News

Peel Hotels looks to expand after cutting debt

16 April 2008 10:43:00

Peel Hotels said today it was well placed to take advantage of weakness in the property market after disposals over the past year left it with minimal net debt.

Pre-tax profits jumped to £9.6m in the year to February 10, from £1.6m the previous year, after an exceptional profit of £8.1m from the sale the Avon Gorge Hotel in Bristol and a site in Bradford.

The company, which now has eight hotels in towns such as Newcastle and Nottingham, cut net debt to £40,000 from £15m.

Turnover fell by 4.8% to £15m due to the disposal of the Bristol hotel on 3 September, chairman Robert Peel told ShareCast, adding that the sales left the company in a strong position to expand.

"We don't have any debt now, so we're in a better position than most to enter the property market," he said.

"Hopefully things are going to be a bit soggy in the next six-to-nine months and we can make some purchases. There's already some signs of weakness, not so much with hotels, but with flat developments in provincial cities and these could be converted into hotels."

While the property market was showing signs of weakness, the company had not been hit by reduced consumer spending, Peel said.

"As far as we're concerned, it's business as usual with no downturn in discretionary spend, so we think we'll grow our profits this year," he added.

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