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A national hotel chain based in the North East has issued cautious guidance for the year ahead despite rising turnover and profits.

Newcastle’s Cairn Group - which is registered at Companies House as The Station Hotel (Newcastle) - reported turnover increasing from £93.9m to £96.5m in the year ending April 30, 2019. Operating profit, meanwhile, was up from £5.1m a year earlier to £7.7m.

The firm’s accounts note, however, that Ebitda fell 15% to £13.7m, and cite a number of rising costs which the company said it was not able to pass on entirely to customers.

The company also highlighted the effect of uncertainty in the economy, and reported that directors “do not expect to report any significant increases in both group turnover and Ebitda in 2020” as refurbishments continue on two of its key properties.

But it said it expected “results to be significantly enhanced in future years” as two key refurbishment project are completed.

In the accounts, company director Aran Handa says: “The year was challenging, with significant pressure on both sales and purchase pricing in the market.

“Pressure on key costs (including wages, food and beverage purchasing, and utilities) was significant, and could not always be passed on to customers. Further, investment into two significant flagship assets began in the period and continued post year end. Other works were also ongoing in the same period.

“Strategic analysis of the business and the expectation of the coming years gave rise to the directors drawing updated conclusions on the residual values and useful economic life of recent significant refurbishments and re-branding projects. On average, both residual value and useful economic life is expected to be greater than per previous assessments.”