likes to think that 'civilisation' will defeat Isis, but history suggests otherwise

The West likes to think that 'civilisation' will defeat Isis...

...but history suggests otherwise
The bald truth: How one author's thinning hair made him a Wayne Rooney sympathiser

The bald truth

How thinning hair made me a Wayne Rooney sympathiser
Froome wins second Tour de France after triumphant ride into Paris with Team Sky

Tour de France 2015

Froome rides into Paris to win historic second Tour
Fifteen years ago, Concorde crashed, and a dream died. Today, the desire to travel faster than the speed of sound is growing once again

A new beginning for supersonic flight?

Concorde's successors are in the works 15 years on from the Paris crash