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Room for improvement at hotel group Chardon Tradin

INDEPENDENT hotel management group Chardon Trading has seen turnover rise more than 4% from £9.5 million to £9.9m but profits were hit by a £1m write-down on asset values.

ACCOMMODATING: Maurice Taylor owns the majority of Chardon Trading and has provided interest-free loans to the company. Picture: Colin Mearns
ACCOMMODATING: Maurice Taylor owns the majority of Chardon Trading and has provided interest-free loans to the company. Picture: Colin Mearns

The business, majority owned by veteran entrepreneur Maurice Taylor, manages a number of Holiday Inns across the UK and also runs the Indigo, Marks and EasyHotel brands in Glasgow.

Accounts filed at Companies House show operating profit edged up slightly from £1.97m to £2.02m in the 12 months to the end of April 2012.

However, at a pre-tax level profits were down from £1.1m to £406,588 after being hit by a £1m provision for an inter-company balance.

The directors said they had made the provision after considering the full recoverability of the balance was "uncertain".

Chardon Trading managing director Nicola Taylor said: "Chardon Hotels is an investment vehicle, separate from Chardon Trading, within which we have made provision for a £1m write-down in asset value.

"Given the present valuation trends in the current asset ownership market, we regard such a provision as a financially prudent measure.

"Chardon Trading continues to expand; indeed we recently won planning approval from Edinburgh City Council to build a £15m 125-bedroom hotel at Edinburgh Airport."

At Chardon Trading, revenue per available room dropped 4.5% to £48.66 as the directors warned of the "difficult and challenging" trading conditions in the leisure sector.

They added: "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.

"We continue to reinvest 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."

Overall net debt dipped from £14.4m to £13.1m.

Capital expenditure more than trebled from almost £102,000 to in excess of £335,000.

Chardon Trading – which owns Chardon Leisure, Chardon Properties, Bettagrade and Ingliston Hotels – saw its average staff numbers increase from 216 to 221 while employee costs rose from £3.06m to £3.3m. Directors' remuneration went from £227,825 to £272,197, although the highest paid had a slight fall from £100,267 to £99,667.

No dividends were paid.

Bank loans fell from £12.5m to £11.6m, but interest and financing payments increased from £590,516 to £619,009.

The group's overdraft went up from £322,155 to £1.9m.

Mr Taylor and his family had provided interest-free loans to Chardon Trading totalling £1.98m at the balance sheet date.

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