MCMILLAN Hotels withstood the economic downturn to narrow pre-tax losses to £6000 last year, but it still suffered a downward revaluation of its substantial property holdings.
The Stranraer-based family company, whose hotels include the Peebles Hydro, North West Castle at Stranraer and Glenapp Castle in Ayrshire, saw turnover dip 5.1% to £10.7m, for the year to May 31, 2010.
Average occupancy rates at its hotels, which also include Cally Palace Hotel at Gatehouse of Fleet and Fernhill Hotel at Portpatrick, fell 2.6% but spend per guest increased by 2.1%.
Cost control and falling interest payments helped the company restrict the pre-tax loss to £6000 against £214,000 the year before.
The directors said that, while returns should be greater, they were pleased with the performance “during difficult economic times”.
The company also saw a “negligible” fall in gross margin, which was smaller than they had anticipated despite a competitive market and the economic downturn.
“The impact of reduced turnover has been minimised with close control of group overheads,” the directors said.
They added: “The current recessionary climate brings uncertainty to the market. The key for the company is to control costs whilst maintaining the high standard of facilities available across the group.”
McMillan Hotels suffered a revaluation to £19.35m in its freehold property assets. This meant that the net book value of its properties fell by £1.8m during the course of the year.
The company dealt with this as a movement in its reserves since it regards the fall as temporary.
It added that despite the revaluation, it has made a gain of nearly £1.1m in the sale of non-trading assets since the end of the financial year.
McMillan Hotels, which saw its workforce fall from 393 to 386 over the year, has still been able to carry out investment. It spent £100,000 modernising the ice rink at North West Castle so it can remain a popular curling venue. It said in January 2011, after the year-end, it refurbished the main public areas at the Peebles Hydro.
The highest-paid director received emoluments of £104,089 for the year, up 1.3% on 2009.
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