FBD's former hotel arm predicting record year
The former hotel and property arm of Irish insurance firm FBD is predicting record earnings of €9m for 2015, an increase of more than 50pc on last year.
FBD Property & Leisure (FBDPLL) owns three hotels in Ireland and two in Spain. It employs over 700 people across its portfolio. In Ireland it owns and manages the Castleknock Hotel and Country Club in Dublin and the Faithlegg House Hotel and the Tower Hotel, both of which are located in Waterford.
Insurance firm FBD Holdings agreed last month to the sale of its 50pc stake in FBDPLL to Farmer Business Developments for €48.5m.
Insurance firm FBD, which made a €4.5m loss last year, sold the business as part of its capital raising efforts which also saw it seal a €70m loan from Canadian multinational Fairfax Financial Holdings.
FBDPLL said if it hit its target of €9m in EBITDA (earnings before interest, taxes, and amortization) for the year to end 2015, it would be a record for the group.
It added that it is targeting operating profits of €50m across its portfolio over the next five years.
The company also announced an investment of €7.5m as part of a growth and investment strategy for 2016. It said the plan includes "significant development plans across the company's portfolio".
It said full details of the development plans will be announced over the coming months.
FBDPLL invested €2m in its hotel portfolio throughout 2015 and said its new investment plan is a "direct response to the upturn".
Chief executive David Kelly said the plan "marks the beginning of a new chapter for FBDPLL".
He said that the firm is already seeing "significant" growth in its EBITDA this year and added: "The Irish hotel market is now firmly in recovery mode, with performance across the industry increasing year-on-year. We are also seeing positive momentum building in the Spanish hotel and residential property sectors.
"We are seeing at first hand that revenue is up on 2014 across our portfolio. Our development plan, including a significant capital investment, means our business is in a strong position to compete and grow."
Mr Kelly said FBDPLL is targeting profits of €50m over the next five years.
"We are confident of achieving this and securing our position as a major hotel and property group," he said.
For the year to the end of December 2014 operating profits at the division rose from €3.9m to €7m. The company said that this was driven by "growth in occupancy and yield" particularly in the Irish market, where revenue per room increased by 9pc.
Released in August, the Crowe Horwath 20th Edition of the Annual Ireland Hotel Industry Survey showed that the sector enjoyed its third successive year of growth in 2014.
However, Irish hotels are still 16pc behind the peak levels achieved pre-recession.