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Luxury hotel's owners upbeat as pre-tax earnings rise

THE company which owns Aberdeen's only five-star hotel the Marcliffe has posted a rise in pre-tax profits and a healthy outlook for the current year, while admitting that the planned sale of the business is still on hold.

The Marcliffe, opened in 1993 by former Russian President Mikhail Gorbachev and the haunt of celebrities, is owned by Pitfodels (named after the hotel's location), a holding company with four members of the Spence family on its board, itself owned by a family trust.

Owner and previously sole director Stewart Spence, 65, celebrates 50 years in the hospitality industry this year having started as a waiter and chef in Aberdeen's Station Hotel, and has been trying to sell the business for several years.

Pitfodels increased its turn-over by 3.7% to £6.1 million in the year to September 30, 2011, and its pre-tax profit by 2.8% to £491,700, according to accounts just published at Companies House. It hiked its charitable donations from £8201 to £23,463, including a donation of £6560 to the Scottish National Party.

After rises in overheads of 4.1%, staff wages of 5.2% and direct costs of 5.6%, the hotel's operating profit slipped by 1.3% to £757,000.

Room revenue slipped by 5% as occupancy rates fell by 2% and average room rate by 3%. Restaurant turnover was up by 3% but spa sales fell by 5%. In the function business, spend per head was up by 5%. Gross margins eased from 80% to 79.6%.

The directors say the company continues to enjoy a good relationship with its bank (Lloyds) and borrowing facilities were renewed until February 2013.

Mr Spence said two years ago that unnamed parties were trying to raise the necessary funds to buy the hotel, enabling him to retire. He is known to have come close to selling the property to another north-east hotelier, Ivor Finnie, but the deal said to have been worth £17.5m collapsed.

The directors write: "The year ahead is already shaping up well with increased sales of 12% across the board, but most encouragingly increased occupancy for the first time in several years.

"During the past financial year an offer of £16.7m was accepted for the hotel however the sale has not yet been completed as the buyer has been unable so far to secure the funding."

The group's shareholder funds rose from £6.71m to £6.96m last year. Debt was cut from £4.5m to £4m. Employment rose from 174 to 182.

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