Jurys look to further strong profit growth
JURYS Hotel Group should announce continued strong profit growth next Thursday. Pre-tax profit should have risen by one-third from £4.1 million to around £5.5 million in the six months to October 31st 1995.
The group will have had the benefit from the Unicorn Hotel in Bristol which was acquired for £6 million sterling toward the end of 1994.
Also, benefits in the form of lower interest costs following the rights issue which raised £15 million in June would have started to flow through to the figures, but this would only have been marginal.
However, excluding these pluses, the group will show real underlying growth.
This will be in keeping with that experienced by others in the hotel business.
Shareholders at Jurys' annual general meeting last August were told that profits in the first four months were ahead of the previous year's record-breaking performance.
All five Irish hotels and the three inns were performing strongly.
Industry figures showed that growth was in double figures in 1995 in nearly all markets with visitor numbers increasing by 14 per cent to 4.2 million.
The ceasefires have improved the environment for the industry.
Jurys' Bristol hotel has "performed very well", the Jurys Kensington Hotel should have had reasonable results and the group also has a hotel in Glasgow.
The main Ballsbridge hotel has experienced buoyant trading conditions.
And the adjacent Towers, operating at the more expensive end of the market is understood to have performed strongly.
Jurys should also perform strongly this year. Indications are very positive.
Hotel managers, in general, are reporting summer 1996 bookings as strong or even better than a year earlier.
Jurys' position is unlikely to be any different.
The number of tourists from Britain is forecast to grow by 15 per cent this year. An increase of some 10 per cent is projected from mainland Europe and the North American market is forecast to grow by 12 per cent. This points to continued strong growth by Jurys for its year which ends on April 30th.
In the second six months - November to April - it will also have the benefits from the proceeds of the rights issue for a whole six months.
It will also have a contribution from the Cardiff International Hotel. a 143-bedroom, four-star hotel in Wales, purchased for £17 million last November.
The consideration represented £49,000 a bedroom and the hotel is said to hold "significant potential".
As group managing director, Mr Peter Malone put it at the time of the acquisition, the city is "enjoying superior economic growth and is attracting strong inward investment, particularly in the service industry
The takeover was funded from internal sources and the hotel has been renamed the Jurys Cardiff Hotel.
The group now looks poised to push profit from £6 million to around £8 million for the full year. Dividend payments will also continue to increase.
However, the growth in these payments has lagged earnings and cash flow growth. This is reflected in the rise in dividend cover from 1.5 in 1992/93 to 2.8 in 1994/ 95. Shareholders will be interested to see if this conservative policy will continue.
As the graph shows, the market has been anticipating strong profit growth. The share price has grown by over 45 per cent over the past 12 months.