Profits at Jurys down 12% but outlook upbeat for the full year

HOTELS: Profits at Jurys Doyle Hotels fell 12 per cent to €28.8 million (£22.7 million) before tax in the six months to October 31st, 2001. The results were in line with market expectations for the period, which the company described as the most challenging the hotel and leisure sector has faced for many years.

Despite the combined effects of foot-and-mouth disease, the economic downturn and the terrorist attacks of September 11th, group turnover for the six-month period rose by 6 per cent over the corresponding period in 2000, to €137.9 million. Operating profit fell to €42.2 million, a fall of 2 per cent on the same period in 2000. Interest costs rose from €8.5 million to €11.8 million, which the company said reflected financing costs of recent investments. This, in turn, hit pre- tax profits, it said.

However, the group's 31 properties all made a profit during the period.

On a like-for-like basis, operating profit fell 11 per cent on the year-ago period - or €4.2 million - but this was offset by new openings, which contributed €1.2 million - or 3 per cent - and acquisitions, which added €2 million, or 5 per cent, to operating profits. Disposals added €300,000 to the operating profit.

"Our performance, which is ahead of some of our international peers, was achieved by maintaining strong occupancy levels, managing costs and utilising the strong cross-selling opportunities afforded by our central reservations office," said Mr Pat McCann, chief executive of Jurys Doyle.

The group's four- and five-star Dublin and Washington hotels were affected by the trading environment. Occupancies fell by 8 per cent in Dublin and 10 per cent in Washington. But Dublin occupancy rates were 5 per cent ahead of the 77 per cent industry average, while Washington was in line with market trends, according to Mr Paul MacQuillan, director of finance. Occupancy rates at the group's London hotels fell by 8 per cent, but profits were maintained, he said.

Average room rates in Dublin were up 3 per cent to €96, were unchanged in the US at $122 (€137), and down 3 per cent in London, to £74 sterling (€120). Including new openings, operating profits at the British hotels were up 21 per cent.

Mr McCann said the group would concentrate on developing operations within Britain, particularly with its inns concept.

Operating profits from its inns were up 22 per cent. Inns now delivered 26 per cent of turnover and 34 per cent of profits, said Mr MacQuillan. "The inns have proven to be extraordinarily resilient to all the events of the last eight to nine months," he said.

He said the group would introduce its own coffee brand as part of the opening of Jurys Inn in Croydon in London, reflecting the growing popularity of coffee houses in the high street.

Plans to expand into Poland were still on the agenda but had been delayed by the current trading environment, Mr McCann said.

Trading in November and December was in line with expectations, the company said. "Overall, we are cautiously optimistic for the trading environment for the rest of the year," said Mr McCann. "We're expecting growth but it will not be up to the dizzy heights of 2000."