Current trading at the Jurys Doyle Hotel Group is ahead of last year and in line with expectations, chief executive Mr Pat McCann said when he announced a 70 per cent rise in pre-tax profits to €50.04 million for the year to end April. Turnover rose to €219 million from €106.2 million.
With some €120 million to spend, the group is planning further expansion, with the UK market the prime focus. But opportunities in the US and mainland Europe markets - emerging countries such as Poland and small chains in France or Germany will be considered.
Some 55 per cent of group profits came from outside the Irish market last year. It expects its profits breakdown to be about 40 per cent from the Republic and 60 per cent from other markets within the next year to 18 months.
The latest performance was enhanced by the merger in May 1999 of the Jurys and Doyle hotel operations. When the Doyle contribution is stripped out, underlying operating profits at Jurys were 20 per cent ahead at €37.3 million on turnover which was 15.8 per cent higher at €122.9 million. Operating margins improved to 30.3 per cent from 29.2 per cent.
The Doyle operation chipped in operating profits before goodwill of €26.8 million on a turnover of €96.1 million, producing operating margins of 27.25 per cent. The lower margins at the Doyle operation reduced the overall group operating margin to 29.2 per cent.
Cross selling, increasing occupancy rates at the Dublin Doyle hotels and better discount deals from increased scale as new supply contracts are renewed, should get margins up to 30 per cent and beyond over the next two to three years, according to finance director Mr Barry Sheehan.
With 20 hotels and nine inns in Ireland, Britain and the US, the group is expanding in the Greater London area. A new 240-bedroom inn in Croydon is planned at a cost of £15 million sterling, or £62,500 sterling per room. It is expected to be completed by late autumn 2001 and will bring the group's Britain's inns to five, with a target to expand to 10 to 12 UK inns within the next four years in the greater London area and other major commercial centres.
With earnings per share up 25.7 per cent to 68.3 cents, shareholders are to get a final dividend of 11.11 cents per share, to bring the total dividend for the year to 17.14 cents, an increase of 22.7 per cent.
Mr McCann attributed the strong results to the continued strength of the economies in its chosen markets.
Following the merger the immediate strategic priority was the streamlining and merging of core business functions, he said. The new group central reservations office and its new online Web booking site are seen as key elements in providing for future development.
The Irish market, where the group has 11 hotels and five inns, accounted for 60 per cent of sales and 45 per cent of operating profits. A strong economy and record tourist numbers brought hotel and inn occupation to record levels. Ongoing developments in the Irish market will include a modernisation of the Westbury and Berkeley Court hotels in Dublin. But further acquisitions are unlikely "unless there is an opportunity offering exceptional value", Mr Sheehan said.
The British market, where group has six hotels and four inns, accounted for 30 per cent of turnover and 43 per cent of operating profits, with the higher margin attributed to the lower proportion of food and drink sales in total revenue. The US market, where Jurys Washington Hotel was opened in March 1999, and where the group has three hotels, contributed 10 per cent of revenue and 12 per cent of profits. Jurys Doyle is interested in acquisitions around the Washington area and the eastern seaboard down to Boston.
With 5,454 rooms including the new Clifton Court and Great Russell Street hotels in the UK, the group quoted a revenue per available room for the year of £46.50 in the Republic, £49 sterling in the UK and $82 in the US. This measure of efficiency was up 7.5 per cent for Jurys in the Republic and 8 per cent for Jurys in the UK on a like-for-like basis, Mr Sheehan said.
