MF Wells, the Scottish hotels and holidays group, has continued to defy the downturn with a strong trading performance in 2011-12.
The Dunbartonshire-based company, founded in 1979 by Michael Wells and operating as Lochs & Glens coach tour holidays, saw turnover hold up at £18.6 million, a drop of 1%. Pre-tax profit slipped from £2.7m to £2.54m in the year to March, according to accounts just lodged at Companies House.
In August, a year later than originally planned, the group opened the purpose-built £8m Ardgartan Hotel in the shores of Loch Long, reflecting its confidence in the future and taking its chain of owned three-star hotels across Scotland to seven. Now owned and run by Neil Wells and brother Ian, the family company paid out half of its post-tax profit in a dividend last year, totalling £928,098, after the previous year's pay-out of £65,030.
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The directors write: "The company was able to reduce its costs and as a result its profit for the financial year was only slightly down on the previous year. The directors consider this to be particularly satisfactory given the downturn in the economy."
The latest expansion takes the debt-free company's shareholder funds up by £1m to £22.3m, and its total interest bill on bank borrowings last year went down £204 – from £827 to £623.
Neil Wells tells potential customers on the company's website: "Over the years our company has built up a portfolio of seven hotels and 19 coaches all of which are owned outright.
"We have no bank loans, and even when we develop a new hotel everything is paid for the old-fashioned way out of money that has been saved up for the job."
He told The Herald early in the recession: "I think the key is that we have built up a large and loyal customer base, and they keep coming back for more. Loyalty is crucial in tough economic times."
The website says that by acting as both hotelier and tour operator, Lochs & Glens is able to "cut out the middle-man" and offer highly competitive prices. Three-night tours based at the new Loch Long Hotel start at £99.
The accounts show employee numbers were unchanged last year at 241, and the bill for directors' remuneration dropped from £86,998 to £77,315.
The company's other hotels are the Loch Long, the Inversnaid, near Loch Lomond, the Loch Achray in the Trossachs, the Loch Awe Hotel, the Loch Tummel, near Pitlochry, and the Highland Hotel in Fort William, where the company invested around £3.5m in 2009 after buying it in the break-up of the Swallow group.
The Scottish hotel sector is under pressure, with the latest report from PKF warning that hotel revenue fell sharply in Scotland in September.
Occupancy rates were only slightly down on September 2011, but average revenue per room fell by 7.8%, compared with a drop of 0.8% in England and a 3.1% rise in Wales.