Profit surges 45% to £4m at hotelier

THE Ryan Hotel Group has reported a 45 per cent rise in pre-tax profits to £4.04 million last year and expects further strong growth in 1997. Reporting buoyancy in commercial and tourist business throughout the group in 1996, the chairman, Mr Conor McCarthy, indicated that the strong trend was continuing in the current year.

"We are very encouraged with the pattern of bookings so far, which is running well ahead of last year.

Mr McCarthy also announced that he was stepping down as chief executive of the group, but would remain on as non-executive chairman, while the group's director of finance and marketing, Mr Patrick Coyle, would take over as chief executive.

Following the group's good performance in 1996, the board has recommended a 25 per cent increase in the final dividend paid to shareholders to 1.25p per share.

Earnings per share grew by 43 per cent over the year, from 3.61p to 5.25p.

The group's continental European and Irish hotels all contributed to the growth in profits, according to Mr Coyle. Its Dublin hotels the Gresham and the Royal Marine recorded particularly strong growth in new commercial business, with rising demand for its meeting rooms and conference facilities.

The new leisure centre at the Galway Ryan also attracted substantial new business and allowed the group to replace lower margin business with higher yielding packages.

Last year, Ryan spent around £8 million in a refurbishment programme, which included the extension of the Gresham and the Galway Ryan and a complete upgrade of its Killarney hotel.

The second phase of its development plan in the current year would include the addition of another 100 bedrooms at the Gresham plus a multi-storey car park, as well as further refurbishment of its Galway hotel and would cost another £8 million, financed through its internal cash resources and bank borrowings, Mr Coyle said.

Business at its hotels in Germany, Belgium and the Netherlands also performed strongly, with a particularly strong performance from its Memphis hotel in Amsterdam.

The full year figures, issued yesterday, show a relatively modest rise in turnover despite the strong upsurge in profits, with turnover up 4 per cent to £27.3 million last year. Mr Coyle said the overall percentage rise in turnover reported failed to fully reflect the actual rise in the group's sales, particularly as earnings from its European hotels were sharply reduced when translated into the Irish currency.

Ryan also achieved higher operating margins on its business activities, increasing from 16 per cent in 1995 to 22 per cent last year.

Ryan also achieved higher operating margins on its business activities, increasing from 16 per cent in 1995 to 22 per cent last year.

Room occupancy remained steady at 75 per cent throughout last year, while the average room rate went up from £53 a night to £58.

Despite the refurbishment programme, the group's debt was reduced to £2.5 million, with net debt, exclusive of its various leasing obligations, ending the year at 34 per cent of shareholders' funds.