The North East owner of the Vermont Hotel and Livello is set to start work on its latest Newcastle city centre hotel and leisure scheme after posting record revenues.
Chester-le-Street property, care and hospitality business Gainford Group owns and operates a number of care homes alongside bars, restaurants and hotels in Newcastle, including Aveika, The County Hotel and The Hudson. The firm used the pandemic lockdowns to invest in its properties – resulting in the opening of rooftop bar Above at the Vermont Hotel as well as a new-look Livello bar – and the group has now published accounts for 2022 showing a 30% jump in turnover to £47.33m.
Operating profit, however, dropped from £8.37m to £7.21m on the back of a “major escalation” in costs, though that figure was still markedly above its pre-pandemic figure of £4.9m in 2019. The company also took on more staff, increasing its workforce from 1,087 to 1,205 employees.
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In his report, director Imran Khaliq highlighted rising costs, but said the firm would look to start work redeveloping the former Premier Inn building in Newcastle city centre, which it acquired in April 2018, as well as a new care home.
The report says: “Post Covid, 2022 was a successful year of recovery and growth. The hospitality operations outperformed the care homes operations. The hospitality trade growth trajectory was 78% in revenue as compared to the care homes growth of 6%.
“The operations have been growing organically in 2022 as compared to using the Covid Government support available in 2021. The business has seen a major escalation in costs due to high inflation this year. The UK economy faced 11.1% inflation in October 2022, resulting in increased energy prices, food and labour costs, Despite all of this, the company has managed risks effectively and, through different pricing, costing and marketing strategies, responded very well. The improved financial results are a credit to the management team and the operational staff of the business. The business is expected to carry the same spirit into 2023 and beyond.
“The hotel and leisure market and geographical locations within which the group operates are without doubt very competitive. The group faces pressure both from large leisure chains and also local boutique brands. The group manages this risk by continually seeking to enhance the service it offers, by providing quality product and services, by maintaining strong relationships with key customers and contacts and close monitoring over suppliers.”
Last year Gainford Group was set to submit a new vision for the former Premier Inn hotel, which it has renamed Newbridge, which will include a full revamp of the hotel, to regenerate a neglected part of the city. The new vision includes a large mixed-use skycraper combining housing, leisure and a hotel, standing higher than Newcastle’s current tallest building, the 26-storey Hadrian’s Tower.
In the accounts, Mr Khaliq added: “Reinvestment in the hotels and the care businesses will continue into 2023, with works due to commence with the Newbridge high rise hotels and apartments in the coming months. The company will also commence the development of a new health care site which will include a 70-bed luxury care home.”
