Dalata revenue soars 33pc but firm wary over Brexit
Published 07/09/2016 | 02:30
Ireland's largest hotel operator, Dalata, has seen revenue soar by 33pc in the first half of the year to €130.1m.
The company, which has recently entered exclusive discussion to acquire the operating interest at the former Burlington Hotel in Dublin, also announced it had purchased the freehold interest of the Maldron Hotel in Cork for €8.1m.
Elsewhere, earnings at the company rose by 50pc to €34.3m during the period excluding the likes of acquisitions costs and revaluation gains and losses.
The firm benefited from a net upward property revaluation of €41.5m and started the construction of four new hotels in Dublin, Belfast, and Cork.
Occupancy rates during the six months to the end of June improved to 79pc while the revenue per available room (RevPAR) increased to €74.90.
Dalata also outlined the potential threats from Brexit including a weak sterling potentially deterring UK visitors.
Chief executive Pat McCann said it had been a very busy start to the year for the firm.
"Trade has been ahead of our expectations with the Irish hotel market performing exceptionally well in the period," Mr McCann said.
"We have continued our acquisition and development programme as well as further developing the Clayton and Maldron brands in the UK and Ireland.
"The continued recovery of the Irish economy has allowed us to benefit strongly from the growth in RevPAR in Dublin and the other large cities in regional Ireland," he said.
The vast majority of Dalata's rooms remain in Dublin with 3,196 rooms or 48.4pc of all of its rooms based in the capital. Just under a quarter of its rooms are based in the regions excluding Dublin while 26.8pc of them are in the UK.
Dalata's Dublin portfolio consists of six Maldron hotels, four Claytons, the Ballsbridge Hotel, the Tara Towers Hotel and The Gibson Hotel.
The firm pointed out initial success with its Maldron hotel on Pearse Street, which made "substantial" growth in RevPAR. Revenue in Dalata's Irish food and drink arm improved by €5.5m when compared with the same period last year.
Davy analyst Robert Stokes said despite the Brexit risk, the stockbrokers will look to increase its full year EBITDA forecast by around 3pc to €83m.
"On outlook, prospects remain very strong for the hotel market in Dublin and regional cities in Ireland.
"The impact of Brexit on the UK hotel market is not yet clear; however, the group notes that the reduction in the value of sterling continues to have a significant negative impact on the euro-translated earnings from its UK hotels," he said.
During a successful six months for the company it began trading on the main indexes on the London and Irish stock exchanges.
In July the company began trading on the Alternative Investment Market in London and the Enterprise Securities Market in Dublin.
Britain's exit from the European Union remains a significant threat to Dalata's business in the UK, however Mr McCann said after the referendum result that the company would need to adapt.
"In business, there are certain things you can control and certain things you can't. This is one of those things you can't."