CHARDON Trading, the hotel and restaurant firm owned by hospitality veteran Maurice Taylor, has defied challenging conditions to record a 74% hike in profits.
The Glasgow-based business has booked pre-tax profits of £705,328 for the year ended April 30, 2013, up from £406,588 the previous year.
This came in spite of a "difficult and challenging" trading backdrop in the hospitality sector, with rising utility costs contributing to an 0.8% fall in revenue to £9.84 million and a 0.95% drop in revenue per available room (rev par) to £48.20. Operating profit, before interest, depreciation, taxation and exceptional items, was also down to £2.2m from £2.3m the year before, accounts newly filed at Companies House reveal.
The financial period closed before Mr Taylor, who founded Glasgow's La Bonne Auberge French brasserie in the 1970s, sold his Chardon Management business to US firm Interstate Hotels and & Resorts in September.
The deal, which went through for an undisclosed sum, saw Interstate acquire a business holding the management contracts for a 32-strong hotel portfolio, including properties trading under brands such as Holiday Inn, Best Western, Holiday Inn Express and Hotel Indigo.
But it was unrelated to Chardon Trading, the vehicle majority controlled by Mr Taylor which had full or partial ownership of 18 hotels when the Interstate acquisition went through. The management of those properties was handed over to Interstate further to the deal.
Chardon Trading owned four hotels outright over the period and since year end has added to its portfolio with a hotel at Edinburgh Airport. The Holiday Inn Express launched yesterday.
Mr Taylor was unavailable for comment yesterday, but he delivered an upbeat assessment of Chardon Trading's performance in its latest accounts.
He stated: "Notwithstanding the relatively difficult trading climate, we continue to deliver financial performance indicators in respect of added value, return on capital employed and the generation of cash flows which we believe are, in relative terms, higher than those employed by much larger hotel groups."
In spite of tough competition, rising costs and the need for ongoing investment, Mr Taylor insisted the business was in good shape. He added: "We continue to invest in the maintenance and upgrading of facilities.
"We are also becoming more aware of the importance of conserving resources and are making a conscious effort to aid this objective.
"The hotel and leisure sector remains challenging and very competitive. Notwithstanding the impact of outside agencies, for example disproportionate increases in energy costs and the level of commissions paid to third parties, we remain confident of the profitability of these hotels even in the current economic climate."
Chardon Trading said in the accounts that it has made provision for the national minimum wage continuing to rise faster than general wage inflation, noting it had observed this trend for the last four years. It also confirmed that no dividend would be paid for the year to April 30.
The accounts show that Chardon Trading employed an average of 197 staff over the period, down from 221 the year prior. Overall staff costs narrowed to £3.18m from £3.29m as pension costs fell to £46,508 from £91,677.
Directors' remuneration also dropped, to £237,405 from £272,197, as did directors' pension contributions to money purchase schemes. This fell to £38,508 from the previous year's £81,517. The highest-paid director received emoluments of £95,486, down from £99,667, and pension contributions of £2400, down from £3009.
Exceptional items totalling £729,426 were booked for the year, including a provision of £600,000 against the uncertainty over funds due from associate company Chardon Hotels.
The group also incurred costs linked to a new hotel venture, which the directors decided to abandon.