News

High energy costs hurt Peel Hotels

09 October 2008 09:48:00

Higher energy costs helped bring about a sharp drop in pre-tax profits at Peel Hotels.

The company, which operates eight hotels in provincial towns such as Peterborough and Dunfermline, saw profit before tax in the half year to 24 August fall by 42% from the same period a year ago to £438,000.

Energy costs climbed by more than 50% to £300,000.

"The impact of the huge increase in the cost of energy affects almost everything to do with everyday business life and therefore our domestic market is being challenged and one would expect this to continue for a year or so," chairman Robert Peel said.

The company said revpar - the amount revenue it takes in for each hotel room - was holding up well. While turnover fell to £6,819,000 from £8,764,000, the bulk of this was accounted for by the sale of the Avon Gorge Hotel in Bristol.

"In spite of disappointing interim results our revpar is similar to the comparative period and if we can grow this in the full year we will be better able to absorb increased costs," Mr Peel said.

"Our overall debt level is low and we are in a good position to take advantage of any beneficial acquisition opportunities should they arise in the future."

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