Good growth in tourist and business customers across the Ryan Hotels group delivered a 37 per cent rise in pre-tax profits in the first half of 1998 to £2.6 million, up from £1.9 million in the same period last year. Announcing the record six-month out-turn yesterday, Ryan chief executive, Mr Patrick Coyle, warned against complacency in the tourist sector, calling for urgent funding for Bord Failte to market Ireland internationally.
Such an initiative is now a priority to ensure that the extra capacity within the Irish hotel sector can be met in the future, he warned. "Action is urgently needed to fill capacity. It is imperative that Bord Failte get appropriate funding to market Ireland abroad." The group would support the proposed 5 per cent tourist departure tax as a "very equitable" way of funding the international marketing campaign, he added.
The upsurge in profits over the six-month period was achieved by the group's three divisions: the three continental hotels, the hotels along the west coast of Ireland and the Dublin region. Group turnover rose by 10 per cent from £14.4 million to £15.9 million. After-tax profits increased from £1.9 million to £2.6 million. Operating margins were up by 10 per cent to 22 per cent.
For shareholders, the strong half-year results mean a 16 per cent rise in the interim dividend payment to 0.8p per share, up from 0.68p last year. This will be payable on November 16th to shareholders on the register on October 9th, 1998.
The group reported a 81 per cent room occupancy rate during the half-year, with average room rates at £61, up 2 per cent.
In Ireland, occupancy increased throughout the group, with its hotels in Galway, Limerick and Killarney enjoying particularly strong business.
In Europe, its hotels in Brussels, Amsterdam and Hamburg, also reported increased activity as well as higher average room rates.
Ryan's has undertaken a substantial refurbishment and maintenance programme, spending £750,000 over the period. In May it opened the Lavery wing at its flagship Gresham Hotel in Dublin city centre, adding 100 new bedrooms and making it the third largest hotel in Ireland. The enlarged Gresham reported a 5 per cent increase in occupancy levels to 85 per cent. It also added a new multi-storey car park and additional meeting rooms. The group is now preparing to embark on further development at the hotel, and will begin work on adding new meeting and conference rooms on the former Rumours nightclub site.
Ryan has bank borrowings of £23 million, which includes the cost of the refurbishment of the Gresham.
Mr Coyle said the group was continuously looking out for appropriate acquisitions, focusing mainly on the Irish and British markets. It could consider an acquisition of the order of between £20 million and £25 million, he said.
Meanwhile, it also announced the appointment of Mr Sean Henneberry as deputy chairman. Ryan chairman, Mr Conor McCarthy, who has been with the company for 42 years, said it was the group's intention that Mr Henneberry would succeed him as chairman "in due course".
