Auchrannie, the Isle of Arran hotel and leisure destination, has underlined the challenges it is facing recruiting staff from within the European Union (EU) after new accounts show it hiked profits by nearly one-third in its most recent financial year.

The Brodick-based resort, which was founded by Linda and Iain Johnston in 1988, reported a pre-tax profit of £448,493 for the year ended March 31, 2018, up from £308,982 the previous time.

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The accounts coincided with the hotel’s move into employee ownership in January last year, which gave each of its160 employees a direct stake in the business.

The ever-expanding resort, which spans two four-star hotels, 30 self-catering lodges, six couples’ retreats, a spa and three restaurants, was the first hotel in Scotland to make the move, and has since been emulated by The Priory Hotel in Beauly, near Inverness.

The change came during a year which saw Auchrannie maintain occupancy rates at 90 per cent, helping to grow turnover to £7.6 million from £7.2m last time. Director Colin Morrison noted that profits had increased following a concerted effort to make savings across the business, ahead of it becoming a “real living wage” employer following year-end in April.

However, he noted that Brexit is undermining the company’s ability to retain and recruit staff from EU countries. Currently, around one-third of Auchrannie’s staff come from nations within the bloc, which the UK is scheduled to leave on March 29.

“We have certainly seen a number of our European staff head off [to their home countries],” Mr Morrison said. “Certainly this summer there were quite a lot of reasonably long-term team members who headed back to their home countries. We are finding it more difficult to recruit from Europe.”

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Asked whether Brexit is causing the business in other ways, Mr Morrison said there has been a reduction in the average length of stay guests are booking, reflecting diminished consumer confidence. He also expressed concern that Brexit could hit consumer spending if it puts more pressure on the economy.

While its ownership model has changed, Auchrannie continues to be run by the same senior team, led by managing director Linda Johnston. Mr Morrison said there has been little change to the way the resort operates as a result of the shift and reiterated that the decision was made to help ensure the resort retains its community ethos.

“It was more of a legal change to protect the business going forward in the future, to stop it being sold and to keep it as a business that looks after its team and the community it is based in,” he explained.

But he said that it has brought a positive response from staff as they carry out their duties, noting there is an increased awareness that their actions can influence the fortunes of the business. He added that staff turnover has begun to fall since the change occurred.

Mr Morrison said: “It has given people a sense of ownership, and the responsibility that comes with that. People are more aware that what they do can have an impact on the business, and that ultimately it is them and the rest of the team who will benefit from that.”

Mr Morrison said that £800,000 was invested last year to add six couple’s retreats to the Auchrannie grounds, which began taking guests in June. The performance of the standalone lodges is being assessed with a view to more being added.