Dalata reports earnings rise but remains wary of Brexit impact

Hotel group Dalata has reported a 33 per cent jump in revenue to €130.1 million for the six months to the end of June.

The company, which runs a string of hotels under the Clayton and Maldron brands, made a pretax profit of €18.2 million, up from €2.7 million for same period last year.

The group used its half-year results to announce the purchase of the Maldron Hotel Cork for €8.1 million and the acquisition for €5 million of three buildings adjacent to its Maldron venue in Dublin's Parnell Square. It plans to use the buildings to extend the hotel.

Former Burlington Hotel

The company is also in exclusive discussions to buy the former Burlington Hotel in Dublin, which is currently operating under the “DoubleTree by Hilton” brand.

The hotel is being sold by private-equity group Blackstone in a deal expected to achieve €180 million.

Dalata, now Ireland’s largest hotel business, said it had invested €13.2 million in hotel development and refurbishment in the first half of 2016 and was progressing plans to develop new hotels in Dublin, Cork and Galway and obtain planning permission for extensions to four of its hotels in Dublin and Galway.

The group said RevPar - revenue per available room – rose 11.2 per cent to €74.90, while noting prospects remained “very strong” for the hotel market in Dublin and the regional cities.

However, it said the impact of Brexit on the UK hotel market was not yet clear.

Sterling

The reduction in the value of sterling continues to have a significant negative impact on “euro-translated” earnings from Dalata’s UK hotels, it said.

The publicly quoted company also said a significant reduction in the value of sterling would make Ireland a more expensive destination for UK visitors, which could impact on the number of UK residents staying in Irish hotels.

“We were disappointed with the outcome of the Brexit vote in the UK due to the uncertainty it creates and its potential negative impact on the future prospects of the UK and Irish economies,” chief executive Pat McCann said.

“To date, we have not seen any impact on trading at our hotels but we are monitoring booking levels closely to ensure that we react quickly to any impact,” he said, while noting that overall trade remained above expectations .

Diluted earnings per share for the period increased from 0.429 cent to 8.429 cent.