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Arran's family-owned spa hotel in good health

THE family-owned Auchrannie hotel and leisure complex on the Isle of Arran is on course to raise its profits and turnover in its current financial year, after a fall in earnings and revenues in the 12 months to March 2012.

Company accountant Colin Morrison highlighted Auch-rannie's much stronger trading performance in its current quarter to December, compared with the same period of last year.

Auchrannie has put back its plans to add bedrooms to its Spa Resort, a project that had been scheduled for this winter. But Mr Morrison underlined hopes of completing a 20-bedroom extension in time for the anticipated fall in ferry fares between Ardrossan and Brodick in 2014 arising from the Scottish Government's extension of the Road Equivalent Tariff scheme to Arran sailings.

He also underlined expected trading benefits from a major redevelopment of Auchrannie's spa facilities this winter.

Auchrannie was hit by an unexpected downturn in trading in the October to December quarter back in 2011. However, it is enjoying much better trading in the final three months of this year, with business boosted by special offers and a new booking system, which makes it easier to change room rates quickly according to demand.

Mr Morrison said: "We are feeling a lot more confident this time this year than we were this time last year."

Accounts that have just become available from Companies House show the turnover of Auchrannie Holdings, which runs the 28-bedroom Auchrannie House Hotel and 36-bedroom Spa Resort, fell to £4.44 million in the year to March 31, from £4.84m in the previous 12 months.

Pre-tax profits fell to £66,950 in the year to March, from an underlying figure of about £164,000 in the prior 12 months. The reported pre-tax profit for the year to March 2011 was £232,788, but Mr Morrison noted this included a near-£70,000 gain on the sale of a house.

Commenting on the results for the year to March 2012, Mr Morrison said: "I think it was really just a very difficult trading year, as I think most people were undergoing. I think we were quite happy that, to some extent, the dip was that small. We actually felt we did quite well compared with quite a lot of similar businesses in the sector.

"It really was a struggle to get people through the door to some extent, and to get them to spend when they were here. We had a particularly difficult third quarter (of that financial year)."

He added: "Tourism-wise, things last year were pretty bad in Arran, across the board."

Asked about expectations for turnover for the current financial year to next March, Mr Morrison replied: "I think we would be hoping to get closer to the £4.8m. I think we certainly hope we can pull the income back (up) to where we were the year before."

While citing higher heat, light and power, and food costs, Mr Morrison forecast a rise in pre-tax profits this financial year.

He said: "I don't think at the moment we will quite make the £164,000 (made in the year to March 2011). Hopefully, we will be a lot closer to it than last year."

He noted about 1300 children visited Auchrannie in January to March this year, up from about 400 in the same period of 2011, after the resort's opening of its Playbarn. Auchrannie maintains a core of more than 100 staff over the winter. Its staff rises to around 130 to 140 in peak season.

Mr Morrison said: "We try to maintain a core of staff over the winter so we have continuity and so we can keep our customer service at a decent level.

"We probably have more staff than business might justify in the winter, but we see that as a benefit for the rest of the year because the staff know the business and know the resort and we are not having to train a lot of staff at the start of the season when things are getting quite busy."

Auchrannie, which is shortlisted in the customer service excellence and rural family business categories of The Herald's inaugural Scottish Family Business Awards, is owned by the Johnston family, which has built up the resort over 24 years.

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