Jurys poised for year of record profit

JURYS Hotel Group is poised for further strong growth following the healthy interim results announced yesterday and is looking at expansion in Northern Ireland, Britain and the Benelux countries.

The results show a 37 per cent rise in pre tax profit from £4.1 million to £5.7 million, in the six months to October 31st, 1995, broadly in line with the upper expectations.

Profits for the full year should rise from £6 million to more than £8 million. Trading for November and December showed a further improvement and Jurys predicted that the 12 months to next April should prove to be another record year.

Apart from core growth, there will be a contribution from the 143 bedroom, four star Cardiff hotel, purchased for £7 million in November. While financing of the purchase will result in higher interest costs, this will be more than offset by a contribution from the hotel, said Mr Barry Sheehan, director of finance & corporate affairs.

The group is continuing to look for acquisitions but none are imminent, according to managing director, Mr Peter Malone. It is in a strong position to expand by acquisition from its internal resource. Gearing was down to 4 per cent at the end of October and, after the acquisition of the Cardiff hotel, it is still at a low 11 per cent. The focus for expansion will continue to be Ireland, Britain and possibly the Benelux countries, he said, though the economies in continental Europe are "quiet fragile". The search, he added, will be on the main metropolitan areas.

Northern Ireland continues to be a possibility for a new inn but only if it works well. We are in it for profits, not for prestige. In Britain, Jurys is looking at possible expansion in Coventry, Manchester and Edinburgh.

With a market capitalisation of over £100 million, there is now more interest from British investors in Jurys as an investment, said Mr Sheehan. These now account for about 15 per cent of the total. There has also been increased interest from US investors, and Jurys intends to develop and widen the share base he added.

The latest group results show a 16.6 per cent rise in turnover from £21.4 million to £24.97 million. The profit margins improved from 19.4 per cent to 22.8 per cent. This, is partly due to the reduction in interest costs from £660,000 to £483,000, following the rights issue which raised £15 million. However, there was still good core growth from all its outlets and the shareholders are to benefit with an interim dividend of 2.3p net per share, a 12.5 per cent rise on last year. Earnings per share rose from 11.2p to 12.0p.

Trading was "very buoyant across the group, with occupancies in excess of the high levels achieved in the corresponding period last year", the group said. The new five star Towers hotel in Ballsbridge "performed very well", said Mr Malone.

While the growth in its hotels outside Dublin was a little lower, the performance was still described as very good. Galway "was exceptional", he observed.

Both the Bristol hotel and the Cork Inn, during the first full summer period of the group's ownership, produced strong contributions which exceeded expectations.

Jurys also opened a new theme bar Kavanaghs in its London hotel which has been successful.

Construction of the 234 bedroom inn at Custom House Quay near Dublin's IFSC is underway and will be completed, on schedule, next, September.

The shares yesterday fell 2p to 233p (12 month high 235p; low 156p) and are on a prospective price/earnings ratio of 13.2, assuming profits rise to £8.2 million for the whole year.