Revenue at hotel group Dalata rose by 31 per cent in the first six months of the year, up to €35 million, as the group benefited from strong growth in the tourist sector and an improvement in domestic consumer sentiment. The group also disclosed this morning that it is to buy the Tower Hotel in Derry, Londonderry for £4.4 million (€5.5m)and will continue to pursue further acquisitions.
In the six months to June 30th, earnings (EBITDA) at Dalata rose to €2.4 million from € 0.9m in the same period in 2013, while pre-tax profits stood at €943,000, up from a loss of €1.7m in the same period in 2013. Pprofit growth was derived from a combination of additional management contracts and favourable market conditions in the leased and owned business across all hotels, the company said.
Dalata’s revenue, which grew from €26.8 million in 2013, comes from the operation of a mix of 13 owned and leased hotels and from fees for hotel management services provided to third party owners under management agreements. Management fee revenue advanced by 75 per cent from € 1.7m to € 2.9m. However it noted that this trend is being reversed in H2; several hotels operated under management contract are currently for sale including three with sale contracts agreed.
Top line revenue increases in the period were driven by the addition of Maldron Hotels at Dublin Airport and Tallaght and growth in the existing business.
Dalata chief executive Pat McCann said that the outlook is encouraging for the group.
“We are confident for the remainder of 2014 with strong momentum maintained,” he said. “The sustained commitment of Government to the development and support of the tourist industry through a combination of investment, promotional and fiscal measures has revived confidence in the hotel sector. The solid growth in recorded visitor numbers in the first half is continuing into the second half. We expect EBITDA in the full year to be in the range € 7.5 million to € 8.0 million (2013: € 5.3 million) excluding the effect of acquisitions.”
Acquisitions will also remain on the group’s agenda.
“ We are actively pursuing further acquisitions as activity in the market continues to accelerate through the second half of the year,” Mr McCann said.
Dalata announced its latest acquisition this morning. The Tower Hotel Derry is a 4 star hotel located in the heart of Derry City. The hotel contains 93 en suite rooms as well as a bar & grill, restaurant and five conference rooms. It reported profits of €0.5 million in 2013. Dalata is to pay £4.375 million in cash for the hotel, which it will rebrand as a Maldron, and it expects that the transaction will complete in October 2014. In a statement, the company said that the acquisition will allow the group expand its position in Northern Ireland where it already operates the Maldron Hotel Belfast.
