Profits at Hastings Hotels hit by rising overheads and declining business

PROFITS HAVE fallen sharply at Hastings Hotels, one of Northern Ireland’s largest hotel groups and part-owner of Dublin’s five-star Merrion Hotel.

Financial results for the group, whose portfolio includes the landmark Europa Hotel in Belfast and the luxury Culloden Hotel on the outskirts of Belfast, show pre-tax profits slumped by 64 per cent in the 12 months to the end of October last.

Financial director Edward Carson said rising overheads, including energy costs, and a decline in corporate and government business, hit revenue, which fell to €28.5 million (€36 million) from £30.5 million a year earlier.

That fed through to a drop in pretax profits, which are reported at £742,019 last year, down from £2,052,353 in 2010, according to the accounts for the Hastings group.

Profits had already fallen by a quarter in 2010.

“Thankfully,” said Mr Carson, “2012 is looking much stronger, with visitor numbers to Northern Ireland up and improved bedroom occupancy.”

Although the group’s performance overall deteriorated, the value of its net assets improved marginally last year.

The accounts state that its net assets were valued at £28,918,701 in 2011, compared with £28,647,505 in the previous year.

Hastings operates six upmarket hotels across Northern Ireland, including the Europa in Belfast and the Everglades in Derry.

The current open market value of these properties is estimated to be in the region of £43.4 million.

Hastings is a major employer in the North, with 1,063 full- and part-time workers, and its annual staff costs run to more than £10.3 million.

Mr Carson said the group had continued to upgrade its hotels despite the downturn and had retained all staff.

The group also has a joint venture interest outside of the North in Landmark Investment Limited a property holding company that operates the five-star Merrion Hotel in Dublin.

Hastings’ financial statements for 2011 show it incurred a share of pre-tax losses in relation to Landmark Investment Limited of £213,295.

The accounts also contain details of unsecured joint venture loans to Landmark Investment Company of £9,126,618.

One significant development highlighted in its latest financial statement by the Hastings Group is that Landmark Investment Ltd last December exercised its right to buy the freehold interest in the Merrion Hotel.

According to the accounts, the purchase was financed by a loan provided by AIB of €35,294,891.