MACDONALD Hotels has revealed it is sitting on offers worth £83 million to enter joint property ventures on 11 of its sites, as it continues to unlock cash to invest in its portfolio.

Gordon Fraser, managing director of the Bathgate-based hotels and resorts firm, said Macdonald is continuing to maximise its non-hotel asset base in its bid to establish itself in the luxury end of the hospitality market.

His comments came as Macdonald reported a pre-tax profit of £5.6 million in the year ended March 31, boosted by a 30 per cent uplift in group bookings from Japan, China and the US on the back of sterling’s post-Brexit vote slump. It had achieved a similar spike in group bookings, which account for around 10 per cent of overall sales, from those markets in the months immediately after the vote to leave the European Union (EU) last year, with its hotels in tourist destinations such as Edinburgh, Oxford and the Lake District benefitting most.

In December last year, Macdonald had reported that profits had surged to £62.4 million thanks to a £57.2m gain on the sale of land at Botley Park Golf Course in Southampton to developers.

Now, rather than selling land, Mr Fraser said the focus is on realising value from non-hotel assets by pursuing property joint ventures at certain sites. It has development opportunities at as many as 26 locations.

“It’s very significant for us as a company,” said Mr Fraser of the offers currently on the table. “That really does allow us to achieve the plan and the objective.”

Sharing profits from such partnerships will provide the company with funds to invest in upgrading the quality of its estate, he added, noting that proceeds from such projects will typically crystallise between years two and five of their development.

“This is a medium to long-term strategy but it allows us to plan,” Mr Fraser said. “We’ve got the cash flow from the developers and the architects working on this within the five-year plan.”

Having soared above £700m in 2003, the company’s debt was cut last year to £184m, helped by the sale of the Macdonald Swan’s Nest Hotel in Stratford in May 2016. The disposal followed the previous year’s sale of the Old England Hotel at Bowness-on-Windermere, and Marine Hotel in North Berwick, both of which are now owned by Macdonald family companies and managed by Macdonald Hotels.

The loss of income from those three hotels contributed to turnover at the group falling to £154.2m from £163.4m. Operating profit fell to £11.1 from £17.4m, which the company put down to the impact of higher overheads, including investment in IT, as well as hotel sales. Stripping out the effect of hotel disposals, Macdonald reported that like for like operating profits were up eight per cent at £3.2 million.

Meantime, asked about the effects of Brexit, Mr Fraser said the company was working hard to mitigate the possible end to the freedom of movement for EU citizens when the UK’s divorce is complete. Currently around 30 per cent of Macdonald’s 4,000 workforce are EU citizens, he said.

Mr Fraser, who sits on the British Hospitality Association’s government advisory group, said the company’s preference would be for the current arrangements on freedom of movement to be retained. But he noted that it was working on initiatives to promote careers in hospitality in schools to help ensure a future flow of talent.

“The entire UK hospitality industry is concerned that the flow of EU workers, upon which we all depend to some degree, might be severely curtailed,” Mr Fraser said. “We’ve therefore increased investment in our graduate programmes and in our internal hospitality development schemes, improving staff retention.”

He noted the company was adapting to higher utility costs, the national minimum and living wages, apprenticeship levy and higher business rates, which between them added £2.4m to costs last year. Having exceeded a self-imposed target of saving energy by 15 per cent, it has set the bar higher at 20 per cent. Steps are being taken to minimise food waste, and to offset the higher cost of goods caused by the lower value of sterling by finding alternative suppliers.