Jarvis Hotels today moved to cast off the clouds of gloom hanging over the industry by checking in improved profits and insisting it was confident about its prospects.
Chairman John Jarvis hailed record turnover, margins and profits but noted that the group’s share price had suffered heavily, as had many other hospitality groups.
“We have no current evidence that the adverse economic conditions that prevailed in the early 1990s have returned, and there are few full-service hotels being developed outside London at this time adding to competitive capacity,” he said.
In the 28 weeks to October 10, Jarvis – based at High Wycombe in Buckinghamshire – made a pre-tax profit of £19.4m on £77.6m turnover. This compares with £17.1m on £73.1m in the equivalent period last year.
The room yield rose as a result of an increased average room rate, higher occupancy levels, capital expenditure and investment in information technology.
Jarvis added: “In view of the present market pessimism for the hotel sector, we are particularly pleased with these results. They have been achieved through a combination of highly targeted capital expenditure, brand support and tight cost control. We recognise that the general economic climate is difficult, but with our strong balance sheet, cash flow and international management experience together with continuing evaluation of pan-European opportunities, we remain confident about our company’s future prospects.”
He noted that the company was in its third year of a substantial capital investment programme in its hotels. Jarvis has refurbished 475 bedrooms, added 87 bedrooms and a range of new meeting rooms at Ealing, East Grinstead and Hemel Hempstead.
Jarvis said the group was continuing to evaluate pan-European opportunities, but the speed of these projects was hampered by market volatility and concentration on the impending introduction of the euro.
EGi News 24/11/98
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