Directors at North East hospitality company Cairn Group have said they are pleased with its performance despite seeing turnover and profits fall amid the impacts of inflation.
The Newcastle-based business was launched to buy and develop a diverse portfolio of leisure properties across the North and beyond, and aims to reinvest profits so as to maintain and improve standards across the properties.
The group now owns some 25 hotels, including the Holiday Inn in Jesmond, Hotel Mercure in Darlington, Newcastle’s Royal Station Hotel, Redworth Hall and Spa near Newton Aycliffe and the Hilton Doubletree near Newcastle Airport. It also owns 10 bars and restaurants including the River Bar in Washington, Jalou and Tickets Cocktail Bar in Newcastle, plus Spy Bar, Sohe and 97 & Social in Jesmond.
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Accounts for the firm covering the year ended April 30 2024 have now been published and show turnover fell from £131.6m to £128.1m, while operating profits fell from £15m to £2.4m, which the firm partly put down to the sale of two hotels in the South.
In a report within the accounts, director Aran Handa said: “EBITDA (earnings before interest, taxes, depreciation and amortisation) reduced primarily due to the sale of two hotels in the previous year, and a material increase in utility costs. Overall, the directors are pleased with the results for the year and would like to take this opportunity to thank all the employees of the group for their dedication and hard work.
“While suffering an accounting loss, due to EBITDA containing repair costs – then accounting for depreciation and amortisation, one-off costs, and the interest cost of debt – this was expected and included in the group’s plans for 2024 and some future years as the business invests in securing its longer-term success.
“The primary focus of the group is to ensure long-term shareholder value is achieved. Following this strategy, profits are reinvested into long-term assets. That includes capital improvement, and repair and refurbishment programmes for all trade-related properties, and investments in joint ventures and other strategic partnerships.
“While a property’s turnover and EBITDA is reduced during both the period of refurbishment and during the initial period of relaunch, (which together can span more than one financial year), such investments yield medium and long-term value. Further, the directors continue to look for new properties which will fit into their existing portfolio.
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“Following Covid, the opportunity was taken to holistically reconsider business models at every hospitality venue, and initiatives and programmes were implemented to deliver value for guests against a more efficient cost base. However, the group continues to trade in a challenging and changing market principally due to both global and 海角视频-specific economic uncertainties.
“Specifically, the impact of inflation on the group’s key costs – including wages, food and beverage purchases, and utilities – has been material to the results and this has continued to be the case to date.”