FBD Hotels and Resorts reports profit of €7.2m for 2016
Company announces another joint venture with homebuilder Taylor Wimpey
The La Cala resort, situated on 1,000 acres of the Costa del Sol in Spain
Irish hotel group FBD Hotels and Resorts has reported a 14 per cent increase in pre-tax profit to €7.2 million for 2016.
Speaking to The Irish Times, the company’s chief executive David Kelly recounted a positive year for the group with revenue exceeding €55 million.
The hotels group also announced another joint venture with British homebuilder Taylor Wimpey, which will see construction of a further 280 units at the Irish-owned 1,000-acre golf resort La Cala.
Taylor Wimpey and FBD Hotels and Resorts have already either completed construction on or agreed to build 378 units at the La Cala resort.
The development announced on Wednesday will see 90 plots entirely owned by FBD Hotels and Resorts, with the remainder being owned 50/50 by the two partners in the project. It is estimated that the gross sales value of the agreement is €100 million.
“We’re seeing the outlook for Spain in the medium term as being very strong. Both our hotels in Spain had occupancy last year in the mid 80 [per cent range]. We’re seeing now that rate increases are possible,” Mr Kelly said.
In addition to the strong performance of the group’s Spanish resort, its Irish hotels have performed well.
Investment is under way in its Irish operations, with a €7 million 46-bed extension due to be opened in December this year.
Asked about expansion in Ireland, Mr Kelly said it was something the company was considering. However, prices in Dublin were starting to push too far upwards. “We’re small in the overall scheme, and anything that comes up we think, especially around Dublin, the price has gone too spicy for anything decent.
“We looked at something like Mount Wolseley [in Carlow] but it just didn’t stack up for us,” said Mr Kelly.
While suggesting that the outlook for the group was positive, Mr Kelly said that Brexit was having a tangible effect.
“We’re seeing the booking pattern for UK customers for golf in La Cala is much later. They’re making later decisions, so it’s harder to predict what’s going to happen.”
The group chief executive also noted that the Dublin market was starting to temper off a little, although demand still outstripped supply.
“Certainly for Dublin there is concern that tourist numbers are down. The concern for us is Northern Irish tourists.”
FBD Hotels and Resorts is fully owned by Farmers Business Development after the group bought out the 50 per cent stake held by FBD insurance in 2015. The hotels business accounts for around 47 per cent of the holding company’s net assets.
Farmer Business Development still has a shareholding of around 24.6 per cent in FBD Insurance.