Jarvis Hotels, the leading UK business and leisure hotel group, today announces a 41.6% decline in profits before tax and exceptional items to £17.0m in the financial year to 30 March 2002. These results reflect the difficult trading background, especially through the second half of the financial year.
* Turnover reduced by 8.2% for the year as a whole, with commercial markets bearing the brunt of the decline, particularly in London and the South East.
* Profit before tax and exceptional items fell by 41.6% to £17.0m (2001: £29.1m), mainly caused by a drop in occupancy from 68.8% to 65.5%.
* Exceptional items include £0.7m for the accelerated write-off of web site development costs, £0.5m for uninsured claims and replacement premiums arising from the collapse of Independent Insurance, £0.45m issue costs in respect of bank facilities and a £0.6m profit arising on the sale of an hotel.
* Earnings per share before exceptional items fell by 57.1%, from 14.0p to 6.0p, partly reflecting the absence of last year’s release of prior year tax provisions as well as the drop in trading levels.
* In view of the Group’s strong asset base and balance sheet, and healthy cash flow, the Board has recommended a maintained final dividend of 3.8p, making the total 5.6p for the year, unchanged from 2001.
* Average room rate was only fractionally lower at £53.34 (2001: £53.38), reflecting an active marketing programme, and the decline in rooms revenue per available room (‘Revpar’) was held to 5% (£34.91 vs. £36.74).
* During the year, Jarvis completed the re-branding of 56 hotels under the Ramada International flag, after entering into a 20-year agreement with Marriott International Inc. All of these hotels are now actively marketed through Marriott’s powerful worldwide sales and marketing distribution network, MARSHA.
* A new division, Jarvis Hospitality Management (‘JHM’) was established to secure operating leases with limited capital involvement at prime locations throughout the UK. JHM has recently completed leases to operate two new hotels at Glasgow Airport, one under the Ramada flag, the other as the first UK franchise for the Travelodge brand, owned by Compass.
* During the year, major re-development projects were completed at the Ramada Guildford/Leatherhead, and the Ramada Chester hotels. Both these properties now trade in the four-star commercial and leisure markets. In addition, there were substantial refurbishment projects at Bristol, Ascot, Edinburgh and Watford.
* Five smaller properties that no longer fit the Jarvis brand are being marketed: two of these are under offer and one has been sold.
* The Group now operates 67 hotels throughout the UK, with some 6900 bedrooms, over 500 conference rooms and 32 health clubs.