Jarvis Hotels could be set to launch across the Channel in the latest stage of its expansion programme.
Chief executive and chairman John Jarvis said the growing hotels operator, which last year said it could afford to spend up to £100m extending its chain, had to explore the opportunities available on the continent.
“In evaluating the next stage of our development, and with a strong and internationally experienced management team, we are currently considering the opportunities that structural change in the UK and mainland European hotel markets could bring to our company,” he said.
Jarvis was speaking as the Cheshire-based group posted a big jump in its pre-tax profits, on the back of a proportionately smaller rise in turnover.
In the year to March 28, Jarvis made £30m before tax on £136.6m turnover – this compares with £24.1m on £118.2m during the previous 12 months.
Jarvis said the company, which is now represented in or around most of Britain’s main cities, had demonstrated its ability to increase profits through both organic growth and selective acquisitions.
He pledged to carry on acquiring suitable individual hotels and small groups – and noted five smaller hotels had been sold so far this year at a profit over net book value of £1.5m.
Over the year, Jarvis’ highest-ever capital expenditure programme of £18.2m added 127 bedrooms to existing venues and saw the purchase of a 106-bedroom hotel in Norwich.
An agreement over a new long lease for Cardiff’s Royal Hotel has also been reached in principle – this will allow an extensive refurbishment programme to take place at the city centre building.
“I am sure the Royal Hotel, when it re-opens in 1999 at the time of the Rugby World Cup, will enhance the hospitality portfolio of the city and add significantly to company profit,” Jarvis said.
Jarvis was content his company had managed to avoid the effects of the strong pound as it derived only around 3.5% of turnover from overseas guests.
He was also happy that if the government set the minimum wage at the recommended level of £3.60 per hour it would not cause the operation any harm.
EGi News 10/06/98
