Jurys Doyle results disappoint market as profits decline

Shares in Jurys Doyle took heavy punishment yesterday after the hotel group posted disappointing 2003 results and said it was cautious about trade in 2004.

Higher costs and currency pressures combined last year to eat into the company's operating profits, which fell back by 23 per cent to €56 million.

While almost €2 million of the €16.5 million decline reflected loss of revenue from hotels sold over the year, some €8.4 million was blamed principally on lower returns from Irish hotel operations.

Foreign exchange pressures accounted for €5.2 million of the fall, although this impact was reduced to €920,000 at the pre-tax line when hedging and interest savings kicked in.

Pre-tax profits of €45.8 million marked a 13 per cent decline on the previous year, while turnover fell by 5 per cent to €253.8 million.

The fall in sales was entirely due to currency movements, with Jurys reporting a 1 per cent rise in turnover on a constant-currency measure.

The company described the performance as "satisfactory" against a challenging backdrop.

The market was less convinced however, with shares in the company dipping as low as €9.15, down 15 per cent, in early trade before recovering to finish €10.15, still down 65 cents.

Jurys chief executive Mr Pat McCann said the company's main financial focus would be on achieving a better yield from its growing business.

He said UK and US operations had been performing well this year but he was cautious on the Republic, where room rates did not grow sufficiently fast to compensate for rising costs in 2003.

"Ireland is still not over the little curve," said Mr McCann. "We have been too optimistic before and have been disappointed."

The company is nonetheless taking an extremely bullish stance on expansion, with six new Jurys Inns under development in the Republic and Britain, and one hotel being built in Boston. It said that it was investing €28.5 million in a new inn for Nottingham for late 2005.

"Opportunity is there in spades," said Mr McCann of the UK market, as he reeled off a list of about 15 English towns - including Cambridge, Reading and Plymouth - that could support an inn.

Jurys drew 55 per cent of its operating profits and 41 per cent of its turnover from the UK last year. This compares with 49 per cent of profits and 39 per cent of turnover from the UK in 2002.

Mr McCann said the company's exit from the three-star market was almost complete following the sale of its Limerick hotel earlier this month. A three-star property in Glasgow is also thought to have been marked for disposal.