APEX Hotels has warned the ongoing coronavirus pandemic represents a “material uncertainty” over its ability to continue as a going concern, accounts newly filed at Companies House reveal.

However, the Scottish company, which has 10 four-star hotels located across Edinburgh, Glasgow, Dundee, London and Bath, has declared that it anticipates a “strong recovery in hotel and hospitality operations in the short to medium term as we emerge from the Covid-19 pandemic.”

The hospitality industry began to reopen in Scotland last week (April 26) after being shuttered since Boxing Day under lockdown measures. But while hotels, bars and restaurants are welcoming customers again, the sale of alcohol is currently confined to outdoor areas. Sales of alcohol are expected to be permitted indoors again from May 17.

The Apex hotels in Edinburgh, Dundee and Glasgow are now open, with London and Bath to follow suit on May 17.

In its latest accounts, the company underlines the impact of the pandemic on its finances.

The directors state they have prepared cash flow forecasts to April 2022 that “indicate” Apex “will have sufficient funds, through its cash balances and bank facilities to meet its liabilities as they fall due for that period.”

But bosses say they are “acutely aware of the impact of the global coronavirus pandemic on the group.”

The directors declare: “This represents a material uncertainty with respect to going concern.”

Apex, which is owned by the Springford family, declared that it had delivered a “resilient performance” for the year ended April 30, 2020.

The accounts show that revenue fell by nine per cent to £68.7 million, “despite the Covid-19 pandemic having a significant impact on the hospitality industry from February 2020.”

Pre-tax profits fell to £6.99m from £12.4m. The company added: “Positively, revenue growth of 3.4% was achieved to January 2020 compared with the prior year.”

However, directors go on to highlight the impact on profitability from the first UK-wide lockdown, which came into effect on March 26 last year. “The hotels were closed from 20 March 2020 due to the nationwide lockdown restrictions imposed by the government in response to the Covid-19 pandemic,” chief executive Angela Vickers writes.

“This had a substantial impact on profitability with group operating profit down 28.4% year on year despite a strong trading period prior to the onset of the pandemic. Operating profit is stated after donations of £1.86m to the Ross Development Trust.

“The strong financial performance prior to the pandemic was underpinned by the continued outperformance of our new Apex City of Bath hotel, and strong trading from the Apex Temple Court and Apex City of London hotels as a result of substantial capital investment in prior years.”

Apex revealed it was making redundancies last June as it responded to the “severe impact” on trade arising from coronavirus. The company employed around 1,100 people across its hotels and head office at the time, and confirmed yesterday that around 25 per cent of its staff were ultimately made redundant.

The accounts show that, after year-end, the company secured £1.45m of additional funding from from Bank of Scotland for working capital though an increase in it its revolving credit facility, as well as a coronavirus large business interruption loan of £1m from the bank.

An extension to the facilities was also agreed, meaning they will now mature in December.

The company also secured two tranches of funding from Royal Bank of Scotland totalling £20m under the coronavirus large business interruption loan scheme after year-end.

Apex said yesterday that bookings are “looking increasingly stronger” while expressing “confidence the staycation market will benefit all locations.”

Ms Vickers said: “There’s no denying the impact of the pandemic, from the initial significant drop in international travel through to the government-imposed lockdown restrictions, has been substantial not just for Apex but the whole hospitality industry.

“However, we have used this period of closure to re-evaluate, invest in new technology, and come back ready to thrive.

“Our ongoing refurbishment programme means our portfolio has never looked better.”

Company auditors at KPMG state in the accounts: “Based on our financial statements audit work, we consider the directors use of the going concern basis of accounting in the preparation of the financial statements to be appropriate.”